Newsline Volume 32, Number 2
Employer Sponsored Health Insurance and
By Beth Dworetzky, Project Director
Mandated Health Services
Massachusetts Family-to-Family Health Information Center
To find out if your ESI is fully-funded or self-funded, ask your health plan administrator, human resources department, or your boss.
The Massachusetts Family-to-Family Health Information Center helps families raising children and youth with special health care needs navigate systems of health care services and supports. Many families call with questions about why some health services are not covered by their employer-sponsored health insurance (ESI).
We will use ARICA (An Act Relative to Insurance Coverage for Autism) - the Massachusetts law that mandates Massachusetts health plans to pay for the diagnosis and treatment of Autism Spectrum Disorders (ASDs) - to illustrate the differences between ESI plans, and why some plans pay for certain health services and others do not.
Some ESI plans are fully-funded; others are self-funded (also called self-insured).
- Fully-funded Health Plans: Every time you or a family member on your health plan uses a health service, you give the provider of service (like a doctor, hospital, or medical laboratory) your health plan information and you pay any copayment. The provider of service bills your insurance company and the insurer reimburses the provider.
- Self-funded Health Plans: Self-funded plans work differently. Instead of purchasing coverage from a health insurance company, self-funded plans pay for their employees and covered family member's health services directly. Many self-funded plans use a third party administrator to manage the paperwork - you may see this company's name on your insurance card, making it less-than-obvious that you are in a self-funded plan.
ESI and Mandated Health Services
The federal government mandates that all ESI plans cover certain health services. These include coverage for medical expenses related to pregnancy, hospital stays for childbirth, and mental health parity.
States have the authority to regulate insurance within their borders and so may also require additional health services that state-based ESI plans must cover. These laws are called state mandates or state mandated benefits. The number and type of mandated services vary by state. Out-of-state plans are subject to the mandated benefit requirements of the state in which they are issued. So, for example, if you work for a Massachusetts-based employer that is fully-funded but your health plan is issued by a Connecticut-based insurer, Connecticut's mandated benefits will apply, not Massachusetts'.
It's important to note that while all ESI plans must provide federally mandated health services, self-funded ESI plans are exempt from all state mandates. The good news is some self-funded employers will cover state mandated services. Try making your case for coverage by:
- Sharing information about self-funded employers who have chosen to pay for state mandated services. There is a list of self-funded employers who pay for Autism-related services http://bit.ly/self-funded-autism.
- Reading your plan's definition of medical necessity. Use the definition to frame your request for a covered service. Explain how the service will improve your child’s functional abilities and overall health.
- Stating that an ounce of prevention now will be worth a pound of cure later. For example, if your child receives speech therapy now, he or she will be less likely to need expensive augmentative communication devices later.
Have questions about ESI or MassHealth? The Massachusetts Family-to-Family Health Information Center provides free, confidential assistance to families. Speak with Beth or Bonnie at 1-800-331-0688, ext. 301 or visit www.massfamilyvoices.org.