The cost of group health insurance is becoming unsustainable for small business owners and startup entreprenurs. Dropping healthcare benefits altogether is not a feasible option for most small employers, as offering healthcare is a crucial part of employee recruiting and retention. Instead of paying the high price of group health insurance, many employers are reimbursing their employees' indivual health insurance premiums.
Premium reimbursement is an alternative to traditional group health insurance, and is growing in popularity with small businesses who want to offer health benefits for the first time. Employers use a premium reimbursement administration provider for compliance and administration reasons. For background, see this article on premium reimbursement software.
What should a business expect with premium reimbursement administration? Read on for 14 premium reimbursement administration features to expect from your provider.
1. Employee Education & On-Boarding
While this first feature isn’t entirely a "software" feature, it is one of the most important considerations of offering premium reimbursement administration: employee education and company on-boarding. The premium reimbursement administration provider should provide you a tool kit to help your company:
Understand the benefit (What is premium reimbursement? How does it work?)
Understand the benefits of individual health insurance
Learn how to request reimbursement and use their participant portal
Because even when the benefits are awesome, many employees are not familiar with choosing their own policies -- and change can be hard. For this reason, look for a premium reimbursement administration provider that:
Provides custom on-boarding process for your company
Provides an instant and electronic way to send Welcome Kits to employees
Provides an online help and support center with tutorials for employees and the company administrator
Has a responsive and helpful support team knowledgeable about premium reimbursement and health care reform
2. Employee Allowances
The premium reimbursement administration software should allow you to give employees their allowances monthly or at any time on an exception basis—with automatic monitoring of HIPAA and ERISA discrimination compliance rules. Deferred allowances (a waiting period) should be possible for new hires, and suspended allowances should be allowed for former employees that employers hope to re-hire on a seasonal basis.
3. Claim Submission
Employees should be able to submit claims (requests for reimbursement) online, by fax, or by mail, and immediately receive an email acknowledging their claim and providing an online link to monitor claim status. Documentation should be permanently available online for convenient access by employees.
4. Claim Processing
The premium reimbursement administration provider should process claims within 24 hours and employees should be able to inquire about their claim via online chat, email, fax, mail, or telephone. No claim should be rejected for improper or incomplete submission without multiple contacts. All employee contact should leave clear audit trails and meet appropriate regulatory guidelines (e.g. ACA, IRS, HIPAA, ERISA, SAS 70). Look for software that provides “real-time” tracking on claims, available online 24/7.
5. Claim Reimbursement
Employees should receive email notification when their claim is approved and again confirming when (and how) it is reimbursed. Reimbursement should be administered individually or on a periodic batch basis via check, payroll addition, or direct deposit leaving a clear and permanently-available audit trail.
6. Employee Ledger
All employees should have access to an online ledger showing their current balance, allowance, claims, and reimbursements including permanent storage of receipts, relevant tax information, Plan Documents, and the ability to save or export their own medical information via the administration platform.
7. Integrated Electronic Plan Documents, SPD, and Employee Signature
The Plan Document, Summary of Benefits and Coverage (SBC), and SPD (Summary Plan Description) should be electronically created, readily accessible online, and signatures should be collected electronically. Employers should be able to administer a change to benefits for any specific Class of Employees at any time and the electronic documents should automatically change and, where required, new electronic signatures should be collected when the employee is next online.
8. Classes of Employees
Employers should be able to instantly create unlimited different Classes of employees with each Class receiving different benefits by employee family status.
9. Employee Enrollment & Termination
Employers should be able to instantly enroll or remove employees in real-time on an individual or batch basis, with automatic printing of employee welcome kits and other appropriate plan administration information.
10. Plan Setup
Employers should be able to completely set up and/or change both their premium reimbursement Health Plan and their Plan Documents simultaneously online. See related article: How to Set Up premium reimbursement Health Plan.
Employers should be able to view all reimbursements by employee or by Class of employees, and monitor in real-time claim information for each Class of employees. Employees should be able to see 3-5 prior years of history.
12. Tax Forms and Information
All information for required administration reporting (e.g. 5500 for employers with more than 100 employees) should be available online in real time, and non-eligible plan participants (e.g. independent contractors, owners of Sub S companies) should receive appropriate 1099 information.
13. Personal Health Insurance Distribution
premium reimbursement Software should automatically provide the employer’s health insurance broker a CRM (Customer Relationship Manager) to best serve their employees—including automatic notification to the broker when an employee’s premium reimbursement plan status changes due to family additions, promotions, etc.
14. HIPAA and ERISA Compliance
The employer should be automatically protected and the plan administration made HIPAA Compliant through technology rather than the training of administering employees. For example, employers should not be able to view HIPAA-protected employee information, and should automatically follow Department of Labor, HIPAA, and ERISA guidelines for employers allowing insurers’ access to their employees.