The Intricacies of Health Plan Organization and Maintenance
Medium to large organizations with hundreds, if not thousands of employees, all, or most on health insurance plans, need a highly organized individual to steer the ship. Health insurance plan organization and administration duties are a full-time practice of taking in and distributing needed information for overall plan maintenance.
A company needs to understand the amount of money they are obligated to pay for maintaining the health insurance policy, take actions to ensure payments are made timely and all needed changes have been dutifully reported and documented. Employee hiring and dismissals, catastrophic health events, plan health coverage changes and premium change notices have to be dealt with as they arise. Health plan administration is the total overseeing of the insurance plan from start to finish.
Overwhelming Need for a Health Plan Administrator
There is no reasonable way that standard employee management can keep up with schedules, employee conflicts, and work supervision, along with the nearly unending duties associated with the administration of health care benefits.
These individuals would be put to the test and one area or more would get forgotten about, delayed in updating and it would ultimately cost the company a lot of extra money in paying for benefits for employees that had quit, been fired or otherwise opted to stop coverage.
Hiring a plan administrator is the best way to ensure that all of the paperwork is valid, current and the employees with coverage are aware of what level of plan their premiums cover. Critical deadlines and payments can be made without the worry of cancellations. Quality plan administration allows for a smooth operation of health benefits plans for the largest of corporations.
Duties and Obligations of Health Plan Administration
One of the most important duties with healthcare plan administration is creating proper documentation in every phase. Making sure that all deadlines are met is also an important function of proper administration. A few of the specific duties of a plan administrator are:
- Offering new employees plan coverage options.
- Making existing employees aware of COBRA coverage options.
- Providing accurate information to each employee about their specific coverage.
- Keeping employees aware of any premium changes.
- Giving notification of any impending changes to coverage.
- Maintaining accurate and up-to-date records for all covered employees and dependents.
- Providing detailed numbers for the company portion of health plan costs.
Legal Obligations of a Health Plan Administrator
Rarely is health plan coverage provided at no cost to employees. There is normally a portion that each employee has to pay, with the amount being calculated based on the desired level of coverage and number of included and qualifying family members.
As a consumer, each employee is entitled legally to know what coverage they are paying for and reasons for any changes to premium charges. In addition, the plan administrator is legally obligated to:
- Provide detailed information about the existing policy.
- Offer detailed information about how to file a claim.
- Provide access to policy cards, including prescription drugs.
- Allow employees that are leaving the company the option of choosing COBRA coverage, if it is available.
- Make contact with each new employee and offer health plan options.
- Notify employees of coverage start and end dates.
Keeping Information Accurate and Current
A health plan administrator is in charge of the flow and accuracy of information that all employees provide. A checks and balance system needs to be incorporated to make sure that all addresses, phone numbers, names and social security numbers are true, correct and up-to-date.
Any new births, child adoptions or spousal deaths should be immediately reported and handled. New children that needed to be added to existing policies require specific paperwork, which should be done in a timely manner to ensure dependent coverage.
Notices should be sent out immediately if there will be plan policy changes, premium increases, or enrollment changes can be made. Being able to offer reasonable explanations for changes and a good time frame for making plan changes will create happier employees.
There are some companies that opt to hire a third party to take over the role of healthcare plan administration. The experienced administrator will take on the role that an on-site administrator would carry out, which is preferable to smaller businesses.
\If there are less than 100 employees, it often cannot be justified financially to hire a full-time benefits administrator. A third party organization will handle all of the administrative duties for a fee, which is often much less than a salary for an administrator.
Self-Insurance and Plan Administration
Many small companies that self-insure opt to run the plan administration through existing office personnel. This is reasonable if there are a small number of employees and most claims are handled at the time. The larger the company and more employees, the increasingly difficult it is to handle without one person at the helm.
Self-insurance options are increasingly being favored for medium to larger sized companies that have relatively healthy employees. It is a gamble, but barring a catastrophic health event, saving large amounts of money on unneeded premiums is attractive. Careful administration of company allocated funds is a necessary part of successful self-insuring plans.
Contact health insurance experts to find out if a designated health plan administrator would be helpful to your organization. You can either opt to hire one to work on-site or consider the option for a third party organization to do all of the administrative work for you.
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