Employer-sponsored insurance (ESI) is group health insurance offered by an organization to its employees as well as to the spouses and dependents of employees. ESI is group insurance inasmuch as the health plan covers more than one individual, and this group status also affects the laws and regulations that apply to the insurance. ESI may be fully insured or self-insured. In the fully insured insurance model, the employer pays a third-party insurance company to assume the obligation of paying medical claims under the terms of the insurance plan. The self-insured model, in contrast, has an employer retain the legal and financial responsibility for paying these claims.
More Americans have health benefits through ESI than any other single form of insurance. Under the Affordable Care Act, employers who have 50 or more full-time equivalent employees must offer health insurance coverage to their workers meeting minimum coverage requirements specified under this law.
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