3 Steps for Self-Insured Employers to Take to Stay Compliant

What words spring to mind when you think about compliance?

Complex? Scary? Time-consuming?

We know it’s important for self-insurers to stay compliant with healthcare regulations so you can avoid penalties, ensure smooth operations, and keep data secure. But it can also be overwhelming to keep up with requirements.

We’re going to break it down and outline the steps you need to take to stay compliant and be confident that you’re in line with regulations.

 

Step 1: Understand the legal obligations

It’s key that you understand the federal laws and state-specific regulations that are relevant to health insurance.

ERISA

(the Employee Retirement Income Security Act of 1974) regulates coverage for around 139 million Americans. This federal law regulates health plans in private industries to protect individuals.

It requires plans to communicate effectively with employees about their features and funding. It also outlines fiduciary responsibilities for employers and offers employees the right to sue for benefits and breaches of duty.

HIPAA

(the Health Insurance Portability and Accountability Act of 1996) is another important consideration for self-insurers. Most self-insured health plans are subject to HIPAA.

The specific requirements for self-insured health plans depend on factors like the nature of the employer’s business and the size of the business.

HIPAA compliance for most self-funded insurers involves appointing a Privacy or Security Officer to oversee the development, implementation, maintenance of, and adherence to privacy policies and procedures regarding the safe use and handling of protected health information (PHI) in compliance with HIPAA and with any applicable state laws.

They should cover:

• When PHI or ePHI may be used or disclosed
• What workforce members may access PHI or ePHI
• When PHI or ePHI may not be used or disclosed
• The consequences for an employee who violates policies and procedures

ACA

(the Affordable Care Act) includes numerous reforms affecting the health coverage that employers provide to their employees. Many ACA reforms apply to all group health plans, regardless of their method of funding. See here for a full list of the compliance requirements.

How a TPA can help

An expert TPA can advise you on how to keep in line with all the regulatory bodies. They will have systems in place that can guide you, or they will provide you with a dedicated account manager.

 

Step 2: Make sure you have adequate reserves

Maintaining adequate financial reserves for claims is key, as they will act as a safety net for unexpected costs. To determine the amount of reserves needed, a business must take into account the size and demographics of a workforce as well as its overall health status.

Funds will need to be set aside systematically, and purchasing stop-loss insurance is a smart move because it will offer an extra layer of protection.

You’ll need to carry out regular reviews of and adjustments to your financial reserves to make sure they reflect your current situation — and the economic climate in general.

How a TPA can help

A TPA can give you access to data analysis to help inform your decisions. This analysis can be used to forecast potential future claims by assessing current health status, age, lifestyle factors, and other demographics.

 

Step 3: Administer claims fairly and accurately

Handling claims accurately is the cornerstone of effectively managing a self-insured plan. It involves diligent evaluation of each claim, taking into account the specific nuances of every case. This accuracy will help maintain the financial balance of the plan and nurture employees’ trust.

The process must be well documented and transparent, particularly when handling claims disputes. You must also perform regular audits to ensure the system is functioning as it should.

How a TPA can help

TPAs bring a wealth of knowledge and experience in handling and adjudicating claims, ensuring claims are evaluated on accurate and consistent principles. TPAs implement standardized claims-processing protocols that verify consistency and fairness. This process includes a comprehensive review of all claims, applying the same set of criteria in each evaluation.

TPAs also manage claims disputes, with an objective resolution procedure to comply with rules and regulations.

 

Final thoughts

Although the world of compliance is complex for self-insurers, TPAs can be a vital piece of the puzzle. They bring a wealth of experience to the table, giving self-insurers the confidence that they’re following regulations, avoiding penalties, and staying compliant at all times.

A TPA also gives the self-insured employer the gift of time — which, as we all know, is more important than ever these days.