What type of insurance coverage allows large employers to assume the financial risk for providing health care benefits?

The selected answer is appropriate because a self-insured employer-sponsored group health plan is a type of health insurance arrangement in which large employers take on the financial risk of providing health care benefits directly to their employees rather than purchasing insurance from an external insurance carrier. By opting for a self-insured plan, employers can benefit from greater flexibility in designing their health insurance policies, as well as potential cost savings by avoiding premium payments to insurance companies.

In a self-insured model, employers typically cover the costs of their employees' medical claims directly, setting aside funds to cover these expenses. They may also engage third-party administrators to manage claims and network arrangements effectively. This option is particularly common among larger employers with the financial resources to absorb the associated risks and costs.

Other options present different health care financing structures that do not involve employers directly assuming financial risks in this way. For instance, a consumer-driven health plan emphasizes health savings accounts and consumer choice, while a single-payer plan and socialized medicine represent government-funded health care models where the government, rather than employers, bears the costs. Thus, the distinction lies in who assumes the financial responsibility for health care benefits, which is clearly defined by the self-insured employer-sponsored group health plan.