How are reimbursements handled in a self-funded insurance plan?

[Guest Tara Curran]

A company has a self-funded insurance plan with annual premiums of $108,000 and annual administrative expenses of $60,000. The plan has received reimbursement of claims from secondary insurance and doesn't know how to treat these funds. Can the plan keep these reimbursements to cover future medical claims? Or does the plan have to refund the money to the company?

[KIP KRAUS]

Tara:

You are making us do some assuming here.

1. Can we assume that the $108,000 is stop-loss premium?

2. Can we assume that by saying the plan recieved reimbursement from a secondary insurer it is a coordination of benefits issue, or is it reimbursement from the stop-loss insurance? If it's from the stop-loss insurer, I would assume that the plan is being reimbursed because it paid claims above the stop-loss limit. In which case the money would go back into general assets, again assuming that claims are paid from general assets.

Maybe you could clarify the situation more.

[Lisa Hand]

Tara: To get more responses, you might want to post this question on the Health Plan work group.

[KIP KRAUS]

I give up Lisa. What's Health Plan work group?

[Lisa Hand]

Kip: I guess I've been doing this too long and got my semantics confused, at one point these "benefits boards" were called "work groups". There is a benefits board called "Health Plans" which obviously would be more helpful to Tara than the Section 125 Cafeteria Plans.