SELF-FUNDED INSURANCE POLICY

A special thanks to D.N. of Myerstown, Pennsylvania for the suggestion and E.F. from Mechanicsburg, Pennsylvania for this ‘Notes on Insurance’ question and remark (initials changed for confidentiality).  Saturday, July 5, 2003

What is a Self-Funded Insurance Policy? 

A Self-Funded Insurance Policy is the employer funds the plan and the health insurance simply administers the edicts/wishes of the employer.  This also means that if you are in a self-funded plan, you do not have the option of appealing to the state level (refer below). 

Typically, some type of appeal process is in place.  When I began my appeal, there were three levels:  

Ø  A written letter to the health insurance company requesting that my denial be overturned.  A lot of supporting evidence accompanied this letter explaining the procedure and why it was a more viable option than major surgery, etc.   

Ø  The second level was a hearing with the health insurance company that included a doctor and registered nurse, both employed by the health insurance company, plus an 'un-partial' participant who is covered by the same health insurance company as I am.  

Ø  The third level was a letter to my parent company providing all of the background leading up to that level of the appeal.  When my appeal was approved, my company notified the health insurance company to cover the procedure as they would any other 'out of network' coverage.  This meant that I was reimbursed a lesser amount of the total bill versus what I would have been reimbursed had the procedure been done ‘within the network’. 

Please refer to the ‘Doctor’s Section’ pre-certification process.

Viewpoint of a Self-fund Insurance Designer (E-mail Saturday, May 15, 2004)

Dear Hope: 

I happened to see your article on the Internet this evening and thought I would write a short note.  Not all self-funded plans are alike.  I have been designing them for over 20 years and have had very happy clients as well as insured's.  The real goal of a self-funded plan is to build benefits that fit the majority of the participants while recognizing there will be times when treatments, procedures, diagnosis, etc may fall outside the stated benefits.  A good self-funded plan will take into account the spirit of the benefits and not just the clearly stated ones.

In California, most jurisdictions will look at Insurance Code, ERISA regulations and make determinations based on both.  Some states only recognize the federal guidelines set out in ERISA.  I believe that was one of your points.  It is too bad that your procedure was paid as out of network.  When we (our clients) have situations like this one, we try to educate the insured as to understand that non-covered benefits will be paid if approved through appeal as out of network.  You already know this.  What you may not know is that if you know in advance you may have a special need not available in network, many providers can be persuaded to accept what the insurance company/TPA is going to pay.  We just have to push the providers a little, offer them payment in short order and move on down the road. 

Your article really hits the target when you say be persistent.  It works!  Good luck with your website.   (M. N. - initials changed)

Dr. Indman’s viewpoint to the above e-mail:

“Yes you can ask for out of network benefits, and as long as there is nobody in the network that says they can do a procedure it may be approved.  The problem is as long is there is one doctor that says they can do a procedure, it doesn't matter whether or not they have a skill.  Once in a while it may be approved." 

STATE HEALTH CARE UNIT

Some states may have a Health Care Unit in place to handle insurance complaints.  The following is one of the states that have such a unit in place. Refer to "Insurance".

Ø   Pennsylvania Health Care Unit: Online Health Care Complaint Form 1-877-888-4877, printable PDF Health Care Complaint Form at http://www.attorneygeneral.gov/ppd/health/index.cfm, e-mail healthcare@attorneygeneral.gov, web site at www.attorneygeneral.gov/.

Personal Appeal Letter | Back to Notes On Insurance
Insurance | Insurance - States