'Horrific': Mark Cuban says your CEO has 'no clue' your health claim got denied — when it should be their job to fix it

“Employees and their families get sicker while the denial is appealed… when the CEO has no clue,” says Cuban. “Even if the cost to help the patient could [be] a small amount.”

The culprit is a common employer-sponsored insurance setup that leaves companies without control of or knowledge about how their employees’ health insurance is being handled. But there’s a fix that can keep employees healthy while helping employers comply with federal laws.

Here’s a breakdown of what Cuban’s talking about.

Most large employers offer self-insured health insurance

The majority of Americans get their health insurance through either their employer or a loved one’s employer. Indeed, the Affordable Care Act requires that employers with at least 50 full-time employees provide health insurance that meets a minimum baseline to their workers.

There are two primary ways that employers can offer health insurance plans: They can either offer a fully insured plan or a self-insured plan.

A fully insured plan is the simpler option. An employer partners with an insurance company, such as United Healthcare or Aetna, to provide a plan to employees. The insurance company takes on the risks associated with paying for healthcare, while the employer pays the insurance company a fixed premium.

As convenient as this is, it’s usually the more costly option for employers because they have to pay for the insurance company to turn a profit.

Most large employers instead opt for a self-insured, or self-funded, plan. For these plans, the employer pays for its employees’ healthcare itself, taking on the risk involved personally.

Cuban has no problem with employers’ actions up until this point, calling self-insured plans a “good thing.”

TPAs help employers carry out health plans — but they also introduce problems

Self-funded plans save employers money over the long run. But most employers don’t already have employees skilled in running a health insurance plan. Instead, many employers hire a third-party administrator, or TPA, to oversee the plan, including processing health insurance claims.

This step is where Cuban says employers frequently go wrong.

“They hire a third party administrator that is owned by a Too Big To Care insurance company. - Really Bad,” said Cuban in the X post. “They allow that TPA to deny care determined by the doctors that the TPA selected to be in network - Horrifically bad.”

TPAs that needlessly deny claims are obviously bad for employees, who could face significant health and financial hits. But they’re also bad for employers, who could be held accountable for a TPA’s improper claim decision.

What CEOs can do to help employees get the healthcare they need

The problem with this setup is that CEOs are largely kept in the dark with what their TPAs are doing — making it hard for them to do their due diligence in keeping their employees happy and healthy.

Cuban says that regular reporting can help bring light to a TPA’s decisions.

“I think [F500 CEOs] should get a report that lists any potential denials that could negatively impact patient health,” says Cuban in a reply to his original post.