As health care costs continue to rise, employers increasingly seek to discover new ways to offer affordable health coverage to employees. For a variety of reasons, including various laws that require more robust group health plan designs and increased competition in the labor market, employers are reluctant to address rising costs by cutting health benefits and are loathe to shift additional health care costs to employees.

Some employers have engaged an innovative service commonly referred to as a benefit concierge service to lower health care costs by increasing employee utilization of their health and welfare benefits. Benefit concierge services strive to achieve these two seemingly competing goals by serving as a central point of contact for employees, as a trusted adviser to employees, and as a data analyst. This article describes these roles and some legal issues associated with each role.

Central point of contact

A benefit concierge service provides a central point of contact for employees with questions about their health and welfare benefits. Contact information for a benefit concierge service may appear on the back of employees' medical insurance cards so telephone calls that previously went to the health plan's third party administrator, are instead directed to the benefit concierge service.

A couple of advantages of having a benefit concierge service serve as a central point of contact are:

Because the benefit concierge service is familiar with all of the employer's benefit offerings, it is able to direct employees to the appropriate resource to address their specific needs and it eliminates the need for employees to spend time learning about available benefits or searching for information about them. As a result, the concierge increases utilization of benefit programs that have the potential to save a doctor's trip or increase an employee's productivity.
For example, a benefit concierge could help an employee with a medical concern by connecting the employee to a nurse on the plan's nurseline who has the necessary training to understand the medical symptoms and provide general information to either allay the concern (and thereby eliminate the need for an unnecessary doctor visit) or connect the employee to a medical provider that would be best positioned to evaluate the employee's symptoms.

Many of the calls about available benefits that typically would be directed to the employer's human resources or benefits department will be handled by the concierge. Accordingly, a concierge service can also eliminate barriers for employees to ask questions about available benefits that could reveal personal health information.

Services provided by the benefit concierge raise concerns regarding fiduciary liability under ERISA. A concierge service provider could be considered a fiduciary under ERISA. Accordingly, employers might consider asking the concierge to perform services as though it were a fiduciary as a precautionary measure. In addition, plan fiduciaries have a duty to monitor the benefit concierge provider. Monitoring the benefit concierge service is challenging because the benefit concierge is communicating with employees about many different plans on a regular basis. Errant statements regarding plan terms could result in liability for the plan sponsors and fiduciaries.

Trusted adviser

As a result of being a central point of contact, concierge representatives develop relationships with employees to help them identify health care needs that employees may have and arm them with valuable information about ways that the employer's benefit plans can meet those needs. Currently, many employees make decisions about health care providers without knowing what their out-of-pocket expenses will be. Benefit concierge services often have access to tools and services that allow employees to compare the costs of potential providers as well as see ratings to assure they are still receiving quality care before they go to a provider.

For example, if an employee needs an MRI, the benefit concierge can educate the employee about potential savings from choosing an outpatient facility of comparable quality to an inpatient provider and also inform the employee of available outpatient facilities and their ratings. Some concierge services provide case management services to employees with a chronic or serious condition that connects employees with available treatment options, assists employees in obtaining any pre-authorization approvals, and helps manage an employee's treatment plan.

Because concierge services may provide medical information to employees, it is important to clearly explain that the concierge service provider is not a medical provider and ensure that the service is operated accordingly. For example, although the concierge service may employ nurses to educate members about available medical providers or treatment options, the service itself is not a medical provider. State laws govern the practice of medicine and standards of care for medical providers operating within a state. So, the role of the concierge service provider should be clearly defined and monitored to avoid inadvertently becoming subject to any such laws.

Data analyst

Another important way benefit concierge services can reduce health care costs is through the use of data analytics. Most benefit concierge services require access to the employer's claim data. By analyzing aggregated data and using proprietary algorithms, benefit concierges can predict likely adverse outcomes based on the existence of certain factors. The concierge service might use this knowledge to engage in affirmative outreach to an employee and encourage him or her to take preventive measures or seek more information from a medical provider.

Because benefit concierge services have access to employees' protected health information, it is important for benefit concierge providers to comply with all applicable HIPAA privacy and security requirements and have the appropriate safeguards in place. Employers may consider explaining to employees how a benefit concierge service might use protected health information or other personal information to engage in proactive outreach to an employee.

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Kendra Roberson is an employee benefits attorney at Covington, where she provides strategic advice on a broad spectrum of employee benefits matters including health and welfare plans, qualified retirement plans, executive compensation arrangements, and equity compensation plans. Chris Lowther is an associate in the firm's Employee Benefits and Executive Compensation practice group.

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Benefit concierge services: Legal issues to know

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