Third party Administrator confidentiality
Jul 24, 2012
If I send the medical question insurance form to the third party administrator, are they prohibited from sharing that information with employer? Are they bound by the same confidentiality laws as insurace company's.
Response from Mr. Chambers
Third party administrators are NOT subject to the same HIPAA medical confidentiality requirements as are "covered entities" under the Code of Federal Regulations "CFR" Title 45, 160.103.
It is my understanding (as a non-attorney) that an employer who self-funds its health plan and hires an outside administrator to process the claims, still retains ownership of all the documentation its contractor (the third party administrator) uses to perform its duties.
However, self-funded plans tend to exist almost exclusively with large employers whose "spread of risk" is sufficient that they don't need to "insure" for loss, but simply need someone to pay claims accurately. Employers that size tend to be well aware of medical confidentiality laws as well as potential discrimination in the workplace for even having such information.
Therefore, most of the employers (and their attorneys) build very strong "walls" so that specific medical information on employees and their families is not available to anyone in the company. This is done to protect themselves from any liability for misuse more than it is to protect employees, but it accomplishes the same purpose.
While I don't know of anything legal "prohibition" against such sharing, the sharing is extremely rare if not totally avoided.
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