Tuesday, June 14, 2016

Employer Self-Insured Health Plans

Self-insured, or self-funded, health plans selected by employers for their employees are an important part of remaining ACA compliant.

What is a self-insured health plan?
In self-insured health plans, the employer assumes the risk (financially) for providing health care benefits to employees. This means the employer would pay out of pocket for each claim as it occurred rather than paying an insurance carrier a fixed premium.

Why would an employer choose self-insured health plans?
There are various reasons for why an employer opts for a self-insured health plan. Some of the most common reasons cited for using self-insured health plans are:
  • Employers can customize the plan to meet workforce-specific health care needs
  • Employers maintain control over the health plan reserves, maximizing interest income
  • Employers don’t have to pre-pay for coverage, providing improved cash flow
  • Self-insured plans are regulated under federal law, so employers aren’t subject to conflicting state health insurance regulations
  • Employers are free to contract with providers (or the provider network) best suited for their individual employees

So does that mean self-insured plans are the best for every employer?
Not necessarily. Self-insured employers assume the risk for paying employee costs for health care claims, which means it must have the resources available for unpredictable financial obligations.

Is there any way for an employer to protect itself against unpredicted claims with self-insured plans?
Yes. Most large and applicable large employers will have sufficient enough reserves to cover practically any health care cost. Other self-insured employers can also purchase stop-loss insurance, which will reimburse them for claims above an agreed upon dollar level.

Are there laws on self-insured health plans with which employers need to comply?
Yes, any federal law applicable to self-insured group health plans must be followed by employers, in addition to state-specific laws that may apply. Federal documents that outline self-insured group health plan compliance include:
  • Age Discrimination in Employment Act (ADEA),
  • Americans with Disabilities Act (ADA),
  • Civil Rights Act,
  • Consolidated Omnibus Budget Reconciliation Act (COBRA),
  • Employee Retirement Income Security Act (ERISA),
  • Health Insurance Portability and Accountability Act (HIPAA),
  • Pregnancy Discrimination Act, and
  • Various budget reconciliation acts, including Tax Equity and Fiscal Responsibility Act (TEFRA), Deficit Reduction Act (DEFRA), and Economic Recovery Tax Act (ERTA).

If you’re ready to report the offers of self-insured coverage you made in 2015, ExpressIRSForms is ready to help you e-file! Just create an account to get started. If you need any assistance, we’re in the office Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT, and are available by chat and phone (704-684-4751). We also provide after-hours email assistance at support@ExpressIRSForms.com.

Looking for something a little less hands on? Check out ExpressACAForms, our full-service ACA e-filing solution.

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