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At Employee Benefit Services (EBS), we want our clients to understand the benefits they provide their employees. Here are some definitions of benefits terms found on our website.
Alamo Risk Management (ARM)
A subsidiary of EBS that takes care of case management for our self-funded clients. EBS formed Alamo Risk Management (ARM) because of the poor service we encountered in the areas of utilization review and large case management. Managed by an RN, MSN with more than 26 years of experience, ARM works closely with providers, hospitals, insureds and EBS to make sure the best and most economic care is given without sacrificing the health of the patient.
Simply by eliminating duplication of care, ARM has saved clients hundreds of thousands of dollars while improving the health of the patient. ARM also provides bill auditing and provides covered employees easy answers to their benefits questions—making it priceless for our clients.
A form of stop-loss insurance that limits your liability on a group of employees and dependents. For instance, if your company has 50 employees and dependents enrolled in your benefits plan, with specific insurance of $25,000 on each, your maximum risk—in the unlikely event that every insured has a large claim—would be $1.25 million.
Aggregate insurance insures you against this possibility, limiting your total liability so that you know your maximum benefits cost right down to the penny. Aggregate insurance must be purchased in combination with specific insurance.
EBS’s internal IT system for managing employee benefit plans.
A company or individual who negotiates the sale of insurance or other benefits in return for a commission. As a broker and licensed third-party administrator, EBS puts its commission to work for its clients, offering benefits administration at no additional cost.
Consolidated Omnibus Budget Reconciliation Act of 1985. A federal law requiring continuation of coverage to employees who leave their jobs, as well as to their dependents. Health plans sponsored by employers with 20 or more employees must provide COBRA coverage. The former employee must pay the premium, and can extend coverage for up to 18 months. Surviving dependents can receive longer coverage.
Employee Retirement Income Security Act of 1974. A federal law establishing rules and regulations to govern private pension plans. Self-funded insurance plans are created under the terms of this act, and are subject to federal, not state, regulation.
Health Insurance Portability and Accountability Act of 1996. Federal law giving patients increased access to their medical records and greater power to restrict the use of their personally identifiable health information. HIPAA requires health care providers and health plans to protect this information.
Health Maintenance Organization. A health care plan in which members must generally receive all of their medical care from providers within the HMO network. Access to providers is overseen by a primary-care physician (PCP).
IRS Form 5500
IRS Form 5500 is an annual report that employers are generally required to file on tax-preferred benefit plans that they offer to employees.
Long-Term Disability Insurance
An insurance policy covering disabilities lasting longer than six months to two years. Long-term disability insurance often lasts until the insured is 65 years old, or for life in the case of an accident.
Limited Self-Funded Plan
A self-funded benefits plan in which stop-loss insurance is used to limit employer liability to a predetermined amount.
Primary-Care Physician. A physician who coordinates all of a patient’s care. In HMO plans, the PCP typically acts as “gatekeeper,” controlling access to services.
Preferred Provider Organization. A health care network composed of physicians, hospitals, or other providers that provides health care services at a reduced fee for network members. Unlike an HMO, patients pay for care when they receive it, not in advance.
Section 125 Cafeteria Plan
A flexible spending plan that allows employees to pay for benefits with pre-tax dollars. Cafeteria plans can contain a variety of benefits, including medical and life insurance, sick leave, and disability benefits.
Self-funded insurance plans are benefit plans in which the employer designs their own benefits package rather than purchasing a pre-made package from an insurance company. Under this arrangement employers generally purchase stop-loss insurance to mitigate the risk of loss from medical expenses. EBS clients find that self-funded plans provide greater control over benefits and lower costs.
Short-Term Disability Insurance
An insurance policy written to cover disabilities lasting 13 or 26 weeks. Short-term disability insurance can cover periods as long as two years. Compare with long-term disability insurance.
A form of stop-loss insurance written to limit an employer’s liability for claims from a particular employee. For instance, an employer might purchase stop-loss insurance to cover all medical claims from an employee in excess of a particular amount. To further control liability, specific insurance can be combined with aggregate insurance.
Stop-loss insurance protects self-funded plans against large claims. For instance, if an employee is diagnosed with a serious illness, stop-loss insurance would kick in to pay for any claims above a pre-set limit.
Texas True Choice (TTC)
Texas True Choice provides EBS’s self-funded clients with a statewide network of health-care providers. The TTC network consists of more than 340 acute care hospitals and 35,000 participating providers throughout the state. Their network discounts enable employers to enhance their existing benefit package by offering significant healthcare savings without limiting choices.
Third-party administrators are licensed by state to accept premiums and process claims on behalf of insurance companies and other providers. Being a licensed third-party administrator, as well as a broker, gives EBS the ability to administer benefits for its clients.
The typical insurance plan purchased by an employer for its employees. With a traditional insurance plan, you choose a pre-made plan with a state-approved, predetermined rate structure. Your liability is limited to paying the premiums. In contrast, self-funded plans allow greater customization and control (along with additional risk that is mitigated by stop-loss insurance).
A report on the claims your employees are making: doctor’s appointments, hospitalization, emergency room visits, etc.