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April 2016

Bleeding EDGE On the

Regenerative Medicine Sparking Interest, Controversy


Experts everExperts inin government governmentinsurance, insurance,wewespecialize specializein inthethe everevolving public entity insurance sector, so you don’t have to. evolving public entity insurance sector, so you don’t have to.As As an provide customized solutions anindustry industryleader, leader,MIDLANDS MIDLANDScan can provide customized solutions that include superior service for the agent and the insured. WeWe that include superior service - for the agent and the insured. offer the coverages that your clients need at competitive prices offer the coverages that your clients need at competitive prices that only MIDLANDS has the market presence to deliver. that only MIDLANDS has the market presence to deliver.


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Bleeding EDGE On the

Regenerative Medicine Sparking Interest, Controversy


April 2016

Volume 90


Captive Industry Sees Solid Growth in 2015 and Looks for More in 2016


OUTside the Beltway Texas Responds Favorably to Self-Insurance Industry Coalition


Combating Opioid Abuse in Workers’ Compensation Plans with Advances in Bio Analytics

Bruce Shutan


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22 Lessening the Pain of



PPACA, HIPAA and Federal Health Benefit Mandates IRS Notice 2015-87 Provides Much Needed Guidance for Account-Based Plans and ACA Employer Shared Responsibility Requirement (IRC 4980H) Part11


No Standard Standard of Review


SIIA Endeavors Annual Self-Insured Workers’ Comp Conference Offers Strategic, Educational Programs and Sessions

Specialty Drugs Bruce Roffe

April 2016 | The Self-Insurer


Bleeding EDGE On the

Regenerative Medicine Sparking Interest, Controversy


utting-edge medical treatments delivered through specialized national networks and centers of excellence can elevate both self-funded medical plans and workers’ compensation programs in a multitude of ways. For starters, they present an opportunity for greater control over potentially huge catastrophic claims. But they also can improve health outcomes relative to surgical and pharmaceutical interventions, as well as save lives. The emergence of regenerative medicine is one such promising area, with the Stem Cell Therapy Network and National Marrow Donor Program helping lead the way. Demand for cellular and platelet-rich plasma (PRP) therapies is exploding as they target a myriad of injuries. And while some people are fortunate enough to find a genetically matched donor in their family for a marrow or cord blood transplant, 70% do not and can use outside assistance. Written by Bruce Shutan

ON THE BLEEDING EDGE | FEATURE But federal regulators, researchers, health insurers and medical providers are reacting cautiously or skeptically to this trend, which is seen as largely experimental and unproven compared to remedies in mainstream medicine. Some have even gone as far as equating it to quackery. In spite of this reaction, several industry insiders encourage self-insured employers to take a closer look at these alternative treatment options, which they say can pay tremendous dividends down the line.

All Eyes on ROI With these procedures considered “investigational” by health insurers, selfinsured employers enjoy the freedom to decide on coverage terms without having to wait on reluctant carriers, explains Jason Hellickson, president of Harborview Healthcare and the Regenerative Orthopedic Institute, whose ROI acronym is telling.

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Describing the potential ROI as being in the thousand percentiles, he notes that there’s no additional cost to these treatments. In other words, it’s all pure savings. And he says they have saved employers anywhere from 70% to 85% compared to with orthopedic surgical costs.

orthopedic costs for employers within their workers’ comp and health plans related to regenerative medicine. What’s so significant in his mind is that orthopedic costs are among the top five expenses for any large employer and generally account for 80% or more of overall workers’ comp injuries. He says these savings can quickly add up to millions each year. Beyond the potential for significant annual savings, he also mentions better health outcomes tied to a non-invasive, less painful procedure, as well as much less downtime. “In essence,” Hellickson explains, “surgery damages tissue to repair tissue, whereas we are able to help the body heal the tissue.” Self-insured employers that use regenerative medicine or cellular therapy can save in several ways, according to Morgan Pile, director of business development at the Strategic Cellular Therapy Network, a regenerative medicine consulting program, as well as founder of Arkansas Stem Cell Therapy and a global consultant at Willis Towers Watson. One example is (PRP) therapies that return workers’ comp claimants with ligament tears to work quicker and keep them off highly addictive pain medications. He cites significant savings ranging from 70% to 90% relative to surgical procedures requiring up to six months of pain injections.

Pile credits Regenexx for taking the lead on helping incorporate regenerative medicine into group health plans, which can be as easy amending summary plan descriptions to allow for PRP. “It could be a covered treatment through these specific modalities,” he explains, also noting the potential to treat occupational injuries. He knows of at least eight Regenexx cases from employers whose savings surpassed $250,000, but believes that’s only the tip of the iceberg. For example, he notes the potential for $34 million in first-year savings for treating state of Arkansas employees. The estimate was based on just 40% or 50% of that population using regenerative medicine instead of surgical treatments that were actually paid in 2013 for knee replacements, knee and shoulder scopes and spinal fusion. The broad application of cellular therapy across numerous diseases means this portion of the nascent regenerative medicine market could generate anywhere from $20 billion to $100 billion in the next five to 10 years. The prediction was made by Michael Boo, chief strategy officer, administration and business development for Be the Match, which runs the National Marrow Donor Program. But for now, he says it’s largely confined to one or two licensed products with much left to prove in the eyes of skeptics. “Everyone is cautious about making sure that even if the treatment works, there’s not any untoward complications as a result of that,” he explains.

Another huge advantage is “substantially lower permanency ratings Like Hellickson, Pile is bullish on the for work comp claims, which ultimately potential for improved outcomes. provides a much lower impairment for that “I’ve seen hundreds and hundreds of injured employee and patients with severe osteoarthritis in the which means you’re getting a better result,” knees do better, get out of wheelchairs,” Hellickson adds. he says. “So the growth factors are very These savings important for healing and regenerating square with a study by the National Business some of these injured tissues and restoring Group on Health, which the blood flow is the key component of he says found a 50% to 80% reduction in what regenerative medicine is all about.”

April 2016 | The Self-Insurer



Healthy Skepticism? Stem cells have been used or considered to treat cancer, blood immune disorders, congestive heart failure, lung disease, glaucoma, muscular dystrophy, ALS, Parkinson’s, Alzheimer’s, multiple sclerosis, traumatic brain damage and autism. Other applications include orthopedic issues, arthritis and joint pain, as well as treatments for drug addiction, kidney function and even face-lifts and erectile dysfunction. In addition, clinical trials have shown promise for wound healing, improved heart function and scleroderma. A bone marrow or cord blood transplant is used to treat or potential cure leukemia, lymphoma, sickle cell anemia and many other diseases. More than 25,000 people worldwide have received cord blood transplants thanks to baby umbilical cord blood donations. But the experimental and untested nature of such treatments has

generated a tempered response among clinicians, researchers and federal regulators. The Food and Drug Administration (FDA) has proposed requiring medical clinics that use stem cell therapies to undergo a rigorous approval process that includes showing evidence of their safety and efficacy. A public hearing on the matter was scheduled for April. Physicians and researchers alike have long pressured the FDA to rein in unproved therapies. Leigh Turner, Ph.D., a bioethicist at the University of Minnesota, is surprised clinics that use stem cells have been allowed to grow so rapidly. “If it’s not safe and it’s not going to help patients, it’s just predatory behavior,” he told STAT, a publication that examines the frontiers of health and medicine. However, proponents of such treatments are crying foul. The federal government is overstepping its authority by potentially “interfering with the patient’s right for treatment and, in the case of autologous cells, placing restrictions on a person’s own healing capacity,” according to Brad Fullerton, M.D., president of the American Association of Orthopedic Medicine. David L. Harshfield, Jr., M.D., a diagnostic radiologist and adviser to the Strategic Cellular Therapy Network, noted in a recent e-mail that “there have been no serious adverse events attributed to the administration of approved cellular medicine products. This negligible complication rate speaks volumes about the safety of these procedures, particularly compared to the increasing, often devastating complications related to dangerous pharmaceuticals and surgical procedures.” Pile is mindful of the tremendous power wielded by pharmaceutical and health care lobbyists who see their businesses threatened by regenerative medicine. In contrast, he says a group like the International Cellular Medicine Society is funded

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ON THE BLEEDING EDGE | FEATURE by a handful of doctors who are trying to do the right thing. “Think about 90% of surgical treatments being eliminated because these treatments can work that well if done correctly,” he observes.

to help employers and insurers build provider networks, as well as patients compare treatment options pertaining to their specific disease.

Need for Early Intervention

The program arranges for transplants by paying hospitals for collection and physicians for patient physicals, as well as testing for infectious disease markers. The cost of a typical blood or marrow donation is about 15% to 20% of the total transplant cost. Network operators, such as Optum and Allianz, negotiate prices with primary or third-party insurers, or benefit managers.

