Letter From the Editor

Government Study Shows Self-Funded Health Plans Are Less Expensive

Employee Benefit Management Services, Inc. (EBMS) 2011 Health & Business Symposium, 7/28/2011, www.EBMS.com

• Adam Russo, Esq., The Phia Group, LLC, 7/28/2011, www.phiagroup.com
• AND Corporation, Study sponsored by the U.S. Department of Labor, RAND Study: Employer Self-Insurance Decisions and the Implications of the Patient Protection and Affordable Care Act as Modified by the Health Care and Education Reconciliation Act of 2010 (ACA)

"Health care reform is making self-funding an increasingly attractive way to insure employee health," says Adam V. Russo, Esq., Co-Founder & CEO, The Phia Group, LLC, "...and the government sponsored the study that proves it!"

Russo proclaimed the good news for self-funding at the annual Employee Benefit Management Services, Inc. (EBMS) 2011 Health & Business Symposium hosted by F. H. (Rick) Larson, Co-CEO and Nicki Larson, Co-CEO, in Billings Montana on July 28th.  The Symposium brought together national thought leaders for an audience of more than 300 individuals from the self-funded community.

Sponsored by the U.S. Department of Labor, The RAND study uses literature review, data analyses, and qualitative methods to identify factors that will influence employers' decisions to self-insure. The RAND COMPARE micro-simulation model is then adapted to estimate how the ACA will influence self-insurance decisions and to predict the share of firms that will self-insure.

"Reform has been imposing costs on insurers that will be passed on to employers," continued Russo, "However, employers that self-fund can escape prescriptive reform mandates and gain flexibility in plan design, thereby avoiding some new costs."

Study findings

• Workers at large employers (200 or more workers), workers in self-insured plans paid statistically significantly lower annual premiums.
• During the latter part of the decade there were larger premium increases for fully-insured plans,
• 35% from 2005 to 2010, versus
• 26% for self-insured plans over the same period
• From 2009 to 2010, average fully-insured premiums increased by $808 while average self-insured premiums increased by $248.80.
• Workers paid a larger share of their family coverage premiums when their plans were fully-insured,
• 36% versus
• 26% for self-insured plans.

"The Study reported very favorable findings for the self-funded community.  In fact, it I were a TPA, I would make of the copy of the study and send it to every prospect I can find," said Russo.  "At large employers, fully-insured plans had higher premiums, faster premium growth, and workers paid a larger share of premiums compared to self-insured plans."

Self-Funding Just as Generous as Fully-Insured Plans

• The study finds no statistically significant differences in plan generosity between self-insured and fully-insured plans.
• Claim denial rates are similar in the two types of products
• There was no perception of a greater conflict of interest in claims adjudication among self-insured than among fully-insured plans

"Interestingly, the study fails to address the fact that a fully-funded insurance carrier not only makes claim payment determinations, but also funds those claims with its own money," adds Russo.  "The study fails to address the fact that the health and wellbeing of the employees has no value to a fully funded insurance carrier." 

About Employee Benefit Management Services, Inc. (EBMS)

EBMS is a Third Party Administrator (TPA), specializing in the management and administration of self-funded, corporate employee benefit plans.  EBMS was founded in 1980 when a local employer needed a claims administrator to accurately adjudicate claims and provide superior service to its covered employees and their dependents. Today, EBMS continues to assist this client and hundreds more in controlling benefit plan costs.  Over the past twenty-five years, EBMS has created a system that provides cost effective plan management through integrated management programs. EBMS integrates each discipline-design, enrollment, claims administration, provider relations, regulatory compliance, consultation, and quality of care - to produce the most cost-efficient benefit administrative services in the marketplace today.  Visit www.EBMS.com

Department of the Month - Case Handlers

We originally received this file with information that stated the member had been injured when he fell through a glass table while at a friend's house.  After investigating the file a bit further, we found out that the injury was actually sustained when he punched his hand through a glass window. 

We were able to narrow down where the incident took place and obtained a copy of the police report.  It was discovered that he was injured after breaking down the door of someone's home, threatening the individual, and then while in a fit of rage, punching his arm through the window as he left.  Because he cut through an artery, charges billed were in excess of $200,000. 

After reviewing the Plan Document, we were able to determine that both the self inflicted and illegal acts exclusion applied to the matter.  The Plan was able to deny over $150,000 in claims and we are currently recovering $38,000 in claims from providers that were paid before accident details were received.

Mattie Sesin

Mattie has been an employee of the Phia Group since 2010.  She was hired to be a part of our Case Handler Department as a Claims Recovery Specialist I.  Since being hired, Mattie has swiftly moved up within the department and is now handling complex cases, dealing directly with attorneys in obtaining reimbursement for our clients. Most recently, Mattie was awarded our "Employee of the Quarter" honor for her hard work and for excelling at her position.  

Mattie received a bachelor's degree from Roger Williams University in Communications in 2004 and received her paralegal certificate from Bridgewater State College in 2009.

Mattie lives locally and enjoys spending time hiking and traveling with her husband and two dogs Fred and Bella.