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By Bruce Shutan
Written By Bruce Shutan
By Laura Carabello
Written By Alston & Bird, LLP Health Benefits Practice
(SIPC).
(ISSN 10913815)
Written By David Ostrowsky
HealthCare Price Checks 2.0
Transparency spotlight expected to shine brighter in 2025
TTo say that medical price transparency is still a work in progress for the self-insurance space may be an understatement. Hospitals have been early targets of concern about a lack of legislative and regulatory compliance with the federal price transparency rule, though industry observers say the focus is shifting to payers and deploying publicly available data for strategic plan design.
Only 34.5% of hospitals are fully compliant, according to a recent report by PatientRightsAdvocate. org. Since 2021, more than 1,596 warning notices and 918 corrective-action requests have been issued.
Just 15 hospitals, however, have been fined, triggering calls for stronger penalties and better enforcement to ensure true transparency for healthcare consumers. Inadequate staffing in federal agencies obviously weakens enforcement, which could remain a challenge given President-Elect Donald Trump's view that the government is already bloated. A tertiary issue is that last year's ruling on the Chevron deference case compromises the authority of federal agencies.
Nevertheless, rare bipartisan support has been building for rolling back the dark drapes on medical prices even further for both hospitals and payers. The Health Care Price Transparency Act 2.0, which has been referred to by the Committee on Health, Education, Labor, and Pensions, is expected to build on the No Surprises Act and Transparency-in-Coverage rule. Other key pieces of legislation worth tracking include the Lower Costs, More Transparency Act and Pharmacy Benefit Manager Reform Act – the latter sparking considerable interest as PBMs continue to make headlines.
A SHIFTING FOCUS
Deerhold, Ltd. CEO Jeff Gasser, estimates that about 400 hospitals haven’t yet posted prices online, and many of the ones that have done so aren't putting data in the right format. While hospital machine-readable files (MRFs) contain valuable information, they’re not as sophisticated from a technological standpoint as on the payer side. That’s why his near-term focus, as well as that of many others, is now on fleshing out payer MRFs.
While payers don’t have cash prices or bill charges, Gasser says they do have the complete gamut of rates for doctors, hospitals, surgery centers and areas of specialty like dialysis. His firm has taken in all of the BUCAH (Blue Cross Blue Shield, UnitedHealthcare, Cigna, Aetna and Humana) MRFs for administrative-services-only (ASO) clients, plus about seven large regional plans and is adding eight a month. “When you have that data,” he explains, “you can look at what network you’re in and alternative networks in your market and start understanding how much you’re paying relative to other options.”
While the hope was that publicly available prices on medical procedures would be placed in Excel or other common formats, the amount of data is simply too enormous to simplify. "We use document-based search engine technology, which is very consistent with these files, and that’s why we got involved to begin with,” he reports.
Gasser is focused on trying to solve problems that involve a sense of immediacy, such as cleaning up "ghost rates" or "zombie rates" that are a placeholder when there is no other rate to put into the system. "It's something that everybody will have to continue to improve," he
says, estimating that 99.5% of all prices in an MRF are ghost rates. When providers sign up for, say, the Cigna fee schedule that a third-party administrator (TPA) is administering for an employer, they’re not signing up for just those 100 current procedural terminology (CPT) codes that they bill. Gasser says their name gets attached to probably 10,000 to 15,000 codes on all doctors, hospitals and services.
“Dermatologists don’t do hip replacements. Orthopods don’t do retina surgeries. So how do you eliminate the bad rates and not inadvertently eliminate some actual rates that occur in the real world?” he poses. “That’s a huge cleanup challenge – something that I think AI could be trained to help develop a near-term solution that could benefit this industry quickly.”
The CPT book has 20,000 to 30,000 medical services, which most consumers aren’t familiar with, according to Christopher Santas, co-founder and CEO of ClearCost Health.
NEGOTIATING AND BENCHMARKING
Ahmed Marmoush, CEO of Handl Health, notes that self-insured employers with access to an ASO or TPA-driven network can now review the underpinning negotiated rates and benchmark the relative performance of their carriers and providers against others in their location.
Jeff Gasser
“We’re starting to see people using this data to design twotier benefit systems to support contract negotiations with carriers as it relates to the type of contract that they will put in place between the ASO and employer,” he says.
In explaining how making more prices on medical services publicly available might play out in the marketplace, Marmoush uses a self-insured employer that consistently sends health plan members to four acute general hospitals as an example. "If one of them is four times the cost of the others," he wonders, "what rights do they have in their contract with the carrier to exclude that high-cost hospital and create incentives for employees to go to the other three hospitals or one in particular that they’re targeting?”
At the strategic core of greater price transparency comes an ability to design high-value health plans that access quality primary care for preventative services and minor diagnostic services,
Marmoush says. This will enable employers to get ahead of the reactive or sick care that has driven a dysfunctional system.
“We’re starting to see pockets of that through direct primary care, for example,” he notes. “But self-insured employers need access to their claims data and to start thinking as population health managers to design benefits around the needs of their population and within the networks that they have access to as opposed to the one-size-fits-all approach.”
Innovative plan design will help break the reliance of small to midsize self-funded employers on all the price-transparency data that’s still missing and can’t be fully utilized, as well as provide more flexibility to control costs, suggests Christine Cooper, CEO of aequum.
SIIA’s Price Transparency Committee, which she chairs, will shift its focus in 2025 from fiduciary issues to gathering ideas from think tanks for shaping the regulatory and legislative landscape. It comes nearly a year after recommending various best practices and guidelines in response to the J&J lawsuit and other high-profile cases.
Santas says there are ways to help patients overcome the challenge of shopping for medical procedures and make price transparency more effective. Those steps include baking into the plan design health savings accounts so that patients pay closer attention to cost if they’re shopping with their own money, tiered networks featuring higher coverage levels and zero or lower out-of-pocket costs for more cost-effective choices and telemedicine options, which are convenient.
“The other thing we find hugely helpful is having a comprehensive customer service function to help people make cost-effective choices,” he says, noting that most people are confused by the clinical and financial language of health care.
Other innovative approaches Santas points to include setting a fixed price for local health care services in a break from the traditional feefor-service model, carving out behavioral health services, contracting with centers of excellence and offering a second expert medical opinion on major procedures. In addition, ClearCost Health works with several partners like Included Health that publish quality ratings, and
Ahmed Marmoush
Christopher Santas
many of the carriers have their own quality scores.
REGRESSION TO THE MEAN
With respect to providers raising prices on below-market rates to match the competition as pricing information becomes more widely available, Marmoush believes there will be a regression to the mean, much like when airline flights became shoppable online. "While I do think that we will see prices from the lowest-cost providers increase, I also think we will see prices from the highest-cost providers decrease,” he says.
While providers are intrigued to finally have access to competitors' pricing, Cooper believes certain providers may be bidding against themselves if they're going to land big contracts. "Maybe it's going to lower rates. I think it's still very early to tell the interplay of this data that's not so user-friendly between providers," she surmises. "Lower-priced providers, especially ones who are really out of range of some of the higher-priced ones, may readjust their price to meet the market."
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But then again, the healthcare market is atypical when it comes to assessing a competitor's prices. Nothing in the pricing mechanisms seems to be tied to any particular quality or accessibility, she cautions, noting that "it's all somewhat irrational."
Meanwhile, the general rule about price transparency is to educate consumers that if they need an outpatient service like surgery or magnetic resonance imaging, it’s going to be about one-third the price if they go to a facility that’s not owned by a hospital, Gasser says. “There’s not enough price variation in the non-hospital
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provider space to make much of a difference,” he adds.
At the other end of the spectrum, he says deciphering inpatient care is complex and beyond any consumer to comprehend, referencing a knee replacement surgery he needed to be done in the hospital because a blood clot issue made it safer in that setting.
LEGISLATIVE OUTLOOK
Looking ahead, Cooper thinks it’s likely to expect a new transparency bill to strengthen what’s already in place. One huge step in the right direction would be to add clarity to the uniformity of reporting price transparency data. Another issue is significantly increasing penalties on providers that don’t comply with the price transparency rule would add teeth to the original legislation. She also expects some legislation to address issues surrounding PBMs, though it’s anyone’s guess exactly what it will look like.
The Lower Costs, More Transparency Act addresses self-funded plans recording their attestation that they don’t have any contracts with health care providers or other entities that restrict the sharing of information about cost and quality of care with patients, Cooper explains.
"It allows them to almost free form why they can't get the data that they're that they're being asked to get," she says. "Because of whom controls the data, it's been hard for smaller plans to obtain it all. They were stuck between a rock and a hard place on whether to sign the attestation or do nothing. Now, there's an opportunity for them to try and get the data, but is it ever really going to be enforced?"
Continuing to strengthen and standardize hospital price transparency is going to be critical, Marmoush opines, but the beauty of the 2.0 legislation is that it extends beyond hospitals to include labs, imaging and ambulatory surgery centers.
However, he notes that there's a scalability challenge for companies that are scraping this information because it provides the local vs. state-based or national view that carriers
Christine Cooper
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don't provide. Local prices are the nuts and bolts of true contracted rates and cash prices, he says, which is important to filling in the information gap in order for healthcare to truly be shoppable.
“What’s powerful about 2.0 is it takes the good-faith estimate concept and shifts responsibility to the health plan,” he explains. The thinking is that prices need to be based on what the plan’s coverage supports and include all providers, as well as contributions that individuals have made to their plan, their deductible information, etc. “If that estimate is wrong, the individual should not be liable to pick up the rest of the bill within a margin of error,” he adds.
Marmoush is excited about the prospect of being able to benchmark a formulary and PBM’s performance against competitors. “The cost of pharmacy and specialty drugs are almost 30% of an employer’s costs,” he explains, “so having the same degree of transparency and scrutiny in this area is going to be critical to any sort of cost curbing that we can do in the future.”
