30 Sep Understanding Health Insurance: What’s the Difference Between Self-Insured and Insured Employer Plans?
September 30, 2025 ~ Do you get your health insurance through an employer? If so, it’s important to understand what type of plan you have—a self-insured or insured plan—because it can impact your coverage, your rights, and your ability to appeal decisions.
Many people are familiar with terms like “deductible,” “copay,” or “network.” But whether a plan is self-insured or insured is a less familiar—but crucial—concept.
What Are Self-Insured and Insured Plans?
Employers offer health insurance in one of two main ways:
Insured (Funded) Plans
Also called funded plans, these are traditional insurance plans.
Your employer pays a premium to an insurance company, which then takes on the financial risk for your health care claims.
Self-Insured (Self-Funded) Plans
Also called a self-funded plan, this is where your employer pays your health care bills directly, instead of paying a premium to a health insurance company for a health insurance plan.
How Do I Know What Type of Plan I Have?
You probably can’t tell just by looking at your insurance card.
It can be confusing because your employer may hire a third party to administer the plan—like processing claims or issuing ID cards—and they often hire an insurance company to do that. So, you may have an insurance card with an insurance company’s logo on it, but they are just handling the claims for the employer. It’s still the employer who is financially responsible for paying for the health care claims.
The best way to find out: Ask your HR representative or benefits manager. You can ask directly, “Is our plan self-insured or insured?” You can also call the number on the back of your insurance card and ask that question.
Why Does This Matter?
State vs. Federal Protections
Self-insured plans are regulated by federal law, mainly the Employee Retirement Income Security Act (ERISA). This means most state laws about health insurance do not apply.
That can affect:
- Protections from out-of-pocket costs for oral chemotherapy or screenings and diagnostic tests
- Access to step therapy exceptions
- Dependent coverage extensions (like New York's law allowing coverage for young adults up to age 29)
Other Examples:
- In Michigan, standardized prior authorization rules under Public Act 60 of 2022 don’t apply to self-insured plans.
- In California, Cal-COBRA lets some workers keep coverage longer than federal COBRA—but only for insured plans.
- Twenty-one states and Washington, D.C. have laws requiring insurance coverage for fertility preservation for people facing medical treatments, such as chemotherapy, that may cause infertility—but self-funded plans are generally exempt from these laws.
Even though they’re not required to, some employers choose to offer these protections anyway, especially large companies that want to support their workforce.
If you’d like to learn more about what protections your state offers, visit Triage Cancer’s Charts of State Laws.
What If I Disagree with a Coverage Decision?
If your self-insured plan denies coverage for something, you still have the right to appeal. Appeals work a bit differently depending on whether your plan is self-insured or insured, but you have the right to an internal and external appeal.
Learn more and explore tools to help you appeal a health insurance denial at Triage Cancer’s Health Insurance Appeals Module.
Additional Resources
- Triage Cancer’s Health Insurance Resource Hub
- Quick Guide to Health Insurance Basics
- CancerFinances.org
- Charts of State Laws
Final Thoughts
Being diagnosed with a serious medical condition like cancer comes with a lot of uncertainty. Understanding your health insurance shouldn’t add to that burden. By learning whether you’re in a self-insured or insured plan, you can make more informed decisions, know your rights, and get the help you need.
About Triage Cancer
Triage Cancer is a national, nonprofit providing free education to people diagnosed with cancer, caregivers, and health care professionals on cancer-related legal and practical issues. Through events, materials, and resources, Triage Cancer is dedicated to helping people move beyond diagnosis.
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