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What is a Self-Insured (Self-Funded) Plan for Part III Reporting?

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Part III was added in order to track employee and dependent coverage for self-insured plans. The instructions are specific: “Complete Part III ONLY if the employer offers employer-sponsored self-insured health coverage in which the employee enrolled. This part must be completed by an employer offering self-insured health coverage for any employee who enrolled in the coverage, regardless of whether the employee is a full-time employee.”

Unless the employer’s policy is self-insured, you will not put anything in Part III of Form 1095-C. A self-insured group health plan (or a “self-funded” plan, as it is also called) is one in which the employer assumes the financial risk for providing health care benefits to its employees. Self-insured employers pay for each out-of-pocket claim as those claims are incurred instead of paying a fixed premium to an insurance carrier – the arrangement known as a fully-insured plan. Even though these plans are called self-insured plans, an employer typically does not assume 100% of the risk for catastrophic claims. Rather, the employer buys a form of insurance known as stop-loss or excess-loss insurance to reimburse the employer for claims that exceed a predetermined level.

The cloud solution ACA Plan Setup allows you to choose self-insured.  When it is checked, the employee’s coverage will appear on Part III of the 1095-C.  The employees dependents will also appear on Part III as long as the up to date employee information has been uploaded or added in the dependent window.  See the link below.

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Last Review:  5/28/2020 – Revision: 2.0

Applies To:  ACA Reporting Requirements, ACA Compliance solution

Categories:  Dependents

Keywords:  Dependent, Part III

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