Whatever ends up happening with regenerative medicine’s place within the health care community, timing is a critical ingredient to its success. These treatments are effective only with early intervention, according to Boo. “We’ve seen often where patients go through the first or second remission for their cancers without being offered a transplant,” he notes. “And the science clearly shows that, in many cases, early access to transplant is good for the patient, but it’s also good for the economics, because repeated rounds of chemotherapy followed by a transplant, is unsuccessful and costly for patients.” He says another key message is a need for reasonable benefits that include reimbursement of travel expenses, good access to pharmaceuticals and after-care program management following each transplant. Be the Match’s national registry includes more than 12.5 million Americans and up to 25 million worldwide who are willing to donate peripheral blood and bone marrow, as well as cord blood units, for allogeneic or non-own cell source transplantation. It also connects with registries around the world to broaden the search for a match and has banked 209,000 cord blood units. A donor’s immune system is able to remain strong because just 1% to 5% of marrow is needed to save a patient’s life.

Greater interest in regenerative medicine is expected in the years ahead. “I think there’s enough demand for any one of our clinics in any city the size of Des Moines, Iowa, or bigger,” Hellickson says. “But there are not enough doctors to meet that demand requirement.”

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Boo says outcomes data from various organ transplant centers are published

Traveling for Treatment

April 2016 | The Self-Insurer


ON THE BLEEDING EDGE | FEATURE His interest in the topic began as an investor who was interested in an alternative to shoulder surgery he was facing. “I knew that it had great potential,” he recalls. Patients are showing a willing to travel for life-altering treatments, according to Pile. He mentions Gordie Howe and Bart Starr as examples of “recent celebrity athletes that went to Mexico on death’s door and are now standing up and speaking at conferences again in less than a year. It’s absolutely incredible and saved their lives.” Promising and affordable treatment options are now available worldwide. Thailand and Singapore are on the cutting edge of regenerative medical treatments offered at deep discounts, according to Nigel Wallbank, president of New Horizon Insurance Solutions who also chairs the Self-Insurance Educational Foundation. For example, he says a Bangkok hospital suite with 24-hour nursing is only $350 a night “as opposed to Lord knows how high it would be here.” His knowledge of this topic dates back to the 1980s when he started an organ transplant network that became the nation’s second largest at that time and was later sold to JPMorgan Chase and then Aetna. After that, he waded into the cancer arena to help combat widespread misdiagnoses and inappropriate treatments. An aging workforce that has become increasingly savvy about its treatment options appears to be driving interest in regenerative medicine. Research suggests alarming rates of failed knee and hip replacements, as well as spinal surgeries, Pile says. And when coupled with mounting frustration over prescription drugs that simply mask the pain associated with these procedures, patients are motivated to learn about alternative options. “The baby boomers are seeing what’s going on with their parents, even with these diseases and Alzheimer’s and they don’t want that to happen to them,” he


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explains. But with only about 2% of the world’s population familiar with regenerative medicine or cellular therapy, Pile says education is necessary to help advance these options. Another challenge is dispelling myths. For example, he notes that roughly half of patient marketing materials in the U.S. portray these treatments as illegal or a threat to unborn lives as seen with discussion about removing stem cells from human embryos. When skeptics are told that regenerative medicine is simply a matter of using a person’s blood and body fat to help people heal, he sees understanding taking shape. Pile would like to see a grassroots movement to educate patients about these treatment options and help the U.S. play a leading educational role. ■ Bruce Shutan is a Los Angeles freelance writer who has closely covered the employee benefits industry for 28 years.

Schedule of


April 5-7, 2016 | San Jose, Costa Rica

SIIA’s International Conference provides a unique opportunity for attendees to learn how companies are utilizing self-insurance/alternative risk transfer strategies on a global basis. The conference will also highlight self-insurance/ART business opportunities in key international markets. Participation is expected from countries all over the world.

Self-Insured Taft-Hartley Plan Executive Forum May 18-19, 2016 | Chicago, IL




International Conference

Taft-Hartley plans refer to the multi-employer pension plans collectively bargained by a union and a group of employers, usually in related industries. Taft-Hartley plans are governed by a trust, half of whose trustees are appointed by the employers and half by the union. This retirement plan model has enabled tens of thousands of small and medium-sized businesses to provide workers with the traditional defined benefit pensions that used to be standard among larger employers, but have now virtually disappeared in the non-unionized private sector.

Self-Insured Workers’ Comp Executive Forum May 24-25, 2016 | Scottsdale, AZ


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SIIA’s Annual Self-Insured Workers’ Compensation Executive Forum is the country’s premier association sponsored conference dedicated to self-insured Workers’ Compensation employers and group funds. In addition to a strong educational program focusing on such topics as analytics, excess insurance, wellness initiatives and risk management strategies, this event will offer tremendous networking opportunities that are specifically designed to help you strengthen your business relationships within the self-insured/alternative risk transfer industry.

36th Annual National Educational Conference & Expo September 25-27, 2016 | Austin, TX

SIIA’s National Educational Conference & Expo is the world’s largest event dedicated exclusively to the self-insurance/alternative risk transfer industry. Registrants will enjoy a cutting-edge educational program combined with unique networking opportunities and a world-class tradeshow of industry product and service providers guaranteed to provide exceptional value in three fastpaced, activity-packed days.

| The Self-Insurer 11 April 2016 visit For more information

Captive Industry Sees Solid Growth in 2015 and Looks for More in 2016 Numbers released for 2015 captive formations shows that captives are continuing to grow despite a lingering soft market.


ince the beginning of the year, U.S. captive domiciles have been releasing results of captive activity in 2015. These results show that overall captive formation was strong even while pricing results for the property and casualty market were down. Captives are being formed all over the U.S. in both established domiciles and newly legislated domiciles and, according to industry insiders, 2016 is shaping up to be an even better year for the industry.

2015 Numbers

Written by Karrie Hyatt 12

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Quite a number of domiciles posted double digit gains in captives last year. Delaware led the way with nearly 200 new captives. At the end of 2015, the domicile’s total number of operating captives was 1060. Seventy-four pure captives were licensed, three special purpose captives and 112 series captives for a total of 189 last year. Series captives, as legislated in Delaware, segregate risks into subsidiaries all owned by a parent company. Over the last five years, the domicile has become a specialist in licensing and regulating this type of captive structure. The domicile is looking to continue expanding their captive program in

2016. Steve Kinion, director of the state’s captive program, said, “Our plan is to continue to offer a good captive product with firm and fair regulation. So we plan to have an equal number or more in 2016. Any good captive applicant is welcome in Delaware.” Following Delaware is Utah, which licensed 66 new captives in 2015. The domicile added pure captives, cell captives and association captives to their roster. According to David Snowball, director of captive insurance in the state, “2015 was slower in growth than the prior couple of years which were very high years for growth. It was good to settle in at a more reasonable rate... It allowed us time to implement some efficiency measures such as developing an online annual reporting process as well as an online captive application process and establishing an online secure document upload process that is more efficient approach for providers and the Department.” He also believes that 2016 is shaping up to be another big year for the department,

“We expect to have strong growth with at least as many [captives] as in 2015, and probably more. There will be some extra work to accommodate the changes in the IRS 831(b) election rules but that also will increase the number of potential captives that will be able to afford the captive process.” Tennessee and Nevada licensed 57 and 50 new captives, respectively. Tennessee saw a number of redomiciled captives – seven in total – which is the highest number the state has experienced. In Nevada, the domiciled nearly doubled the number of captives licensed compared to the prior year. Michael Lynch, captive director in Nevada, is pleased with the growth in his department, saying, “With 50 new captives, I feel we did very well.”

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North Carolina followed closely with 42. One of the newest U.S. domiciles, North Carolina has been climbing the ranks of top captive domiciles. In 2015, the state licensed pure captives, protected cell captives, special purpose captives and risk retention groups. Since it began operation in late 2013 until the end of 2015, the domicile licensed 96 captives and 240 “cell business plans.” Montana, Vermont and South Carolina garnered 38, 33 and 30 captives each respectively. These domiciles licensed pure captives, reinsurance captives, special purpose captives, sponsored captives, incorporated cell captives, association captives and risk retention groups. Eleven of Vermont’s new captives were redomiciled captives. Domiciles that licensed between 10 and 30 captives last year were Texas (11), Hawaii (19), Washington D.C. (21) and Oklahoma (26). The types of captives licensed ran the gamut of captive structures, including cell and pure and also included risk retention groups (RRGs). “We are pleased with the 21 new companies and also that this represented a mix of RRGs, pures and cell companies,” said Sean O’Donnell, director of financial

examination for the Risk Finance Bureau at D.C.’s Department of Insurance, Securities and Banking. He continued, “For 2016, we expect to continue to see growth in the protected cell [captive (PCC)] area. We have already licensed one PCC in 2016 and we have several prospects in the pipeline, both for new PCCs as well as the addition of more cells in existing PCCs. And we expect additional companies in other areas as well. We already licensed a pure captive and in 2016 and we have several prospects in the pipeline, including an RRG and several pures.”

