Roles within a self-funded plan
The TPA’s role in administering a self-funded plan
Due to the complexity and regulatory hurdles associated with self- administering a health plan, employers who wish to self-fund typically hire the services of a TPA, such as Pinnacle Claims Management Inc., to provide administrative services for the plan. The level of services offered by a TPA can range from simple claims processing to full-service plan design, COBRA, and compliance support.
Depending on the terms of the service agreement between the employer and the TPA, the TPA may:
- Adjudicate claims
- Produce and distribute ID cards
- Maintain enrollment files
- Provide customer service support
- Provide utilization management services, disease management programs, and other cost-containment initiatives
- Negotiate rates with providers, or otherwise provide access to a provider network •
- Assist with plan design and communication materials
- Provide compliance support, such as drafting summary plan descriptions, distributing benefit materials, and coordinating regulatory filings
- Administer COBRA enrollment and benefits
The fiduciary’s role in administering a self-funded plan
ERISA requires companies with self-funded health plans to appoint fiduciaries to exercise discretionary authority over the plan and its assets. The fiduciaries must be named in the plan document and are tasked with managing the company’s self-funding policies.
Fiduciaries are responsible for:
- Acting in the best interests of plan participants
- Administering the plan in accordance with the terms outlined in the plan document
- Holding the plan’s assets in appropriate reserve funds
- Monitoring plan expenses, and ensuring they are reasonable
- Following fiduciary standards of conduct
The role of the benefits consultant
Along with a TPA, a health insurance benefits consultant can help guide employers through the best options for their coverage and help optimize plan performance.
