· Post a 200- to 300-word response to the following: Compare cost control strategies of employer-sponsored health plans, in which employers buy from insurance companies, to self-funded health plans, in which employers cover costs of benefits. Include the following factors:

o Riders

o Enrollment periods

o Provider networks

o Third party administrators

Discuss how the following affect cost control within group health plans:

o Portability



o Creditable coverage

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Compare cost control strategies of employer-sponsored health plans

with

self-funded health plans.

Be sure to include the points listed.

To compare cost control strategies of employer-sponsored health plans where employers buy from insurance companies to self-funded health plans where employers cover costs of benefits, we need to consider the following factors:

1. Riders: In employer-sponsored health plans, riders are additional coverage options that employers can purchase on top of their basic plan. These riders could include coverage for dental or vision care, prescription drugs, or mental health services. In self-funded health plans, employers have more flexibility in designing their plan and can customize it based on the specific needs of their employees. This can lead to more targeted cost control strategies compared to insurance company plans where riders may be more limited.

2. Enrollment periods: Employer-sponsored plans typically have open enrollment periods where employees can select their coverage options. This allows employers to manage costs by limiting the enrollment period to a certain time frame and optimizing the number of employees covered. In self-funded plans, employers have more control over enrollment periods and can tailor them to their specific needs.

3. Provider networks: In employer-sponsored plans, insurance companies negotiate contracts with specific health care providers to create a network of preferred providers. By accessing these providers, employers can benefit from negotiated rates and cost savings. In self-funded plans, employers have the opportunity to negotiate directly with providers or use a third party administrator (TPA) to manage their network. This can provide more control and potentially result in further cost savings.

4. Third party administrators (TPAs): In self-funded plans, employers often hire TPAs to manage the administrative tasks of the plan, including claims processing and network management. TPAs can assist in implementing cost control strategies such as claims analysis, utilization reviews, and wellness programs. In employer-sponsored plans, these tasks are typically handled by the insurance company.

In terms of the impact on cost control within group health plans, the following factors should be considered:

1. Portability: The ability for individuals to maintain their health coverage despite changes in employment or insurance plans. Portability provides options for individuals to continue coverage even if they switch employers. This can help control costs by maintaining a stable pool of insured individuals and reducing the likelihood of individuals having a gap in coverage.

2. Creditable coverage: This refers to the previous insurance coverage an individual had before enrolling in a new plan. Creditable coverage can impact cost control by allowing individuals to receive continuous coverage for pre-existing conditions, which can reduce costs related to managing chronic illnesses or expensive treatments. This also ensures that individuals are not subject to waiting periods or exclusions for pre-existing conditions.

In summary, the cost control strategies of employer-sponsored health plans and self-funded health plans differ in terms of riders, enrollment periods, provider networks, and the use of TPAs. The factors of portability and creditable coverage also play a role in controlling costs within group health plans. Employers should carefully evaluate these factors when choosing a plan to ensure they are able to effectively manage and control costs while providing comprehensive and affordable coverage to their employees.