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📋 '''Insured plan''' refers to an [[Definition:Employee benefits | employee benefit]] arrangement — most commonly for health, dental, life, or [[Definition:Disability insurance | disability]] coverage — in which an [[Definition:Insurance carrier | insurance carrier]] assumes the financial risk of paying [[Definition:Claim | claims]] on behalf of the sponsoring employer. Unlike a [[Definition:Self-insured plan | self-insured plan]], where the employer funds claims directly out of its own assets, an insured plan transfers that exposure to a licensed insurer in exchange for a fixed [[Definition:Premium | premium]]. This structure is particularly common among small and mid-sized employers who lack the cash reserves or risk tolerance to absorb variable claims costs.

⚙️ Under this arrangement, the employer purchases a [[Definition:Group insurance | group insurance]] policy from a carrier and pays premiums — often on a monthly per-employee basis. The insurer then bears the obligation to pay covered claims according to the policy's benefit schedule and terms. The carrier handles [[Definition:Claims administration | claims administration]], maintains [[Definition:Loss reserves | reserves]], files required regulatory reports, and complies with [[Definition:State insurance regulation | state insurance regulations]] governing the product. Because the insurer is on the hook for claims, premiums are typically set using the carrier's [[Definition:Actuarial analysis | actuarial models]] that factor in the employer's group demographics, historical [[Definition:Loss experience | loss experience]], and broader risk-pool trends.

💡 For employers evaluating how to structure their benefits programs, choosing between an insured and a self-insured plan is one of the most consequential decisions on the table. An insured plan offers predictability: the employer knows its cost up front and delegates the volatility of claims to the carrier, which can be especially valuable during years of unexpectedly high utilization. The trade-off is less control over plan design and potentially higher long-term costs, since the carrier's premium includes margins for [[Definition:Underwriting profit | profit]], [[Definition:Administrative expense | administration]], and risk. From the insurer's perspective, group insured plans represent a core revenue stream and a competitive battleground where [[Definition:Insurtech | insurtech]] platforms are increasingly helping carriers streamline quoting, enrollment, and servicing.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Self-insured plan]]
* [[Definition:Group insurance]]
* [[Definition:Employee benefits]]
* [[Definition:Administrative services only (ASO)]]
* [[Definition:Stop-loss insurance]]
* [[Definition:Experience rating]]
{{Div col end}}

Definition:Insured plan - Revision history

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