Why use a Third Party Administrator?
Employee benefit plan administration is complex. There may also be pressures brought to bear, especially in the area of claim payment, that are best handled by a third party. Therefore, it is recommended that employers retain a third party to administer their plans. In most areas of the country there are skilled, professional TPAs available to do what was done by the insurance company underwriting a fully insured plan. Many TPAs are capable of administering such business nationwide. Lower costs, flexibility, personalized service and clearer legal compliance are the main reasons. This type of employee benefit administration has boomed in recent years. It is estimated that 40% of U.S. workers with employee benefits are covered by plans administered by TPAs. TPAs have an active "grapevine" to compare experiences with other TPA firms. Clients of TPAs get the advantage of practical insight from thousands of employers who have faced almost any problem. Most self-funded plans are federally regulated (such as COBRA, MSP, HIPAA, ADA, etc.) and not subject to state insurance requirements. While insurance companies may say, "Sorry, but that's your problem, not mine." CMRG plays a special role with employers to ensure compliance of the various governmental requirements.
Why use CMRG?
CMRG can bring you significant savings in several ways. First, of course, is that instead of paying 100% of the costs for an in-house claims administration staff, you pay only a fraction of that price for an even wider range of programs that can also bring you claims cost savings. CMRG has been in the forefront of not just planning, but actually implementing effective cost containment for client plans. CMRG customizes cost-containment programs to the needs of each client. Your plan is the prime concern of CMRG. We do not simply sell you a one-size-fits-all-policy. We work together to design and operate a custom-made program and funding. This also assists in cost containment programs for your particular plan. Just as the design and implementation of your plan is personalized, so too, is the service. You are our #1 priority! We know the plan, covered employees and the medical providers up-close and first hand. Thus we can often save client plans significant amounts of money. Most importantly, we are accessible when you have a question or need help.
Employers invest millions of dollars each year in insured employee benefit plans. This typically affects the employer's employee compensation budget without producing the desired return:
In an effort to control rising costs, employers are examining ways to economize and improve cash flow without sacrificing coverage. Budget considerations, bargaining agreements, geography and plan design each have an effect on the way a health plan is funded. For many employers with more than 100 employees and a stable benefit history, there is an alternative: self-funding. Until 1974, restrictive state laws that required employers to become licensed as insurers when funding their own employee benefit plan obstructed self-funded plans. Passage of the Employee Retirement Income Security Act (ERISA) removed those barriers to a great extent, and self-funding is now one of the fastest growing areas in the employee benefit industry. Under a self-funded plan, it is usually possible for an employer to reduce operating costs significantly and maintain control of reserves. The reserves may be held in a trust, producing tax-exempt interest and thereby reducing the overall expenses of providing employee benefits or in an interest-bearing bank trust account. In order to provide an extra measure of financial protection against catastrophic claims, most self-funding employers purchase Stop Loss Coverage. Employers who self-fund can offer only the benefits they feel their employees need or prefer and only pay for claims their participants actually experience when they occur, instead of paying premium prior to the participant's claim experience. Furthermore, employers who self-fund can implement innovative, cost-effective health care prevention or treatment techniques through disease management programs.