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Glossary

Self-funded plan

Commercial and employer plans · 1 documents cited · Read September 2026

Denise Ramirez, Coverage Editor · Who writes this

In one sentence

An employer plan that pays claims from the employer's own money and only hires an insurer to administer it. The insurer's name is on the card, but state insurance rules may not reach the plan.

Also written as Self-insured plan, ERISA plan.

What self-funded plan actually means

The distinction is invisible from the front of your card and it changes which rulebook governs your appeal. In a self-funded plan the employer carries the risk; a carrier is being paid to process claims, not to insure them. State insurance law generally regulates insurers, so a plan that is not insured can fall outside it.

The practical consequence lands at external review. The federal rule contemplates exactly this case, and it makes the state process available to a self-insured plan only where the state process actually binds the plan and is not preempted. Otherwise the federal process is the one.

If you do not know which kind you have, the plan document says so, and the plan administrator is required to give you the plan document. That is worth establishing before you file, not after.

The text it comes from

This is the wording the definition rests on. Where it decides anything for you, read the section rather than our summary of it.

The federal external review rule addresses self-insured plans as a separate case: it applies "To the extent that a group health plan provides benefits other than through health insurance coverage (that is, the plan is self-insured) and is subject to a State external review process that applies to and is binding on the plan (for example, is not preempted by ERISA)." Where that is not so, the plan must instead run the federal process.

45 CFR §147.136(c)(1)(ii) and (d), Electronic Code of Federal Regulations, effective August 2026 · source

Where this comes from

  1. 45 CFR §147.136(c)(1)(ii) and (d), Electronic Code of Federal Regulations, effective August 2026 — www.ecfr.gov/current/title-45/part-147/section-147.136

Where this comes up

American GLP is not a law firm, an insurer, a government office or a clinician, and nothing here is legal or medical advice. This page says what a published rule means by a word. Which rulebook governs you depends on your plan, and your own notice and plan documents govern your case.