Self-funded health plans are very common these days among larger employers and governmental entities. Private sector plans are typically subject to ERISA, which imposes a fiduciary duty, and even plans covering government employees have fiduciary obligations.
What does that mean in practice? Chris Deacon, Senior Vice President of 4C Health Solutions and former director of the State of New Jersey Health Plan, explains in this podcast that the plan administrator, vendors and the plan, itself, have a fiduciary duty. That means all actions have to be performed for the best and sole interest of the beneficiaries and the plan.
Vendors have to be selected and evaluated accordingly. Duties have to be carried out prudently. The plan’s documents must be followed consistently. So, for example, the plan can’t pay some out-of-plan claims and not others.
It sounds fairly clear, but, she explains it isn’t because of the opacity in health care pricing. It’s difficult to know if the charges are reasonable or not.
One step she strongly recommends is to demand ownership of the claims data and insist it be provided in a way that is usable. That will help ensure that the money is being spent properly, and the plan administrators are living up to their fiduciary obligations.
Listen in to learn more about how to live up to the fiduciary duties of your self-funded plan.