Your patients’ health plan identification cards indicate if the health plan is fully-insured and regulated by the Texas Department of Insurance (TDI) - and thus subject to state prompt pay regulations. If the ID card doesn't indicate that the plan is regulated by TDI, you can infer that it is self-funded and may NOT be subject to prompt pay regulations.*
Additionally, you can search a free database from freeERISA.com to affirm that a plan is self-funded. Also, TDI provides information about what wording to look for on various health plan ID cards that indicate whether the plan is fully insured or self-funded.
A health plan is fully-insured if it is purchased from an insurance company or other underwriter that assumes full risk for medical expenses. Self-funded or self-insured health plans are those for which the employer assumes the financial risk of covering its employees, paying medical claims from its own resources.
Generally, federal laws and regulations govern self-funded plans. The federal Employee Retirement Income Security Act (ERISA) of 1974 exempts self-funded health plans from compliance with certain state laws and regulations.
*Note: This article was written for a lay audience and is not appropriate for legal citation. The article does not capture the complexity of ERISA jurisdictional issues. Private litigation may be necessary to determine ERISA preemption issues and the scope of prompt pay law applicability.
NOTICE: This information is provided as a commentary on legal issues and is not intended to provide advice on any specific legal matter. This information should NOT be considered legal advice and receipt of it does not create an attorney-client relationship. This is not a substitute for the advice of an attorney. The Office of the General Counsel of the Texas Medical Association provides this information with the express understanding that 1) no attorney-client relationship exists, 2) neither TMA nor its attorneys are engaged in providing legal advice and 3) that the information is of a general character. Although TMA has attempted to present materials that are accurate and useful, some material may be outdated and TMA shall not be liable to anyone for any negligence, inaccuracy, error or omission, regardless of cause, or for any damages resulting therefrom. Any legal forms are only provided for the use of physicians in consultation with their attorneys. You should not rely on this information when dealing with personal legal matters; rather legal advice from retained legal counsel should be sought.
Content reviewed: 5/24/12
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