Employees love it...Benefits Administrator hates it!

[Sheila K]

As the end of a plan year approaches, we are trying to decide whether or not to leave our current medical provider. Our employees seem to have their claims paid quickly and the variety of docs is sufficient to serve their needs. Our claim experience is quite high, we're self-funded and based on our (potentially) new broker, no one else wants us at the price we've been paying.

So, the problem is that our plan has been an administrative nightmare. Billings have been wrong every month. Employees are dropped and added without our approval. People who have never been employed here have appeared on our billings. In the past 4 months, we have received premium refunds which neither we nor the ins. company can substantiate! The company also has exhibited very poor customer service to our benefits administrator, sending incorrect information, etc.

The head of the HR department has said that if the employees are happy, we should just stick with the ins. co. and try to figure out a way to deal with the administrative nightmares...

The benefit administrator wants to wash her hands of this company and do whatever it takes to get our business moved elsewhere...

*How do you all weigh these kinds of concerns?

*Any advise for dealing with a really messed up ins. co. staff?

*Any recommendations for ins companies that are willing to look at a 200+ group with high claim experience?

Thanks so much!

Sheila K

[KIP KRAUS]

Sheila:

Without knowing to what degree you are self-insured and what the financial arrangement is with your current insurer it's difficult to make any solid suggestions. However,I would suggest that if you are heavely self-insured you may want to look at using a TPA and purchasing stop loss on your own.

As for the insurer, it sounds like you must be dealing "Six Gun of Texas", don't get mad Texans,it's just a joke. Some insurers don't ever get it right. I've seen it happen far too often, and once it get started it seems to snowball. Try getting together with the insurer and matching data runs of active employees to see what the errors are, and what controls they have to insure the right people are enrolled in your plan.

Maybe if you can let us know more about your financial arrangement we can better help you. If you don't want to put it here, feel free to e-mail me and I will be glad to share my thoughts.

[Guest Tamre]

Why not ask the insurer if you can self bill. It is a simple way to pay for only those employees current on your roster. Most insurers like self billing cause it saves them money on personnel, benefit administrators love it cause they have full control.

[KIP KRAUS]

I agree with Tamre on the self billing. However, that will not necessarily eleviate the problem of non-employees showing up as covered and insure that covered employees are put into the system correctly. I would ask to audit how they put covered employees into the system to see what their checks and balances are.

[Guest ScottN]

Sheila,

It sounds like you are partially self-funded through a "bundled plan" with an insurance company. Have you explored contracting with a TPA and obtaining reinsurance contracts either through the TPA or a broker?

Depending on the network you have, you may be able to contract with the network and continue to use them which will help keep your employees happy. You will also get much better claims reporting (at least that's what we have seen) from a TPA rather than an insurance company.

Claims payment from a TPA tends to be rather quick as well since they are spending the plan's money rather than their own.

If you decide to stay with the company you are currently using set up a meeting with your broker and the insurance company's marketing rep and service rep. Tell them you understand they don't have rocket scientists in customer service and billing positions but they need to pay some attention to your account now.

Billing seems to be a real problem with carriers right now. I have rebuilt bills for 3 clients and taken them to the carrier to resolve the issues. It's a pain but once they get it cleaned up, future billing can be a lot easier to keep clean.

[Guest ronc]

Have you considered using performance guarantees with your vendor?

[Larry M]

You say "Our claim experience is quite high".

My response is "why?" Your comment raises a lot of questions, including:

Does your company feel it is important to pay every medical bill an employee incurs? Does it enjoy spending money that way?

In addition to correcting some of the administrative problems you mention, there is a much more expensive concern - the high cost of claims.

Is there something about the makeup of your employees which makes them either sicker than other companies' employees or more prone to use certain benefits in your plan?

Does your company's work situation encourage people to go to the doctor for relief?

Is there something in the design of your plan or employee benefits programs which encourages employees and their dependents to use the plan's benefits? or to use more costly (to the employer) services because it doesn't cost the employee anything?

Is the claim administrator paying claims without regard to their being necessary or reasonable?

Before you shop for a new carrier or claims administrator, you should find out why claims are high and then what you can do to correct that situation.

Whether a plan is self funded or insured or a combination of those two, the ultimate cost is equal to the amount of benefits paid plus the cost of administration (offset by any investment earnings)

Since claims should be the major portion of the cost (by far) it behooves you to make sure your plan's design is not responsible for the high claim experience for which your company is paying a heavy price.