At Maple Brooks Benefits & Consulting we are passionate about health plan transparency. Self-funding allows enterprises to pinpoint challenges and look for full transparency in health plan pricing. It allows for plan design changes to serve your population and mitigate against health plan spend abuse. Which is regulated by ERISA.
By self-funding healthcare plans, small firms can derive five main regulatory benefits:
- Self-funded plans are not subject to the essential health benefit requirements of the ACA, which stipulate minimum coverage for healthcare plans sold by insurers to small firms with less than 50 FTEs in 2017, to be extended to small firms with 50 to 100 FTEs in 2016. Such minimum coverage includes maternity care, mental health and preventative services.
- Self-funded plans are not subject to the community rating requirements that ACA applies now to small firms with less than 50 FTEs and in 2016 to Small Firms with 50 to 100 FTEs. These requirements severely restrict how much insurers may vary premiums based on health factors like age and smoking status.
- Self-funded plans are not subject to medical loss ratio requirements, which apply to traditional policies issued by healthcare insurers. These requirements mandate that at least 80% of premiums received by the insurer be spent on healthcare activities, as distinct from administrative functions.
- Self-funded plans escape the health insurance tax mandated by the ACA on most healthcare premiums paid to traditional insurers. In 2017, this federal tax amounted to 2% of such premiums.
- Self-funded plans also escape the state taxes on healthcare premiums paid to third party insurers. In 2017, these state taxes amounted to roughly 1.75% of such premiums.
As experts in self-funded we explore alternative funding mechanisms for our clients. Here are a few items we review:
- Transparency in medical claims
- Direct contracts with facilities
- Benchmarking to show average medical procedure pricing
- Repricing of claims and comparing networks