• Self-funded health insurance plans help employees when they need medical care.laparoscopic surgery image by Grzegorz Kwolek from Fotolia.com
  
  An employer who takes on the responsibility of a self-funded health insurance program must be prepared to comply with several state and federal regulations. The greatest consideration to remember is all self-funded health insurance plans come under the jurisdiction of the U.S. Department of Labor. On the state level, the employer will be subject to legal sanctions imposed by state courts if a beneficiary files and wins a lawsuit.
  
  

Administration

• When you consider the state and federal laws associated with a self-funded health insurance program, the most important issue to consider is who will administer the plan. An administrator for a self-funded health insurance program is responsible to structure the different coverage options that will be available to employees and beneficiaries. The administrator in conjunction with the employer will need to ensure the program has sufficient cash reserves and sufficient cash flow to ensure program viability. Other laws that must be considered are health insurance coverage issues for children or disabled persons. The administrator will need to understand issues surrounding preexisting conditions and civil rights issues.
  
  

Preexisting Conditions

• Protections provided to insurance beneficiaries to continue their coverage if they change employers through the Consolidated Omnibus Budget Reconciliation Act (COBRA) must be understood by the self-funded insurance plan administrator. If the self-funded employer has fewer than 20 employees, you won't be eligible for protections provided by COBRA to transfer your coverage when you're hired. Self-funded employers with 20 or more employees are required to comply with all of the protections provided by COBRA. This is an important consideration for beneficiaries who have serious preexisting conditions that must be covered if they change employers. The Patient Protection and Affordable Care Act didn't change any of the provisions of COBRA.
  
  

Federal Reforms

• Self-funded insurance plans are impacted in many ways by federal health insurance reform that will override state regulations. A major change that will have immediate impact on self-funded insurance plans is the elimination of maximum lifetime coverage limitations. This reform will have major ramifications for the funding reserves a self-funded plan will be required to maintain. Another reform that self-funded plans will need to consider and provide coverage for is the extension of coverage of plan beneficiaries' adult children until age 26. Additionally, preventive care services must be provided to plan members without the requirement for copayments. Most importantly, requirements for preapproval to receive emergency care will be lifted.