The way PBMs work with pharma companies is they create rebate structures that drive up the price of drugs that get them rebates, "and so the employer is paying essentially for rebates that go to the PBM,"
Gasser observes. However, forward-thinking employers are discovering "transparent" or "fiduciary" PBMs that are taking on the Big Three traditional players to secure better results.
He cited a novel example of a B Corporation called Ventegra, Inc. in Glendale, Calif., that's not owned by shareholders. "They don't seek all the highest rebates, 100% of which goes to the employer," he explains. "They just take a small transaction fee. Everybody I know that has replaced a traditional PBM with this one has seen drug costs drop 30% overnight."
As the quest for greater price transparency matures, Gasser believes it would be interesting to match up what the claim says the provider got paid to what the MRF says that the payer is paying the provider, which he predicts will get flushed out over the next few years.
“How do you know that the direct-contracting rate you got offered is a great rate?” he asks. “Just because you negotiated as an employer doesn’t mean you got a deal. In my mind, the transparency data supports better employer direct contracting to the extent that continues to be a trend, which I would presume it will.”
Bruce Shutan is a Portland, Oregon-based freelance writer who has closely covered the employee benefits industry for more than 35 years.
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Employers Act When Retail Pharmacies Close, Cancel Primary and Virtual Care
DWritten By Laura Carabello
Don't be surprised if, on your next trip to the local pharmacy, there is a sign on the door: “CLOSED.”
Industry pundits characterize it as the looming pharmacy crisis in America, a “Pharmageddon” pockmarked by pharmacists protesting what they say are unreasonable and unsafe working conditions at the biggest chain pharmacies in the United States. It’s all part of the recent stumbles of the national pharmacy chains that are struggling for survival. Analysts point to the culprit of lower reimbursement rates for prescription drugs since the majority of sales come from filling prescriptions.
There’s also a lot of finger-pointing as to why the prices differ for what customers pay for drugs vs. what pharmacies receive. Many lay blame on the pharmacy benefit managers (PBMs) who negotiate rebates from drug manufacturers to insurers with accusations that PBMs have been cutting reimbursement rates to boost their own profits.
Declining profits from prescription sales channels are part of the overall picture, as each retail pharmacy company maintains its own complex narrative and market circumstances that have led to these problems. Senior pharmacy chain management was very bullish about the potential for highly lucrative, accretive healthcare business lines. However, their well-intended but lofty expansion plans for developing primary care clinics, virtual primary care services, and innovative programs to leverage their retail pharmacy locations did not deliver the expected return on investment.
A THUMBNAIL SKETCH OF THE LANDSCAPE
Market collapse of retail drug stores has created pharmacy deserts, and a landscape punctuated with failures from coast to coast.
Deerfield, Ill.-based Walgreens recently announced that in response to mounting losses, the venerable chain would be shuttering about 1,200 locations nationwide over the next three years, representing about 9.5 percent of the chain’s 12,500 locations nationwide. Company leaders decry
online competitors and declining prescription drug payments as the root causes. By 2027, about one in seven Walgreens currently open will close its doors, and an estimated 500 stores will close over the next year.
in 2021, Walgreens also took a $5.2 billion stake in VillageMD, a primary care network, but this has not been profitable as the chain has been closing VillageMD locations and announced last summer it will divest from the company.
Bentonville, Ark.-based Walmart Health announced in April 2024 that after five years, they made a “difficult decision" to close all 51 Walmart health centers across five states and shut down Walmart
Health Virtual Care. Leadership determined that these business models were simply not sustainable. Company leaders also cited the challenging reimbursement environment and escalating operating costs that dented profitability. However, the retailer won't be reducing the number of the chain's nearly 4,600 pharmacies and more than 3,000 Vision Centers.
UnitedHealth, which owns Optum, also announced that it was exiting the telehealth business, shutting down Optum Virtual Care after a three-year run at the market. Industry experts agree that the closure reflects broader trends in the telehealth market, in which saturation and differentiation challenges are leading some providers to struggle.
In the future, experts believe the most successful virtual care companies will be those that provide personalized patient experiences and focus on niche community needs.
Philadelphia, PA-based Rite Aid announced 154 store closures as part of its filing of voluntary Chapter 11 bankruptcy petitions in October of 2023. Since that time, more than 520 Rite Aid pharmacies have closed, about a quarter of the 2,111 pharmacies open at the time of the bankruptcy filing, including 74 store closures in 2024. In September 2024, leadership announced that it was emerging from bankruptcy with fresh financing. Burdened with struggling sales and opioid-related lawsuits, Rite Aid has completed its restructuring and is now a privately held company with "a rightsized store footprint, more efficient operating model, significantly less debt and additional financial resources."
Woonsocket, RI-based CVS Health, which owns Aetna, is in the process of shuttering about 300 locations across the country in 2024, including the dozens of pharmacies in Target stores. They have also cut about 5,000 jobs in an effort to pare down the workforce as it evaluates the changes in population, consumer buying patterns and future health needs. When they announced a plan in 2021 to close nearly 900 stores from 2022 to 2024, with a goal of about 200 per year, leadership said that decisions regarding which locations were to
close would be based on "local market dynamics, population shifts and store density" as well as "ensuring Aetna and Caremark coverage and the needs of underserved communities."
However, they are offering innetwork primary care to Aetna members in certain markets through its MinuteClinics. There are about 1,100 MinuteClinics across the country, with the walkin retail health clinics located at CVS pharmacies.
Independent Pharmacies are also disappearing. In 2023, about one independent pharmacy closed each day, and according to a February 2024 survey by the National Community Pharmacists Association (NCPA), 32% of independent pharmacy owners plan to close by the end of 2024.
However, UnitedHealth Group’s Optum Rx is rolling out a variety of new programs that seek to support independent pharmacies in managing costs and more complex patient needs. These pharmacies play a critical role in underserved communities. The OptumRx CVS90 program allows patients to get 90-day supplies of medications at nearly 9,700 CVS Pharmacy locations or through OptumRx home delivery service. Optum's new
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Independent Pharmacy Network is available as an add-on for its PBM clients.
PHARMACIST-LED TELEHEALTH CLOSES CARE GAPS
Stepping in to fill the void, PharmD Live, an innovative pharmacist-led virtual care solution powered by AI-driven algorithms, underscores the critical role of its Pharmacist Care Managers (PCMs) to optimize chronic care management and close care gaps created by national retail pharmacy chains shuttering primary care clinics and eliminating virtual care options. The Company contracts directly with self-insured employers, hospital-affiliated and hospital-owned clinics, health systems, Accountable Care Organizations, and telehealth organizations that lack medication expertise or virtual pharmacist support.
”PharmD Live’s innovative pharmacist-led telehealth care model enables continuous patient engagement, providing millions of people, especially those in underserved communities, consistent access to vital services,” Cynthia Chioma Nwaubani, PharmD, BCGP, CEO, certified geriatric pharmacist and founder, PharmD Live. “PharmD Live’s PCMs provide continuous monitoring and education to support medication adherence. Now more than ever, this is vital given the cessation of services typically provided by retail pharmacists. PCMs are specially trained to help patients adhere to treatment regimens,
understand complex health information and feel supported every step of the way.”
PCMs play a pivotal role in chronic disease management.
"As a board-certified geriatric pharmacist with over 15 years of experience, I've witnessed firsthand the gaps in cardiac care management, medication management and medication adherence," says Nwaubani, who has developed medication management solutions for large managed care organizations, patients and accountable care organizations (ACOs). "The turning point came for me when I saw patients tragically die from avoidable medication overdoses. This deeply impacted me and drove me to found PharmD Live. Our mission is to empower pharmacists to deliver proactive, personalized care and prevent similar tragedies from occurring.”
Cynthia Chioma Nwaubani
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She says pharmacists have specialized expertise in medication management and specific disease states, enabling them to look at patients through multiple lenses and identify gaps in chronic care, such as diabetes, hypertension and heart disease. These conditions often require complex medication regimens that increase the risk of adverse drug events, which are a significant threat to patient safety and contribute to over 770,000 injuries and deaths annually.
"By embedding PCMs into healthcare teams, we provide a critical lifeline and go beyond the role of traditional pharmacists," she continues. "For example, there are cases where medications that should have helped the patients have instead created new problems due to drug interactions, incorrect dosing and efficacy issues. PCMs provide immediate access to potentially lifesaving interventions and avoid potential health crises. People feel supported every step of the way."
She recalls one particular case involving a patient who had diabetes and heart failure and was struggling with a complex and frequently changing medication regimen. Additionally, the patient also needed assistance with a rolling walker to prevent falls.
"A PCM stepped in to identify gaps in the medication regimen and worked with the patient's physician to eliminate drug interactions that were worsening the patient's heart condition. Additionally, the patient did not understand how to adjust their diuretic for their heart failure. Therefore, the pharmacist worked to educate the patient on how to safely manage their diuretic to prevent overload that could lead to hospitalization. “
The PCM worked closely with the patient and his physician and was able to adjust the therapy and stabilize the patient’s health. This patient had been in and out of the
hospital before they came under the care of the PCM, and this intervention led to a significant reduction in the patient’s hospitalization rate – from seven hospitalizations prior to just two after the pharmacist got involved. Beyond medication support, the PCM also helped the patient navigate the process of getting a much-needed rolling walker, which helped reduce the risk of falls.
WHAT’S AN EMPLOYER TO DO?
Access to Medications
Even prior to the demise of brick-and-mortar retail or community pharmacies, employers were encouraged to utilize mail-order pharmacies as a way to drive savings and provide a convenient way for employees to receive prescriptions. These entities ship medications directly to the member’s door and typically operate through or are owned by a pharmacy benefit manager (PBM).
However, there are many skeptics of this approach. Online pharmacies can’t administer vaccines, and not every medication can be shipped. Some fear that a medication may have been exposed to extreme heat or otherwise compromised during the delivery process. Moreover, a new in-depth report by the Wall Street Journal presents data showing that mail-order pharmacies are driving up costs for employers when they are supposed to do the opposite. According to the report:
• “Markups were as much as 35 times higher than what other pharmacies charged, according to a recent analysis of millions of prescriptions in Washington state.”
