Principal Group to serve as new claims administrator

by ZACH VEILLEUX

The Rockefeller University has chosen The Principal Financial Group, a 129-year-old financial services company headquartered in Des Moines, Iowa, to take over the administration of its self-insured health plan, dental plan and flexible spending accounts. Principal has taken over claims processing for expenses incurred after January 1, 2008 from 21st Century Health and Benefits, which has been the university’s claims administrator since 1998.

Though the switch to a new administrator means claims will be reviewed and paid by a new team of processors, the move does not change the benefits offered to Rockefeller employees or the services or doctor networks covered under the Rockefeller University health plan. In addition, mail-order prescriptions filled under the Rockefeller plan will continue to be processed by Express Scripts as they have been in the past.

Rockefeller has historically had renewable one-year contracts with its health benefit administrators, and the Benefits Office, part of Human Resources, reviews the contracts each year to ensure they are maintaining a high level of service. In 2007, after 21st Century was acquired by a much larger firm dealing principally with large government clients, Fringe Benefits Management Company, HR felt the time was right to undertake a broad, more systematic search to make sure the university’s claims administrator was best serving the community’s needs. “Our emphasis in choosing an administrator is on service,” says Ginny Hansen, director of benefits. “It’s important that claims are processed quickly and accurately and that customer service personnel are capable of effectively speaking with and serving our diverse community.”

Working with an international human resources consulting firm, Mercer, HR identified 11 companies capable of delivering benefits administration services. The firms included both insurance companies, such as Oxford Health Plans, which provides the university’s managed care plan but can also administer self-funded plans, and third-party administrators, such as 21st Century and Principal, which process claims on their clients’ behalf. Over three months last year, HR personnel conducted site visits, interviewed key personnel, examined financial disclosure statements and checked references of the companies.

Principal was selected primarily because of its experience providing claims administration to small organizations, particularly hospitals and research facilities in which plan participants have a very high level of knowledge about health care. “At Principal, our claims and inquiries will be handled by a single group of seven processors,” says Virginia Huffman, vice president for human resources. “It’s appealing to us that phone calls are not routed through large call centers as they are at many national vendors.”

Other benefits of Principal are faster turnaround of claims, a nursing staff that can provide medical support for those who need assistance, a more robust Web site and the option of direct deposit for flexible spending account reimbursements. Like 21st Century, Principal is also able to process and pay overseas claims.

“Continuity was also a key part of the decision,” says Ms. Huffman. “Because Principal uses the PHCS doctors’ network and Express Scripts, switching to them means that disruptions are minimized for the majority of plan members. For many people, carrying the new ID card instead of the old one is all that’s required.”

In addition to the PHCS network, doctors in the Weill Cornell Physician Organization — which includes most doctors who practice full-time at Weill Medical College of Cornell University — will continue to be covered in-network. The addition of the Weill Cornell network to the Rockefeller health plan was negotiated last year after the Weill Cornell doctors’ group dropped PHCS (then known as Multiplan). “Since so many of our people use Weill Cornell doctors, we felt it was important to try to work out an arrangement where they would continue to be covered in-network, and it was critical that we were able to preserve this relationship with the move to Principal,” says Ms. Huffman.