Shifting to Self Insured Plans

Lori B

Hi

We are fully insured and contemplating a shift to a self insured health plan. We have about 450 ees in 20 different states so we would need a top notch TPA. I'd be curious to hear your experiences, positive and negative, if you have made a similar move. I'd like to know the right sorts of questions to ask going in. All tips and comments are welcome. Thanks.

ritaanz

One company I worked for had gone to a self funded plan several years ago. To keep the monthly payments level, we arranged a "minimium premium payment plan". This way the cost to the company was the same each month regardless of the usage of the plan. The thinking was that over time it would even out. Some months had less uaage than others. In addition to hiring the services of a TPA, we needed to purchased stop loss insurance. This protected the company from huge claims due to a catastrophic illness.

One of the problems we experienced was when we decided to terminate the plan. Since there is a lag in the processing of claims, we needed to fund the "run out". Basically we needed to put up approximately 3 months of premiums to ensure the claims that were incurred up to the termination date would be paid.

Self funding is a big topic. I have just touched the tip. Hope this helps.

Janet

The company I'm with has been self-funded for years. We also have EE's in several states. The biggest problem we run into is finding a network to cover multiple states. (We prefer to stay with a minimum of networks for adminstrative ease.) Often the networks that cover many states have weak spots somewhere.
Regarding TPA's, the ticket is to find one that has its act together. They all put on good sales pitches, but ultimately the TPA will determine how much added work and frustration there will be for your benefits person. Good luck!

B_Jackson

As a self funded plan, it is important to have discount networks for all needs, and it may be difficult to have acceptance in several different states or locale unless the TPA is a nationally known entity. Quite often the employee may be out out of pocket cost and need reimbursement as a result of your plan not being accepted. Finding the right network is crucial.

Cheryl S SPHR

We went to self-funding several years ago and purchased both specific and aggregate stop-loss insurance. I am not convinced this has saved us much, if anything. In fact, I am going to suggest we get a quote for full funding to see if we would be better off.

One of the BIG things looming on the horizon for employers with self-funded plans are the privacy requirements going into effect next April under HIPAA. For self-funded plans, it is up to the employer to comply, rather than the TPA as the employer is considered the plan administrator. Be sure you understand what you will be required to do under HIPAA if you head in this direction.

Good luck!