Carve-Out

What is Carve-Out?

A carve-out is an arrangement in which a specific component of an employee benefits plan is separated from the main plan and managed by a specialist provider. Common carve-outs include mental health and substance abuse services, pharmacy benefits, dental coverage, and disease management programmes. Employers use carve-outs to access specialised expertise, improve quality of care in specific areas, or reduce costs. While carve-outs can deliver targeted improvements, they require coordination between providers to ensure a seamless experience for employees.