How the Soft Market Affects Captive Formations News of strong growth is good for the industry, especially since the property and casualty insurance market is still sluggish. Captives, like other alternative risk transfer insurance mechanisms, are typically formed as a result to a hardening or hard insurance market – when premiums increase and capacity narrow. Hard markets are hallmarked by less competition and strident underwriting. Higher premiums generally help to expand alternative risk transfer insurance marketplace. Soft markets involve lower premiums, expanded capacity and stiff competition among traditional insurers. Because of the competition in the traditional insurance marketplace, alternative insurance system structures are not typically sought after as a way of saving money. However, since 2007, the property and casualty sector has been experiencing a soft market with only occasional upticks. According to a recent report published by Marsh, U.S. Insurance Market Report 2016, rates have been softening since 2014 and look to continue softening throughout April 2016 | The Self-Insurer


2016. Yet, captive formation, among most U.S. domiciles, has not slowed at all in the last several years. Even with the surge in stateside domiciles, captives are still forming at an unprecedented degree during the continued soft market. A reason behind this growth is that captives are becoming more wellknown and more trusted as alternative insurance providers. Other reasons are: regulation has become more sophisticated; captives have proven to be viable insurance mechanisms; and many more people, both inside and outside the insurance industry, are familiar with their uses. Even as the insurance market remains soft, captives are enjoying the fruits of their established success. A hallmark of this trend is interest in RRGs. This alternative risk transfer mechanism does not necessarily have to be a captive, but most RRGs

are regulated as captives by captive domiciles. RRGs are federally legislated insurance companies that provide insurance to their members. RRGs can operate in any state in which they are registered but can only be regulated by their domicile. More so than any other type of captive, RRGs are a bell weather for soft and hard markets – their numbers increasing during a hard market and falling off during a soft market. Since RRGs are typically owned by individual members (i.e. physicians, truck drivers, or non-profits), their operation is more in tune with the vagaries of premium rates. Since the soft market beginning in 2007, RRG numbers have been in an overall slow decline. However, interest in RRGs and also in association captives, has been increasing in the last year. Tennessee, Vermont, Washington D.C., North Carolina and Hawaii all saw RRG formations in 2015. Several

states have indicated that more RRGs are looking to form in the next year. According to Michael Lynch, captive director in Nevada, “I am seeing more RRG applications that I have in the past couple of years, also segregated cell applications continue to grow.” While this doesn’t necessarily indicate a hardening market, it does indicate that alternative risk transfer insurance is becoming an option for any type of insurance market. ■ Karrie Hyatt is a freelance writer who has been involved in the captive industry for more than ten years. More information about her work can be found at

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April 2016 | The Self-Insurer



the Beltway Written by Dave Kirby

Texas Responds Favorably to Self-Insurance Industry Coalition


major challenge to Texas employers who sponsor self-insured employee health programs was averted when the Texas Department of Insurance shelved its consideration of adopting stop-loss insurance regulations that would have followed the general framework of the NAIC Stop-Loss Model Act which SIIA has questioned in a variety of venues.

“Immediately after learning of the TDI proposal SIIA filed a letter questioning the need to regulate the product in the absence of any consumer complaints or demonstrated consumer harm,” said Adam Brackemyre, SIIA Vice President of State Government Relations. Within about five months of its regulatory foray, the TDI quietly dropped the idea.


“This policy achievement was largely due to effective coalition building, swift action and working with public officials who were willing to ask questions and listen to the entities that they regulate,” Brackemyre reported to SIIA members. A full-scale “boots on the ground” effort by a coalition of state and national interests effectively 16

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communicated the concerns of Texas businesses and the self-insurance industry to regulators and political leaders. The effort can serve as a model for future policy advocacy anywhere, according to SIIA member Catherine Bresler, Vice President of Government Relations for The Trustmark Companies of Lake Forest, Illinois. SIIA participation in the Austin meetings included Brackemyre, Bresler, Robyn Jacobson of Houston TPA Entrust, Jeff Gavlick and Ted Kennedy of AIG and Marc Marion and Barry Koonce of American Fidelity. They were part of a coalition that included a cross-section of the state’s insurers, brokers, TPAs and representatives of both the Texas Association of Business and the Texas Association of Health Underwriters. “The last thing any government body wants is people coming only from elsewhere to tell them how to run their business,” Bresler said. She was gratified to see the quick response by SIIA and others to the surprising announcement of proposed new regulations. “This first surfaced last October in the course of a usual TDI review of regulations,” she said. “Some provisions in the regulations were being updated and the stop-loss proposal came along with that.

“It seemed to many of us in the industry that the new regulations could have subjected self-insurers to ACA-like mandates,” Bresler noted. “This caught us by surprise because Texas has always provided a reasonable business environment with balanced employer and consumer interests.” It wasn’t easy to participate in TDI’s first stakeholders hearing on the proposed regulation, Bresler recalls. “That meeting coincided with a torrential storm that

flooded many areas of the Southwest and made travel in Austin very difficult. Some people couldn’t fly into Austin and others couldn’t fly out.” Even so, she says, the hearing included strong industry representation. A second pivotal round of meetings was held, with industry representatives meeting with TDI staff and the office of Texas Governor Greg Abbott. “We were gratified at our reception by the governor’s staff where we sensed their concern both for the state’s businesses and consumer protection,” Bresler said. “It seemed important to them for the state to consider whether new regulations would be implemented in the absence of consumer complaints or uncertainty.” Brackemyre noted that quick responses in advocacy and coalition building such as the Texas episode are largely made possible by active

SIIA members who stand ready to defend self-insurance against any legislative or regulatory challenges. ■ SIIA members who wish to join the state government relations team are invited to contact Adam Brackemyre at the Washington, DC, office, (202) 463-8161 or



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Combating Opioid Abuse in Workers’ Compensation Plans with Advances in Bio Analytics


pioid abuse is a growing epidemic impacting individuals across the nation. According to the U.S. Centers for Disease Control (CDC), 44 people die every day due to opioid overdose. Patients are commonly prescribed these strong and often addictive painkillers to alleviate pain after an accident, injury, or illness and too many are not able to properly wean themselves off of the need for their pain reducing effects. The opioid crisis in our nation has become particularly concerning for employers, as the ongoing utilization of these drugs by injured workers is driving workers’ compensation plan costs. New advances in bio analytics are providing workers’ compensation plan administrators with new insight into ways to identify if a patient may be more likely than the average individual to experience opioid overuse. By implementing such advanced bio analytics, workers’ compensation plans are better equipped to both help patients fully recover without ongoing prescription medication use and control workers’ compensation plan costs.

Written by Jessica Marabella 18

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Opioids come in several forms and may include such familiar drugs as: fentanyl, morphine, codeine, hydrocodone (Vicodin, Lortab), methadone, oxycodone, (Percocet, OxyContin), hydromorphone (Dilaudid) and meperidine (Demerol). Recent data indicates that prescription opioids are being prescribed too often to treat the wrong kinds of pain, without eliminating the source of the pain, creating an unnecessary long-

term dependency on the drug for the patient. Such long-term dependency on drugs that merely mask pain symptoms can result in a return-to-work delay or extended disability for patients who are not moving toward full recovery by using more effective treatment-based clinical methods.

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For example, many work-related injuries involve back pain and an increasing number of health care providers are prescribing opioids both short-and long-term to help patients manage their back pain symptoms. This comes despite clinical data that suggests that opioid use is not the most effective strategy for treating back-pain. Rather, it often results in prolonged feelings of opioid dependence to mask symptoms when the source of the pain is not being properly treated. Opioid effectiveness typically plateaus after 60 days of treatment; however the drugs are often prescribed to patients for longer periods of time. According to guidelines from the American College of Occupational and Environmental Medicine and Washington’s Department of Labor & Industries, in the past, 42% of workers with back injuries were prescribed an opioid treatment in the first year after their injury – most of the time after the first medical visit. One year later however, 16% of those workers were still utilizing opioid medications. In addition to back pain, opioids are generally prescribed for three reasons in workers’ compensation claims: catastrophic injury with chronic pain, an injury involving surgical treatment which requires immediate pain control and general pain control. According to research conducted by The Workers’ Compensation Research Institute (WCRI), which looked at data from 21 states, longerterm opioid use is most prevalent in New York State and Louisiana, however California and Texas were also noted as

having significant long-term opioid usage. The study found that in New York State specifically, 14% of non-surgical workers’ compensation claimants prescribed narcotics were identified as longer-term users of the drugs. In California, according to its Workers’ Compensation Institute, only 3% of the state’s doctors prescribe 55% of dispensed opioids. Over the last decade, the state has seen a significant increase in opioid prescriptions. Between 2002 and 2011 California’s Workers’ Compensation Institute (CWCI) identified a 300% increase in opioids. In 2002 approximately 1% of all injured worker outpatients were prescribed opioids, but by 2011 that%age had increased to 5% and payments for opioid prescriptions had risen from 4% to 18% in that time period, representing at 321% increase in payments in only nine years.

Employers who require the test for employees identified as at risk, are armed with data and knowledge about an employee’s potential for opioid abuse. Such knowledge allows for a more discerning review of the individual’s claims and treatment plan and allows a nurse case manager to more greatly emphasize a return-to-work strategy that focuses on weaning the patient off of the prescribed medication before use becomes long term.

Fortunately, recent advances in bio analytics are making it possible for workers’ compensation plan administrators to predict potential highcost, high-risk claimants and intervene before long-term addiction occurs.

