How much of an effect can these fees have?
It depends on the size of your plan and on the percentage the carrier uses. These fees can have a significant effect if you are a very large employer. For instance, if you add 6 or 7 percent to all your claims, and your claims total $1 million, that’s $60,000 to $70,000 — quite a substantial amount.
The exact percentage is going to vary based upon practices, but it will probably be somewhere in the 6 to 10 percent range.
Does this issue affect both fully funded and self-insured employers?
It is more important for self-funded employers because they are assuming their own risk. It does also come into play for fully insured employers, but it is part of the rate development process for them.
Still, fully insured groups should be asking these questions, as well. Every employer should be able to see the breakdown of their itemized health plan costs.
How can employers determine if their carriers are transparent in their billing practices?
They need to carefully scrutinize their proposals and settlements. Also, employers need to look at their total cost and ask the carrier to give them the breakdown of that number.
Ask the carrier how much of its costs are related to claims, if it has an access fee and, if it does, how much is it, how is it reported, how can the employer know what it is, what is its administrative fee and what is that fee made up of?
That is extremely important for groups that self fund, because they assume their own risk and they are paying their actual claims experience.
Ask when you enroll, when you are considering a proposal, or during your annual renewal process. Depending on the program, you may get a year-end settlement. But I think it’s a fair question to ask your health care partner at any time.
Don Whitford is vice president of sales at Priority Health. Reach him at (248) 324-4711 or [email protected].
