Final answer:
The type of contract under which an insurance carrier works as a third-party claim administrator for a self-funded health plan is known as a service contract.
Step-by-step explanation:
The type of contract under which an insurance carrier works as a third-party claim administrator for a self-funded health plan is known as a service contract. In this arrangement, the insurance carrier provides administrative services to the self-funded health plan, such as processing and paying claims, while the plan bears the financial risk of providing health coverage to its employees.
For example, an insurance carrier may work as a third-party claim administrator for a company's self-funded health plan, handling all the claims processing and reimbursement on behalf of the company.
This type of arrangement allows the self-funded health plan to have control over its benefit design and cost management, while leveraging the expertise and resources of the insurance carrier to administer the plan efficiently.