Self-Funded Inurance vs. HMO

[MKSquared]

I can't seem to find much about this topic ... at least, not much that doesn't leave me reeling with questions. I hoped I could come to my favorite font of knowlege. :)

I have a teaching position for this upcoming year. I'm signing up for health insurance and I have two options: Self-Funded plan and a HMO. The difference between the two, in monthly premiums that I would pay, is about $100 (the HMO is more expensive). Copays, meds, etc. are all within $10 of each other, so I'm not concerned too much with that.

From what I'm reading, self-funded plans go through the organization that sponsors them. So, for a minute, imagine I'm Bruce Banner and the organization I'm working for doesn't really mind that I turn into the Hulk. In fact, the organization is totally against preventing things like that. If I (as Bruce) could get a magic cure that would prevent me from being Hulky, could the self-funded plan say that they're not covering it? Even if Wolverine, all the other X-Men, Spidey, and the like are taking the same medicine that is typically covered under insurance? Could the HMO also deny Bruce-me the meds?

[ashleenicole]

Self Insured is a term used regarding how your employer is funding the healthplan.

I would compare the Coverage Maximums, Deductibles, In/Out Network benefits, Exclusions, and the provider directory.

In the scenario you've desribed - yes. Either plan could cover or not cover a therapy or prescription drug you may need - regardless of medical necessity, that's why you need to pay special attention to the plan benefits and the exclusions.

You usually get what you pay for, so I'm thinking that the self insured plan must be more restrictive than the HMO. But, it's impossible to speculate without comparing the two plans side by side.

You can PM me if you have very specific questions - I used to work in health insurance and might be able to help.

[imloulou]

Oh my...that was the funniest post I have read in a long time!!

I wish I could help. You could not have explained it any better but I do not have an answer for you or even anything constructive to add but I could not let that post go by without replying! :D

I hope you find an answer!

[CindyWeightWatcher]

Just want to add that most self insured plans don't cover divorced spouses.
I'm not implying that applies to you but some others on the BB might be interested in knowing that.

[mst]

Self-insured. Grr. Basically, self-insured works differently than an HMO. For example, for an HMO, the company might pay $1000 a month. No matter what the expenses are, the company only has to pay $1000. With self-insured, the company ends up paying that actual bill for all of the services. Both plans might be administered through the same insurance company. Like, both plans might be Blue Cross, but what is covered can be different.

My DH and I were on a self-insured plan for a few years through my DH's job. We had no idea. It was through a major carrier, and everything seemed covered. In Massachusetts, infertilty treatment is a law. Except if your company is self-insured. We talked to everyone- and there was nothing that we could do. So, I gave up my business, and took a job- where ironically, I was also on a self-insured plan, but it DID cover infertility. And, btw, the plan that I was on was amazing, and even did things like cover lactation care consultants and bought me a brand new, top of the line breastpump. It is very rare to get good coverage for breastfeeding. So, even though they were self-insured, they chose to cover more than most companies.

[MKSquared]

Self-insured. Grr. Basically, self-insured works differently than an HMO. For example, for an HMO, the company might pay $1000 a month. No matter what the expenses are, the company only has to pay $1000. With self-insured, the company ends up paying that actual bill for all of the services. Both plans might be administered through the same insurance company. Like, both plans might be Blue Cross, but what is covered can be different.

My DH and I were on a self-insured plan for a few years through my DH's job. We had no idea. It was through a major carrier, and everything seemed covered. In Massachusetts, infertilty treatment is a law. Except if your company is self-insured. We talked to everyone- and there was nothing that we could do. So, I gave up my business, and took a job- where ironically, I was also on a self-insured plan, but it DID cover infertility. And, btw, the plan that I was on was amazing, and even did things like cover lactation care consultants and bought me a brand new, top of the line breastpump. It is very rare to get good coverage for breastfeeding. So, even though they were self-insured, they chose to cover more than most companies.

I've been getting a little help off-line (THANK YOU!), and your example helped me understand a little bit more, too. Thank you for helping me even when my example was a bit vague. :)

[mst]

Glad I could help.

Backing away slowing in case you are turning into the Hulk!

[blazedog]

My understanding is that self insured goes to whether a company funds the medical expenses and just hires an administrative company to cover the claims.

Many major companies are self funded in terms of insurance because they have the financial capability to handle large medical claims and it's cheaper for them to self insure and just pay for administrative expertise.

The Massachusetts law is an interesting wrinkle because in most instances the benefits wouldn't necessarily be different. Any company can choose to purchase the level of insurance they want (within legal requirements) and also elect to provide any level of subsidy.

As others have stated, what is most significant is what is covered. It appears that you are choosing being an HMO or a more classic medical insurance plan which is often more expensive than an HMO.

[LakeMartinGal]

DD has a self-insured plan, and has LOTS of medical bills. She got to her deductible just fine, but has run through the money the employer put in her account, and is back on her own again! :eek: I'd go with the HMO...

[clairea]

I think self-insured has both good and bad. As others have explained, the company actually pays the bills, and the insurer just acts as the administrator. Self-insured plans may not be subject to the same requirements as other plans (like the infertility treatment mst mentioned), and the employer definintely has more flexibility in deciding what they will or won't pay for. However in my own experience this actually became a benefit, as under a self-insured plan that we were covered by the employer agreed to pay for treatment that the insurer would not have normally paid for, and also agreed to cover an out-of-network provider at in-network rates when we demonstrated that there was a significant difference in experience. I don't think any plan other than a self-insured one would have been able or willing to do that. Also, whenever I had trouble getting claims processed (which was fairly frequent) I was able to get help from the employer as they were the ones paying the bills and could pull strings with the insurer/administrator that I couldn't. I'm not saying all self-insured plans would do this, but am just presenting another side of the story.

One major concern I did have with the self insured plan came about when we sought coverage for a treatment that the insurer considered "investigational" (don't get me started on that -- just how many studies do they want!). With a "standard" health insurance plan, you have the right to appeal coverage decistions to a third-party review board (state review board I think). With a self-funded plan your final appeal is to the payor (your employer), which in my mind changes the equation quite a bit. When push came to shove, we actually chose not to pursue up to the final appeal as we did not wish to take it to that level. If we had been going before a neutral third party I'm sure we would have continued to try to obtain the treatment.