After testing is completed, the facilitating laboratory delivers an interpretive report to an employer and its workers’ compensation plan administrator that enables a treating physician to lead injured workers to their best possible outcome by prescribing the most effective medications at optimal dosages, minimizing any trial and error. The interpretive report is designed to give physicians the information they need to make more informed treatment decisions. Every report is unique, based on the genetic attributes of the individual patient and focuses on three key elements: 1. Explaining the metabolic behavior of an individual 2. Identifying what medications to rule out and avoid immediately 3. Providing direction to the physician on the optimal prescription treatment plan Ideally, an employer’s pharmacy benefit manager (PBM) and/or medical management program partner are engaged in the discussion and work to aid in the identification of injured workers that would benefit from a PME referral.

A personal metabolic evaluation (PME) is a biometric test intended to measure drug sensitivity for an individual patient for current and future care. The PME is an easy to administer test that will discern how an individual will metabolize commonly prescribed workers’ compensation medications.

Almost every claim can benefit from the PME test, however, ideal candidates can be identified using the following list of clinical triggers: • Patients currently using opioids or anti-depressants • Patients prescribed 3 or more medications

This trend of long-term opioid use is particularly concerning for workers’ compensation plans, since the medical benefits portion of a workers’ compensation claim may be open for a number of years and may be open for the lifetime of the injured worker, resulting in significant annual plan costs. According to WCRI opioids account for up to 3% of costs in shorter-term claims and between 15 and 20% of all medical costs on longer term workers’ compensation claims.

April 2016 | The Self-Insurer


• Patients whose physician has prescribed an increase in strength or dosage • Patients in pre- or post-surgery • Post-surgical patients specifically who after 30 days post-surgery are still receiving pain management prescriptions • Patients prescribed escalating dosages of narcotics • Patients who have been prescribed morphine equivalent dosages (MED) of medications exceeding 100 mg • Patients whose prescription patterns include frequent switching of medications • Patients with high dollar monthly prescription costs • Patients who often attempt to re-fill too early, resulting in frequent rejections at the point of sale • Patients who have been prescribed narcotics for 3 months or more Other strategies employed by strategic workers’ compensation plan administrators to effectively mitigate the risk of prolonged opioid use and manage plan costs include: • Medical bill audits • Network, pharmacy and fraud and abuse protections • Nurse case management of patients that emphasizes return-to-work strategies

Jessica Marabella is the marketing and communications specialist at POMCO, one of the nation’s largest third party administrators. Prior to joining POMCO, Jessica was a senior account executive and managed a variety of businessto-business and business-to-consumer clients to develop and lead marketing and communications strategies. While working at POMCO Jessica has assisted in the development of thought leader communication pieces, including white papers, webinars on industry trends and compliance regulations and industry newsletter content. Jessica contributes weekly to POMCO’s Health Care Educator blog and has been published in trade and business publications.

• Retrospective drug utilization reviews • General employee education regarding opioid misuse • Injured worker narcotic education initiatives • Physician dispensing education • Pre-hire drug testing ■

Mind over risk.

Staying confident in a world where change is constant.

With today’s ever-changing and challenging market, successful companies rely on financial stability and strong credentials. We’ve used those needs to drive us into group life and disability products while maintaining our position as a leader in the medical stop loss market for over 35 years. We have the strength and experience to remain prepared for whatever tomorrow brings. We call it Mind over risk. For more information, visit us online at A subsidiary of HCC Insurance Holdings, Inc.


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HCC Life Insurance Company

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Lessening the Pain of


Specialty Drugs


pecialty drugs made up less than 1% of all written prescriptions in 2014, yet they accounted for 32% of total drug expenditures (according to research by Express Scripts1). The expense of these medications is a liability for Medicare, private insurance and the self-insured alike, one that threatens the healthcare system. Putting a few solutions in place now can help lessen the impact these expensive drugs have on your bottom line.

What are Specialty Drugs? Specialty drugs are medications to treat chronic, rare, or complex conditions like multiple sclerosis, hepatitis C or certain cancers. Unlike traditional therapies, specialty drugs are novel; they rarely have a generic counterpart or other medication option that provides an identical Written by Bruce Roffe, President and CEO, H.H.C . Group 22

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SPECIALTY DRUGS | FEATURE result. Their therapeutic effects can be astounding. The treatment for hepatitis C, for example, is a de facto cure for the disease and new cancer therapies are extending the lives of patients. At one time, these medications were not very common, but there is evidence to show that they will be prescribed more in the future. For example, in its 2014 Drug Trend Report, Express Scripts (the largest benefit management organization in the U.S.) noted that new PCSK9 inhibitors for high blood cholesterol could eventually cost the health system as much as $100 billion per year.2

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Why do Specialty Drugs Cost so Much? All medications, not just specialty drugs, are becoming more expensive. Even generic drugs have seen price increases because each time an old medication is re-patented, the price of the medication seems to rise. In the case of these new, novel therapies, the most common explanation for their high price tag is that the medications are expensive to develop and approve. Pharmaceutical companies explain that they have a responsibility to create a profit for both their investors and to continue funding future medication development. While this is no doubt true, there is much debate about the validity of pricing for all medications and there has been a call for greater transparency from pharmaceutical companies about how prices are set. Such a move would require a large reform of the system. Until that takes place, expect prices to continue to go up.

How are Specialty Drugs Impacting Healthcare Costs? It would be hard to underestimate the financial impact these drugs have

now and will continue to have in the future. The AARP Public Policy Institute issued a report in 2015 stating the average annual price of specialty drug therapy was 18 times higher than brand name prescription drugs and 189 times higher than the average annual cost of generic medication. The report showed the average costs for one specialty medication was $53,000 a year in 2013 – greater than the median U.S. household income ($52,250)3 and far outpacing the average Social Security retirement benefit. The devastating implications for individuals and payers are clear. According to Express Scripts’ research, the new hepatitis C therapy accounted for more than half of the increase in overall specialty medication spending, which is not surprising given its price tag of $84,000 for a course of treatment. Yet, even when the data was adjusted to remove costly compound medications and the new

hepatitis C drug, the year-over-year increase in per capita drug spending was still over six percent.4 The number of people taking specialty drugs is increasing, too. The same study showed that the number of Americans taking at least $100,000 worth of medication a year tripled between 2013 and 2014. Usage and costs appear to be increasing exponentially, which means it is critical to find solutions to manage the financial burden of these medications.

Solution at the Source Perhaps the best place to begin controlling medication costs is at the source: the prescribing physician or pharmacist. These trained professionals are the best points of information for drug therapy. Either individual can review the prescription and determine if it is really the best medication for that patient at that time. The doctor or pharmacist can participate in a

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SPECIALTY DRUGS | FEATURE thoughtful conversation about the health value the patient can expect in the context of other factors including cost, side effects, quality of life and life expectancy. New drugs are generally priced higher because they are new, like a new shirt would be more expensive than last season’s fashion. Just because a medication is new does not guarantee a dramatic improvement in one’s condition any more than a new shirt will keep one any warmer than an old one. A pharmacist or doctor has the breadth of knowledge to look at the entire formulary and find the best solution for the patient’s health and pocketbook.

Utilization Management Techniques Another solution to managing skyrocketing costs is to manage the way drugs are utilized through techniques like “step therapy.” In step

therapy, a patient can be given a lower cost drug first to see if it has therapeutic benefit before jumping directly to the high-cost specialty drug. Another way to guide utilization is through dosage management wherein a patient is given a small amount of a medication rather than a full course. Then, if the treatment proves ineffective, a full, expensive course of treatment does not go to waste.

Leverage Technology We’ve all heard the saying “there’s an app for that,” and pharmacy is no exception. While many of these specialty drugs are unique and therefore cannot be replaced with a brand name or generic alternative, price discrepancies across geography and pharmacies do exist. Apps like Prescription Saver5 and GoodRx6 allow a patient to use their mobile phone to track down the best price for their prescription. The rise of technology has created a gigantic storehouse of statistical information related to prescription use and general health that can play a role in bringing down prescription costs. Predictive analytics is the process of mining deep wells of data to identify trends and forecast probability. If we apply this predictive modeling to prescriptions, a clearer picture can emerge of how drug therapies interact with certain conditions and how likely a medication is to succeed or fail based on the patient and the disease state. This, in turn, means the provider and the payer can make a choice about the best course of drug therapy that is informed by concrete data.

Work Efficiently with PBMs The pharmacy benefits manager (PBM) must be a partner in the process


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SPECIALTY DRUGS | FEATURE of price control and reduction. It is the PBM that sets the formulary – the medications in a certain category that will be stocked and accessible to the insured – and manages it to best effect. Depending on one’s industry, there are medications that might be appropriate to have within the formulary to best address the needs of the prospective patients. Self-insured payers need to communicate with their PBM to ensure that the formulary is being well managed and customized to meet the new demands of specialty drugs. PBMs can do even more to manage costly medication. They have contracts with national retail pharmacies and can thus negotiate for the greatest discounts on medications. Discounts can be achieved through PBMs by managing the uses of mail order prescriptions, too. Prescriptions by mail often come with added discounts and, as an additional benefit, can often improve medication adherence. It pays to review the practices of one’s PBM to ensure it is doing all it can to keep costs down. PBM’s have access to plenty of their own electronic data regarding prescriptions and usage within the plan, so make sure they are effectively reporting data to you, the payer.

