By Doug Aldeen
Sample road map of plan sponsor and stop loss ERISA fiduciary considerations PY 2025:
As a condition of enrollment to the health plan, members must provide their financial information. Consider the following:
1. Every PPO contract and/or alternative arrangement and stop loss policy that a plan sponsor enters should contemplate the appropriate provisions of the applicable FAP. 300% of the FPL equates to a complete write off under this specific FAP which for a family of four equals $112,500 (AGI). Roughly 60% of the US earns <300% of the FPL. Presumably, this represents an equal percentage of a plan sponsor’s employees;
2. The FAP provides (highlighted section IV (p) ) that any “OON carriers and balances are not subject to this FAP.” Besides the antitrust and discriminatory considerations (forcing expensive contracts on patients and denying financial assistance to the most vulnerable populations), traditional RBR will not work here in the event there is an outstanding patient balance;
Strategy moving forward:
1. Does a plan sponsor need to provide coverage to employees that earn 300% of the FPL when a MEC+501r could work? It is an all you can eat buffet of all medically necessary and ER services… :
2. See highlighted section IV (n): Only “non-covered services under an insurance policy are covered under this FAP.” Does a plan sponsor buy the crappiest, cheapest insurance coverage with a 20% coinsurance payment that has a contract with this facility and just transfer the risk for the balance back to the facility?;
3. EVERY stop loss policy should condition reimbursement on financial assistance. Why should a stop loss carrier reimburse a plan sponsor if the facility should appropriately have the Charlie Brown lump of coal? Stop loss premiums will be reduced and you can assist the facility to fulfill its charitable mission…
4. EVERY not for profit hospital should be a de facto stop loss carrier under the appropriate circumstances.
Bonus takeaway for my trial lawyer friends:
Imagine the class of individuals and families across the US that have had their money stolen pursuant to provisions such as outlined above? I would roll up every single FAP with similar provisions, advertise for patients from the past several years and take it from there… .
