With an increasing number of employers turning to self-funded health insurance for their workers, businesses are in need of technology solutions to help them administer health benefits and manage claims. In this article, I will be sharing my thoughts for the 4 main technology requirements for a successful deployment and management of self-funded health plans.
Under the self-funded health insurance model, the employer pays directly out of pocket for an employee’s medical costs — subject to certain limits and conditions — rather than paying premiums to an insurance company.
Some employers prefer self-funding because it is more flexible, allowing coverage to be tailored to the needs of the workforce, unlike a typical one-size-fits-all insurance plan.
In many cases, it can also save money over the fully-funded model in which fixed premiums must be paid to the insurance carrier regardless of the actual claims in a given period. In the self-funded model, the employer maintains control over reserves and reaps the benefits of any savings.
On the flip side, the self-funded model carries a higher risk to the employer, as health costs are unpredictable and may fluctuate widely from year to year. Self-funding also comes with significant administrative responsibilities over benefits, claims, and disputes.
Employer and third-party administrators should aim to use a collaborative platform instead of a single-sided solution. Such platforms allow TPAs to manage coverage and streamline communication directly with healthcare providers and employees. By automating much of the pre-authorization and claims adjudication process, the system helps reduce costs and avoid human errors.
For employees, the platform provides faster claims approval, pre-authorization, and greater transparency when it comes to their benefits. It allows them to locate healthcare providers, submit reimbursement requests, follow up on the status of claims, and be notified when payments are available.
Healthcare providers can use the platform to submit pre-authorization requests and receive instant answers, as well as to update price lists, submit electronic claims and follow up on payment plans.
It offers employers potential cost savings via comparison of healthcare provider price lists, giving better grounds for negotiation to get employees the best care at the best price.
An open API architecture allows simple integration with third-party human resources and accounting systems, and helps employers enroll members in the health plans and remove them.
One of the most important technology features consists of the increased flexibility and control, including the ability to build a personalized coverage plan for each employee and his family, with customizable coverage limits. It gives employees transparency about their benefits, avoiding potential frustration and misunderstandings.
Many enterprises are now planning to offer mobile solutions integrated with wearable devices in order to provide additional services such as health tips and wellness games that encourage users to track their steps, sleep patterns and other lifestyle habits. By promoting better health habits, the system aims to reduce costs in the long run.
CME has been working on a similar comprehensive technology platform that facilitates the management of self-funded plans for employers and employees, third-party administrators and healthcare providers, providing greater ease of administration and potential cost savings. It streamlines the process of healthcare benefits administration, pre-authorization, and claims adjudication for all parties involved and is compliant with all relevant regulations in the markets served.
For employers contemplating a switch to self-funded healthcare or who have already made it, a similar platform provides greater peace of mind and better service to their employees.