Self Funded & Government Funded Health Insurance Plans
Part 1: The Basic Tools, Chapter 1: The Health Insurance Maze Page 3
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However, self-funded plans -- plans sponsored by a corporation, an association, a union, or a state or municipal government agency -- are generally exempt from state regulations related to benefits. Instead, such plans are governed by rules established by ERISA (the federal Employee Retirement In come Security Act), a federal law, and are regulated through the Pension and Welfare Benefits Administration of the United States Department of Labor.
At this point, there are so many government-sponsored programs, private health insurance plans, and insurance-related laws and regulations on both the state and federal level, that the current health insurance maze is almost impenetrable. Just trying to identify the existing programs, the laws and regulations under which they are governed, and the agencies in charge of designing and implementing those regulations can be a challenge (See Table 1).
To make matters even more confusing, a number of health insurance companies seem to have recently begun a process of mergers, purchases, and subcontracting of benefits that's become so extensive that in some cases it's difficult to figure out who the insurer or administrator of a health insurance plan really is. I recently called a health insurance company, for example, to determine why a claim for physical therapy had not been paid. I discovered that claim-related decisions were being handled by a new company, formed as a result of a recent merger.
I called the new company, only to be informed that claims for physical therapy had been subcontracted to a separate company. When I called that company a few weeks later, I was informed that the company had just been purchased by a larger company and that all inquiries about policy now needed to be directed to that new company.
The health insurance maze is difficult enough for profes sionals to deal with. However, what makes the situation worse is that the current system of health insurance claim-filing and claim-processing involves the consumer directly. And unlike professionals, consumers have no training in claim-filing or claim-processing.
At this point, in addition to filling out forms for a primary insurer, photocopying bills, mailing claims, filling out secondary insurance forms, and keeping records, consumers often have to deal directly with claim-processing problems. For example, when a claim is denied, a consumer generally needs to try to figure out why the claim denial occurred. That's often difficult, since insurers are not always specific as to the reasons for a claim denial.
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