• “Branded drugs filled by mail were marked up on average three to six times higher than the cost of medicines dispensed by chain and grocery-store pharmacies, and roughly 35 times higher than those filled by independent pharmacies, according to the analysis…”
• “Generic prescriptions dispensed by mail pharmacies were marked up on average more than three times higher than prescriptions filled by bricks-and-mortar pharmacies...”
• “Mail-order drug sales have increased to more than $206 billion from $86 billion over the past decade, though the number of prescriptions filled by mail has risen only 11%.”
Benefits consultants point out that employees may receive a prescription when effective and often less expensive over-the-counter (OTC) options are available. Experts also advise that, in certain instances, prescriptions provide little value to employees or their family members. Assessment of these and other issues related to pharmacy and prescription drug costs should be conducted at least annually with consultants and TPAs since these decisions significantly impact health plan costs.
Additionally, onsite medication dispensing programs, also known as physician dispensing, provide an alternative for patients to access prescribed medications. These services, often integrated with an onsite clinic, equip healthcare providers with the necessary licensing, internet access, and a printer in order to dispense medications directly to patients at the point of care. As a result, employees eliminate trips to the local pharmacy and accelerate treatment. It also empowers providers to manage medication availability and quickly address any concerns, which leads to improved patient care and optimized outcomes.
There are also risks to the pharmacy dispensing model that can occur without the intervention of a pharmacist:
• With approximately 6,800 prescription medicines available in the US, there are countless combinations of medications that can have potentially adverse interactions.
• Each year, 7,000 to 9,000 people die from medication errors.
• Each year, it costs over $40 billion to care for people affected by medication errors.
Dr. Nwaubani says, “Pharmacist Care Managers play a crucial role in preventing adverse drug events (ADEs) and drug interactions by reviewing medication regimens, identifying potential conflicts between drugs a patient is taking, and providing patient counseling to ensure proper medication usage. They truly act as a safety net against harmful drug interactions. When our pharmacist-led telehealth model is embedded into an onsite clinic or practice, these risks are minimized."
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Access to Primary Care
There are alternative options beyond the traditional doctor’s office. In virtually every geographic area, there is an urgent care clinic providing convenient access to primary or episodic care. They are typically staffed by physician assistants and nurse practitioners but may also have doctors on site. The Urgent Care Association, an industry trade group, reports a record 11,150 urgent care centers have popped up around the US, and they are growing at 7% a year.
Although urgent care visits are less expensive than a trip to the ER, they do not establish a relationship with a physician who knows the entire patient history.
Employers are also establishing onsite and near-site clinics to offer medical and wellness services delivered by primary care physicians and other licensed practitioners in settings that are located directly at their companies. A wide range of services can be offered to all or a portion of eligible employees, including general first aid, treating minor illnesses, primary care appointments, and ongoing management of chronic diseases.
Nick Soman, CEO, Decent, asserts that Direct Primary Care (DPC) is already well-positioned to address gaps created by retail pharmacy closures and declining primary care access.
“Many DPC providers currently dispense medications in-house where state regulations allow, offering patients a convenient and cost-effective alternative to retail pharmacies,” says Soman.
Additionally, he points to the DPC relationship-based model that fosters trust and continuity of care, allowing physicians to provide personalized support for chronic conditions and preventive health needs.
“With affordable flat-fee memberships and same-day or next-day appointments, DPC reduces reliance on urgent care and emergency services,” he continues. “These capabilities make DPC a practical, communitycentered solution to today’s healthcare access challenges.”
IMPACT OF ‘PHARMACY DESERTS’
A survey recently conducted by Wolters Kluwer Health found that nearly 6 in 10 Americans worry about obtaining medications close to home. Respondents said that while internet mail-order pharmacies and pharmacy benefit managers could serve as alternatives to brick-and-mortar pharmacies, only 16% of those surveyed prefer using online pharmacies.
Researchers report that the rise of pharmacy deserts adds complexity for consumers taking multiple medications:
• 75% of respondents rely on daily prescriptions; of that group:
• 41% reported taking one to two medications;
• 21% said they take between three and five medicines;
• 13% currently take more than five prescription medications.
Nick Somon
When Retail Pharmacies
Pharmacists are a trusted source and key access point to care in the US healthcare system, including preventive care such as flu shots and vaccines – for COVID, shingles, and pneumonia. Prior to the recent closing of pharmacies, around 90% of Americans lived within five miles of a community pharmacy. In nonemergent situations, 58% of Americans seek healthcare at a pharmacy, and patients visit their community pharmacist about twice as often as their physician or other qualified healthcare professional.
Access to a pharmacist is essential in rural and underserved communities where “pharmacy deserts” represent a serious shortage of pharmacies and healthcare providers. For employers with workforces that live in rural areas that have virtually seen local pharmacies disappear, there is growing concern that these employees will be left without access to the medications they need. These closures are a disruption of care, breaking people’s routines of going to a drug store that is geographically accessible — and hopefully affordable — only to discover their pharmacy is no longer in business and a new one has not opened to fill in the gap.
Experts fear that when pharmacies close, some patients will be forced to travel farther to get the prescription drugs, over-the-counter medications and other healthcare products they need. The extra mileage requires more gas and time, which often translates into a grim reality that people won’t pick up their medicine at all.
Dr. Nwaubani concludes that medication is the cornerstone of disease management, with 95 percent of conditions treated and managed through medications.
“We've had an enormous number of medications approved in recent times, so we have many moving parts when it comes to medication management," she observes. "We encourage employers to include virtual pharmacy services like ours as part of their employee wellness programs, and we have been approached by self-insured employers and HR professionals who are interested in integrating our solutions, especially for managing chronic conditions. Our program benefits both employees and employers by reducing healthcare costs and boosting workforce health and productivity. Our solution is scalable as well as adaptable to diverse healthcare settings and patient populations, ensuring flexibility in meeting the diverse needs of different organizations.”
RETAIL SETTINGS NOT THE FUTURE OF HEALTHCARE
The thinning herd of pharmacy-sponsored primary care clinics doesn’t eliminate the pressing need for dramatic changes to the primary care landscape. Nearly one-third of Americans — more than 100 million — lack access to primary care, according to a recent report from the National Association of Community Health Centers.
The closure of pharmacy-based services is causing many people to
feel medically disenfranchised from their care setting, their doctor and their pharmacist. Individuals and families who depended upon the local pharmacy for primary and chronic care may now be forced to resort to the hospital emergency room and burden employers with exorbitant costs.
While pharmacy chains are to be admired for attempting to use their resources, knowledge of consumers and geographic retail footprint to try and improve access to primary and virtual care, they fell into the trap of not fully grasping the complex American healthcare system. They are not alone since some of the country's most sophisticated businesses, such as Haven Healthcare, the Amazon/JP Morgan/Berkshire Hathaway joint venture, failed to overcome these inherent challenges.
Primary and virtual care must be scrutinized as more than a profit center. Delivering quality care is a tough undertaking, one that pharmacy chains just could not master. Some analysts chalk it up to a lack of insight into the unique patient-provider relationship, while others point to the administrative burdens needed to get paid for services and the patience required to change consumer attitudes. The sheer size and depth of financial resources can't
guarantee success – as many of these retailers learned.
Amazon, another major player in the retail healthcare space, is striking out on its own with a different approach. By leveraging its technology capabilities and logistical reach and investing heavily in the healthcare supply chain, Amazon is embarking upon doorstep drug delivery, cloud services, pharmacy, telehealth and artificial intelligence. These strategic differentiators must surmount the challenges similar to those of their brick-and-mortar retail pharmacy counterparts.
Analysts praise Amazon’s chronic care initiatives for their potential but foresee struggles to establish deep, ongoing patient relationships — a competency that health systems and provider organizations excel at with established infrastructures and comprehensive care models. Amazon focuses on episodic and transactional care vs. managing a patient’s full continuum of healthcare needs, constraining its potential to make a meaningful impact on healthcare outcomes. It remains to be seen how its platform can successfully connect consumers to healthcare services and sustain a viable model.
consumer experience. People depend upon their relationships with pharmacists and providers, continuity of care and coordination of services –support that chain drugstores were unable to offer and make profitable.
With the demise of pharmacy-sponsored healthcare services, it becomes obvious that healthcare must be more than a transactional
Expect More
Laura Carabello holds a degree in Journalism from the Newhouse School of Communications at Syracuse University, is a recognized expert in medical travel and is a widely published writer on healthcare issues. She is a Principal at CPR Strategic Marketing Communications. www.cpronline.com
EXPERTISE NEEDED TO DECIPHER MACHINEREADABLE FILES
Written By Bruce Shutan
SinceSU.S. hospitals were required to make machine-readable files (MRFs) of their medical service prices available to the public in January 2021, it has been virtually useless to the self-insured marketplace without experts to translate the raw data. The same can be argued for pricing data that payers have needed to make public since July 2022. While expectations ran high amid lax enforcement, the quality of this information is still very much a work in progress.
There’s an apprehensiveness about the extent to which the data is actually usable, explains Peter Schultz, vice president of actuarial and underwriting services for Marsh McLennan Agency (MMA). “A lot of the thought initially was that when transparency data becomes available, we’ll be able to know the price for every service with a high degree of confidence when the MRFs are released, and that has just not been the case,” he says.
Healthcare consumers are unable to obtain straight answers from raw data files unless they're carefully scrubbed, adds Matthew Robben, co-founder and chief technology officer for Serif Health. “You basically have to do some very thorough-like data engineering to get it to a place where what you’re left with is actually the nuggets of truth that came from that raw data, and that usually takes an outside ingredient of expertise,” he says.
MRF data must be melded with other inputs such as provider demographics and credentials as well as member-specific information involving copays, deductibles, etc., explains Heather Cox, president of insights and empowerment at Zelis. “This information needs to be presented to the member in a digestible and actionable way that they understand,” she says.
