Certified Revenue Cycle Representative (CRCR) Practice Exam

Who are typically self-insured?

1. Small businesses

2. Large employers who assume risks for healthcare costs

3. Government agencies

4. Insurance companies

The correct answer is: Large employers who assume risks for healthcare costs

Large employers who assume risks for healthcare costs are typically self-insured because they have the financial resources and risk tolerance necessary to manage their own employee healthcare expenses. Self-insurance allows these employers to pay for healthcare claims directly instead of purchasing a traditional health insurance policy. This model often results in cost savings because the employer may avoid paying premiums to insurance companies, and they also gain greater control over healthcare spending and benefits management. In addition to potential financial advantages, large employers generally have access to more data and resources that enable them to effectively manage their health plans, including the ability to analyze healthcare usage and implement wellness programs. This approach is less common among smaller businesses, government entities, and insurance companies, which usually seek to minimize risk through third-party insurance mechanisms.