Paul Gomez Featured in “Healthcare Roundtable: The Experts Discuss the Current Healthcare Landscape”The Los Angeles Business Journal August 29, 2016
Paul A. Gomez, a Member of the Firm in the Health Care and Life Sciences and Corporate Services practices, in the firm’s Los Angeles office, was featured in The Los Angeles Business Journal, in “Healthcare Roundtable: The Experts Discuss the Current Healthcare Landscape.” The Q&A asked panelists to discuss some of the most pressing problems health care companies currently face.
Following is an excerpt (see below to download the full article in PDF format):
What are the pros and cons companies should consider in contemplating going self-insured for their medical/ benefits?
In a self-insured health plan, the employer sponsor pays for employee health claims as they arise, rather than paying for premium costs to a health insurance plan. Implementing this option can provide better opportunities for the employer to tailor the plan to meet the specific healthcare needs of its employees, instead of choosing from available health insurance plan options. This sort of plan is typically governed by federal ERISA law, rather than several layers of (sometimes conflicting) federal and state laws and regulations, which may potentially reduce regulatory compliance burdens. The option generally permits employers to control health plan reserves, enhancing interest income from same. Moreover, the plan may not involve prepayment for coverage and services, which can improve cash on hand and cash flow, and is generally exempt from any applicable state health insurance premium taxes. Self-insurance is not necessarily an option for all employers. For instance, one must have sufficient financial resources to handle what are often substantial healthcare expenditures. Larger employers and or those with better cash flow tend to be better able to bear such a financial burden. Employers that implement this option typically obtain appropriate stop loss insurance coverage, which limits, but does not eliminate, potential employer liability. Additionally, the employer should assess whether it can handle the administrative burdens that accompany this option. Many employers contract with a third party administrator (TPA), which is often a health insurance company, to handle these burdens. Such burdens may include, claims processing, claims determinations, payments, appeals, preparation of forms to administer the program, customer service and other services.