Conclusion As healthcare continues to move toward more innovative and personalized approaches to care, specialty drugs will become the norm, not the exception. The skyrocketing cost of these medications is already part of the national debate. A long-term solution to this problem will need to balance profitability for the pharmaceutical company to fund their continued innovation with common sense protections against price gouging, more transparency in pharmaceutical pricing and a larger discussion about the true value these medications provide to the patient. Until then, the self-insured industry must continue to apply innovative solutions so patients can receive appropriate care at a price that won’t drive the payer to the poorhouse. ■ Dr. Bruce Roffe is a Pharmacist and President and CEO of HHC Group, a National Cost Containment Firm that services many self-insured employers throughout the United States located in Gaithersburg, Maryland. At one time, he was Assistant Director of Hospital Pharmacy at Detroit Receiving Hospital and University Health Center and was also an Adjunct Assistant Professor of Hospital Pharmacy at Wayne State University, College of Pharmacy and Health Sciences, Detroit, Michigan. He may be reached at References Express Scripts “Super Spending: U.S. Trends in High-Costs Medication Use,” May 2015


The Express Scripts Lab, “The 2014 Drug Trend Report,” March 2015


AARP Public Policy Institute PRIME Institute at the University of Minnesota), “Rx Price Watch Report: Trends in Retail Prices of Specialty Prescription Drugs Widely Used by Older Americans, 2006-2013,” by Leigh Purvis and Dr. Stephen Schondelmeyer, November 2015.

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Express Scripts “Super Spending: U.S. Trends in High-Costs Medication Use,” May 2015




Do you aspire to be a published author? Do you have any stories or opinions on the self-insurance and alternative risk transfer industry that you would like to share with your peers?

We would like to invite you to share your insight and submit an article to The Self-Insurer! SIIA’s official magazine is distributed in a digital and print format to reach over 10,000 readers around the world. The Self-Insurer has been delivering information to the self-insurance/alternative risk transfer community since 1984 to self-funded employers, TPAs, MGUs, reinsurers, stoploss carriers, PBMs and other service providers.

Articles or guideline inquiries can be submitted to Editor Gretchen Grote at

The Self-Insurer also has advertising opportunities available. Please contact Shane Byars at for advertising information.

April 2016 | The Self-Insurer


PPACA, HIPAA and Federal Health Benefit Mandates:



IRS Notice 2015-87 Provides Much Needed Guidance for Account-Based Plans and ACA Employer Shared Responsibility Requirement (IRC 4980H)1 Part11


n IRS Notice 2015-87, the agencies provided further clarification on the impact of the Affordable Care Act (ACA) group health plan market reform provisions on account-based plans and much needed guidance on the Section 4980H employer shared responsibility requirements. In many cases, common benefit

design practices for employer credits and opt-outs must be revisited prior to the next annual enrollment. In this two part article we cover this important IRS guidance. Part I covered the impact of Notice 2915-87 on HRAs, FSAs and HSAs. This Part II covers the guidance related to the IRC 4980H excise tax and FSA carryover provisions.


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Service Contract Act and Davis-Bacon Act Fringe Benefits

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The McNamara-O’Hara Service Contract Act (SCA), the Davis-Bacon Act and the Davis-Bacon Related Acts (DBRA) require workers employed on some federal contracts to be paid prevailing wages and fringe benefits. The SCA and DBRA typically allow employers to satisfy the fringe benefit obligation by providing benefits of a sufficient dollar value. Usually, employers can select the benefit or benefits they provide. As an alternative, employers usually can satisfy their fringe benefit obligation by paying cash equal to the fringe benefit, or a combination of cash and benefits. If an employer provides SCA or DBRA fringe benefits by allowing employees to elect health coverage, but the employee declines coverage, the employer usually must pay the employee cash or provide benefits of an equivalent value. Many employers noted that when employers satisfy their SCA or DBRA fringe benefit obligations by offering employees the option to enroll in the employer’s health coverage, the amount that must be provided to employees who decline coverage as cash or other benefits is substantial. In addition, amounts that are available as cash payments or other benefits would not reduce the employee’s required contribution for health coverage. Employers that satisfied their SCA or DBRA fringe benefit obligation by allowing employees to elect health coverage would also need to provide a significant additional subsidy to make the offer affordable and avoid Section 4980H(b) penalties. This subsidy would result in some employees receiving amounts significantly more than the SCA and DBRA requirements.

The IRS said it will continue to study the interaction of the SCA and DBRA with the employer shared responsibility rules. However, until the applicability date of further guidance and at least for plan years beginning before January 1, 2017, the amount of the employer’s SCA and DBRA fringe benefit obligation that the employee can use to elect health coverage will reduce the employee’s required contribution even if the employee can elect other benefits or cash. Employers can also treat SCA and DBRA fringe benefit payments as reducing the employer’s required contribution on Form 1095-C. However, the IRS encourages employers not to adjust Form 1095C so that employees can qualify for premium tax credits. The IRS says that if the IRS contacts an employer regarding a possible excise tax under Section 4980H(b), the employer can respond and show that it was entitled to the relief and that it would have qualified for an affordability safe harbor if the employee’s contribution had been reduced by the fringe benefit payment. Likewise, employees are not required to take fringe benefits into account as reducing their required contribution when determining premium tax credit eligibility.

most employees. However, employees who enrolled in the Marketplace, but did not receive the advance premium tax credit, may need more information from their employers to determine if they can claim the premium tax credit. Employers using the relief in the Notice should notify employees that they can obtain accurate information about their required contribution by calling the number listed on Form 1095C. Regardless of how the employee obtains this information, the employee can obtain the premium tax credit if the required contribution is not affordable and the employee is otherwise eligible regardless of the information reported on that employee’s Form 1095-C due to the relief.

Cost of Living Adjustments Notice 2015-87 also provides cost of living adjustments for the employer mandate affordability safe harbors and excise taxes.


Good News: Affordability Safe Harbors Increased for Plan Years After 2014


Under the ACA, premium assistance is available if the employee’s required contribution for employer coverage exceeds 9.5% of household income. For plan years after 2014, this 9.5% threshold is adjusted annually for cost of living changes. As a result, employees can obtain premium assistance for Marketplace coverage if the cost of employer coverage exceeds 9.56% of their household income for the 2015 plan year and 9.66% for the 2016 plan year.

The IRS noted that the relief for health flex credits, opt-outs and SCA/ DBRA fringe benefits will not affect

Of course, employers do not know their employees’ household income, so the IRS provided affordability safe harbors in its Section 4980H regulations. Under these safe

The IRS is considering methods for reporting required contributions for employees subject to the SCA or DBRA, such as indicator codes. If adopted, these codes will not apply to plan years beginning before January 1, 2017.

Relief for Flex Credits, Opt-outs and Service Contract Act/Davis-Bacon Act Fringe Benefits

April 2016 | The Self-Insurer





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harbors, the employer is deemed to provide affordable coverage if the employee’s required contribution for single coverage is no more than 9.5% of the employee’s rate of pay, employee’s W-2 wages or the federal poverty line for a single individual. However, unlike the premium tax credit regulation, the employer mandate regulations did not provide any adjustment to the 9.5% threshold for the employer safe harbors. This resulted in an inconsistency where premium assistance was available only if the employee’s contribution exceeded 9.56% of household income for the 2015 plan year, but the affordability safe harbor for employers was capped at 9.5%.

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Due to this inconsistency, the IRS intends to amend the Section 4980H regulations so that the employer affordability safe harbors are adjusted with the premium assistance threshold annually. Thus, employers can use the 9.56% and 9.66% for the 2015 and 2016 plan years, respectively, when determining if coverage met the affordability safe harbors. Employers can also use the adjusted amount to determine whether coverage under a multiemployer plan is affordable under the IRS’s interim guidance for multiemployer plan contributions. The IRS also intends to amend the Section 6056 (i.e., Form 1095C) regulations so that the threshold for qualifying offers of coverage is adjusted. Generally, an employer can use the qualifying offer method for reporting if the employee’s required contribution for employee-only coverage does not exceed 9.5% of the mainland single federal poverty line. This change will be applicable back to December 16, 2015, and employers can rely on the adjusted amounts in applying the qualifying offer alternative reporting methods.


Not as Good News: Excise Taxes (Penalties) Also Increase

The ACA includes a $2,000 “sledgehammer” excise tax based on the employer’s total number of full-time employees when an employee obtains a Marketplace subsidy because the employer did not offer minimum essential coverage to the employee and/or dependents (Section 4980H(a)). The ACA also assesses a $3,000 tackhammer tax for each full-time employee who obtains a Marketplace subsidy because the employer did not offer affordable, minimum value coverage (Section 4980H(b)). These penalties are adjusted annually after 2014. Accordingly, the sledgehammer penalty for the 2015 calendar year is $2,080 and $2,160 in 2016. The tackhammer penalty for the 2015 calendar year is $3,120 and $3,240 in 2016.

