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  • As a small business owner, you probably rely on the services of other organizations to accomplish a range of tasks, services and other duties. Your health insurance broker or policy provider is one you expect has your best interest in mind. The reality is, they may not, especially when it comes to premium and individual claim costs.

    With all your other responsibilities, you don’t have time to keep tabs on everything your health insurer does, however, there are some key questions you need to ask in order to effectively evaluate just how much they are working for you:

    What does the plan cover? 

    Many health insurance providers add in coverage for care you and your employees may never need. By providing an everything-but-the-kitchen-sink plan, insurers are able to increase the overall cost of the policy, meaning you and your employees are paying for benefits that don’t match their needs. Alternatively, using a third-party administrator (TPA) can help you secure group coverage that fits the needs of your employees, which can help you keep your healthcare-related costs down.

    How do you negotiate costs? 

    Healthcare is expensive. While some insurance companies claim to negotiate lower costs on your employees’ claims, they are not revealing the entire truth. The discounts are taken from the astronomically expensive costs doled out by the hospital or physician’s office. With a TPA and other services, there are many other ways to negotiate costs.   Multiple negotiation strategies keeps claims in line with more realistic pricing. 

    How do you audit medical bills? 

    Health insurance companies have little transparency when the final bill for medical care comes in for a claim. Generally, they do not ask for details related to costs or challenge prices. Instead, they pay their portion and turn the balance over to your employee. TPAs have the resources and knowledge to help your employee check each bill to ensure there is no double billing for equipment or health care services. They will challenge prices for services that are beyond “reasonable and customary,” substantially reducing patient bills and keeping your costs related to medical claims down.

    What type of customer service do you offer?

    With most insurance companies, you and your employees are a number in a huge system. You are at the mercy of the representative who takes your call when you have a question about your policy or have an issue with a claim. Navigating through red tape and other administrative obstacles can be frustrating and can lead to paying for unnecessary expenses. With a self-insured health plan managed by a TPA, each person’s needs can still be handled with personalized customer service to ensure issues are resolved and costs are minimized.

    Asking these questions of your health insurance carrier or broker can expose issues you may not have known existed. With a self-insured plan managed by a third-party administrator like GMS, you have more control over the type of insurance you need. Ultimately, this can cut your healthcare costs and enable you to provide better, more customized coverage for your employees and their dependents.

  • Maneuvering through federal rules and tax regulations has never been an easy task, especially when you are simultaneously trying to grow your business. The Affordable Care Act makes those waters murkier to navigate with the various stages of implementation and rules for different sized companies. 

    As a small or medium sized business owner, there are some significant dates to keep in mind in 2014 as the Affordable Care Act begins to take effect. 

     

    January 2014

    • The Health Insurance Marketplace coverage begins January 1, 2014
    • The tax credit for small business will only be available if you buy coverage through the Small Business Health Options Program (SHOP) Exchange
    • The tax credit can be as much as 50% of your contribution toward health insurance premiums
    • Individuals who are eligible for employer-provided health coverage will not have to wait more than 90 days to begin coverage
    • The Transitional Reinsurance Program begins and runs through 2016. This program reimburses insurers in the individual insurance marketplaces for high claims costs.  The program is funded through fees which will be paid by employers (for self-insured plans) and insurers (for insured plans)
    • The maximum reward to employers using a health-contingent wellness program will increase from 20% to 30% of the cost of health coverage. Programs designed to prevent or reduce tobacco use could increase to as much as 50 %. 
    • Those with pre-existing conditions cannot be denied health coverage
    • Medicaid coverage is expanding in many states
    • Small businesses with fewer than 25 full-time employees making an average of about $50,000 a year or less may quality for employer health care tax credits
    • Individuals without health care will be charged a fee based on household income or on a per person basis

     

    March 2014

    • Open enrollment for health insurance marketplace ends

     

    October 2014

    • Open enrollment begins again

     

    If you are not yet sure how the changes brought on the Affordable Care Act will impact your business, or if you’re considering making major changes to your employees’ health plans (including eliminating it altogether) to combat rising group premiums, contact us today. We provide solutions that enable you to provide quality health insurance to your employees while limiting increases to your healthcare costs.

  • Escalating costs of healthcare and benefits have led business owners across the country to seek out a solution that makes the most sense for their company. Of the many options out there, self-funded health insurance has become a realistic opportunity for many small businesses thanks to third-party administrators.

    These organizations, also known as TPAs, allow business owners to take advantage of self-funding, which can provide a “greater level of flexibility that comes with being able to tailor the plan to their needs,” according to the Society for Human Resource Management. The self-funding process can be complicated, but a good TPA can simplify the process so that employers can reap the benefits of self-funded insurance without having to deal with the risks of managing it themselves.

    Image of a third-party administrator for a small business.

    How Does the TPA Process Work?

    While some people refer to TPAs as “claims payers,” the role a TPA plays is much more intricate than that. Let’s start by imagining that your business is going from a fully-insured carrier to become self-funded. In this instance, the business owner is  now the plan fiduciary, which just means that they are financially responsible for the plan.

    Since you’re now self-funded, there’s no insurance company anymore, and you rent what is called a PPO network. For example, GMS primarily works with Cigna. These networks have a long list of providers and hospitals in their network and negotiate discounts with each of these groups. You then pay your network a set cost per employee, per month so that they have access to these discounts.

    This is where the “claims payer” name comes into play. When members of your plan go out and generate insurance claims, those claims go directly to your TPA. The TPA then administers these claims to tell providers who’s eligible on the plan, processes them, and bills the client for monthly fees and the amount of money that needs to be paid to these providers.

    Do I Need a TPA if I want Self-Funded Insurance?

    Absolutely. While a Google-sized company can afford to have an in-house TPA, normal businesses with fewer than 5,000 employees won’t have the infrastructure to comply with all the regulations and make it financially feasible. A TPA gives you access to a team of people who can handle the day-in, day-out needs of self-funding, which can range from daily electronic filings of plan eligibility to a pharmacy benefits manager who deals with every prescription one of your members has filled.

    There are also the potential financial ramifications of managing self-funded insurance in-house. The right TPA can offer you stop loss insurance to mitigate your liability. As GMS’ Costas Reamensnyder points out, a self-funded health insurance plan allows you to “pay only for actual claims; not the total expected claim level from a fully insured carrier.” This means your plan can save a substantial amount of money each year. . A TPA can help you set a cap for maximum liability, which means that you can properly budget for your plan and cover yourself from unforeseeable circumstances.  This maximum liability is provided by adding a stop loss insurance policy. It essentially mitigates your financial liability by limiting the plan’s maximum exposure.

    The PEO TPA Connection

    If interested in self-funding your health insurance, GMS can help. As a Professional Employer Organization, we can help business owners in a variety of ways, including our TPA services. Contact GMS today to talk to one of our experts about self-funded health insurance for your business.