One Of the biggest problems With Self-Funded Health Plans is the abuse of discretionary authority.
A Plan document is a Rule Book. “Please read the Rule Book before you begin summer practice” said the high school football coach.
During the first football game quarterback Johnny, number 15, fumbles and the opposing team takes possession. “I want an exception! I didn’t mean to drop the ball!” screams Johnny, “Besides, my mommy sits on the school board!”
An appeal is considered and Little Johnny wins the exception. A mediocre team wins the game but morale will never be the same.
I see this fairly often among self-funded plan sponsors. “Our insurance won’t cover this procedure! I want an exception!” screams little Miss School Teacher. As political pressure mounts and little Miss School Teacher causes turmoil amongst the troops a decision is made to cover something that’s not.
“In the interests of keeping everyone happy we are going to make an exception! After all, our employees come first!” said the plan sponsor.
But morale will never be the same. The rank and file take notice. “It’s unfair little Miss School Teacher gets an exception. I want one too!” is the message from below.
Thus a precedent is set. A self-funded health plan becomes a Welfare Plan subject to political whims fueled by strident voices from below.