Leaves of Absence Notice 2015-87 also includes highly anticipated guidance regarding the calculation of hours of service during a leave of absence.


No Hours of Service Credited After Termination

When determining if an employee is full time under the employer mandate, employers must include each “hour of service,” which means each hour for which an employee is paid, or entitled to payment, for performing services, as well as each hour that the employee is paid, or entitled to payment by the employer, for a period when no duties are performed due to vacation, holiday, illness, incapacity, disability, layoff, jury duty, military duty or a leave of absence under Department of Labor (DOL) Regulation 2530.200b-2(a). The DOL regulations are typically used to define hours of service for retirement plans, which has resulted in some confusion. The IRS clarified that the employer mandate regulations do not incorporate DOL Regulation 2530.200b-2(a)(2), which requires hours to be credited for certain periods when no duties are performed “irrespective of whether the employment relationship has terminated.” Thus, an hour of service does not include any hours after an individual terminates employment.

Hours of Service Not Required Due to Payments from Certain Plans Moreover, the IRS stated that it intends to incorporate the limitations in DOL Regulation 2530.200b-2(a)(2)(ii) and (iii). An hour of service for Section 4980H purposes does not include: 1. Hours of service associated with payments from a plan maintained solely to comply with workers’ compensation, unemployment or disability insurance laws. 2. Hours for payments that solely reimburse employees for medical or related expenses incurred by the employee.

501-Hour Limit Does Not Apply (Except for Educational Organizations) However, the IRS said it did not intend to incorporate the 501-hour limit on hours required to be credited during a single continuous period when the employee performs no duties if the hours otherwise qualify as hours of service April 2016 | The Self-Insurer


(although the 501-hour limit still applies to an employee of an educational organization during employment breaks in a calendar year under Treas. Reg. 54.4980H-3(c)(6)(ii)(B)).

Employer Must Credit Hours for Short-term and Long-term Disability Payments Hours that an employer must credit when no duties are performed must be credited regardless of the payment source. Employees must be credited with hours for short-term or long-term disability payments regardless of whether the employer pays directly or indirectly. For example, an employer must credit hours if it pays disability benefits directly through a trust or if paid by an insurer to which the employer paid premiums. However, the employer does not need to credit hours for payments if the employer did not contribute directly or indirectly. An arrangement that the employee paid for on an after-tax basis would be treated as an arrangement the employer did not contribute to and would not result in any hours of service. Moreover, employers need not credit hours to employees receiving workers’ compensation payments from a state or local government.

Practice Pointer : The

IRS does not require hours of service to be credited when an employee receives disability payments based on his or her previous after-tax contributions. However, pre-tax contributions are considered to be made by the employer. Employers must credit hours of service for disability payments received under coverage that the employer paid for or allowed the employee to obtain on a pre-tax basis through its cafeteria plan. 30

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Potential New Rules for Hours of Service for Educational Organizations

The IRS’s employer mandate regulations prohibit most employers from treating a rehired employee as new hire unless the employee had a break in service of at least 13 weeks. However, the IRS provided special rules for educational institutions to account for periods when employees might not be providing services, such as during summer break. Under those rules, employees of educational institutions must have a 26-week break in service before the employer can consider them a new hire under the employer mandate. However, the IRS is aware of situations where educational institutions are trying to avoid this special rule by using third-party staffing agencies. The IRS intends to propose rules that apply the 26week break in service requirement in circumstances where services are provided to one or more educational institutions even if the employer is not an educational organization. The IRS intends the rule to apply to employees providing services primarily to educational organizations who are not given a meaningful opportunity to work during the entire year. For example, the rule would apply to a cafeteria worker who is primarily placed to provide cafeteria services at educational organizations and is not given a meaningful opportunity to provide services during one or more months of the calendar year, such as during summer break. However, an employer that placed cafeteria workers at educational organizations would not apply the special rule to employees who are offered a meaningful opportunity to provide services during all months

(for example, by working at a hospital cafeteria during summer break). The amendments will apply as of the applicability date in the regulations, but not earlier than the first plan year beginning after the date of the proposed regulations.


AmeriCorps Employees

Notice 2015-87 clarifies that participants in the AmeriCorps program are not employees of AmeriCorps or the grantee receiving assistance through AmeriCorps for which the participant is providing services for purposes of the employer shared responsibility rules of Section 4980H.


TRICARE Eligibility

The IRS clarified that for determining potential liability

under Section 4980H and related information reporting under Section 6056, an offer of coverage under TRICARE for any month based on employment with an employer that results in TRICARE eligibility is treated as an offer of minimum essential coverage by that employer.


Applicable Large Employer (ALE) Status or ALE Member Status

The IRS noted that the aggregation rules under Section 414(b), (c), (m) and (o) that typically apply when determining if an employer is an ALE do not specifically address government entities. As provided in the preamble of the final employer mandate regulations, government entities can use a reasonable, good-faith interpretation of those aggregation rules to determine if it is an ALE or ALE member. The IRS noted this is of

little consequence when government entities would independently be ALEs, with one of the few consequences being the allocation of any reduction of assessable payments under Section 4980H(a) or the cap on assessable payments under Section 4980H(b).


Separate EINs Required for Each ALE and ALE Member The IRS clarified that each separate employer entity that is an ALE or ALE member, or that provides self-insured health coverage to employees, must use its own EIN for reporting purposes regardless of the aggregation rules. Thus, separate Forms 1094-C must be filed by each ALE member and each form must have a separate EIN. This is not changed by a government entity’s use of a designated government entity (DGE) to file Forms 1094-C and 1095-C.

HEALTHIER IS HERE A company is only as strong as its people, so keeping them healthy is a great investment. As a health services and innovation company, we continue to power modern health care through data and technology.

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April 2016 | The Self-Insurer



entity and the name and EIN of the applicable county as the employer. The Forms 1094-C would be filed with the Forms 1095-C for each employee of that county, which would identify the county as the employer.

A state treats the state executive and its agencies, the judiciary and legislature as three separate employers. The executive, judiciary and legislature must each have separate EINs and file Forms 1094-C and 1095-C with the EIN of the applicable employer.


HSA Contributions and VA Coverage

Notice 2015-87 addressed the receipt of health care from the Department of Veterans Affairs (VA) and HSA contribution eligibility. As modified by the Surface Transportation Act, an individual receiving VA medical benefits can make HSA contributions if the medical benefits consist only of disregarded coverage, preventive care or hospital care or medical services under any law administered by the VA for service-connected disability. As a rule of convenience, the IRS will consider any hospital care or medical services received from the VA by a veteran who has a VA disability rating to be hospital care or medical services under a law administered by the VA for service-connected disability.


Ten counties enter into agreements with a state government entity that the state agency will be the designated government entity for filing on behalf of each county. The state agency must file a 1094-C for each county, as well as itself. Each Form 1094-C will list the name and EIN of the state agency as the designated government

Additional Guidance on Health FSA Carryovers The IRS modified the cafeteria plan rules to permit health FSA carryovers of up to $500 from year-to-year in Notice 2013-71. Notice 2015-87 provides updates based on common questions.


Carryover is Included When Determining if a Health FSA is Underspent for COBRA

The IRS clarified that the carryover must be included in determining whether COBRA coverage must be offered because the health FSA is underspent.

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Life’s brighter under the sun *#1 independent direct writer stop-loss carrier based on the 2013 year-end Sun Life Stop-Loss premium of $915.2M and our analysis of marketshare data from various third parties. Group stop-loss insurance policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states, except New York, under Policy Form Series 07-SL. In New York, group stop-loss insurance policies are underwritten by Sun Life and Health Insurance Company (U.S.) (Windsor, CT) under Policy Form Series 07-NYSL REV 7-12. Product offerings may not be available in all states and may vary depending on state laws and regulations. © 2015 Sun Life Assurance Company of Canada, Wellesley Hills, MA 02481. All rights reserved. Sun Life Financial and the globe symbol are registered trademarks of Sun Life Assurance Company of Canada. PRODUCER USE ONLY. BRAD-5073

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An employee can elect to contribute up to $2,500 to a calendar year health FSA and carries over $500 in unused benefits from the prior year. Thus, the maximum amount the employee can receive under the health FSA for the entire year is $3,000. When the employee terminates employment on June 30, he had submitted $1,100 of reimbursable expenses under the health FSA. As a result, the maximum benefit the employee receives for the remainder of the year is $1,900 (i.e., [$2,500 + $500] – $1,100]). Practice Pointer : The

determination seems to hinge on when the qualifying event occurs. If it occurs prior to the end of the run-out period from the prior year, then it would appear that the carryover amount, which is not yet known, would not be a factor. However, if it occurs after the end of the run-out period, when the carryover is known, the carryover amount would be a factor. Additional guidance on the intended application of this rule would be welcome.


Health FSA COBRA Premium Only Includes Salary Reductions and Employer Contributions

The IRS also clarified that the COBRA premium for a health FSA can only include the salary reduction election and non-elective employer contributions for the year, plus a 2% administrative fee. In other words, carryovers are not included when calculating the COBRA premium for a health FSA.


