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Self-Funded Plan
A type of health insurance plan in which the employer assumes all risks and costs in providing healthcare to employees and, therefore, decides what is and what is not covered, such as bariatric surgery. Self-funded plans are usually administered by an insurance company. This insurance company is often referred to as the third-party administrator (TPA) of the plan. The TPA performs administrative functions only and does not determine coverage. Self-funded plans are exempt from state regulations, including mandated benefits, premium taxes, and consumer protection laws, but they must meet federal regulations.
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