Many tribes have implemented self-insured medical plans, an insurance arrangement in which an employer assumes the financial risk for providing health care benefits to its employees. This allows tribes to provide medical coverage for their employees and tribal members as a way to save costs, typically at savings rates of 10%–11%.

Self-insured plans, however, can require constant monitoring to reduce risks and allow tribal employees and members to receive the highest level of benefits. Following is an overview of steps you can take to make sure your tribe’s self-insured plan operates as effectively as possible.

Manage Your Broker

Your broker should constantly evaluate the costs of your self-insured plan to verify you’re charging employees appropriately. If you contact your broker to discuss your plan, they should, at a minimum, inform you of important trends, the ratio of in-network and out-of-network costs, and any anomalies that may impact costs.

Your broker should then recommend plan adjustments to deliver the benefits you’ve prioritized and evaluate the third-party administrator (TPA) that operates the plan.

If you’re not in contact with your broker often, it’s helpful to ask about observations they’ve made when monitoring the plan. If you’re a newly self-insured employer, keep in mind a good broker should proactively contact you to address these issues. If you’re not currently receiving this assistance, you may want to consider changing brokers.

Conduct TPA Oversight

Partnering with a TPA to delegate the claims processing and customer service functions of your benefit plan can be beneficial, helping you save resources and time. However, TPAs are typically more focused on regulatory and compliance issues rather than maintaining financial accountability and correcting any potential errors that can arise in claims processing.

It’s important to know if employees are complaining about the level of assistance they’re receiving from the TPA’s customer service help line or if the TPA urgently requests payments on the next check run for medical claims. These are often red flags and indicative of larger problems with the TPA.

TPA Accountability

Agreed performance standards are typically put in place with the TPA’s contract to guarantee the TPA meets specific metrics when performing their duties.

These can include meeting certain performance level rates for necessities, such as claims payment financial accuracy, processing accuracy, and customer service phone call response time.

Perform Internal Reviews

After being self-insured for a period of time, your human resources (HR) department should be knowledgeable on the plan’s claims and administrative costs, benefits provided to employees and tribal members, and premiums earned. Your tribe might save costs, but you must also determine if your employees and tribal members are satisfied with the plan.  Also, it’s important to ask if your plan has the correct stop loss thresholds for reinsurance to protect against large, unexpected claims.

The HR department should be able to answer these questions and have evidence to back up their logic. Speaking internally with the HR department can help your self-insured plan function as efficiently as possible.

Conduct External Claims Reviews

If you’re not sure if your broker, TPA, or even your own internal departments are appropriately managing your self-insured benefit plan, consider conducting an external claims review.

These reviews can help identify any payment errors or inconsistencies and indicate areas for improvement in your self-insured plans. External claims reviews can typically discover claims processing errors of approximately 1%–3% of total claims expenses for any given period of time. 

Audit provisions should also be included under the administrative services agreement with your TPA. If you’re not periodically evaluating your TPA with a claims review, you won’t know if they’re meeting standard industry practices for processing accuracy, which can result in unnecessary costs directly impacting your medical plan.

If performance guarantees have been put in place, an external review can be the most effective and reliable means for objectively measuring the outlined benchmarks.

We’re Here to Help

To perform external claims reviews or evaluate your self-insurance program to determine if it’s operating at its top potential, contact your Moss Adams professional.