Georgia Navigator Practice Exam

What are the key responsibilities of employers under a Fully-Insured Plan?

1. To pay premiums to third-party insurance carriers covering various costs

2. To administer all health plan claims directly

3. To manage their own risk by creating internal insurance plans

4. To negotiate directly with physicians for all services

The correct answer is: To pay premiums to third-party insurance carriers covering various costs

Employers under a Fully-Insured Plan primarily have the responsibility to pay premiums to third-party insurance carriers. This structure involves the employer purchasing health insurance from an insurer, which assumes the financial risk of providing health benefits to employees. By paying these premiums, employers ensure that the insurance carrier covers medical expenses incurred by employees, effectively transferring the risk from the employer to the insurance provider. In a Fully-Insured Plan, the insurance carrier handles the administration of claims and payment, meaning the employer is not involved in managing individual claims or negotiating payment with healthcare providers, which distinguishes it from self-funded plans. This model allows employers to predict their health benefits expenditures more easily since the costs are fixed based on the premiums paid, rather than variable costs associated with managing risk directly.