According to an article today in Kaiser Health News, more small and midsized employers are choosing to pay their workers’ medical costs directly rather than buy health insurance for them. By self-insuring, the employers aren’t required to comply with many of the Affordable Care Act (ACA) rules for employer provided health insurance. Why? Because firms that self-insure are exempt from those rules.
“For example, policies sold to companies in the small group market — in most states, defined as companies with fewer than 50 workers — are required to cover 10 so-called essential health benefits and are restricted in how much they can raise premiums based on age or tobacco use. Self-funded plans don’t have to comply with those requirements. They also avoid most federal and state taxes on health plan premiums to health insurers.”
You may already be covered under a self-insured plan and not know it. We were! Every piece of paper, every booklet, every brochure we got from Human Resources said “Aetna.” But we found out, Aetna was only administering the claims, not covering them.
Since your employer isn’t an insurance company, the regulations covering health insurers don’t apply. We learned this when we applied for a premium refund under the ACA rules and were told, “Oh, those rules don’t apply to your plan because it is self-insured.”
And things only get worse from here!
Just last month, CIGNA Insurance, along with 113 of their self-insured clients including JP Morgan Chase, Chevron and Macy’s, were sued for embezzlement by medical providers. Among other egregious acts in this complicated situation, CIGNA withheld payments to doctors until they had documented that the patients paid their share of costs. Meanwhile, CIGNA and the plan administrators told the patients that they didn’t have any obligation to pay!
Sounds funny until you’re fighting cancer and your doctor stops seeing you because your bills aren’t being paid.
Bottom line, when employers self-insure, employees can find themselves facing a number of questions, including claim denials, and their only recourse is the US Department of Labor. While it is illegal under the California Fair Employment and Housing Act for your employer to discriminate against you for having a medical condition, is this something you want to test? After all, California is an “at will” employment state, meaning your employer can legally fire you for just about anything as long as they don’t say it was because you got melanoma.
Think this sucks? Join HEAL California and let’s do something about it!
Disclaimer: We’re not attorneys, and we’re not offering legal or insurance advice.