OK for Self Funded Plans to Encourage Sick Employees to Get Individual Policies?

[yorkriver1]

I recall reading in an article or here that it's illegal to cherry pick the employees with high medical costs into individual plans, then do the group with the others.

Just spoke to someone who plans to incorporate that strategy into suggestions for employers. Put the sick ones on their own plans, put the well ones on self insured group plan.

 

[sleavitt]

A company that self funds here in Mass had the DOL all over them. Company owners are in Federal court for doing that.

 

[leevena]

A company that self funds here in Mass had the DOL all over them. Company owners are in Federal court for doing that.

Thanks for the info, can you provide additional information or a link to the case?

 

[tonyisme]

That is discrimatory activity. http://www.dol.gov/ebsa/faqs/faq_hipaa_ND.html

 

[yorkriver1]

Discussion of the topic here: Employers Eye Moving Sickest Workers To Insurance Exchanges | Kaiser Health News
and here, insightful: https://www.law.illinois.edu/_shared/pdfs/Employer_Dumping_Draft_9 10 10.pdf
I guess any strategy, as the first article mentions, that might involve some sort of closed door discussion of the benefits to a specific high medical cost employee of going out of the plan, and how the employer would reward them, is a potential minefield.
It doesn't rise to the level of "well this doesn't look to be specifically covered or excluded, so I guess a claim might have to be challenged legally". Any time I might have to consider a legal challenge to get or stop an action, it's a red flag. Maybe I am over cautious.

 

[scagnt83]

Any time the discussion subject becomes "that person" or "those people" and stops being about "the whole group", it becomes a discriminatory discussion.

And discrimintory actions within an ERISA regulated plan can be just as damaging to you (financially & professionally) as being taken to court over a denied claim you said was covered.

 

[leevena]

Discussion of the topic here: Employers Eye Moving Sickest Workers To Insurance Exchanges | Kaiser Health News
and here, insightful: https://www.law.illinois.edu/_shared/pdfs/Employer_Dumping_Draft_9 10 10.pdf
I guess any strategy, as the first article mentions, that might involve some sort of closed door discussion of the benefits to a specific high medical cost employee of going out of the plan, and how the employer would reward them, is a potential minefield.
It doesn't rise to the level of "well this doesn't look to be specifically covered or excluded, so I guess a claim might have to be challenged legally". Any time I might have to consider a legal challenge to get or stop an action, it's a red flag. Maybe I am over cautious.

Thanks for the links, but I was already aware of this strategy. More interested in the Mass company that the dol is going after. I read the white paper by the profs just after it came out.

 

[yorkriver1]

Lee, I put that up for general reference, I am always impressed with your knowledge. Thanks for all your great contributions here.

 

[sleavitt]

Thanks for the links, but I was already aware of this strategy. More interested in the Mass company that the dol is going after. I read the white paper by the profs just after it came out.

Google HMA Direct. You'll find info on the federal cases and if you dig enough, you'll find links to Mass and NH DOI docs that detail some of their actions. The local DOIs had cause here because they would put the healthy employees on group plans that the DOI had jurisdiction over.

 

[leevena]

Google HMA Direct. You'll find info on the federal cases and if you dig enough, you'll find links to Mass and NH DOI docs that detail some of their actions. The local DOIs had cause here because they would put the healthy employees on group plans that the DOI had jurisdiction over.

appreciate that, thanks.