A broker servicing a self-funded health plan contacted The Phia Group regarding a surrogacy agreement that one of the group’s employees had signed and provided to the group.  The group questioned what the surrogacy agreement meant and how it played into the Plan’s benefits.

The Phia Group reviewed the agreement separately and against the applicable Plan Document, and helped the plan to understand what benefits were payable under the Plan and what benefits the plan was able to recover from another source. As a result of this review, the Plan discovered that it was entitled to receive over $18,000 in reimbursable expenses of which it admitted it would not otherwise have been aware.
   

A client of The Phia Group’s faced a situation in which the group’s Plan Document  referenced an extension of coverage for up to 24 months based on disability (although that term was not well-defined). To contrast, the employer’s Employee Handbook referenced an extension of coverage for up to 36 months, or longer if deemed appropriate by the employer. To make matters worse, the group’s stop-loss policy provided coverage only for twelve months of disability – and only while the member was “totally disabled,” although that term was not well-defined either.

The health plan’s broker referred the Plan Document and stop-loss policy to The Phia Group’s consulting team to perform a Gap-Free Analysis. As part of this analysis, it was discovered that the Plan Document’s leave provisions did not align with those in the stop-loss policy. The Phia Group’s team also included a note to ensure that if the Plan Document was changed, the Employee Handbook may need to be changed to align as well. Upon receiving the Gap-Free Analysis, the group’s broker asked The Phia Group to review the Employee Handbook and make whatever changes were necessary for the documents to align; upon review, the additional discrepancy was discovered and remedied.

Three months later, after the Plan Document and Employee Handbook were amended to alleviate the gaps in coverage, a member requested 18 months of leave from the employer. The employer was free to grant the leave based on other terms in the Employee Handbook, but the employee was informed that after twelve months, coverage under the Plan would terminate. As luck would have it, during the fifteenth month of the employee’s leave, she incurred significant medical claims that, if paid by the Plan pursuant to its former language, would have been denied by stop-loss. By addressing gaps in coverage, the Plan successfully avoided a large stop-loss denial.
 

The Phia Group was asked by a health plan’s third-party administrator to review a stop-loss claim denied due to a combination of insufficient disclosure and payments by the plan in excess of the maximum allowable amount. Specifically, the stop-loss carrier contended that the plan failed to disclose large claims incurred by this particular plan participant between the time of the policy’s initial disclosure and the date the carrier received the plan’s initial premium payment.
    
The plan sponsor contended that it fulfilled its disclosure obligations by notifying the carrier of the plan participant’s known risk at the time of initial disclosure, and that actual claims incurred based on that risk were not specifically required to be continually disclosed. This argument created an impasse, since the policy’s disclosure requirement language was fairly vague and either interpretation was potentially viable. From all angles, it looked like reimbursement would not be forthcoming, and a longstanding relationship was about to crumble.

The Phia Group was asked to provide its assessment of this matter; after reviewing the entire file in detail, The Phia Group recognized the impasse and the unlikelihood of a simple solution. The goal, then, became fostering meaningful communication between both parties. To that end, The Phia Group drafted a detailed letter to the stop-loss carrier outlining the plan’s position, legal arguments to bolster that position, a good faith appeal to the carrier explaining why our entire industry benefits when carriers and plans work together, and of course the business case for the carrier’s reconsideration.

As a result of our efforts, The Phia Group was able to open a dialogue with the carrier; after many hours of negotiation and discussion, the stop-loss carrier was willing to make the plan a generous settlement offer, representing the vast majority of the claims that would have otherwise been denied.