Employers who choose to offer health insurance benefits to their employees have two options for paying or funding those benefits. Those two funding arrangements are self-funded benefits and partially self-funded benefits.
In the self-funded benefits arrangement, the employers guided by third party administrators (TPAs) creates, defines, and establishes a benefit plan for their employees. In order to pay Medicare fees, employee payroll deductions and employer contributions are placed in a special fund for the sole purpose of paying employees’ medical bills as they are incurred. Technically speaking, self-funded arrangement means an employer is 100% responsible for paying medical bills of their employees.
Partially Self-funded Arrangement:
In this arrangement, the employer self-funds, but purchases specific stop-loss coverage to protect against very frequent cases of employee injury or illness that tends to create medical bills in excess and the specific stop-loss coverage to maximize the exposure of the health plan.
Why Companies/Employers Choose to Self-fund?
Companies or employers choose the self-funding arrangement for their benefits, based on what it would provide the most amount of coverage for the least expense. By being self-funded, they can create “customized benefits” to fit in the needs of its workforce as opposed to traditional health insurance plans. In a well-managed self-funded plan, the total potential claims cost tends to be lower than an equivalent fully insured premium.
How is a Self-funded Plan Created?
In order to create a self-funded health insurance plan, companies usually contact third party administrators or TPAs. They are good at providing flexible, cost-effective services for self-funded employers. TPAs use defined parameters to determine whether or not self-funding is the right option for the employer.
For the rising costs associated with regulatory change and compliance, TPAs leverage centralized, SaaS-based, affordable core administrative system, such as CMSPricer – the most trusted SaaS-based Medicare and Medicaid Claims Repricing Solution that comes with streamlined auto-adjudication capabilities and efficient benefit administration. CMSPricer provides critical success factors for TPAs by increasing value for their clients.
How Does CMSPricer Empower TPAs with the Following Benefits?
The centralized SaaS-based CMSPricer medicare claims management system allows TPAs to meet the challenges of rapidly evolving regulatory compliance. They can reprice Medicare and Medicaid claims accurately and quickly, based on the current CMS rates by using the CMSPricer system that keeps updating the pricing rules 10-times faster than the CMS PC Pricer tool. CMSPricer users can also “batch” claims into our system easily, and import/export a claim file for re-pricing so easily with the custom interface of CMSPricer.
Quickview of CMSPricer Advantages:
- No installation required for being SaaS based
- Simplify workflows for Medicare claims repricing based on Medicare claims processing manual
- Utilizes contemporary cloud-based security, including EV SSL Certificate, 5HA2, and 2048 bit encryption
- Fully HIPAA and ANSI 837 version 5010 compliant
- Easy manual, batch or EDI claims entry
Also, you can buy a CMSPricer user plan directly with “no contract” and be pricing claims in the next 15-minutes. All the more, as long as you have access to the Internet, you can run 24/7/365 securely, excluding short windows for system maintenance.
Want to engage with a proven partner to drive your business enablement? Let’s connect with CMSPricer, serving payers, PPOs, TPA’s, BPO’s, self-funded employers and auditing firms.