Table 4. Private health insurance plans, by type of classification.
| Type of plan | Type of classification | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
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| ||||||||||
| Administration | Risk | Regulation | Provider choice | |||||||
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| Insurer | Employer/union | Agent | Insurer | Employer/union | Federal | State | None | Restricted | Unrestricted | |
| Blue Cross and Blue Shield plans | ||||||||||
| Standard contracts | ||||||||||
| Nonexperienced rated 1 | X | X | X | X | ||||||
| Experienced rated | X | (4) | X | X | (8) | X | ||||
| Cost plus | X | (4) | X | X | (8) | X | ||||
| Administrative service contracts (ASC) | X | X | (6) | X | (8) | X | ||||
| Insurance company plans | ||||||||||
| Individual policies | X | X | X | X | ||||||
| Group policies | ||||||||||
| Nonexperienced rated 1 | X | X | X | X | ||||||
| Experienced rated | X | (2) | (2) | (4) | X | (8) | X | |||
| Minimum premium plans (MPP) | X | (2) | (2) | X | (7) | (8) | X | |||
| Administrative service only (ASO) | X | (5) | X | (6) | X | (8) | X | |||
| Self-insured, self-administered plans | X | (5) | X | (6) | X | X | ||||
| Third-party administered plans (TPA) | X | (5) | X | (6) | X | (8) | X | |||
| Prepaid plans | ||||||||||
| Health maintenance organizations (HMO) | X | X | X | X | X | |||||
| Single service plans | ||||||||||
| Individual contracts | X | (3) | X | X | X | |||||
| Employer contracts | X | (3) | X | X | X | |||||
Includes individual contracts, small group contracts, and some larger groups.
Under many contracts, administrative responsibilities are divided between the insurers and the employer or union. In other cases, insurers contract administration out to TPA's.
Some specialized services plans contract administrative responsibilities out to TPA's.
The insurer typically bears only risk of cancellation with a deficit.
Some self-insured plans purchase excess-loss insurance or other catastrophic coverage that transfers part of risk to an insurer.
Under ERISA, all noninsured employer or union sponsored plans are nominally regulated by the Department of Labor. State or local government regulation is specifically precluded by ERISA.
The minimum premium paid to insurers is clearly subject to State regulation. Some States claim regulatory (and tax) authority over the self-funded portion of the premium as well.
Some insurers and self-insured employers have contracted with PPO's and impose various forms of restrictions to encourage PPO use.