What is self-funded insurance?
Self-funded insurance means that your company has decided to assume financial responsibility for its employees’ insurance claims. Instead of buying insurance through another company (e.g. BCBS) who assumes all of the risk for any claims incurred, your employer will be responsible for funding all insurance claim costs over the plan year. Whether its employees use $5,000 or $500,000 worth of benefits, your company is responsible. This is why it is called a self-funded plan.
Why does my card say I have BCBS insurance?
Your employer has hired BCBS to administer its plan. It acts as a third party between you and your employer. Your claims will be submitted to BCBS for processing and then your employer will be responsible for paying them. This also allows you to access the entire BCBS network of providers.
Does this impact my coverage?
No, and maybe. Insurances offer many different types of plans (even among traditional plans that they fund). Depending upon which plan or plans your employer offers, you may have differences in copays/coinsurances and deductibles. However, that would be the case whether this was insurance-funded or self-funded.
That being said, self-funded plans have historically allowed employers to exclude certain coverages (e.g. gender affirming care) as they were not held to the same standards as commercially available plans. Self-funded plans are regulated under federal requirements so even if the state requires insurers like Carefirst BCBS to offer certain coverages, Carefirst-administered plans may not. However, federal regulations continue to evolve, the DOJ has filed an amicus brief specifically on gender affirming coverage for self-funded plans, and several rulings (including one in a Baltimore Federal court) have found that denying gender affirming care violates the Civil Rights Act. That being said, it is best to check with your insurance plan documents to better understand what is and isn’t covered as gender affirming care is only one example.
How do I appeal a coverage denial?
Typically any appeals are handled by the plan administrator, i.e. the insurance company. However, if the appeal is based upon a plan-wide exclusion (e.g. your employer has elected not to cover a certain brand of medication in their formulary), that could potentially be up to the employer to decide if they are going to pay for an exception outside of what they have contracted with the plan administrator.
What about confidentiality?
When an employer chooses a self-funded plan, they are still required to comply with HIPAA regulations. However, some employees within the organization may have access to other employee’s protected-health information. Confidentiality concerns also depend on the size of the company and how unique your identifying information is compared to other employees. As employers review de-identified data on their plans, it may still be easy to connect this data to an individual (e.g. if you are the only employee who is a parent, when your employer pulls data on expenses related to well-child visits, it will be clear that your child incurred those expenses).
How else might this impact me?
Since the claims processing and payment process is complex, typically Carefirst Administrators claims take longer to process (we average 2-3 months). This means that we may not be able to definitively determine your copay/coinsurance and deductible until that time. Please be sure to review your plan documents or call your insurance to verify your financial responsibility.
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