Replacing Self-Funded Health Insurance

You may be in a situation where you want to leave your job-based self-insured health plan for another plan. This may be an individual ACA-compliant plan or a short-term health insurance plan. You may cancel your self-insured health insurance when this happens and you do not want to have two major health coverages. You need to contact your plan administrator or the Human Resources employee benefits department to do this. Ensure that you schedule the termination of your self-insured health plan to the time when your replacement plan will kick off.

If a Texas employer that desires to replace its current self-insured (self-funded) plan, the usual options are:

• Discuss the current organization needs with the existing Third Party (plan) Administrator (TPA), who can redesign the plan accordingly,
• Replace the TPA,
• Switch the organization from Self-Insured to Fully-Insured plans.

Speak to a licensed insurance agent in Texas about the process because canceling your health coverage is a major decision. Through the professional guidance and help of an insurance agent, you can be assured you will not be making mistakes.

How Do I Switch My Self-Insured Health Insurance to Another?

You can switch your self-insured health insurance to another health plan by basically canceling your plan and letting your new coverage begin.

There are various situations where you may want to switch your self-insured health insurance for another kind of health insurance. For example, when you get an ACA-compliant plan on or off the health insurance marketplace during the open enrollment period or special enrollment period. Or when you want to get a non-ACA-compliant health plan like a short-term health plan. Another example is when you get offered another job with employer-sponsored health insurance.

To switch from your self-insured health insurance, you have to cancel your self-insured health plan. It would be best to let the cancellation take effect on the date when your new plan is supposed to start.

An employer can switch between third-party administrators, or change the terms and funding of the plan through the current TPA.

To learn more about switching from self-insured health insurance to another health coverage in Texas, you should speak to the plan administrator or a licensed insurance agent in Texas.

How Can I Replace My Self-Insured Health Insurance if I Find a Better Deal?

Determining what a “better deal” is regarding health insurance is subjective. It usually depends on each person’s medical needs and financial status. For example, if you anticipate high medical costs because of continued expensive medical care, the plan with the lowest maximum out-of-pocket (MOOP) amount may be a better fit for you. At the same time, a lower deductible and copay may be more essential to you if you are a healthy young adult who primarily values preventive services and annual check-ups.

To find what the better deal is, an insured must answer these questions:

• Is your current self-insured health insurance in Texas covering your expected medical needs within your financial capacity?
• Are there other health plans that fit your current needs better than your current plan?

You may speak to a licensed insurance agent in Texas about this issue. They can legally give you qualified recommendations tailored to your specific needs.

Suppose you find a better health insurance deal than your present self-insured health plan. In that case, you can only replace your existing plan by calling your company’s Human Resource department or your plan administrator. Tell them about your intention to cancel your plan. They will inform you about the steps you need to take. Ensure that you let them know the date you want your self-insured health coverage to end, which should be the same date that your new coverage should start.

Can I Switch My Self-Insured Health Insurance to Another Company?

For employers: Yes, you can switch your self-funded health insurance to another third party administrator company, or to a fully-funded health insurance model for your employees. Make sure to discuss the repercussion of this move on the company’s finances with the current TPA and an accountant.

For employees: No, you cannot switch your self-insured health insurance to another company. Because it is your employer that sponsors and administers the plan. By implication, only your employer can switch the third-party company that they use to administer the plan. All you need to do is sign up for the plan, fulfill your obligations under the policy, and enjoy the benefits that it offers.

What Happens if You Change Self-Insured Health Insurance Companies?

An employee cannot change your self-insured health insurance administrator. It is the employer that can do that. If your employer was to change a third-party administrator, there may or may not be substantial changes. It all depends on the reason why a new administrator was contracted. It could be for a better claims process or because the new administrator has better correspondence with health providers. Generally, your employer can easily change the plan administrator without affecting the health plan, enrollees, and providers.

A licensed insurance agent in Texas can provide you with more information about administration of self-insured health insurance.

Can I Change Self-Insured Health Insurance Companies at Any Time?

If you are an employee, you cannot change self-insured health insurance companies at any time or at all, unless you refuse coverage provided by the employer. It is only your employer that can switch plan administrators. If you have any issue(s) with your plan administrator, you can inform your employer about it through the Human Resources department.

Contact a licensed insurance agent in Texas to know more about switching plan administrators of self-insured plans.