Has Your Company Decided To Self-Fund Its Medical Plan? Don't Forget Privacy, Security, And Reporting Requirements.

An employer that changes its medical plan from fully insured – where the insurance company sets the terms of the policy and retains the risk that claims will exceed the premiums paid – to self-funded – where the employer is responsible for the claims – must re-examine all aspects of the operation of its medical plan. In addition to drafting a new plan document and summary plan description, negotiating contracts with a claims administrator and other vendors, and purchasing stop-loss coverage to insure against the risk of catastrophic claims, employers must address privacy and security obligations under the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") and reporting requirements under the Patient Protection and Affordable Care Act (PPACA).