If you work for a large employer or a government agency, there is a good chance your health plan is self-funded. Instead of buying a group contract from a health insurance company, the employer pays health care expenses out of the employer's own pocket. It's not insurance, although a self-funded health care plan may look like insurance to the employee.

Self-funded plans work best for employers that are large enough to offer good coverage and pay expensive claims for medical services. As long as claims are being paid you may not notice or care whether your employer has provided coverage through an insurance policy or a self-funded health care plan.

What is a self-funded health care plan?
Can the Office of Financial and Insurance Regulation assist me with complaints about self-funded health care plans?
What is a third party administrator?
What if the third party administrator is not the problem?
How do I know if my employer-sponsored health care benefit is a self-funded health care plan?
Does a self-funded health care plan have to offer specific benefits?
What happens if my employer goes bankrupt?
Who handles the administration of a self-funded health care plan?
What other resources are available to me?

What is a self-funded health care plan?
Self-funded or self-insured health care plans pay benefits from a fund established by an employer or organization. Self-funded plans are not insurance plans and therefore do not come under the authority of the Michigan Office of Financial and Insurance Regulation. Self-funded health care plans are created under federal law and come under the authority of the federal government.

Can the Office of Financial and Insurance Regulation assist me with complaints about self-funded health care plans?
Self-funded health care plans are administered by third party administrators or insurance companies. The Office of Financial and Insurance Regulation has authority over third party administrators and licenses such entities, therefore, we may be able to assist you with some problems by contacting the third party administrator. To access the OFIR complaint form, click here http://www.michigan.gov/documents/cis_ofis_e_form_25076_7.pdf).

What is a third party administrator?
A third party administrator is a person or organization that processes claims and may perform other administrative services in accordance with a service contract.

What if the third party administrator is not the problem?
If the problem is not with the third party administrator, you may have appeal rights under the Federal Employee Retirement Income Security Act (ERISA) and you may wish to contact the U.S. Department of Labor.

How to contact the U.S. Department of Labor:

U.S. Department of Labor
Employee Benefits Security Administration
Cincinnati Regional Office
1885 Dixie Highway, Suite 210
Fort Wright, KY 41011
(859) 478-4680
(866) 444-3272
www.dol.gov/ebsa

How do I know if my employer-sponsored health care benefit is a self-funded health care plan?
The easiest way to find out if your health care is self-funded or self-insured is to ask your employer. You may also find the answer in the benefit information provided by your employer. Often the word "plan" or "Summary Plan Description" is included as part of the name of the coverage if it is a self-funded health care plan. Most large employers provide health care benefits through self-funded health care plans.

Does a self-funded health care plan have to offer specific benefits?
Most state laws requiring specific health care benefits do not apply to self-funded health care plans.

What happens if my employer goes bankrupt?
If your employer goes bankrupt, you become a creditor. Any unpaid health care claims will be treated like claims for unpaid wages. You might have to pay doctors and hospitals out of your own pocket.

Who handles the administration of a self-funded health care plan?
An employer with a self-funded plan normally hires a third-party administrator (TPA) to collect premiums, pay claims and handle other paperwork.

Many insurance companies contract as TPAs for self-funded health care plans. This can disguise the fact that your plan is self-funded. The administrator's name appears along with the employer's on your benefits booklet and claim forms, just as if it were your insurance company. Your employer provides the money, decides what benefits to offer and what claims to pay. The TPA follows your employer's instructions.

What other resources are available to me?
The U.S. Department of Labor's website provides information regarding self-funded health care plans and the Employee Retirement Income Security Act (ERISA). For more information please click on the following links:

• U.S. Department of Labor at www.dol.gov/ebsa
• How to File a Claim for Your Benefits
  (www.dol.gov/ebsa/publications/how_to_file_claim.html)
• Top 10 Ways to Make your Health Benefits Work for You
  (www.dol.gov/ebsa/publications/10working4you.html)
• How to Obtain Employee Benefit Plan Documents from the Department of Labor
  (www.dol.gov/ebsa/publications/how_to_obtain_docs.html)
• Employee Retirement Income Security Act(ERISA)
  (www.dol.gov/dol/topic/health-plans/erisa.htm)