What is a Fully Insured Plan?

A Fully Insured Plan is a type of insurance plan where the employer or policyholder pays a fixed premium to an insurance company, and the insurer assumes the full financial risk for paying out any claims. In this plan, the insurance provider covers all benefits, such as health, life, or disability insurance, while the employer or policyholder is not responsible for covering additional costs beyond the agreed-upon premiums. This type of plan contrasts with self-insured plans, where the employer assumes the financial risk.