Page 151 - An Indispensible Resource for Being a Credible Activist

Self-insured plan—A plan offered by employers who directly assume the major cost of
health insurance for their employees. Some self-insured plans bear the entire risk. Other
self-insured employers insure against large claims by purchasing stop-loss coverage.
Some self-insured employers contract with insurance carriers or third party administra-
tors for claims processing and other administrative services; other self-insured plans are
self-administered. Minimum Premium Plans (MPP) are included in the self-insured
health plan category. All types of plans (Conventional Indemnity, PPO, EPO, HMO, POS,
and PHOs) can be financed on a self-insured basis. Employers may offer both self-
insured and fully insured plans to their employees.
Stop-loss coverage—A form of reinsurance for self-insured employers that limits the
amount the employers will have to pay for each person’s health care (individual limit)
or for the total expenses of the employer (group limit).

Third party administrator (TPA)—An individual or firm hired by an employer to handle
claims processing, pay providers, and manage other functions related to the operation
of health insurance. The TPA is not the policyholder or the insurer.

Types of Health Care Provider Arrangements
● Exclusive providers—Enrollees must go to providers associated with the plan for all
non-emergency care in order for the costs to be covered.
● Any providers—Enrollees may go to providers of their choice with no cost incentives
to use a particular subset of providers.
● Mixture of providers—Enrollees may go to any provider but there is a cost incentive
to use a particular subset of providers.

Usual, customary, and reasonable (UCR) charges—Conventional indemnity plans operate
based on usual, customary, and reasonable (UCR) charges. UCR charges mean that the
charge is the provider’s usual fee for a service that does not exceed the customary fee
in that geographic area, and is reasonable based on the circumstances. Instead of UCR
charges, PPO plans often operate based on a negotiated (fixed) schedule of fees that rec-
ognize charges for covered services up to a negotiated fixed dollar amount.

134 The H R Toolkit