Availability of Inclusive Insurance among Fully- and Self-Insured Plans

Although it has generally been presumed that fully-insured employers would not be able to obtain inclusive health insurance, CEI-rated and other employers have shown that these (generally smaller) employers are able to find inclusive coverage.

Employers with Transgender-Inclusive Health Insurance Benefits: Fully-Insured or Self-Insured, by Size

What is the Difference Between Fully- and Self-Insured Plans?

Health insurance companies provide a variety of services including:

• setting the level of and collecting insurance premiums (consisting of employer and/or employee contributions),
• maintaining a network of health providers (in-network vs. out-of-network),
• defining covered and excluded treatments and services under the various federal and state regulatory frameworks and
• administering the approval and payment of claims.

Employers may approach insurance companies to handle any of these services, but the primary distinction is between fully-insured and self-insured employers, which is largely driven by the size of an employer (in terms of the number of employees).

• Fully-insured: where the insurance company is responsible for paying claims. Typically smaller employers (under 10,000 employees) are fully-insured, relying on an insurance company to handle all of the necessary functions including the funding of insurance payments. These plans often require approval of the insurance regulatory authority of the state in which the plan is officially located ("sited").
  • Smaller fully-insured employers (with perhaps under 200-300 employees) are often grouped by the insurance company into plans with other employers of similar sizes in the same geographic area to spread insurance risk among a larger pool of insured people.
  • Larger fully-insured employers (with perhaps 400 or more employees) may have a plan limited to the employer and its insured employees and dependents. This latter group of fully-insured employers holds more negotiating leverage with insurers and are thus often more directly involved in plan and network design.
• Self-insured (or self-funded): where the employer is responsible for paying claims. Typically larger employers (although smaller employers are still able to self-fund) rely on an insurance company primarily to maintain the network of providers and define the covered and excluded treatments. In such cases the insurance company is considered to provide "administrative services only" (ASO) or to act as a "third-party administrator" (TPA). Some employers rely on the insurance company's standard offerings as the boilerplate for their own self-insured plans, but most self-insured employers are directly involved with various aspects of plan and network design to closely align their benefits offerings with the needs of their employees and their families.

Regardless of the size of an employer, it is up to an employer and its benefits managers to understand and ask for inclusive coverage, which may require educating an insurer about inclusive plans.

Lifetime Caps for Transgender Benefits

Some of the first businesses to implement inclusive coverage placed a maximum financial amount of insurance coverage available for transgender-specific treatment over an individual's lifetime. Of the 66 CEI-rated businesses that could document that most medically necessary treatments would be covered, only 12 reported a financial cap, ranging from $10,000 to $150,000, with most reporting more than $50,000.

Because they often present significant barriers to care for many transgender individuals, the HRC Foundation strongly discourages businesses from implementing caps specific to transgender benefits, and encourages these businesses to increase or eliminate these caps entirely.

Employers with Transgender-Inclusive Health Insurance Benefits: Lifetime Caps on Benefit, by Size

*One plan is fully-insured (see "Fully-insured vs. Self-insured Employers" above).