Why do self-funded plans hide behind a logo? Employers who self-finance their employee benefit program almost always do. It’s a practiced deception designed to fool everyone.
By Bill Rusteberg
Plan sponsors allow backroom claim administrators to place their name and logo on everything, including member’s I.D. cards when it’s not their plan at all, it’s the employer’s plan.
Plan members think “We have Blue Cross, Aetna, Humana or ABC TPA, etc. as our health insurance carrier.” That of course, is not true. The name behind the logo is simply a backroom claim administrator who bears no risk. The “insurance company” is the employer.
A self-funded health & welfare plan should change all of this. Instead of hiding behind a logo, they should brand their plan exactly what it is……………ABC Fence Company Health & Welfare Plan or City of Little Rabbit Health & Welfare Plan, etc.
By naming a plan for what it really is, changing claim administrators would not be disruptive to the extent of confusing plan members because the name of the plan forever remains the same, ABC Fence Company Health & Welfare Plan. It would be no different than changing stop loss carriers, members never know or care about.
At the end of the day, medical caregivers don’t give a damn whose logo is on the card. All they care about is whether the health plan pays benefits. They verify that while the patient is sitting in the waiting room with all the other patients whose coverage is being verified too by an administrative staff in the back. By the time the patient is seen by the doctor and is checking out, the nice receptionist knows exactly what the plan will pay and what the patient portion is to be collected.
Yet most plan sponsors continue to give away free advertising by continuing the deception.
HR administrators hate change. “We don’t want to change TPA’s because the medical community recognizes our TPA and has gotten used to accepting our members!” one client told me. When their TPA was subsequently purchased by another TPA I suggested they brand their health plan under their company name, leaving off the new TPA’s logo so that their plan could be permanently branded making a future TPA change painless for nervous HR staff members. After all, self-funded plans change stop loss carriers all the time and no one seems to notice. Their answer went something like this: “No, we like hiding behind a logo!”
More than 60% of employers self-fund their plans these days. That number is growing. They should take full ownership and stop hiding behind logos and stop giving away free advertising.