At one time, most employers contracted with external insurance companies to provide benefits for their employees under a “group plan.” The cost to the employer depended upon the number of employees, among other factors. Increasingly, employers have bought into “self-insured” or “self-funded” plans, wherein they establish trust funds or set aside other revenues to pay insureds’ expenses. There are variations of these plans; for example, some provide for companies to pay benefits up to a certain amount, after which an insurer will take over and continue benefits. In some states, “multiple employer trusts” are established to pool funds and reduce costs for employer-paid benefits. Many states also have insurance “guarantee associations” to which employers may or may not contribute (depending on state law) and which ensure benefits for employees/insureds in the event of insolvency or failure to pay on the part of the employer plan.

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