If your company has more than about 500 employees, the card in your wallet probably says Aetna or United or another insurance company- but none of them are actually paying for your care. Your employer is, with your premium dollars.
67% of workers are in self-funded plans, which means the money from your paycheck and your employer’s revenue goes into a trust account. The insurance company is hired as a third-party administrator (TPA) to process claims against it. Lena’s math: rather than hand Aetna $100 in premium, the employer keeps $98 in a claims fund and pays Aetna $2 to administer it.
That $98 is governed by ERISA, a 1974 law protecting employee benefit plans. Under ERISA the employer is a fiduciary: the money must be spent in the interest of the plan and its members. The key point most employers miss: you cannot delegate that fiduciary responsibility. Courts have held that anyone exercising control over plan assets is a fiduciary too, regardless of what the contract calls them. “You can call yourself whatever you want. If you exercise any level of control over that money, you yourself are a fiduciary.”
Ebad Khan is a lawyer who did not come up in healthcare, which allows him to see things differently. He landed at a small out-of-network hospital in Houston as a young attorney with no stake in how things were already done. “There’s a huge presumption that you’re having to overcome,” he says, that institutions this old, doing things this way, must be doing them correctly. He didn’t buy it. Over ten years, the claim-by-claim disputes stopped looking individual. “Everything is just a little tilted. And you start asking yourself why.”.