FILTERING AND PROCESSING
In some instances, Schultz says there is no data available, while in others, there may be many rates published for the same service. Filtering and processing the data
allows consultants to select appropriate rates from payer files.
Another method is referencing prices. "There are rates that are going to be far outside of what's possible in terms of as a percentage of Medicare," he says. In addition, there are "ghost rates" or "zombie rates," which are placeholders when there is no other rate to put into the system. Employers must determine with the help of experts what data they can keep that falls within the realm of reasonable possibilities and compare it to hospital MRFs.
What makes those hospital files so valuable is that the so-called v2 schema, a standardized format used to exchange electronic information between different healthcare systems, provides additional clarity beyond what's available in payer or carrier files.
“If we can triangulate the same data point in a hospital file with a payer file, and those numbers all appear reasonable based on our knowledge of commercial rates for similar services, then we feel pretty good about that data,” Schultz observes.
What’s most promising for 2025 is essentially using the data as a way to search for care based on meaningful comparisons within an individual’s group health plan, according to Robben.
While no one is going to use MRFs to decipher a full bill and upfront estimate, he believes it will prove to be quite useful for a relatively shoppable service like magnetic resonance imaging. An ability to scan through all of the medical pricing records in, say, Tempe, Ariz., and learn that there are $200 to $400 low-cost alternatives to a local hospital’s rate of more than $1,000 helps consumers turn this source data into a practical, real-world application that then elevates their patient experience.
“If they want a search tool for their membership, they can tell us which MRFs they want us to index, and we’ll go stand up a live application programming interface,” he says.
FIDUCIARY DUTY CHECKS
Publicly available data also allows plan sponsors to do fiduciary responsibility checks in terms of determining whether rates are egregious. "If you're not paying attention, and you're a plan sponsor buying a Blues plan, and you don't know that you're paying 10 times the market rate for the code range, you should be able to run that scan and ask, is any of this ridiculous compared to the market?" Robben notes.
Matt Robben
Peter Schultz
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Calling the raw files "still a bit of an atrocity," he says it would be ideal if CMS, HHS, the DOL and state governments align on who's going to enforce pricing transparency, what the standards are going to be and how they improve over time. "There are a couple of groups like Patient Rights Advocate pushing hard to raise the bar on making publicly available pricing data more understandable," he notes, lauding the first Trump administration’s approach as effective.
Robben believes hospital price transparency is in a good place, especially with continued enforcement oversight and leveling up of the requirements. "The hospital files, in most cases, are better sources of information and easier to access, understand and parse into an answer than the payer data at this point," he explains. "We are excited about helping employers answer hard questions, make better decisions year over year and meet their compliance criteria, regardless of what the enforcement priorities are."
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A SUPPLEMENTAL TOOL
MRFs have become more of a supplement to MMA's existing comparative analysis of, for example, provider networks to determine which carrier has the lowest cost for an employer client. That arrangement is expected to continue when the agency deploys its transparent pricing solution to the marketplace in 2025. As the quality of publicly available data improves and becomes more comprehensive, Schultz reports that "we'll be able to scale to where at some point we could leverage these files as a primary insight for employers."
Serif Health finally developed a broad commercial claims data set last January, learning from most customers that filtered information has turned out to be quite helpful. “Our methodologies have gotten better over the past two years where now if an employer works with us or a Turquoise, Payerset or whoever, they’re at least going to get handed something that means something and has most of that un-useable data removed,” Robben reports.
Noting a separate code and cost within the MRF for anesthesia, gastroenterology, pathology and other elements of, say, a colonoscopy, Cox suggests that health plan members need a unified, easy-to-comprehend view of their care. Zelis presents all the data points related to a single procedure as a whole and provides additional details such
Heather Cox
as quality metrics and patient reviews. She says the result is a more accurate representation of the price and a better member experience that helps everyone save money.
“To be truly effective,” she says, “TPAs and self-insured employers need to leverage a solution that consolidates all of the relevant information. It needs to be presented in a way that the member can understand and empowers them to make decisions.”
Wrapping an engagement program around MRF data not only saves money but also greatly improves employee satisfaction, according to Cox. She reports that clients leveraging these programs have seen a 3:1 return on investment, as well as $64 million in savings.
With the start of a new year, Schultz is sanguine about the prospects for more transparent pricing. "There's a lot of energy and attention around getting to better transparency," he says, "and there's a likelihood that the payer files will improve in a way that is that we saw with the hospital files with the v2 schema. That's what we would hope for in that the next round of schema for the payer – something that provides the additional clarity and guidance that wasn't there in the initial regs."
Bruce Shutan is a Portland, Oregon-based freelance writer who has closely covered the employee benefits industry for more than 35 years.
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A YEAR IN REVIEW -- ACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES
Written By Alston & Bird, LLP Health Benefits Practice
2
2024 was a tumultuous year for health and welfare benefit guidance, which included disaster relief, a detailed final rule for Mental Health Parity and Addiction Equity Act compliance, and a Supreme Court ruling that might impact the interpretation of even well-established benefit regulations. The year ends with uncertainty about whether HSA-compatible high-deductible health plans will be able to continue first-dollar telehealth coverage for plan years commencing in 2025.
HSA vendors also face compliance with the final rule for investment advice fiduciaries, as well as uncertainty about whether the incoming presidential administration will retain the rule in its current form. FSAs and other consumer-directed health plans also saw guidance expanding eligible medical expenses, as well as the usual cost of living updates. Employers are also reminded that they might face a 2024 year-end deadline to amend their cafeteria plans to allow new election change events involving Exchange enrollment.
Health and welfare plans also faced increased litigation risks over the past year. More plans found themselves facing litigation involving tobacco use surcharges and wellness programs. Prescription drug coverage was also a source of litigation, as well as regulator involvement, involving plans and their service providers. Such litigation brought renewed focus on health and welfare plan fiduciary committees.
Plans and their vendors also saw significant activity guidance about data privacy and security compliance from multiple federal agencies, including the DOL and HHS. HHS provided final regulations involving reproductive rights that require plans to act by December 23, 2024. Plans also need to be aware of 2024's Part 2 final regulations for the confidentiality of substance use disorder records, as well as watch out for proposed HIPAA security rule updates at the end of 2024. The DOL also clarified that its cybersecurity guidance applies not only to retirement plans but also to all ERISA health and welfare plans.
2024 is likely just the beginning of a busy time for health and welfare plan compliance, as the incoming presidential administration is likely to have its own priorities and goals for health and welfare plans.
MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT FINAL RULE
The U.S. Departments of Health & Human Services, Labor and Treasury (the Departments) published the final rules for Requirements Related to the Mental Health Parity and Addiction Equity Act (MHPAEA) in the Federal Register on September 23, 2024 (first issued online for public inspection on September 9, 2024). These lengthy rules primarily focused on requirements for nonquantitative treatment limitations (NQTLs) and the codification of the requirement to perform an NQTL comparative analysis as mandated by the Consolidated Appropriations Act, 2021 (CAA) (and as further described in related FAQs and self-compliance tools). Although the final rules are generally effective January 1, 2025, some of the requirements are not effective until January 1, 2026, including the requirement that MHPAEA apply to individual policies of health insurance. See our in-depth advisory, Final Mental Health Parity Rules: A Plan Sponsor’s Implementation Guide, for a detailed explanation of the final rule, including effective dates for various parts of the rule.
What Plan Sponsors Need to be Doing NOW for MHPAEA
• Plan sponsors should be prepared to have an updated comparative analysis completed by the first day of the plan year beginning on or after January 1, 2025. We would expect that all comparative analyses would need to be updated. There are very short turnaround times if a department, a participant, or a beneficiary asks for this comparative analysis. Now that the rule is final, we anticipate the departments' investigations of plans for MHPAEA compliance will accelerate.
• Agreements with service providers need to be reviewed – in particular, ASO and TPA agreements – to make sure that they are clear on the allocation of responsibilities for preparing a comparative analysis.
• Plan fiduciaries for ERISA-covered plans should be made aware of the certification requirement and the need to engage in “a prudent process to select one or more qualified service providers to perform and document a comparative analysis.” That fiduciary certification should be in place on January 1, 2025, for calendar year plans.
• Work with your ASO or TPA to identify any areas when there may be a plan design issue with the meaningful benefits/core treatment standard, and be prepared to address those for plan years beginning in 2026.
• For the design and application requirements, seek verification from the TPA/ASO that they are not using any biased or discriminatory information in designing the NQTL, including historical data.
• There are still many unknowns about the relevant data collection requirement, but at the very least, plans should start collecting the data identified in the final rule as well as other relevant data
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suggested in the preamble and examples – especially related to the network composition NQTLs. Discuss with the TPA/ASO their ability to collect and analyze the data, including whether they have the technology required for data collection.
• Watch for developments in the courts and whether the final rule is challenged under Loper Bright or otherwise. In particular, there may be challenges to the relevant data evaluation and meaningful benefits requirements. Congressional action from the incoming administration is also possible, such as under the Congressional Review Act or administrative procedure.
LOPER BRIGHT ENTERPRISES V. RAIMONDO
In Loper Bright Enterprises v. Raimondo, the Supreme Court ruled that courts cannot defer to agency interpretation of laws because a statute is ambiguous. This decision overruled the Court's 1984 decision in Chevron U.S.A. vs. Natural Resources Defense Council, which the Court believed was based incorrectly on the assumption that Congress intended to delegate interpretative authority to federal agencies when the law is ambiguous. The Court noted that the Administrative Procedure Act of 1946 requires courts, not agencies, to “decide all relevant questions of law” when reviewing agency action.
Currently, the full impact of the Court’s decision on benefits regulations and sub-regulatory guidance is unknown. Ultimately, it seems likely that parties to litigation will challenge agency interpretations based on Loper. Time will tell the scope of the impact of Loper on current and future benefits regulations and guidance.
