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Scott

This article is almost as misleading and nonsensical as SICKO, the "documentary" it references. How did we get to this moment in our country's history where there is no longer constructive dialogue but, rather, this type of propaganda? Allow me to illustrate how this article is both misleading as well as illogical.
The Employee Retirement Income Security Act (ERISA) was created by Congress and as such is a federal law. The law was designed with two goals in mind – protect the assets of health & welfare plans (health plans and pensions) and make it easier for firms with employees in multiple states to self fund its benefit plan. Please note that the author conveniently avoids how ERISA protects plan assets by declaring he’s not a lawyer but then attacks it based on the preemption of state law it provides. Hmmm, I guess he must be a lawyer with respect to ERISA’s role in the later case. Ok, let’s stick to that point then.
It is true that self-funded health plans are governed by ERISA and are not subject to state-mandated benefits. To highlight this point, the author provides the following “fact” & opinion:
"The fact that the self-funded plan which covers you is exempt from state law means that it does not have to provide certain benefits, such as minimum post-partum hospital stay, required under state law. A savings for your employer, but a good deal for you? Not so much."
I hate to ruin a good story with facts, but I’m going to nonetheless. The reason ERISA exempts self-funded health plans from state law is to make it easier for large employers, which are the employers more likely to self fund the benefit plan, which have employees in multiple states to provide benefits to their employees; it is easier because the employer doesn’t have to keep up with insurance law in 50 states but, rather, just one law. The intent is to get more employers to offer benefits which results in more employees receiving benefits. Now, to the author’s example of how this is just another way of screwing employees cited above, The Newborns’ and Mothers’ Health Protection Act of 1996 (the Newborns’ Act), signed into law on September 26, 1996, requires plans that offer maternity coverage to pay for at least a 48-hour hospital stay following childbirth (96-hour stay in the case of a cesarean section); this is a federal law, not a state law, and applies to every health plan whether self-funded or not. It is not a state law, as the author states. I’m sure it was an honest mistake.
Ok, I was going to stop there but I read the next paragraph in the article and I have to comment. The paragraph to which I refer begins as follows:
"It gets worse. Let’s say your self-funded plan knowingly refuses life-saving care for your (covered) spouse, and he/she ends up dying as a result, as happened to Julie Pierce’s husband, Tracy, featured in Michael Moore’s documentary, SiCKO."
First of all, health plans NEITHER GRANT NOR REFUSE ANY CARE, LIFE SAVING OR OTHERWISE. Health plans determine whether the cost of the care is covered, period. It is not the health plan that is providing care. To the example from SICKO noted above, both the article and the movie make a grievous omission – the reason the bone marrow transplant (BMT) was not covered by the health plan for the person’s condition was because the treatment, for that specific condition, was experimental. In other words, there is no scientific evidence that it would cure the disease. In fact, go rent SICKO and freeze the frame where Moore flashes the denial letter (he won’t even show you the whole thing) and you see the phrase “clinical trial”. Clinical trials are another way of saying “experimental”. They are a means for researches to ascertain IF a treatment will work and are NEVER covered by ANY health plan. In fact, the patients participating in the trials are not charged a nickel. I don’t recall Moore mentioning this or making mention of those poor people attempting to get into a clinical trial. The point of Moore’s film was the U.S. should have socialized medicine and the sad tale of Mr. Pierce’s death was used to further Mr. Moore’s cause. What is so despicable about Mr. Moore’s propaganda is this – The BMT would have been denied whether we had socialized medicine or not. I’d even wager that Mr. Moore found this out while making his film. At least Mr. Moore is a layperson and can claim ignorance; I wonder what the article’s author claims in his defense?

How is this site called "honest medicine"?