If COBRA is Elected, Carryover Continues Until Exhausted or COBRA Expires Qualified beneficiaries who elected continuation coverage for their health FSAs must be provided with carryovers if similarly situated non-COBRA beneficiaries receive carryovers. However, the health FSA

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is not required to allow a COBRA beneficiary to elect additional salary reductions for the carryover period or provide employer contributions during the carryover period. The ability to carry over amounts is limited to the applicable COBRA continuation period (for example, 18 months due to termination of employment). The health FSA cannot charge a premium for the carryover in later years.

month). At the end of 2015, Lou and Maureen each have $26 left in their health FSAs. Lou elects to contribute $600 to the FSA for 2016. Lou’s $26 is carried over to the health FSA next year, giving Lou a $626 health FSA balance for 2016. However, Maureen does not elect to contribute to the health FSA in 2016, so she forfeits her $26 and has no health FSA balance for 2016.


Health FSAs Can Have a Maximum Carryover Period

The IRS stated that a health FSA can limit carryovers to a maximum period. For example, a health FSA can limit the ability to carry over unused amounts to one year.

Practice Pointer : Employers

that provide carryovers in their health FSAs should revise their COBRA notices to describe how the carryover impacts the premium and that amounts carried over will be available until exhausted or the COBRA period ends.

Practice Pointer : If

an employer wants to provide a maximum carryover period, it should check to see if a plan amendment is required and notify employees accordingly. ■


Carryover Not Required if Employee Does Not Elect Health FSA for Next Year

The IRS also clarified that a health FSA can limit carryovers to individuals who elected to participate in the health FSA in the next year, even if a minimum salary reduction is required.


An employer sponsors a health FSA that permits carryovers, but only if the employee participates in the health FSA during the next year. To participate in the health FSA, an employee must contribute at least $60 per year ($5 per 36

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The Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the Women’s Health and Cancer Rights Act) dramatically impact the administration of self-insured health plans. This monthly column provides practical answers to administration questions and current guidance on ACA, HIPAA and other federal benefit mandates. Attorneys John R. Hickman, Ashley Gillihan, Carolyn Smith, and Dan Taylor provide the answers in this column. Mr. Hickman is partner in charge of the Health Benefits Practice with Alston & Bird, LLP, an Atlanta, New York, Los Angeles, Charlotte and Washington, D.C. law firm. Ashley Gillihan, Carolyn Smith and Dan Taylor are members of 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 email to Mr. Hickman at Steven Mindy, Esq. a senior associate in the Washington, DC office of Alston & Bird, LLP assisted with this article.


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No Standard Standard of Review


t’s far from a novel concept that Plan Administrators of self-funded health plans governed solely by ERISA are subject to a fiduciary duty to prudently manage plan assets and act in the best interest of plan participants. ERISA indicates that “a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and... in accordance with the documents and instruments governing the plan,”1 and that Plan Administrators must discharge duties “with the care, skill, prudence and diligence... that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character... .”2 Codified in 1974, ERISA’s protections are designed for the protection of plan beneficiaries; while ERISA’s provisions impose certain limitations and obligations upon fiduciaries, ERISA has not been crafted for their protection. ERISA applies to a broad spectrum of employee benefits, among them health benefit plans, pension plans and even benefits such as severance pay plans. The vast majority of the law interpreting ERISA’s provisions is concerned with pension plans; though pension plans serve different purposes than health benefit plans, ERISA sets identical standards for the administration of each, with few exceptions. Perhaps the most important and basic requirements of ERISA are those laid out within 29 USC § 1104 – the requirements to both prudently manage Plan assets and administer the Plan strictly in accordance with the governing plan documents.

Written by Jon Jablon 38

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TPAs and self-funded health plans have all heard the argument from medical

providers that “ERISA requires you to pay this claim in full.” TPAs and self-funded health plans are similarly aware that this assertion, as a catch-all, is severely misguided. What some have discovered, however, is that the assertion that ERISA requires a health plan to pay a given claim in full can become true, by virtue of language within the plan document that makes it true. Of course, the statement that ERISA itself requires any particular level of payment is not technically accurate, but instead ERISA imposes a duty on the Plan Administrator to ensure that it abides by the plan document’s terms. It has been made clear by the courts that Congress’ intent in passing ERISA was not, in general, to control the substance of agreements between employers and beneficiaries, but rather to ensure that such agreements, if falling within the purview of ERISA’s protections, are followed. According to one court, ERISA’s fiduciary duty imposition was designed “to prevent fiduciaries from depriving beneficiaries of what they concededly had been promised.”3 In this manner, ERISA acts as a regulating body of statutes, with corresponding common law and regulatory interpretations – with respect to pension plans, health benefit plans and many other types of employee welfare benefit plans. As we know, the Plan Administrator of a self-funded health plan may be given broad discretion to interpret the plan document’s provisions, decide issues of fact related to claims for benefits and otherwise determine the benefits payable by the plan for a given claim. That discretion is not just useful for making determinations; it is also useful when it comes to having the Plan Administrator’s determinations reviewed in court. Affording the Plan Administrator discretion gives the Plan Administrator a certain amount of deference by a court – but only in certain cases. A common misconception is that the Plan Administrator is always afforded the deferential “arbitrary and capricious” standard of review, but that is not necessarily the case.

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A deferential standard of review provides the reviewing court with a much higher threshold that the claimant must meet in order to prevail on the appeal of a denial. When a court finds it proper to employ the “arbitrary and capricious” standard, the court is charged with determining only whether the Plan Administrator’s interpretation was reasonable and made in good faith.4 The inquiry is limited to whether the Plan Administrator’s decision was made “(a) as a result of reasoned and principled process (b) consistent with any prior interpretations by the plan administrator (c) reasonable in light of any external standards and (d) consistent with the purposes of the plan.”5 The first point – (a) – seems to be an iteration of the requirement that the Administrator’s determination not be capricious. The second point is codified within the Code of Federal Regulations and requires that the Plan Administrator afford the same interpretations of plan document language in similar circumstances with respect to similarly-situated individuals. The third point is an indication that the governing plan document may not, in fact, be the only relevant guidance used by the Plan Administrator, if other extra-plan information is truly necessary to take into account. A simple example is that “reasonable expectations” of claimants or beneficiaries are sometimes taken into account when determining whether the Plan Administrator has breached its duty – and despite the breadth of the plan document, a beneficiary’s “reasonable expectations,” strictly speaking, may not be within the plan document. Regarding the fourth point, the purpose of the plan

is first and foremost to constitute a contract to provide benefits – and as with any contract, if the parties’ actions indicate a deviation from the most basic purpose of the contract, there will likely be a problem. Interestingly, it is not uncommon to see language within a plan document that affords the Plan Administrator the right to determine issues of law as well as issues of fact related to claims for benefits. Although the Plan Administrator may certainly be given the discretion to interpret the language of the governing plan documents as well as factual issues surrounding claims for benefits, the Plan Administrator does not implicitly have the same right to interpret relevant questions of law. One federal appeals court has indicated that “in contrast to the great deference we grant the Committee’s interpretations of the Plan, which involve contract interpretation, we accord no deference to the Committee’s conclusions as to the controlling law, which involve statutory interpretation. The interpretation of ERISA itself must be made de novo by the court.”6 In other words, while the governing plan documents may give the Plan Administrator extraordinarily broad discretion to interpret the terms of the plan documents themselves and make factual determinations, the determinations of law – that is, those based upon the interpretation of statutes (drafted by a legislature) as opposed to contracts (drafted by the parties) – are not subject to deference on review and will be reviewed de novo. The de novo standard of review is a Plan Administrator’s worst enemy. It is a non-deferential standard, pursuant to which a court will examine a claim for benefits from start to finish (de novo is in fact a Latin expression meaning “from the beginning”), without April 2016 | The Self-Insurer


affording any deference to the Plan Administrator’s prior determination. Under current law, the review standard for every determination by every Plan Administrator is de novo by default, but can be altered based on plan language. (Notably, this is one primary reason that it is so important for the plan document to give the Plan Administrator discretion.) As with every other facet of the law, however, there are exceptions, exemptions, loopholes and all other manner of niches when it comes to ERISA and review of benefit determinations. One primary exception to the deferential standard of review, even when proper plan language exists to support the Plan Administrator’s discretion, involves instances of a conflict of interest. When a conflict of interest exists for the Plan Administrator, the court may still apply a deferential standard of review,

if appropriate, but the conflict of interest will be weighed as a factor in determining whether the conflict has somehow affected the Plan Administrator’s exercise of discretion. In other words, no matter what the Plan Administrator’s decision entailed – and no matter how reasonable it may have been – if there is a conflict of interest, that may render an otherwise reasonable decision unreasonable. According to one federal appeals court, an “apparent” conflict of interest (and therefore the presumption of a conflict of interest) exists “whenever a plan administrator is responsible for both funding and paying claims.”7 In other words – and this may turn some pre-conceived notions upside-down – when the entity that is the Plan Sponsor also serves as the Plan Administrator, a presumption of conflict of interest is created. Granted, the presumption is rebuttable, but it is sometimes difficult to rebut

the idea that the entity responsible for funding claims has no incentive whatsoever to deny claims. Notably, however, that “apparent” conflict does not necessarily affect the standard of review ultimately used, but instead triggers a court’s examination into that dual role as the holder of both the sword and purse-strings. The burden is on the claimant to demonstrate that there exists some reason to believe that a conflict has affected the Plan Administrator’s decision, more than the mere fact of the apparent conflict. The claimant, notably, need not at this stage prove that a conflict has affected the Plan Administrator’s decision – but the claimant merely needs to demonstrate that there is some reason to think that it has happened. From there, the burden switches to the Plan Administrator to prove that the conflict did not, in fact, influence its decision.

