Question

multiple select question

select all that apply

which of the following are true of self-funded health plans?

• the organization establishes the benefit level and the types of plans to be offered.
• the organization pays large premiums to private health plans.
• most are set up as hmos.
• an account is set up by the organization from which to pay claims.
• the organization assumes the risk of paying directly for medical services.

Explanation:

Define self-funded health plans

Using the Self-Funded Health Plans knowledge point

• Self-funded (or self-insured) health plans are arrangements where an employer or organization assumes the financial risk of providing healthcare benefits to its employees.
• Instead of purchasing a pre-packaged policy from a commercial insurance carrier and paying monthly premiums, the organization pays for each medical claim out-of-pocket as it occurs.

Analyze Option 1

Using the Self-Funded Health Plans knowledge point

• "The organization establishes the benefit level and the types of plans to be offered."
• This is true. Because the employer is funding the plan directly, they have the flexibility to customize the benefit design, coverage limits, and plan types to suit their workforce.

Analyze Options 2 and 3

Using the Self-Funded Health Plans knowledge point

• "The organization pays large premiums to private health plans."
• This is false. In a self-funded model, the organization does not buy traditional commercial insurance policies; they pay for actual claims directly.
• "Most are set up as HMOs."
• This is false. Self-funded plans are typically set up as PPOs or indemnity-type arrangements to offer broader network flexibility, rather than restrictive HMO structures.

Analyze Options 4 and 5

Using the Self-Funded Health Plans knowledge point

• "An account is set up by the organization from which to pay claims."
• This is true. Employers set up a dedicated trust fund or bank account to hold employee and employer contributions to pay out medical claims.
• "The organization assumes the risk of paying directly for medical services."
• This is true. The core definition of self-funding is that the employer, rather than an insurance company, bears the financial risk for claims.

Answer:

• The organization establishes the benefit level and the types of plans to be offered. (Correct answer)
• The organization pays large premiums to private health plans.
• Most are set up as HMOs.
• An account is set up by the organization from which to pay claims. (Correct answer)
• The organization assumes the risk of paying directly for medical services. (Correct answer)