Self Funded Plans

Medical

Self-funded Health Benefits

Protection, cost control and service traditionally have formed the basis for comparison among insurance alternatives. But when it comes to employee health benefits, continued inflation in medical care costs has redefined these objectives and made them much more difficult to achieve.

Flexibility has become a primary concern as employers strive to meet the needs of today's employees, and many managed care plans fail to provide adequate peace of mind. Today, cost control reflects the ability of a health care plan to effectively manage claims, monitor utilization and track provider performance.

And while good service used to be a measure in the number of days it took to settle a claim, it now requires a total commitment to competitive products, expert claims analysis, state-of-the-art technology, including internet access and, of course, financial integrity.

Current surveys indicate that these changing health care objectives have compelled approximately two-thirds of all U.S. employers to choose partial self-funding to finance the cost of employee health care benefits.

What is stop-loss coverage?

To provide financial security against catastrophic losses, a "cap" or "stop-loss" must be placed on medical expenses regardless of the group size. This "cap" is provided through two different forms of insurance coverage: AGGREGATE EXCESS LOSS COVERAGE and INDIVIDUAL EXCESS LOSS COVERAGE (commonly called "Stop-Loss" insurance).

What is aggregate excess loss coverage?

AGGREGATE EXCESS LOSS provides a financial cap for the group as a whole. Essentially, it stops the entire group's losses at a predetermined dollar limit called the Annual Aggregate Deductible (or Attachment Point).

What is Individual or Specific excess loss coverage?

INDIVIDUAL EXCESS LOSS protects the loss fund from being depleted by large individual claims. It is an individual deductible that caps the losses at a predetermined dollar amount. The Stop-Loss Carrier will reimburse the employer or the plan for covered losses that are paid by the employer or the plan through Intermountain Administrators, which exceed the individual or specific stop loss deductible under the terms as specified in the excess loss contract.

Lower Costs

While most of the savings realized from self-funding is created by enhancements in plan design and claims administration functions, the following cost-saving features also apply:

  • - Premium taxes - usually 2% to 6%, do not apply to self-funded claim funds in most states.
  • - Operating costs generally are lower.
  • - Insurance carrier profits and risk charges often are reduced.
  • - Self-funded programs are regulated by ERISA, eliminating many costly state-mandated benefits.

Self-Funding Adds Flexibility

A careful analysis of your existing plan and financial capabilities will help determine proper levels of coverage, deductibles, coinsurance, cost management and the projected amount of stop loss risk.

The following strategies will encourage employees to choose health care delivery systems which are both medically appropriate and cost conscious.

Cost Management

Pre-admission certification, pre-admission testing, second surgical opinion, concurrent review of hospital stays and large case management can be implemented to monitor the quality and appropriateness of hospital care.

Preferred Provider Organizations (PPOs)

These networks enable community based hospitals and physicians to contract with large purchasers of care on a fee-for-service basis. In order to benefit from negotiated discounts on fees and services, most self-funded plans are designed to encourage use of network providers.

Physician/Hospital Organizations (PHOs)

These organizations bond hospitals and physicians together as cooperative units to contract directly with employers or managed care plans.

Direct Provider Contracting

Sometimes referred to as carve-out plans, these contracts are often negotiated with single vendors for purchase of a specific type of coverage.

Point-of-Service Plans

These plans offer employees the ability to go outside a specific provider network for services, usually with a higher deductible or coinsurance contribution.

Throughout the plan design process, we will work closely with your accountant, legal counsel and financial depository to comply with existing government regulations and applicable bargaining agreements. We will help develop the Plan Document, Summary Plan Descriptions, Identification Cards and Administrative Forms. We also will assist in communicating the new plan to your employees in a variety of media.

This is all part of our customized plan design service which provides valuable coverage and cost control with added flexibility and communication.

Design, administration, compliance assistance

We can assist your company with the design and administration of a Flexible Spending plan that is in full compliance with IRC Section 125. Examples of guidelines to consider:

  • - The plan must be in writing and offer employees a choice of two or more benefits consisting of cash and "qualified" benefits. We can help you design a plan that meets these and all other legal requirements, such as non-discrimination rules.
  • - Current rules provide that employees have access to their maximum Flexible Spending Account contribution at any time during a plan year. All refund requests for medical expenses must be documented in writing.
  • - Both the Internal Revenue Service and the Department of Labor require certain information, including annual information returns.

Accurate & Efficient Plan Management

While information can now be accessed by phone or over the internet, covered employees are never without access to an experienced claims analyst, a person who knows and understands your plan.

More than ever today, our technology makes it easy to verify eligibility, compare current charges to prior history, track provider payments, calculate allowed benefit payments and issue claim checks with supporting explanations.

Quality Assurance & Claims Screening

Our claims analysts use state-of-the-art technology to monitor the eligibility of employees and their dependents. Employee status is updated instantly, including name changes, pre-existing conditions and benefit extensions. Using medical logic technology and a clinical support team of nurses and physicians, we screen medical claims for compliance with currently accepted medical practice standards. In addition, our people coordinate benefits with other plans or plan limitations and follow up immediately when additional data is required.

Financial Control

For self-funded employers, we use our in-house information systems to manage loss funds and checking accounts established to handle claims. We maintain check registers and payment summaries, and can direct billing to any plant or office location. We also complete the necessary federal disclosure forms and provider 1099s.

Information Services

As a fully automated benefits administration firm, we provide self-funded employers with easy access to timely reports on claims experience, provider practices and funding status. Our standard management reports include the following:

  • - benefits analysis report
  • - coverage analysis report
  • - monthly check register
  • - monthly paid claims register
  • - lag study/cash analysis
  • - eligibility listing
  • - 1099s and W-2s
  • - provider payment analysis

We can also provide a wide range of utilization and provider reports. A few which are often requested include the following:

  • - hospital utilization statistics
  • - diagnosis reporting
  • - provider comparison analysis
  • - loss ratio reports
  • - average length of stay (by diagnosis and hospital)
  • - hospital admissions by day
  • - co-payment analysis
  • - attending physician review
  • - length of stay by cause

In addition, we can custom-design reports to help clients analyze plan utilization and managed care savings in further detail. You will receive the information you need to effectively plan and manage costs.

Regulatory Compliance Assistance

Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), employers with 20 or more employees who offer health care benefits are required to let certain persons known as "qualified beneficiaries" continue their health care coverage for specified periods of time.

This law, as updated by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), mandates that as long as covered employees meet certain requirements with regard to waiting periods, they are assured of insurability when they leave their employer and move to another.

Fulfilling these regulatory obligations is critical to controlling overall benefit costs. By combining regulatory knowledge, administrative expertise and state-of-the-art information technology, we currently help many employers comply with the requirements of HIPAA, COBRA and other government mandates.

 

Customized plan design, efficient plan management and state-of-the-art information services. These benefits are added control and flexibility!