The bill would exclude medical stop-loss for a self-insured
health plan from the definitions of "health insurance coverage" given in one section of the Employee Retirement Income Security Act of 1974, in one section the Public Health Service Act, and in one section of the Internal Revenue Code.
Employers with self-insured
plans can use Employee Retirement Income Security Act rules and interpretations that exempt self-insured
plans from state health benefits mandates.
But broker David Contorno, president and CEO of Lake Norman Benefits, says that with the proper mix of insurance and stop-loss to protect the employer, self-insured
options can work for almost any company.
Deep knowledge of a self-insured
health plan involves a full understanding of the scope of financial obligations, the opportunities to safeguard against catastrophic health events, and other techniques that can lower healthcare costs.
In 2011, 59 percent of workers with health coverage were in self-insured
plans, up from 41 percent in 1998, the report finds.
employers who select both the network and formulary options can save up to 20% of the average annual prescription price, so that a self-insured
employer with 1,000 employees could save as much as $400,000 per year.
Now, in 2008, the board, until it can find a way for the employers in those self-insured
groups to collectively foot the bill, has had to set aside $66 million to cover the claims of employees whose employers formed the failed groups--"an amount many times greater than that needed in the past," according to a regulatory impact statement the board released over the summer.
The scorecard for the trusts' financial strength has reached a new low, based upon the New York State Workers' Compensation Board (NYWCB) Group Self-Insured
Trusts Report dated March 28, 2008.
In this article, the first in a three-part series, experts experienced in self-insured
group formation and management offer their insights on how to establish a successful self-insured
group, and simultaneously, avoid the governmental clutter, pitfalls and headaches along the way.
The advantages of accepting increased self-insured
retentions go beyond the annual savings.
A third advantage cited by Porat is that insurance premiums may be paid when the firm is profitable and subject to maximum tax rates, while the self-insured
loss may occur when the firm is unprofitable and subject to lower tax rates (or no tax rate at all).
It will also do nothing for self-insured
employers - some of California's largest businesses as well as local government agencies - that don't purchase insurance for workers' compensation.
Agents and brokers who sell unlicensed health plans to self-insured
employers face the prospect of being liable for unpaid medical claims, losing their state insurance license and serving time in prison.
Note: This is the first article in a three-part series on self-insured
There are approximately 48 million Americans covered under self-insured
plans in which the employer assumes the risk for the coverage.