| KEY TERMS YOU SHOULD KNOW
Managed Care Health Insurance plan (MCHIP)
– a health carrier, such as a Health Maintenance Organization
(HMO) or a Preferred Provider Organization (PPO), that designs
arrangements to provide covered services in an efficient and
cost-effective manner, to help control the cost of your coverage.
Group Health Insurance – health insurance
provided by an employer to employees and in some cases family
members, and paid for by the employer, the employees, or both;
coverage may be through an MCHIP or other type of health insurance.
Fully-insured – group health insurance
where an employer pays a premium to an MCHIP or other insurer
and in return, the MCHIP or insurer assumes the financial risk
of paying claims. There is an insurance contract between the
employer and the MCHIP or other insurer.
Self-insured – group coverage where
the employer acts as its own insurer, and uses an MCHIP, “insurer”,
or administrator to administer the plan: establish a provider
network, process claim payments, and conduct other tasks necessary
to run the plan. There is no insurance contract between the
employer and the administrator because the employer bears the
risk for payment of claims.
ERISA – Employee Retirement Income Security
Act that Congress passed in 1974 that provides exclusive federal
jurisdiction over single employer benefit plans, including self-insured
plans.
DOL – U.S. Department of Labor, part
of the federal government and responsible for ensuring employers
comply with ERISA.
To determine if your health care coverage is fully-insured
or self-insured, check with the Benefits Administrator or Plan
Administrator in your employer’s Human Resource office.
You may also find clues in documents provided by the plan in
any language that states the plan is only acting as an administrator
or providing “administrative services only” to the
employer.
Large companies frequently self-insure for a variety of reasons,
including consideration of the costs involved. Some large companies
offer both self-insured and fully-insured coverage, so be sure
to check for your specific coverage.
If you have a dispute with a self-insured plan, state regulatory
agencies like the Bureau of Insurance will not be able to formally
assist you, because ERISA gives the federal government exclusive
regulatory jurisdiction over self-insured plans. Since there
is no insurance contract between the employer and administrator
in a self-insured plan, the Bureau of Insurance cannot intervene
because it only regulates insurance companies. The Bureau of
Insurance does not regulate employers. You can seek assistance
from your employer by contacting the Plan Administrator or Benefit
Administrator. In addition, you can contact the DOL for assistance:
U.S. Department of Labor
Employee Benefits and Security Administration
Washington District Office
1335 East-West Highway, Suite 200
Silver Spring, Maryland 20910
(Phone: 301-713-2000)
(Toll-free: 866-444-EBSA (3272))
(Fax: 301-713-2008)
(Website: www.dol.gov/ebsa)
Self-insured plans also provide a way for individuals covered
under the plan to file appeals through the internal appeal procedure
available with that particular plan.
Along with exemption from regulatory jurisdiction by the Bureau
of Insurance, self-insured plans are exempt from Virginia insurance
laws, including those that pertain to mandated benefits, appeals,
and consumer rights. |