HEALTH SAVINGS ACCOUNTS, FLEXIBLE SPENDING ACCOUNTS, AND OTHER CONSUMER DIRECTED ACCOUNTS
HSA/Telehealth Extension Ends for plan years beginning on or after January 1, 2025.
Generally, telehealth services provided before the statutory minimum HDHP deductible is met (except for permissible coverage like preventive care or certain permitted insurance/coverage) can cause a loss of HSA eligibility. The CARES Act enacted during COVID allows pre-HDHP deductible coverage for telehealth and other remote care services. This provision has been extended twice in the past but is set to expire at year-end for new plan years commencing in 2025. Absent a further extension for plan years beginning on or after January 1, 2025, pre-HDHP deductible coverage for telehealth and other remote care services will disqualify an individual from contributing to an HSA.
Final Rule for ERISA Investment Advice Fiduciaries
On April 25, 2024, the DOL published its final rule on the definition of an ERISA investment advice fiduciary. Although most discussions on this final rule focus on ERISA-qualified retirement plans, the rule also applies to health savings accounts (HSAs). This means that entities that provide investment recommendations (which the new final rule broadly defines) and receive compensation must comply with the rule (and prohibited transaction exemption 2020-02) or risk engaging in a prohibited transaction. The final rule was initially set to go into effect on September 23, 2024 (150 days after publication), but challenges in two Texas courts have blocked the rule from going into effect. It also remains to be seen if the incoming administration will retain the rule in its current form. In the meantime, entities that provide investment recommendations to HSAs should get familiar with the new rule and compliance steps for prohibited transaction exemption 2020-02. Also see Interpretive Bulletin 96-1, which includes a limited exception for investment education.
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This example is illustrative only and not indicative of actual past or future results. Stop Loss is underwritten by Berkley Life and Health Insurance Company, a member company of W. R. Berkley Corporation and rated A+ (Superior) by A.M. Best, and involves the formation of a group captive insurance program that involves other employers and requires other legal entities. Berkley and its affiliates do not provide tax, legal, or regulatory advice concerning EmCap. You should seek appropriate tax, legal, regulatory, or other counsel regarding the EmCap program, including, but not limited to, counsel in the areas of ERISA, multiple employer welfare arrangements (MEWAs), taxation, and captives. EmCap is not available to all employers or in all states.
Employee Choice Programs—Private Letter Ruling (PLR) 202434006
In PLR 20244006, which is binding only on the taxpayer requesting it, the IRS approved an arrangement that allows employees to make an annual irrevocable election to direct employer contributions to an HSA, retiree HRA, education assistance program, or the employer 401(k) plan. This arrangement apparently avoids violating the constructive receipt doctrine and HRA rules because the choice is made annually before the start of the calendar year, and employees do not have a choice to receive the contribution in the form of taxable income. Compliance considerations for such an arrangement include the following: the funds must be an employer contribution, not salary reduction; the arrangement must conform to plan limits; potential nondiscrimination testing issues; and the variety of choices creating additional administrative complexity.
New Eligible Expense for HSAs, FSAs, and HRAs, as well as Pre-Deductible Preventive Care for HSAs
The IRS issued a safe harbor that treats condoms as medical care under Code Section 213(d) (see https:// www.irs.gov/pub/irs-drop/n-24-71.pdf, as visited November 22, 2024). As a result, FSAs, HRAs, and HSAs can now reimburse expenses for condoms. Similarly, the IRS expanded pre-deductible preventive care coverage for HSA-compatible high-deductible health plans to include condoms, as well as overthe-counter oral contraceptives, breast cancer screenings other than mammograms (for example, MRI or ultrasound) for individuals who have not been diagnosed with breast cancer, continuous glucose monitors for individuals diagnosed with diabetes (as is the case with other glucometers), and insulin products regardless of whether prescribed to treat an individual diagnosed with diabetes or prescribed to prevent exacerbation of diabetes or development of a secondary condition (https://www.irs.gov/pub/ irs-drop/n-24-75.pdf, as visited November 22, 2024). However, the IRS did not extend pre-deductible preventive care for HDHPs to include other male contraceptives, such as male sterilization.
Cafeteria Plan Amendment for Enrollment in QHP
In 2022, the IRS added a new election change event for cafeteria plans to coordinate with enrollment in a qualified health plan (QHP) through an exchange.
The IRS allowed employers to amend their cafeteria plans for this new election change event at any time on or before the last day of the plan year that begins in 2024. Thus, employers that offered the new permitted election change event for a plan year that begins in 2023 should adopt an amendment and notify participants by the end of their cafeteria plan's 2024 plan year, which for calendar year plans is December 31, 2024.
Cost-of-living Adjustments
The IRS has adjusted certain limits for 2025, including:
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HEALTH & WELFARE FIDUCIARY COMMITTEES
Litigation aimed at fiduciaries of health & welfare plans was on the rise in 2024, particularly with respect to the cost of prescription drugs and fees paid to pharmacy benefit managers (PBMs). Transparency requirements that went into effect in recent years, which require plans to post their prescription drug costs online, may have played a role, as well as increased scrutiny at the federal level of PBMs generally. When excess fee litigation began to hit qualified retirement plans a couple of decades ago, plan sponsors responded by appointing fiduciary committees to manage and oversee the process of choosing and monitoring plan services providers, but oftentimes, these committees do not have oversight of the health & welfare plans. These lawsuits serve as a reminder to plan sponsors that ERISA's fiduciary duties also apply to the selection and monitoring of service providers to the health & welfare plans.
Some basic best practices to get started include:
• Formally establish and document a fiduciary committee for the health & welfare plans.
• Consider a committee charter to provide clarification of the responsibilities delegated to the committee and specify any limitations on committee authority.
• Schedule routine committee meetings and maintain a compliance calendar to stay on top of routine compliance items.
• Obtain fiduciary liability insurance for the health & welfare committee. If your organization already has fiduciary liability insurance, check the policy to make sure that it covers the health & welfare plan fiduciaries. Note that fiduciary liability insurance is not the same as an ERISA bond.
• Train fiduciaries on key responsibilities related to their fiduciary duties. Fiduciaries should also be able to identify when an arrangement with a service provider could raise red flags for prohibited transactions.
• Hire experts to assist with the selection and monitoring of service providers where the committee lacks expertise.
TOBACCO USE SURCHARGE LITIGATION
In addition to Department of Labor actions, over 20 class action cases have been filed against plans with tobacco use surcharges. These actions typically have three common claims:
1. The plan did not provide proper notice of a reasonable alternative standard. Regulations require notice of a right to a reasonable alternative standard in all materials describing the terms of the program.
2. The plan did not apply the reward retroactively when the participant satisfied the reasonable alternative standard. Regulations require the same reward to be available to those who complete the reasonable alternative standard.
3. The time for completing the reasonable alternative standard is too short. Notably, the regulations do not specify a specific period to complete the reasonable alternative standard. Plans should review their wellness programs (including tobacco surcharges) to ensure compliance with applicable rules, particularly with respect to the reasonable alternative standards. Litigating and settling claims involving tobacco surcharges can be costly. Plaintiffs have even been known to add tobacco surcharge claims to other unrelated claims, such as wage and hour claims (see, for example, LipariWilliams V. Missouri Gaming Company, LLC et al., No. 5:2020cv06067 (W.D. Mo. 2020)).
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PREVENTIVE SERVICES LITIGATION
The Court of Appeals for the Fifth Circuit held unconstitutional the ACA’s requirement for plans to provide certain preventive services recommended by the United States Preventive Service Task Force (USPSTF) (see Braidwood Mgmt., Inc. v. Becerra, 2024 WL 3079340 (5th Cir. 2024)). The Fifth Circuit ruled the requirement unconstitutional because USPSTF's members were not nominated by the President and confirmed by the Senate as required by the Constitution. However, the Fifth Circuit reversed the lower Court's earlier decision to vacate all actions to enforce the USPSTF recommendations and enjoin enforcement nationwide. Accordingly, HHS is only enjoined from enforcing the USPSTF recommendations against the parties named in the suit. The Fifth Circuit remanded to the lower Court the decision of whether the Constitution requires members of the Health Resources and Services Administration (HRSA) and Advisory Committee on Immunization Practices (ACIP), which also have input on ACA preventive coverage, to be nominated by the President and confirmed by the Senate.
NO SURPRISES ACT QUALIFYING PAYMENT AMOUNT
The Texas Medical Association (TMA) has launched numerous challenges to the Qualifying Payment Amount (QPA) under the No Surprises Act (NSA). The QPA is used to determine a participant's costsharing and factors into what the plan pays the provider if a claim goes to the NSA's Independent Dispute Resolution (IDR) process. The Biden administration lost each of TMA's challenges involving the QPA in district court. However, the Court of Appeals for the Fifth Circuit reversed the district court and upheld the Biden administration regulations on several aspects of calculating the QPA (see Texas Medical Association v. Becerra, No. 23-40605 (5th Cir. October 30, 2024)). Specifically:
• "Ghost rates"—These are described as rates for a service negotiated between a provider and a plan/insurer but for which there are no actual claims. The district court held these "ghost rates" could not be used in calculating QPA. The Fifth Circuit ruled they could.
• Incentives—The district court held that risk sharing, bonus, penalty, or other incentive-based or retrospective payments or payment adjustments must be included in calculating QPA. The Fifth Circuit said they could be excluded.
• Special case-specific agreements with provider—The district court held that these agreements must be considered when calculating QPA, even though the regulations said they could be excluded. The Fifth Circuit held that they cannot be considered.
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The Fifth Circuit also held that plans do not need to provide more information on the QPA than the regulations require currently. However, the Fifth Circuit upheld the district court's decision that the 30-day period for a plan to decide an NSA claim runs from receipt of the claim rather than 30 days from receipt of a "clean claim", as the regulations provided. The Fifth Circuit did not address the district court's ruling that a third-party administrator must calculate the QPA on a plan-by-plan basis rather than its entire selffunded plan "book of business". This aspect of the district court's decision appears applicable and could present an issue for smaller self-funded plans in particular. It is not clear how calculating the QPA on a plan-by-plan basis works for a small level-funded plan.
