Life is not quite as easy and dramatic as televised courtroom shows would make us think. In fact, life in the legal lane can be very complicated.
During the AICPA Not-for-Profit Industry Conference, Karl Ahlrichs, Michael J. Monahan and Peter Petesch covered several of the terms that occur in the design of health programs. Among the terms:
- Experience Rated: This describes the process used by insurance companies in setting premium rates with “group” health programs based on the actual claims experienced of the particular plan’s participants.
- Claims Administration: This describes the process by which health claims are reviewed, adjudicated and paid to service providers.
- Stop Loss Insurance: This describes the type of insurance that “caps” liabilities for an employer or plan sponsor in self-insured arrangements at some percent above projected claims for a year for either all plan participants or by individual participants.
- Administrative Services Only (ASO): This refers to the fees an insurance carrier charges to process, adjudicate and pay claims on behalf of an employer or plan sponsor.
- Account Based Health Plan (ABHP): This refers to the health plan design which utilizes either a Health Savings Account or health Reimbursement Arrangement as an element of the program.
- Plan Sponsor: This is a civil entity that oversees the administration of the plan for the benefit of related entities.