Lauren

I read Lee Einers Truth About Self-Funded Plans and was horrified by the implications. After a few days of research I learned our situation is worse than he presented.
Heres a shocking FACT:
ERISA excludes authority over state and local political subdivisions.
So, our self-funded employee welfare benefit plan (that the school district insists on calling insurance) is not covered by either state insurance laws or ERISA.
School employees dont realize they arent protected by any federal or state insurance laws, that they could be held liable for their own medical costs, that school administrators may view their confidential medical records, and any individual can have his rates raised or benefits terminated. The school district never handed out plan booklets (2006-2008), because no law required them, too. School employees here think they have group health insurance.
The only newspaper in the city wasnt interested in this information. An editor said the teachers union would raise the issue if it was real deceit.
People - including the union - just cant seem to understand or believe a self-funded plan is NOT insurance, even though the U.S. Supreme Court said so in 1990.
Meanwhile, premiums are escalating and school employees (with families) are dropping healthcare coverage. Ive read so many tragic stories about self-funded plans, and Im afraid our school system may be another. I keep talking about the problem, but so far no one with power is listening.

Lee Einer

Hi, Lauren -

The situation is largely as you describe. Actually, governmental employers ARE subject to ERISA. The rub is that the mechanism of enforcement, short of taking the Plan to court, is lacking. The DOL does not have jurisdiction - it basically falls to the governmental employer to self-police. You can follow it up the chain of command with the state, but you do have your work cut out for you if you try to enforce ERISA requirements on a state, county or municipal employer. You may want to kick the issue upstairs to your state Public Education Department. Good luck!

Lee Einer

Hi, Lauren -

I have done some more homework and the situation is almost EXACTLY as you describe. Governmental plans are ERISA exempt. But this means that the ERISA clause exempting such plans from state laws does not apply, either. Which is a backhanded way of saying that state laws DO apply to state, county and municipal plans, and that your state Department of insurance should be able to help you.

Lauren

Thank you for your response. I've sent information to so many people and received responses from you and our state commissioner of insurance. She forwarded my documentation to the the state attorney general's office, because my presentation was "beyond the division's authority and understanding." (She called it scholarly.) Our state laws specifically exclude authority over any governmental agency's self-funded plan, so there's truly no way to approach this issue through federal or state statute or jurisdiction. This week our city's only newspaper -- which wasn't interested in my research -- reported that the school district is seeking a mill levy increase. Somebody needs to ask, "just how much more did the school district pay out in medical claims than they collected in premiums this year?" But, absent even a minimal understanding of the consequences of self-funded plans, no one will think of the right questions.

Leslie

Lee,
Within the last two weeks I have received notice from our insurance carrier that they requested additional information regarding a claim and did not receive it within 45 days. As a result they processed the claim with the information available and determined no benefit.

Evidently they requested additional information from the doctor and did not receive it within 45 days and denied the claim.

Now the doctor/facility wants payment from me. Legally, am I responsible?

Interesting that the four claims denied are all large dollar amounts in the thousands. All other previous claims we have had were paid smoothly.

Any advice is greatly appreciated as I start to deal with the insurance and doctors/hospital.

Rachael

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With a self-funded plan, an employer has a document drafted that spells out who is covered, what conditions and treatments are to be paid for, and within what limits.- Self Funded Plans Idaho-

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You need to get the medical records, medical journal articles, your medical Explanations of Benefits (those things the insurance company sends out that declare “THIS IS NOT A BILL”) and/or any other document which supports your position and begin to prepare your case.

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There is a lot of legal mumbo-jumbo surrounding ERISA healthcare (or self-funded) plans. Since I am not a lawyer, I will confine myself to the bare-bones basics of how a self-funded plan works, how it differs from health insurance, and how you can fight back if you need to.

Oliver

Very useful information and highly accurate. I have just been through a full appeals process to try and have my self-funded plan pay out more than $2,500 for my wife's pregnancy.

As you have pointed out and as I can now confirm from personal experience - a self-funded plan is a law unto itself. In my case Starmark and Aetna Signature Administrators have lied and cheated their way out of a reasonable payout and it seems that there's very little I can do about it.

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I have done some more homework and the situation is almost EXACTLY as you describe. Governmental plans are ERISA exempt. But this means that the ERISA clause exempting such plans from state laws does not apply, either. Which is a backhanded way of saying that state laws DO apply to state, county and municipal plans, and that your state Department of insurance should be able to help you

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