A self-fund scheme is whereby the client deposits a specified amount of money with APA Insurance. Any medical claims arising are settled from these funds.
The rules of administration of these funds are drawn by the client and these rules are usually in line with the client’s terms of employment.
APA will vet all claims before settling and if any clarifications are required, the claims are referred back to the company. In all other cases the bills are processed and payment cheques issued within the agreed period.
Self-funded schemes are ideal for large corporates where the terms of employment offers a liberal medical cover. The scheme offers complete flexibility and is not governed by the usual rules and principles of insurance. Since it is managed by the insurance company, there is no need for separate department to monitor the utilisation.
The disadvantages with the Scheme is that the corporate becomes the risk bearer and in serious illnesses requiring long hospital stays or epidemics, the fund allotted may outstrip the budgeted amount. The flexibility in the scheme could also be misused.
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