What Is a MagnaCare Health Plan?
A MagnaCare health plan is a type of health insurance plan overseen by MagnaCare in which a corporation chooses to pay most employee health claims themselves instead of signing up with an insurance company, according to MagnaCare. MagnaCare health plans use a self-insured model, allowing companies the freedom to choose what to cover and how to cover it. MagnaCare plans are available in New York and New Jersey and usually include a wellness component to reduce health care costs.
With traditional fully insured health plans, an employer pays insurance premiums to an insurance company that pays health care claims as outlined in the health plan, states Zane Benefits. With a self-insured plan, such as MagnaCare, the employer instead pays an administrative fee to the overseeing organization and then the actual health claims covered by the plan. Most self-insured plans also include a fee for stop-loss insurance coverage, which pays large claims over a certain amount.
MagnaCare works with employers to custom design plans that bring together self-insurance components, multi-company self-insurance options, traditional insurance for catastrophic situations, workers' compensation and health management tools, maintains MagnaCare. The advantage of self-insured health plans is a reduced cost for the employer, according to Becker's Hospital Review. Disadvantages include the possibility of large expenses for catastrophic claims, especially for small companies. Stop-loss insurance policies and multi-company self-insurance programs help minimize these risks.