Fully-insured group coverage is different from individual coverage because the employer is also part of the relationship. The employer may pay all or part of an employee's premium. In a fully insured group plan, the health carrier issues a contract, typically called a master contract or policy, to the employer. In it, the health carrier agrees to provide coverage to the employees subject to various conditions. In turn the employees and their dependents are covered under what are typically called certificates of coverage.
Some employers provide coverage to their employees through a self-insured health care plan.
This means the employer pays for its employees' health care with its own money. A self-insured employer must file a master plan with the United States Department of Labor and provide to employees a Summary Plan Description that details the terms of coverage. Most self-insured employers do not process claims internally. Rather, they typically have agreements with an outside vendor who processes claims for them. The third party administrator may be an HMO, insurance company or nonprofit health services corporation.