As a natural extension of the export-driven economy and the outcome-oriented medical care industries that exist here today, people from around the globe have begun to travel to Korea for quality, affordable care and this is a prime example of a new trend taking hold in developed and developing nations around the world.
The government of Korea, specifically the Korea Health Industry Development Institute (KHIDI), has taken a leading role in creating a global awareness of Korea’s standing in the medical community. They have completed several initiatives that, taken together, create a platform for international customer satisfaction in the medical industry and a delivery framework within which medical providers must work. This has created a standardized offering of great medical care whose message has begun to resonate with consumers in the US.
As the Medical Travel industry has matured over the past several years, many experts agree that we are on the cusp of a large scale adoption of medical travel by corporations in the form of modified or expanded employee benefit options. In this article we will explore the self-funded group health plan model, the increasing trend of adoption of medical travel benefits by group health plans and what differentiates an association plan model from a standalone plan design.
It is important to point out that the plan designs discussed in this article have been adopted by several employers already, including large multinational corporations, and are in the process of being implemented by several more self-funded groups at this time. This experience in the industry has resulted in an offering that has been developed and then iteratively refined over time to enhance its relevance to the corporate buyer. The ongoing work with employers from many different industry groups continues to bring innovative change to this platform creating an evolving offering that is ultimately designed by the consumer, not the supplier.
When an employer or other group that provides health care coverage to its members (union, government, etc.) evaluates its alternatives for funding that health care, they have several options. In a very general sense, the two ends of the spectrum are a “fully insured” health care plan and a self-funded plan. Using a fully insured plan design means that the employer pays a fixed premium to an insurance company to cover their group and that any claims made against the group are paid by the insurance company. Electing a self-funded plan design, for all intents and purposes, means that the employer will assume the role of the insurance company and will pay any claims made against the group. This is a spectrum so there a theoretically infinite number of ways of designing a plan that uses some aspects of both of the above, and a wide range of commercial products that use partial insurance and partial self-funding to optimize cost containment for the employer.
While insurance products are subject to state-by-state regulation, when employers elect a self-funded plan design they are subject to the federal regulations known as ERISA. This alone can make a good argument for self-funding for employers with facilities or employees located in many different states because it enables them to create a single plan to cover all of their US employees without needing to stay up-to-date, or pay a national insurance company to stay up-to-date, with the regulations of each state in which they operate. Using a self-funded platform for providing employee benefits also allows the employer a far greater degree of control over what benefits are offered and exactly how they are offered, as well as the ability to change the availability and coverage levels of specific benefits within the plan at any time they see fit. It is for these reasons and many more that most large employers (those with more than 1000 employees) choose to self-fund their health benefit plans. In fact, some groups as small as 30 members can comfortably self-fund their benefit plans so long as the demographics and claim history of the group make it financially attractive.