For those with fiduciary responsibilities for a Health or Welfare Fund, there is a lot to be managed. First, there is the matter of compliance with federal and state laws and the associated tasks that must be performed correctly. Once fiduciaries understand the full breadth of what is required in the administration of these plans, many recognize that they are ill equipped to manage the function themselves. That is why many opt to outsource their funds’ administration to a qualified, experienced third party administrator (TPA).
What’s Required in Health and Welfare Fund Administration
The range of tasks that a TPA performs in the administration of health and welfare funds typically include:
- Maintaining records of participant benefits, eligibility, and payment history
- Maintaining full financial records
- Annual audit assistance
- Trustee meeting attendance and reporting
- Assistance in the preparation of government filings
- Administering fiduciary liability and fidelity bond insurance
- Managing all billing and collections (i.e., billing, collection, reconciliation of monthly employer contributions; data maintenance at the participant and employer level, delinquency, and standard reporting)
- Handling member inquiries (i.e., enrollment, eligibility, plan benefits/coverage, claims status, ID cards, appeals, COBRA, premiums)
- General administration, coordination, and communications with other plan professionals (i.e., broker, accountant, auditor, attorney, actuary, and benefits consultant)
- Managing appeals (i.e., providing documentation, presentation, recommendations, receipt of final determination, communication of resolution)
- Maintaining records (i.e., plan documents and amendments, CBA’s, Summary Plan Descriptions, Summary of Material Modifications, benefit overviews, trustee meeting minutes, trust agreements, rate/fee adjustments)
- Distribution of Summary Annual Reports and other member communications
Compliance
In addition to managing all these tasks with knowledgeable specialists experienced in health and welfare fund administration, a TPA is able to assist with compliance in various laws such as:
- The Consolidated Omnibus Budget Reconciliation Act (COBRA)
- Health Insurance Portability and Accountability Act (HIPAA)
- Health Information Technology for Economic and Clinical Health (HITECH)
- Mental Health Parity and Addiction Equity Act (MHPAEA)
- General Information Nondiscrimination Act (GINA)
- Affordable Care Act (ACA)
Regarding HIPAA compliance, the TPA will ensure funds are in compliance related to nondiscrimination, portability, privacy, and information security. HITECH compliance also focuses on privacy and information security.
The Advantages of Using a TPA for Full Fund Administration
When a TPA assumes the full administration of a health and welfare fund, there are other benefits to be gained besides alleviating the burden of this complex task and supporting compliance. The best TPAs are flexible and customize their services to the fund’s specific needs. In addition, they use claims management systems that facilitate various pricing models which enable significant cost containment. Their support in offering cost-effective medical management programs that include telehealth and other online health platforms further help reduce medical costs, while promoting improved patient care and experiences. Their robust reporting further keeps fund fiduciaries fully informed which, in turn, provides peace of mind knowing that their funds are being diligently managed.
