Self-insured short term disability

MNHR · April 2007

Due to cost, we would like to bring our short term disability policy in-house and self insure, plus self administer it. Does anyone have a policy or written program that shows how you handle this in-house? How do you handle HIPAA concerns? I appeciate any guidance you can give me.

Irie · April 2007

We self insure our disability but I have an outside agency that administers it. They call it an "advice to pay". I send the claims to them, they review them, make the determination as to how long to allow the disability, etc. The company then sends me an "advice to pay" letter and we pay the employee through our payroll.

The cost to do this is minimal about $.70 per employee per month. Ours is through Guardian.

Personally I don't think it's a good idea to administer the disability yourself unless you're a professional in this area. Too much private information is involved and unless you have standard guidelines for medical conditions you could be asking for trouble.

Just my opinion.

allsteaks · April 2007

We are also going self-insured STD because of potential savings, but mainly because of problems with multiple insurance carriers. Because our STD is a union contract benefit, it must be paid according to the plan and very timely. We do not have a TPA. The difference is we have a full time medical department which deals with HIPAA issues and protects our medical info. Payroll is only aware of who is to be paid and for what period of time. Medical people handle the correspondence and communicate with the physicians on an employee's condition and restrictions. We also have a physician consultant who can review any questionable claims. There is a risk involved and we'll just have to see how it works out.

MNHR · April 2007

Thanks, this is helpful.

AJ SPHR · April 2007

Please be aware that STD plans are not subject to HIPAA. Our STD plan is a payroll practice benefit, and therefore also not subject to ERISA. We do as the first responder said, we utilize an external third party to evaluate the appropriateness of the leave request (they have a nursing staff) and then they coordinate with us to process the leave.

Self-insured short term disability

Comments