I work for a large company with a presence in most US states and many foreign countries. My employer is self-insured, with the (American) health plan administered by Cigna. Our insurance cards, claims and EOBs are issued by ‘Cigna, as administrator for __________’.
I am familiar with the difference between self-insured and full-insured approaches for health coverage.
My question is: do (typically larger) companies that choose this option process and pay each and every claim individually? So, for example, I see the doctor, who bills Cigna. Cigna pays the provider and then bills my employer for reimbursement of what was covered by the plan? As a result, the cost of this coverage to the employer would vary each year, depending on how its employees use their benefits.
OR, do these employers negotiate with large health insurers and use some sort of algorithm to estimate what costs will be and then sign a contract, paying a set rate in advance? This scenario would mean that the insurance company acting as the administrator could either make or lose money, based on how their customers’ employees used their health insurance through the duration of their agreement with an employer.
If self-insured companies do truly process and pay each individual claim for covered healthcare services of their employees and their dependants, there would certainly be a way for them to evaluate which employees only cost them a little bit of money (young, healthy, single people who go to their GP once a year for a physical) and those employees who put them in the red big time (those with autoimmune diseases, cancer, etc.). If this is how the process works, the protections from termination/limitation of coverage provided by the Affordable Care Act would protect the more expensive employees, as the employer is (for all intents and purposes) a health insurance provider in this scenario. Correct?
submitted by /u/seafox1533
[link] [comments]
I work for a large company with a presence in most US states and many foreign countries. My employer is self-insured, with the (American) health plan administered by Cigna. Our insurance cards, claims and EOBs are issued by ‘Cigna, as administrator for __________’. I am familiar with the difference between self-insured and full-insured approaches for health coverage. My question is: do (typically larger) companies that choose this option process and pay each and every claim individually? So, for example, I see the doctor, who bills Cigna. Cigna pays the provider and then bills my employer for reimbursement of what was covered by the plan? As a result, the cost of this coverage to the employer would vary each year, depending on how its employees use their benefits. OR, do these employers negotiate with large health insurers and use some sort of algorithm to estimate what costs will be and then sign a contract, paying a set rate in advance? This scenario would mean that the insurance company acting as the administrator could either make or lose money, based on how their customers’ employees used their health insurance through the duration of their agreement with an employer. If self-insured companies do truly process and pay each individual claim for covered healthcare services of their employees and their dependants, there would certainly be a way for them to evaluate which employees only cost them a little bit of money (young, healthy, single people who go to their GP once a year for a physical) and those employees who put them in the red big time (those with autoimmune diseases, cancer, etc.). If this is how the process works, the protections from termination/limitation of coverage provided by the Affordable Care Act would protect the more expensive employees, as the employer is (for all intents and purposes) a health insurance provider in this scenario. Correct?
submitted by /u/seafox1533 [link] [comments]Read Morer/HealthInsurance