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AA7295
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Who Pays For Healthcare - Insurance Company or Employers?

Fri Jun 21, 2019 3:24 pm

I work for a very large tech company in the US (formally startup) and am having a rough year, medically speaking.

I've met all my deductibles and out of pocket expenses. Now that I've reached my out of pocket max, my plan pays 100% for every single eligible medical expense. I am wondering, does the insurance company (United Healthcare) pay for this, or does my employer?

I'm getting mixed info on this and can't find any specific data on the internet.
 
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casinterest
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Re: Who Pays For Healthcare - Insurance Company or Employers

Fri Jun 21, 2019 3:32 pm

Your insurance company pays for it.

Then everyone else pays for it if the expenses require the insurance company to raise rates next year.


In my company we get refunds in the middle of the year ( don't have to pay premiums for 1-4 paychecks) based on the final usage the year before.

So if your employer pays all medical costs ( then they will eat it or not eat it in the premiums for the future).
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Aesma
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Fri Jun 21, 2019 3:45 pm

If the employer paid, then what would be the point of the insurance ?
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Tugger
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Fri Jun 21, 2019 3:53 pm

Actually, it all depends on the contract. There can be cost sharing or other factors that come into play. Southwest Airlines is "self-insured" meaning they budget for and pay directly for employee medical expenses. They use internal resources rather than pay a fee to an outside entity to manage this. However even they have insurance in place for "act of god" level things should something occur outside of their ability to budget and manage for it. (Meeting some specified target limit - over $100,000,000.00? - I have no idea.)

So different companies will have varying levels of cost assumption. Especially LARGE companies with significant resources, employees, and the ability to put in play options they find best for their bottom line.

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Pyrex
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Fri Jun 21, 2019 7:07 pm

United Healthcare may not really be your insurer, even though that is what says on your insurance card. Most of the large health insurers offer "admin-only" plans for larger employers where, for a fee, they will manage enrollments, issue insurance cards, handle claims, do cost control, provide access to their network of medical providers, etc. but not actually be responsible for the medical bills, ultimately. If your employer is large enough and with a diversified enough population, it may end up cheaper for them (and they can always obtain stop-loss insurance on a group basis to manage really catastrophic case, or particularly bad years). For instance, 70% of United Healthcare's total lives covered in their Commercial segment (i.e., not Medicare/Medicaid) are in fee-based plans.
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Pyrex
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Fri Jun 21, 2019 7:09 pm

Aesma wrote:
If the employer paid, then what would be the point of the insurance ?


Having a professional manage the business for you, instead of Jennifer in accounting. Same reason many companies outsource payroll administration, retirement benefits, etc.
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janders
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Fri Jun 21, 2019 9:50 pm

Depends. Could very well be the employer depending on the plan. I know a medium sized company which took millions in charges as they had several employees during a single year that rack up massive medical charges. The event wrecked things pretty badly for subsequent years.
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DL717
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Sat Jun 22, 2019 3:43 am

The insurance company technically pays the bill through negotiated rates, the company buys the insurance plan. How much the company pays vs. the employee varies. Then there are uncovered costs that fall to the employee. Insurance company’s look at risk for a given populous of a company. Younger companies would likely have a lower plan cost than a company with older employees. Certain medical conditions for staff members can cause a spike. I talked to an HR guy when I was retiring about how our costs would be managed. He said retiree costs were about 2/3 more than active employees until Medicare kicks in for them. He also said they’ve seen spikes when multiple employees had cancer or rare disorders that required expensive treatments. He said these kind of premium spikes get spread across all plan members, especially with companies that have under about 500 employees. He had come from a company of about 300 employees. It’s why its called a “group” medical plan.
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Aaron747
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Sat Jun 22, 2019 9:03 am

DL717 wrote:
The insurance company technically pays the bill through negotiated rates, the company buys the insurance plan. How much the company pays vs. the employee varies. Then there are uncovered costs that fall to the employee. Insurance company’s look at risk for a given populous of a company. Younger companies would likely have a lower plan cost than a company with older employees. Certain medical conditions for staff members can cause a spike. I talked to an HR guy when I was retiring about how our costs would be managed. He said retiree costs were about 2/3 more than active employees until Medicare kicks in for them. He also said they’ve seen spikes when multiple employees had cancer or rare disorders that required expensive treatments. He said these kind of premium spikes get spread across all plan members, especially with companies that have under about 500 employees. He had come from a company of about 300 employees. It’s why its called a “group” medical plan.


What a waste of time dealing with all that. When I worked in Japan, it couldn’t have been more simple - one NHS health card if employed, another arranged through city hall if not. Can go to any public or private clinic/hospital with either card, with fixed copays. Employer and employee pay the monthly healthcare tax (between $70 and $300/month if income between $25k and $80k) - unemployed or below $25k pays $30/month. Pay 100% out of pocket for electives - cosmetic dentistry, cosmetic surgery, sterilization etc. Employers cover one mandatory preventive exam annually - simple course until 35, blood work and cardio tests over 35. Virtually nothing to think about for both employers and employees - it’s all in a manual online. Universal care is the ultimate large risk pool for keeping costs low.
Last edited by Aaron747 on Sat Jun 22, 2019 9:04 am, edited 1 time in total.
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sierrakilo44
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Sat Jun 22, 2019 9:04 am

I don’t mean to gloat but after reading this thread I’m sure glad I live in a country with government funded national healthcare free at the point of use, and I don’t have to deal with insurers, premiums, deductibles, co-pays, negotiated rates, plans, networks, coverage, etc.

Most people in developed countries outside of the US wouldn’t have a clue what those things are.
 
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Aesma
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Sat Jun 22, 2019 11:51 am

Pyrex wrote:
Aesma wrote:
If the employer paid, then what would be the point of the insurance ?


Having a professional manage the business for you, instead of Jennifer in accounting. Same reason many companies outsource payroll administration, retirement benefits, etc.


Interesting. So when an employee feels his insurance is shafting him, does he turn towards his employer to complain ?
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Pyrex
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Sat Jun 22, 2019 1:22 pm

Aesma wrote:
Pyrex wrote:
Aesma wrote:
If the employer paid, then what would be the point of the insurance ?


Having a professional manage the business for you, instead of Jennifer in accounting. Same reason many companies outsource payroll administration, retirement benefits, etc.


Interesting. So when an employee feels his insurance is shafting him, does he turn towards his employer to complain ?


Depends on what you mean by shafting him... The employers can get more or less involved in plan design (what is and isn't covered under the plan), in consultation with the insurance company (who knows what the minimums must look like), but then normally don't get involved in individual claims decisions. Besides not really being their area of expertise, doing so would by necessity involve them becoming privy to private patient medical information, having to comply with HIPPA (a very complex medical privacy law), etc. - generally not worth the headache, and a good reason to hire someone who does this all day long.
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Pyrex
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Re: Who Pays For Healthcare - Insurance Company or Employers?

Sat Jun 22, 2019 1:32 pm

Also, just to be clear, by law you need to be an admitted insurer in a given state to be able to issue an insurance policy to individual customers, which most employer captive entities aren't. Technically the way this works, most of the time, is that the insurance company issues the policy for you and then reinsures the risk to a captive reinsurance entity owned by the employer (eventually subject to a cap, if the claims manager is also providing the stop-loss insurance to the plan). As a policyholder, you still have a direct contractual relationship with the insurance company, even if they own little to no of the ultimate risk, so you still have course of action against them if you feel wronged, they can still get into trouble with insurance regulators if you complain, etc.
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