1. What is a TPA?

A third party administrator, or TPA, is a company that handles the administration of group health plans, workers’ compensation, disability and similar programs for self-insured employers. This includes, but is not limited to, maintaining employee eligibility, processing claims, procuring stop loss coverage and management of COBRA, HIPAA and other needed plan services. TPAs are employed to maintain all records regarding the persons covered under a group benefit plan and to be sure each transaction is managed with maximum efficiency. Other services such as plan design consulting, plan analysis, plan documentation, prescription drug programs, vision care programs and care management are offered by Spectrum Administrators, Inc.

2. How does a self-funded health plan work?

Under a self-funded arrangement a plan sponsor assumes more of the financial risk for claims instead of paying a monthly premium to a carrier for a fully insured plan. In exchange for the assumption of risk, the employer/plan sponsor can realize great benefit.

A properly structured self-funded health plan provides benefits and contains costs to the exact specifications of the employer. Under a self-funded health plan, the Plan Document defines the plan benefits just as the insurance policy controls the plan benefits with conventional insurance. A clearly worded, professionally drafted Plan Document is a key ingredient in establishing an effective self-funded health plan.

Self-funded programs allow for the retention of underwriting profit and investment income by the employer while operating at a lower expense level than standard insurance plans. If a plan is well designed and managed, a self-funded/self-insured employer’s bottom line will be positively impacted, allowing dollars that would have otherwise been lost on premium to be otherwise retained.

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3. Is self-insurance the best option for every employer?

No. Since a self-insured employer assumes more of the risk for paying the health care claim costs for its employees, it must have the financial resources to meet this obligation. Therefore, small employers (fewer than 50 employees) and other employers with poor cash flow may find that self-insurance is not a viable option. Currently, about 50% of workers in the U.S. with 200 to 1,000 employees have self-funded coverage.

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4. What types of benefits are self-insured?

Depending on the wherewithal of the employer, demographics and risks of their employees and many other factors, an employer may consider self-funding almost all of the risk they assume as employers. Most often the group medical plan is the focus of a self-funded program. Ancillary health benefits are often included, such as dental, vision, prescription drug card plans and short-term disability. Workers’ compensation programs can also be self-funded if the employer meets the requirements of their state to be exempted from the purchase of workers’ compensation insurance.

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5. How can I protect against catastrophic loss?

Most employers choose to purchase stop loss coverage, from an insurance company specializing in such risk, to protect against unexpected large claims. The policy is one of reimbursement meaning it is designed to reimburse the employer for medical expenses exceeding the Individual Stop Loss (ISL) or Aggregate Stop Loss (ASL) retentions. In effect, stop loss coverage is designed to protect the Plan Sponsor, not the individual Plan participants, against certain losses that have been paid under the self-funded plan.

Not all self-funded plans are protected by stop loss coverage. Spectrum Administrators can assist a self-funded employer in understanding the risk assumed and if and how some portion of risk should be transferred back to an insurer through a stop loss policy purchase.

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6. Can Spectrum Administrators assist in the purchase of Stop Loss and other insurance products?

Spectrum Administrators is a licensed insurance agency with powers in many states and many insurance lines. We will work independently and/or with brokers and consultants to design a program of protection most suiting the needs of each client. Spectrum has been approved by and maintains select relationships with carriers rated by AM Best at A or better.

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7. Lots of companies manage workers’ compensation claims. What makes your approach so special?

A well managed, efficient and effective workers’ comp program helps to channel payments where they are deserved, and to eliminate fraudulent payments that drain the system of resources for those who have earned them. Spectrum Administrators provides workers’ compensation “program management” services, not simply claims services, that will streamline your workers’ compensation program, reduce risk, educate and engage managerial staff and enhance both employee relations and the employer’s bottom line.

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8. Is there a way to control workers’ compensation medical expenses?

Medical cost for workers’ compensation claims is impacted by a variety of factors including injury severity, the fee schedule, if there is one, of the state in which the employer operates, opportunities for further bill discounting, the ability to develop and offer transitional duty to injured workers, the skill of the TPA in analyzing bills and treatment records and using utilization review opportunities effectively, etc. However, at Spectrum we believe claims are a by-product of something much bigger—the work environment and human resource policies in place.

We will work with employers to assess the cause of past incidents to identify risk before new losses occur and we partner with each client to promote a work environment that encourages employee buy-in to the self-insured program, loss control and return to work efforts so that it is recognized to be in the best interest of all to control workers’ compensation expenses.

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9. Why combine health care claims management with workers’ compensation program management under one roof?

Integration of workers’ compensation and group health service lines for our clients permits us the opportunity to marry proven techniques of controlling the direct and indirect costs of work-related claims, with those of non-occupational losses, making the most of what we know about injury and illness prevention and treatment in a “24-hour” environment. Our expertise in both service lines affords all of our clients, whether purchasing integrated services or not, a more comprehensive approach to loss control.

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10. How can health care providers check on patient eligibility or the status of claims?

Options are available for providers in need of information when treating members covered by Spectrum Administrators’ client health plans. Our call center is staffed by service representatives from 8-5, Monday through Friday. More conveniently, however, on a 24/7 basis, a provider may use WebSAI, Spectrum’s online customer service portal to obtain confirmation of eligibility and the status of bill processing. Please use this URL: https://secure.healthx.com/SpectrumProvider.asp or click any WebSAI link to log on and register to use WebSAI. Please bookmark this page for easy, on-going access to the site. For more information, or for registration assistance, please call Spectrum Administrators customer service team at 610-969-0410 or 800-925-8549.

Providers interested in claims submitted to Spectrum Administrators, Inc. for repricing, only, can use WebSAI to confirm that Spectrum has, in fact, repriced such a claim. Verification of eligibility and/or inquiries regarding payment status must be directed to the payor responsible for adjudication of claims of the Plans offering coverage for those claims.

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11. How can I find out more about Spectrum Administrators and the services offered?

You can call us at 1-800-925-8459, or email us at SpectrumAdmin@lvh.com. You can also go to the Contact Us tab on our website. If you are interested in obtaining a no obligation quote for services, please call our Sales and Marketing Department via 610-969-0420.

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