ISSUES IN PRESCRIPTION DRUG COVERAGE
Prescription drug coverage has been under scrutiny from several directions in the last few years, from pharmacy benefit managers (PBMs) to drug manufacturer assistance programs. We review where we are at and what's ahead for 2025.
• Which drugs are EHBs: – The final 2025 NBPP requires prescription drugs in excess of those covered by a state’s essential health benefit (EHB) benchmark plan to be treated as EHBs for nongrandfathered individual and small group insurance market plans. This means drugs in excess of the EHB benchmark must count toward the ACA's maximum out-of-pocket (MOOP). Regulators have not applied this requirement to large group and self-funded plans. However, regulators indicated that they intend to propose rulemaking that would apply this requirement to large group and selffunded plans. See https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/ faqs/aca-part-66 (as visited November 15, 2024). Plans with copay accumulator and maximizer programs, in particular, should watch for these regulations.
• Suits Against Copay Accumulator Programs – In late 2023, the U.S. District Court for the District of Columbia vacated a 2021 Notice of Benefit and Payment Parameters (NBPP) drafted by the first Trump administration that allowed plans to exclude manufacturer assistance in calculating the ACA maximum out-of-pocket amount (MOOP) (See HIV and Hepatitis Policy Institute et al. v. HHS). HHS dropped its appeal and, consistent with the 2020 NBPP, now plans are not required to count copay assistance for EHBs toward the ACA MOOP if a generic drug is available. If a generic is not available, then, under the District Court's decision, there is a requirement to count the manufacturer's assistance toward the ACA MOOP. In the process of the litigation, however, HHS indicated that pending final rulemaking, it would not take legal action against employers who continued to not apply the manufacturer's assistance toward the ACA MOOP in all instances. That informal non-enforcement position of HHS would not apply to private litigants. Additionally, fully insured plans might be required by state law to count copay assistance toward the ACA MOOP. It remains to be seen if and how the incoming Trump administration will react to the Court's decision to vacate its rule.
• Note that this applies to the ACA MOOP and not the issue of whether to apply the manufacturer's assistance to the deductible. HDHPs are still prohibited from counting the manufacturer's assistance toward the HDHP minimum deductible. This could ultimately create systems issues where “accumulators” are tracked differently—excluding the manufacturer assistances for the deductible but including them for the ACA MOOP.
• Attack on Rebate Retention Practices by Federal Trade Commission (“FTC”) - The FTC issued an administrative complaint against three PBMs. The complaint alleges that these PBMs "created a perverse drug rebate system that prioritizes high rebates from drug manufacturers, leading to
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artificially inflated insulin list prices. The complaint states that even when lower list price insulins became available, which could have been more affordable for vulnerable patients, the PBMs systemically excluded them in favor of high list price, highly rebated insulin products." See https:// www.ftc.gov/news-events/news/press-releases/2024/09/ftc-sues-prescription-drug-middlemenartificially-inflating-insulin-drug-prices (as visited November 13, 2024). On November 19, 2024, the PBMs filed suit against the FTC in the District Court for the Eastern District of Missouri, seeking an injunction against the FTC's administrative proceedings. The PBMs allege that the Constitution prohibits the FTC from deciding private rights and revising private contracts. The PBMs also allege that FTC proceedings violate their due process rights because the same FTC commissioners that issued the complaint will decide it.
• Preemption of state PBM laws by ERISA: In August 2023, the Court of Appeals for the Tenth Circuit reversed a district court’s ruling and held that ERISA and Medicare Part D preempted parts of Oklahoma’s “Patient’s Right to Pharmacy Choice Act” (see Pharmaceutical Care Management Association v. Mulready, 78 F.4th 1183 (10th Cir. 2023)). At issue are the law’s:
o Geographic standards imposed on networks (Network Access Standards)
o Prohibition against requirements or incentives for using a particular network (Discount Prohibition)
o Any willing pharmacy requirement (AWP)
o Prohibitions against terminating pharmacists from networks because they are on probation
Oklahoma petitioned for a rehearing and filed a motion to stay so that it could enforce the law, but the Tenth Circuit denied both. In May 2024, Oklahoma petitioned the United States Supreme Court for review. The Court has not decided whether to review the case yet, but on October 7, 2024, it invited the Solicitor General of the United States to file a brief expressing the views of the United States.
HIPAA PRIVACY UPDATES
Reproductive Health Care Updates
The Department of Health and Human Services' ("HHS") published its final rule on HIPAA Privacy Rule and Reproductive Health Care on April 26, 2024 (Rule). The rule prohibits HIPAA-covered entities and their business associates (collectively, the "regulated entities") from using or disclosing PHI related to reproductive health care for certain investigatory-type
purposes if the health care itself is provided lawfully. For uses and disclosures for certain permitted purposes, the plan will need to obtain an attestation from the requestor, even if the PHI is only "potentially" related to reproductive health care. This attestation is not required for uses and disclosures to other covered entities or business associates, but it is still required for uses and disclosures for investigatory-type purposes where the health care was not provided lawfully.
Unless the covered entity is the same person or entity that provided the reproductive health care related to the request, the final rule allows regulated entities that receive such requests to presume that the reproductive healthcare was provided lawfully. The requestor can provide information to rebut that presumption, but even then, the regulated entity can deny the request.
The final rule is effective June 25, 2024, and the compliance deadline is generally December 23, 2024.
The compliance deadline for updating Notice of Privacy Practices (“NPP”) is February 16, 2026.
Regulated Entities will need to take the following compliance steps by December 23, 2024:
o Review HIPAA policies and procedures and update to comply with the final rule.
o Review business associate agreements and amend if inconsistent with the final rule.
o Train any personnel that handles requests for PHI on the use of attestations and changes to the policies and procedures.
Final Part 2 Regulations Align with HIPAA Rules
On February 16, 2024, HHS, through the Substance Abuse and Mental Health Services Administration and the Office for Civil Rights (OCR), published final regulations on the confidentiality of substance use disorder (SUD) patient records under 45 CFR Part 2 ("Part 2"). Many of the entities that use, disclose, and maintain SUD records are also covered entities under HIPAA or HIPAA business associates. In general, Part 2 protects SUD information obtained by any federally assisted program and is more stringent than HIPAA. They generally prohibit disclosure of the records in investigations or procedures against the patient absent written consent or court order. The final regulations align aspects of the Part 2 rules regarding patient confidentiality of SUD records with the HIPAA Privacy Rules as required by Section 3221 of the CARES Act.
Plan sponsors need to be mindful of the ways HIPAA Part 2 regulations affect compliance for their own employer health plans. For example, SUD records may be used or disclosed with respect to an employee assistance plan (EAP) or for mental health/substance use disorder benefits offered through the major medical plan. Updates consistent with these new Part 2 requirements include amendments to service agreements and HIPAA Business Associate Agreements for any vendors with access to SUD records. Plan sponsors will also need to update the HIPAA notice of privacy practices, HIPAA policies and procedures, and participant forms.
The Part 2 regulatory update:
Applies the HIPAA breach notification rules to SUD records.
Applies HIPAA enforcement approach and authorities (including the HITECH culpability tiers) to noncompliance with Part 2 regulations.
Allows complaints to HHS regarding SUD records.
Adds a patient notice obligation for SUD records and allows covered entities to combine with the HIPAA notice of privacy practices.
Enforcement of the Final Part 2 Regulations begins February 15, 2026.
Proposed Rule on Cybersecurity and Expanded OCR Enforcement Forthcoming
HHS filed recently an abstract of a proposed rule with the White House Office of Information and Regulatory Affairs (see https://www.reginfo.gov/public/do/ eAgendaViewRule?pubId=202404&RIN=0945AA22, as visited November 20, 2024). According to the abstract, the proposed rule will formalize
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certain cybersecurity requirements and allow OCR to expand enforcement. The proposed rule is likely a response to the rise of ransomware and hacking incidents to gain access to electronically protected health information. The proposed rule will likely align with HHS' Cybersecurity Performance goals released earlier this year (see https://hhscyber.hhs.gov/performance-goals.html, as visited November 20, 2024). The proposed rule may also include HHS’ tracking technologies guidance (https://www.hhs.gov/hipaa/forprofessionals/privacy/guidance/hipaa-online-tracking/index.html, as visited November 20, 2024). HHS is expected to publish the proposed rule by the end of 2024.
DOL CYBERSECURITY GUIDANCE
In September 2024, the DOL clarified that its April 2021 cybersecurity guidance generally applies to all employee benefit plans, including health and welfare plans (see https://www.dol.gov/agencies/ ebsa/keytopics/retirement-benefits/cybersecurity/compliance-assistance-release-2024-01, as visited November 20, 2024). The DOL intended the 2021 guidance to help plan sponsors, fiduciaries, service providers and participants in plans safeguard plan data, personal information, and plan assets.
The guidance has three parts:
1. Tips for Hiring a Service Provider: includes recommended RFP questions and contract terms for plan sponsors
2. Cybersecurity Program Best Practices:
Lists 12 cybersecurity best practices for service providers that the DOL would expect to see if auditing the plan or a service provider.
States that pension and health and welfare plans are tempting targets for cybercriminals because the plans (i) often hold millions of dollars in assets and (ii) store and/or transfer participants' personally identifiable data.
3. Online Security Tips: Tips for participants and beneficiaries to reduce the risk of fraud.
Health and welfare plans should ensure compliance with the DOL’s cybersecurity guidance now that the Department has clarified that the guidance does not apply only to retirement plans.
