Fully Insured vs Self-Funded: A Clue to Your Appeal Process
Funding status can affect which rules and agencies are involved, but it does not identify the filing destination or deadline by itself. Confirm both in your plan documents and denial notice.
Two arrangements that look identical
In a fully insured plan, your employer pays premiums to an insurance company, and that company carries the risk and pays claims from its own funds. State insurance law applies.
In a self-funded plan, your employer pays claims out of its own money. It usually hires an insurance company to administer the plan — process claims, run the network, print the cards — but the money is the employer's. Many private-employer self-funded plans are governed primarily by ERISA, while other arrangements can follow different requirements.
Here is the trap: in both cases your card may say the same insurer, the network is the same, and the customer service line is the same. From the outside they are indistinguishable.
Why it changes your rights
State legislatures have built consumer protections on top of the federal floor. Some states run their own external review programs with their own timelines and their own regulators. Those protections apply to fully insured plans in that state.
For many ERISA self-funded plans, state insurance mandates do not govern the plan in the same way they govern an insurance policy. That does not mean this page can choose the external review route: the plan and final denial notice must identify the process available for the claim.
Appeal and external review requirements vary with the coverage and claim. What matters in practice is the process, timeline, and contact information stated in the governing documents.
The practical consequence
Sending an external review request to the wrong place does not just fail. It burns time inside a window that is running, and appeal windows do not pause while your paperwork sits at the wrong agency.
This is also why a state-by-state deadline table taken at face value can hurt you. Location and funding status are clues, not substitutes for the instructions issued for the particular claim.
How to find out in one call
The fastest route is a single question to your HR or benefits department: does the insurance company pay our claims, or does the company pay them? Benefits staff know this immediately.
If you would rather not ask, check your Summary Plan Description. Self-funded plans commonly state it directly — language along the lines of the plan being self-funded, or not being an insurance policy. A fully insured plan is issued as a policy by a licensed carrier.
Your denial letter may also name the process and the agency that oversees it, which tells you the same thing indirectly.
A rough prior, while you find out
Self-funding is common among large employers and unusual among small ones. If you work somewhere with thousands of employees, self-funded is the more likely answer. If you buy your own coverage on the individual market, it is generally an insurance policy. Treat both observations as starting points to verify, not rules for choosing where to file.
But treat that as a guess to check, not an answer to act on. The cost of being wrong is a missed deadline.