The Medical Savings Account Program Model For Employers
VI. MSA Administration

MSA administration objectives are to account for deposits and withdrawals, pay for and maintain receipts of medical expenses, and "shoebox" receipts for audit as required. The employer can make the choice to self-administer the MSAs and arrange internal bookkeeping processes. Account receipts and payments can be processed by a third party administrator, bank, other fiduciary, or even an organized health plan.

There is no need to adjudicate all MSA spending. MSA expenses only need review when exceeding the deductible. Below the deductible, spending from MSAs for uncovered medical services are of interest only to the employee.

MSA money belongs to the employee and may used accordingly. However, employees must understand that only qualified MSA expenditures count toward meeting the medical insurance deductible. The idea is to pay claims from the MSA promptly, with the lowest possible cost, intrusion, and complexity.

Payments from MSAs are usually made directly to the billing provider. These payments can be made at the point of service with a check, cash, or a debit card. MSA Administrative Services can be purchased to perform these services; they can be arranged in conjunction with electronic data interchange, electronic billing, and immediate dollar transfers.

Standard provider billing with itemized diagnostic, procedure, and examination information often continues whether manually or electronically produced. Simplified administration and elimination of layers of intermediate involvement adds greatly to the economic and psychological value of MSAs.

Internal MSA administration can be as simple as following ledger entry guidelines tailored for MSAs. Another approach is to use MSA enhancements to existing accounting software already used by the company. Small companies may want to purchase a Golden Rule MSA Guideline Manual especially written for Quicken users. (see Appendix) Installation of administrative and accounting procedures may be adapted to medical practice software already installed in provider locations. Many of these applications facilitate electronic claims billing and payment.

"Simplified administration and elimination of layers of intermediate involvement adds greatly to the economic and psychological value of MSAs."

Annual MSA plan and administrative review cannot be neglected. The entire plan's performance should be formally reviewed at least annually. This will allow the employer to make revisions necessary to meet current economic conditions, government regulations, changes in tax laws, employer/employee compensation objectives, etc.

Employees and family members should be asked about their experiences and satisfaction with MSA benefits. Their views about plan improvements and modifications can be invaluable. Some of the key indicators to judge success of MSA Managed Health Benefits are:

• Beneficiary perceived health status
• Access to affordable, quality health services
• Patient identified quality of health plan, providers, outcomes, and benefits
• Beneficiary and employer satisfaction with the plan
• Employer expense and compensation objectives

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org