GAG CLAUSE CHANGES
Group health plans (GHPs) and health insurance issuers must annually attest compliance with Gag Clause Prohibition and submit Gag Clause Prohibition Compliance Attestations (GCPCAs) by December 31 every year. CMS says brokers, agents, TPAs, PBMs and other entities attesting on behalf of GHPs and issuers should notify the GHP or issuer. GHPs or issuers, or those submitting on their behalf, should submit GCPCAs via https://hios.cms.gov/HIOS-GCPCA-UI.
On March 28, 2024, HHS, DOL, and Treasury released final rules regarding short-term, limited-duration insurance (STLDI) and certain fixed indemnity excepted benefit coverage. The rule is intended to reduce confusion between STLDI and fixed indemnity coverage and ACA-compliant coverage. With respect to
STLDI, the final rule adopted the proposed rule published on July 12, 2023. However, the final rule did not adopt most of the proposed rules for fixed indemnity coverage, with the notable exception of the proposed rule's notice requirement for fixed indemnity coverage that, as finalized, takes effect January 1, 2025. This notice requirement applies to both plans and insurance issuers. The plan or issuer must display the notice prominently on the first page (either in paper or electronic form, including on a website) of any marketing, application, and enrollment materials provided to participants at or before the time they are given the opportunity to enroll. The notice must be in 14-point font and include the language in the final rule, which is available at https://www.govinfo.gov/content/pkg/FR-2024-04-03/pdf/2024-06551.pdf Fed. Reg 23338, 23415 – April 3, 2024). Employers should ensure they are in compliance with this notice requirement, as it applies to plans and, depending on the circumstances, might not satisfy the insurance issuer with respect to their plan.
Although the final rule is in effect, it has been challenged by the American Association of Ancillary Benefits, as well as ManhattanLife Insurance and Annuity Company, in the District Court for the Eastern District of Texas (American Association of Ancillary Benefits et al. v. Becerra et al., 4:24-cv-00783, August 29, 2024; ManhattanLife Insurance and Annuity Co. et al. v. U.S. Department of Health and Human Services, 6:24-cv-00178, May 22, 2024). In a December 4, 2024 “Final Judgment” in favor of ManhattanLife, the district court vacated the rule’s notice requirements for fixed-indemnity insurance policies, but the Court did not rule on the notice requirement for STLDI policies. The Court ruled that the notice requirement for fixed-indemnity coverage exceeded HHS' statutory authority and was not a logical outgrowth of the compelled notice in HHS' notice of proposed rulemaking. The scope of the Court's decision and whether HHS chooses to appeal remains to be seen. Additionally, the Court's decision in the American Association of Ancillary Benefits is still forthcoming.
DISASTER RELIEF FILING EXTENSIONS
Deadlines vary depending upon the disaster and locality. Details on all recent disaster relief for presidentially declared disasters are on the Around the Nation page on IRS.gov. Currently:
Taxpayers in all or parts of Connecticut, Florida, Illinois, Kentucky, Louisiana, Minnesota, Missouri, New York, Pennsylvania, Puerto Rico, South Dakota, Texas, Vermont, Virgin Islands and Washington State have until February 3, 2025, to file their 2023 tax year returns.
For Helene or Milton, taxpayers in all of Alabama, Florida, Georgia, North Carolina, South Carolina, and in affected parts of Tennessee and Virginia will have until May 1, 2025, to file their 2023 tax year returns.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. The DOL automatically recognizes these extensions for Form 5500 filing. Visit https://www.irs.gov/newsroom/tax-relief-in-disaster-situations for more information.
DOL/EBSA and Treasury/IRS also published Extension of Time Frames in the Federal Register on November 8, 2024, for Hurricane and Tropical Storm Helene and Hurricane Milton. These "Disaster areas" are those areas designated as eligible for Individual Assistance by FEMA due to a particular storm. It is narrower in some states than the IRS tax filing relief. The Extension of Time Frames relief applies to:
A participant, beneficiary, COBRA-qualified beneficiary, or claimant in group health plans, disability, and other employee welfare benefit plans (including pension) subject to ERISA or the Code who (i) resided, lived, or worked in one of the disaster areas at the time of the hurricanes or tropical storm; or (ii) whose coverage was under an employee benefit plan that was directly affected.
Group health plans subject to ERISA and Internal Revenue Code and their sponsors and TPAs affected by the hurricanes or tropical storm.
For participants, beneficiaries, COBRA-qualified beneficiaries, and claimants, the DOL and IRS provide mandatory extensions until May 1, 2025, that operate similarly to the COVID Outbreak Period in that the "Relief Period" must be disregarded for certain deadlines and timeframes. The agencies give group health plans the ability to disregard a "Relief Period" for COBRA election notices.
ACA NONDISCRIMINATION 1557
On May 6, 2024, HHS finalized the latest rule for Nondiscrimination in Health Programs and Activities ("2024 Rule") under §1557 of the Affordable Care Act ("ACA"). Section 1557 prohibits a “health program or activity” that receives Federal financial assistance (“FFA”) from discriminating against an individual on the basis of race, color, national origin, sex, age, or disability. The mandate also applies to a program or activity that is administered by an executive agency or by an entity established by Title I of the ACA. HHS has issued final regulations under §1557 twice before—once in 2016 ("2016 Rule") and again in 2020 ("2020 Rule"). The 2024 Rule resurrects and revises several concepts and policies from the 2016 Rule that the 2020 Rule had repealed or amended (e.g., notices and grievance procedures). HHS also revised its interpretation of Medicare as constituting FFA (and thus triggering §1557) and provisions related to discrimination on the basis of sex.
Generally, any health program or activity that receives Federal financial assistance (FFA) from HHS or that is administered by an executive agency or by an entity established by Title I of the ACA is covered by the
2024 Rule (limited exemption for Federal religious freedom and conscience objections).
In a departure from the 2020 final rule (and a return to the 2016 final rule), the definition of “health program or activity” includes “health insurance issuer,” which has implications for insurer TPAs and the self-insured plans they administer.
The 2024 Rule does not apply to any “employer or other plan sponsor” of a group health plan with regard to its “employment practices”, including the “provision of employee health benefits”, which “includes when the Federal financial assistance received is for their employee health benefits.” The 2024 rule applies to telehealth and treats Medicare Part B as FFA.
What does a Covered Entity need to do to comply with the 2024 Rule?
Provide an assurance when applying for FFA that it will comply as a condition of receiving the FFA. Duration of this obligation lasts for as long as FFA is extended.
If the covered entity employs 15 or more employees, the covered entity must designate §1557 coordinator to ensure compliance, manage the grievance procedure, and coordinate training.
Implement written policies and procedures, including a nondiscrimination policy, grievance procedures, language access procedures, effective communication procedures, and reasonable modification procedures.
Provide training to the relevant employees to implement the policies and procedures.
Provide the following notices:
Notice of nondiscrimination, which must include (among other things) how to obtain language assistance services and appropriate auxiliary aids; contact information for the §1557 coordinator; how to file a grievance with the covered entity and a complaint with OCR.
Notice of availability of language assistance and auxiliary aids and services
CONCLUSION
Those involved with health and welfare plan administration and compliance have a lot to think about before 2024 closes. 2025 is not likely to bring any respite for year-end efforts, as it seems inevitable that the incoming presidential administration will have new goals and priorities that will require action from health and welfare plans and their vendors.
Attorneys John Hickman, Ashley Gillihan, Steven Mindy, Ken Johnson, Amy Heppner, and Laurie Kirkwood provide the answers in this column. John is partner in charge of the Health Benefits Practice with Alston & Bird, LLP, an Atlanta, New York, Los Angeles, Charlotte, Dallas and Washington, D.C. law firm. Ashley and Steven are partners in the practice, and Ken, Amy, and Laurie are senior members in the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation. Readers are encouraged to send questions by E-MAIL to John at john.hickman@alston.com.
THE OBESITY EPIDEMIC IS FORCING NEW HEALTH PLAN COVERAGE DECISIONS
AAnew sobering report was recently published indicating that nearly three-quarters of US adults are overweight or obese – a percentage that has been steadily rising over the past 30 years and is expected to continue doing so well into the mid-21st century. Despite the well-publicized health conditions associated with obesity (most notably, increased risk for cardiovascular disease and Type 2 diabetes) and heightened social emphasis on the efficacious effects of physical exercise, the disturbing trend has persisted and remains a particularly acute concern for younger generations of Americans as well.
Written By David Ostrowsky
For many who suffer from obesity, the journey to maintaining a healthier weight can seem daunting – a lifelong pursuit that constantly requires tremendous willpower, sacrifice, and time. In particular, for low-income Americans living in food deserts, it can be even more challenging to find affordable yet healthy food options. So naturally, when news broke earlier this decade that a class of drugs called GLP1s, or glucagon-like peptide-1, receptor agonists, initially used to treat diabetes, were approved for obesity, it instantaneously captured the imagination of millions.
But then came the sticker shock for these enticing new drugs, such as Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound: an out-of-pocket cost exceeding $1,000 per month. With the hefty price tag making the weight loss drugs prohibitively expensive for the vast majority of potential consumers, American employees participating in their employersponsored health plans have turned to their employers for help.
While the number of employers who cover GLP-1 drugs appears to be ticking up, more than half still do not foot the bill. And surely, over the coming weeks, as companies roll out their benefit plans for 2025, potential coverage of weight loss drugs will be top of mind for an American workforce that continues to pay increasingly higher premiums and deductibles year after year to cover themselves and their dependents.
It should be noted that in late November, the Centers for Medicare and Medicaid Services proposed a rule to include anti-obesity drugs within Medicare Part D plan coverage and required Medicaid programs to cover the cost of those medications for treating obesity. Under current CMS rules, such drugs are not covered under Medicare Part D unless they are for treating another
medical condition other than weight loss.
However, this proposed rule reinterprets obesity – having a body mass index of 30 or higher -- as a medical condition eligible for weight loss drug coverage under Medicare Part D. It remains unclear how the Trump administration will handle the proposal, which, if finalized, would take effect in 2026. Further, with a Republicancontrolled Congress taking over in 2025 and the HHS nominee (Robert F Kennedy Jr.) being strongly opposed to this proposal, it is quite possible that Congress could rescind this rule. In fact, pursuant to the Congressional Review Act (“CRA”), Congress is empowered to pass a joint resolution to overturn any final regulation within sixty (60) Congressional session days.
