Certified Disability Management Specialist (CDMS) Practice Exam 2025 – Comprehensive All-in-One Resource for Exam Success

The term used for employers that take on the financial responsibility for group disability benefit payments is accurately described as "self-insured entities." When employers opt for self-insurance, they set aside funds to pay for disability benefits directly rather than purchasing insurance from an external provider. This approach allows organizations more control over claims and potentially lowers costs over time, as they are not paying premiums to an insurance company.

While "self-funded with internal administration" might suggest a similar concept, it typically emphasizes an administrative aspect that implies the use of internal resources to manage the self-funded program. The broader term, which encompasses both the financial risk and the administrative responsibility, is "self-insured entities." This terminology is widely used in the context of disability management and employee benefits.

Understanding this distinction is crucial, as it highlights the financial and operational aspects of how employers manage disability benefits, affecting not only their financial planning but also their approach to employee health and welfare programs.