For those companies that declined to provide coverage for GLP-1 drugs in their 2025 plans, the conundrum of whether or not to do so will resurface in less than a year for 2026 planning. In fact, while open enrollment season for health insurance typically occurs in the fall, self-insured employers will be having renewal discussions with their benefits brokers and agents this spring, during which weight loss drug coverage may be an agenda item.
Plan sponsors and administrators who are inclined to provide coverage will have to assess the primary impetus for doing so while conducting a thorough cost-benefit analysis. Certainly, there is no one-sizefits-all course of action, and the sheer size of an employer will largely dictate whether or not it has the financial wherewithal to offer coverage (i.e., smaller companies that want to provide coverage but run the cost-benefit analysis and are simply priced out of the market.) That being said, there are certain universal matters that warrant serious consideration for plans weighing the pros and cons of covering weight loss drugs in the future.
• It's important not to place all high-priced specialty drugs under one umbrella. It may seem obvious, but it bears emphasizing that different ones will impact self-funded plans in disparate ways. The exploding growth of GLP-1s is akin to that of cell and gene therapies, which have been following a steady growth trajectory since 2017, but the two treatments will affect self-funded plans differently. Generally speaking, cell and gene therapy drugs are rarely consumed, but when they are, the price tag can be exorbitantly expensive and lead to a plan experiencing a crippling financial burden; conversely, GLP-1 usage is far more common – obesity is, as previously discussed, rather prevalent in American society – but does not translate to such extravagant costs. Accordingly, it behooves plan administrators to perform their due diligence regarding stop-loss insurance while bearing in mind that cell and gene therapy claims are more likely to affect Specific coverage, while GLP-1s are more likely to affect first-dollar and Aggregate coverage.
• Aside from research into stop-loss insurance options, self-funded employers can perform even more due diligence. Most notably, companies can gauge their employee population's collective interest in GLP-1s by assessing claims and PBM data. Along these lines, employers who do proceed with covering weight loss drugs need to make a difficult decision as to how much of the (considerable) financial burden should be passed on to employees, the majority of whom will likely not need these drugs. As just one hypothetical scenario, if 25% of an employee population consumes weight loss drugs, all employees’ premiums will rise by whatever percentage is necessary to cover the heightened cost.
• It would also be prudent to evaluate one’s PBM and formulary strategies to make sure that GLP-1s if deemed worthy of coverage, are acquired at the lowest price for the patient and the health plan. Meanwhile, self-funded employers should consider discussing a multi-step strategy with their benefit consultants (as previously mentioned, this typically occurs in several months) regarding coverage logistics, such as timing and necessary authorizations.
• If there is interest in moving forward with coverage of weight loss drugs, consider taking a holistic approach to offering this benefit. In other words, GLP-1s, by themselves, may not be a panacea for managing obesity – at least not for the long term. Supplemental services such as nutrition counseling, access to dieticians, exercise/fitness benefits, and even providing healthy food options for company-sponsored meals can not only help participants maximize the benefits of weight loss drugs but, more importantly – at least from the perspective of the plan's financial well-being – empower them to engage in more healthy lifestyles so they are not dependent on pharmacological support.
There are, of course, many other considerations to bear in mind. Does the plan intend to exclusively provide coverage for weight loss drugs that are FDA-approved? Is the plan interested in covering off-label drug use (i.e., for a Type 2 Diabetes diagnosis)? Is it worth switching to a different insurance carrier simply because they may offer significantly more favorable rates for weight loss drug coverage?
There’s no telling how the GLP-1 market will develop in the months ahead – especially given the expected flurry of novel regulations with the new administration – but the demand for these “miracle drugs,” ones being touted by celebrities, tech moguls, and TikTok influences, is unlikely to wane. If anything, the demand will only accelerate, perhaps leading to more Americans actually basing their employment decisions on whether or not their respective employers, particularly those who are empowered to make flexible plan design choices pursuant to self-funding, offer coverage of GLP-1s for weight loss, and not just diabetes.
David Ostrowsky is manager of Corporate Communications at the Phia Group.
NEWS FROM SIIA MEMBERS
2025 JANUARY MEMBER NEWS
Provided below are news highlights from these upgraded members. News items should be submitted to membernews@siia.org.
All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at www.siia.org.
If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy at jivy@siia.org.
SIIA boasts a very active and dynamic membership. Here are some of the latest developments from the companies powering the selfinsurance industry.
Erik Hinniger
ERIK HINNIGER PROMOTED AT HMA
Healthcare Management Administrators, Inc. (HMA) announced the promotion of Erik Hinniger to Chief Financial Officer. In this new role, Hinniger will continue to lead the Finance and Accounting teams and will report to President and CEO of HMA, Aadam Hussain.
"Erik's financial leadership has been instrumental in helping HMA establish and maintain its position as a preeminent and trusted TPA. His sharp intellect and pragmatic approach will continue to be great
assets for HMA in this new role," said Mr. Hussain.
ONE80 INTERMEDIARIES ANNOUNCES ACQUISITION
One80 Intermediaries (One80), a specialty insurance broker headquartered in Boston, announced that it had acquired Waypoint Underwriting Management, LLC. Terms of the deal were not disclosed.
Based in Basking Ridge, New Jersey, Waypoint Underwriting Management (Waypoint) is a leading specialty reinsurance Managing General Underwriter (MGU) operating primarily in the United States. The company offers Property, Casualty, Workers' Compensation, and Accident & Health reinsurance solutions to insurers. Waypoint also functions as a primary MGU for Personal Accident and Medical insurance and provides consulting services for filing, forms, and actuarial memorandums within the Accident insurance industry.
"Waypoint maintains an extremely broad product offering and best-in-class underwriting teams which complement One80's marketleading solutions," said Matthew F. Power, President, One80 Intermediaries. "Together, we
are well poised for further diversification and profitable growth while continuing to provide an unwavering commitment to client service," he continued.
"Waypoint and One80 share a common focus of bringing innovative products and services to the marketplace. Joining the One80 team will not only provide an enhanced platform to support our business but also expand our ability to provide solutions to our reinsurance intermediaries and clients," said Joseph Horan, Managing Partner, Waypoint.
ALLIANT INSURANCE SERVICES EXPANDS EMPLOYEE BENEFITS TEAM
Matt Kennedy has joined Alliant Insurance Services as Vice President within its Employee Benefits Group. Based in South Carolina, Kennedy will work across the Southeast region to deliver innovative solutions for employer groups, enhancing health plan offerings and implementing effective cost containment strategies.
With more than 15 years of experience in the healthcare space, Kennedy brings a deep understanding of the challenges and opportunities within the industry. Prior to joining Alliant, Kennedy led the national sales team for a large third-party administrator, where he worked closely with self-funded employers to enhance their health plan offerings. His team pioneered innovative costcontainment solutions that drove impactful results for clients.
"Matt's extensive experience in healthcare and proven track record of delivering cost-effective solutions make him a valuable asset to our team," said Kevin Overbey, President of Alliant Employee Benefits. “His commitment to supporting self-funded employers with customized benefits strategies aligns with our mission to empower our clients with tailored, sustainable solutions. We are excited to welcome him to the Alliant team.”
POINT C COMPLETES RECAPITALIZATION
Point C, a third-party administrator of medical benefits, cost containment, and other administrative services for self-funded employers, announced that it has completed a recapitalization.
Shore Capital Partners made a strategic investment in Point C with advisory services provided by Houlihan Lokey.
investment. Shore believes its investment will allow Point C to capitalize on a robust pipeline of acquisition opportunities, pursue additional cost containment solutions, and take advantage of sector growth with rising healthcare costs driving selffunding and TPA tailwinds.
Point C was formed through its initial partnership with Benefit Plan Administrators and grew to become a leading company in the TPA industry through a combination of organic growth, acquisition, and
Matt Kennedy
2025 SELF-INSURANCE INSTITUTE OF AMERICA
BOARD OF DIRECTORS
CHAIRMAN OF THE BOARD*
Matt Kirk President
The Benecon Group
CHAIRPERSON ELECT, TREASURER AND CORPORATE SECRETARY*
Amy Gasbarro President
ELMCRx Solutions
DIRECTOR
Mark Combs CEO/President Self-Insured Reporting
DIRECTOR
Orlo “Spike” Dietrich Operating Partner Ansley Capital Group
DIRECTOR
Jeffrey L. Fitzgerald Managing Director, SRS Benefit Partners Strategic Risk Solutions, Inc.
DIRECTOR
Mark Lawrence President HM Insurance Group
DIRECTOR
Matthew Smith Managing Director Risk Strategies
DIRECTOR
Beth Turbitt Managing Director Aon Re, Inc.
VOLUNTEER COMMITTEE CHAIRS
Captive Insurance Committee
George M. Belokas, FCAS, MAAA President Beyond Risk
Future Leaders Committee
Erin Duffy Director of Business Development Imagine360
Price Transparency Committee
Christine Cooper CEO aequum LLC
Cell and Gene Task Force
Ashley Hume President Emerging Therapy Solutions®
* Also serves as Director
2025 BOARD OF DIRECTORS
SIEF CHAIRMAN
Nigel Wallbank President New Horizons Insurance Solutions Wellington, FL
Matt Hayward Office President Ryan Specialty Benefits Greenwood Village, CO
Elizabeth Midtlien Vice President, Emerging Markets
AmeriHealth Administrators, Inc. Bloomington, MN
Jonathan Socko
Senior Vice President East Coast Underwriters, LLC Spartanburg, SC
SIIA NEW MEMBERS
JANUARY 2025
NEW CORPORATE MEMBERS
Shannon Ganzer Senior Marketing Specialist
Fabric
New York, NY
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