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Would you climb a mountain without a guide?

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April 2016 | The Self-Insurer


Denials of claims for benefits are not the only possible reviews that courts may conduct; the standards of de novo and “arbitrary and capricious” apply only to appeals of benefit determinations.8 For other reviews of fiduciary conduct unrelated to benefit determinations, the standard has commonly been deemed to be that of a “prudent man.” In fact, the “prudent man” standard is laid out in the very terms of ERISA itself; a fiduciary must discharges its duties “with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise with like character and with like aims.”9 When a given case is for redress under ERISA but “does not concern a denial of benefits under 29 U.S.C. § 1132(a)(1)(B) or an interpretation of [the plan document],” the deferential standard of “arbitrary and capricious” becomes inapplicable.10 We are left with a number of different standards, used in different situations and under various circumstances and there can easily be confusion with which apply in a given situation. The take-away, though, is primarily two-fold: first, the drafter

of the plan document should ensure that the Plan Administrator is afforded the maximum discretion allowed under the law and second, the Plan Administrator should ensure that in every case, it acts within the strict purview of the Plan Document and it does not in any way “try” to find reasons to deny claims. Every determination made by a Plan Administrator – and, accordingly, determinations on appeal of those determinations – should be strictly neutral, or the Plan Administrator runs the risk of having its deferential standard of review extinguished by the conflict of interested created by both determining whether to pay and footing the bill. Those two responsibilities can be a dangerous combination when in the wrong hands – so the legal burden rests with the Plan Administrator to ensure that any actions taken in its capacity as a fiduciary of the plan are appropriate, reasonable and neutral – or, in the words of ERISA, solely in the interest of the participants and beneficiaries. ■ After being admitted to the bars of New York and Massachusetts, Jon Jablon joined The Phia Group’s legal team in 2013. He is well-versed in the ins and outs of ERISA, stoploss policies, PPO agreements, administrative services agreements and health plans. Jon focuses on providing various consulting services to clients as well as serving as a part of The Phia Group’s in-house legal counsel. References 1

29 USC § 1104(a)(1)(D).


29 USC § 1104(a)(1)(B).


Trans World Airlines, Inc. v. Sinicropi, 887 F. Supp. 595, 608 (S.D.N.Y. 1995) aff’d, 84 F.3d 116 (2d Cir. 1996).


Geddes v. United Staffing Alliance Employee Med. Plan, 469 F.3d 919, 929 (10th Cir. 2006).


Fought v. Unum Life Ins. Co. of Am., 379 F.3d 997, 1003 (10th Cir. 2004).


Penn v. Howe-Baker Engineers, Inc., 898 F.2d 1096, 1100 (5th Cir. 1990).


McDaniel v. Chevron Corp., 203 F.3d 1099, 1108 (9th Cir. 2000).


Struble v. N.J. Brewery Emp. Welfare Trust Fund, 732 F.2d 325 (3rd Cir.1984).


29 USC § 1104(a)(1)(B)


In re Unisys Sav. Plan Litig., 173 F.3d 145, 155 (3d Cir. 1999)

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SIIAEndeavors Annual Self-Insured Workers’ Comp Conference Offers Strategic, Educational Programs and Sessions


IIA’s Annual Self-Insured Workers’ Compensation Executive Forum, May 24th25th at the JW Marriott Scottsdale Camelback Inn Resort & Spa, is the country’s premier association sponsored conference dedicated exclusively to self-insured Workers’ Compensation. In addition to a strong educational program focusing on such topics as excess insurance and risk management strategies, this event will offer tremendous networking opportunities that are specifically designed to help you strengthen your business relationships within the selfinsured/alternative risk transfer industry.

Program highlights include...

AlTeRnAtIvE To StAtUtOrY WoRkErS’ CoMpEnSaTiOn The movement for employers to opt out of workers compensation is moving from Texas to Oklahoma and is gaining interest in other states. Is this good or bad? Hear Bob Burke, Law Offices of Bob Burke and Bill Minick, President, PartnerSource, two nationally known speakers who will present polar opposite views on this subject. This promises to be a very spirited presentation which you won’t want to miss. 44

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ApPlIcAtIoN Of BiG DaTa You have the data, now discover how to use it. What level of historical data has been available and how was it put to use? What level of data is now available and how has it been applied? Learn about the benefits of retention, finances, new business and others that come with the use of “big data” from Brian Billings, Data Strategist, Midwest Employers Casualty Company and Stan Smith, Predictive Analytics, Milliman.

UsInG BiG DaTa To PrEdIcT AnD PrEvEnT LoSsEs When you think of loss control and safety, you probably think of safety manuals, safety directors, check lists, safety meetings, OSHA, DOT and inspections. Loss control is much more than that – loss control means profits! Learn about using data to predict and prevent losses that incorporates analytics, demographics and predictive modeling from Don Boatright, Chief Operating Officer, Alabama Trucking Association (ATA) Workers’ Compensation Fund and Todd Hager, Director of Claims, Alabama Trucking Association (ATA) Workers’ Compensation Fund.

AlTeRnAtIvE MeThOdS To HeAlThIeR EmPlOyEeS: WhErE WeLlNeSs AnD WoRk CoMp InTeRsEcT Obviously, the best work injury is the one that doesn’t happen and workplace safety is an incredibly important part of achieving that goal. But there is a growing consensus that a healthier workforce can not only reduce injuries but also reduce lost time and injury severity. The advent of wearable technology, higher focus on wellness programs sponsored by employers and broader acceptance of alternative treatment modalities has helped make this goal more of a reality. However, there remain skeptics to the value of these kinds of programs because results have often been either anecdotal or overly ambitious. Kevin Confetti, Director of Workers’ Comp Program, University of California, Tron Emptage, Chief Clinical Officer, Helios and Mark Pew, Senior Vice President, PRIUM, will discuss the demographics that make healthier employees important, how pharmacotherapy manages but also impacts those demographics, the biopsychosocial model that includes treatment typically denied, how technology is changing motivation and measurement and connecting the dots between Work Comp and Group Health to treat the whole person. Then, to prove that this approach can actually have a measurably positive impact, the University of California system’s wellness

program and its positive results will be discussed with takeaways for employers in the audience.

ThE RoAd To EmOtIoNaL ReCoVeRy AfTeR CaTaStRoPhIc InJuRy The emotional component of recovery is too often overlooked and under addressed in the traditional medical and rehabilitation process following a significant injury. Jon Pearson, Director of Life Path Services, QLI will show how the best long-term outcomes are often achieved by skillfully addressing the process of emotional acceptance as well as key aspects of fostering purpose, hope and optimism for injured workers and their families.

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ThE ErOsIoN Of ThE ExClUsIvE ReMeDy Exclusive remedy protections provided by workers’ compensation laws across the country are under attack. The historic benefit to employers included protecting employers and co-workers from tort based claims arising from an injury; the corresponding benefit to the employee came in the form of timely benefits, despite any negligence of the injured worker. These tenets have been undermined by the establishment of certain causes of actions not subject to the exclusivity provisions and by the prospect of “opt out” legislation, increasing the risk of litigation and exposure to employers. Charles H. (Clay) Clark, Huie, Fernambucq & Stewart, LLP and Frederick L. (Fred) Fohrell, Wilmer & Lee, P.A. Attorneys at Law will explore this troubling trend surrounding exclusive remedy and the probable impacts to all parties subject to the workers’ compensation system.

AdR PrOgRaMs - ThE RiGhT WaY To OpT OuT Of ThE TrAdItIoNaL StAtE PrOgRaM Very experienced

speakers from California and New York, will discuss the history and success of ADR programs in their respective states. Roy Barnes, Esq., Jack J. Frazier, Senior Vice President, American Global LLC and Hon. Steve Siemers, Ret. WCJ will speak to the factors that have helped to decrease the exposure of employers who have negotiated use of these programs. They will share that you can reduce costs, without reducing benefits and in fact can provide a greater level of service to the injured employee, highlighting the role of the Ombudsperson, who acts as an advocate for the injured employee. Because an ADR program must be collectively bargained and jointly operated and managed by both labor and management, all parties are aligned and incentivized to work together to provide an injured worker with the support, care and services they require, to return to health and work. A properly managed ADR program should provide for a safer and more harmonious work environment, as well as reduced exposure and costs.

SiG TaX UpDaTe William L. Shores, CPA, President, Shores, Tagman & Company, P.A., one of the country’s top SIG tax experts, provides an update on the latest IRS enforcement activities and accounting practices that you should consider for your fund.

the resulting surgeries that too often are lose-lose. Anne Alabach, Workers’ Compensation Manager, CPC Logistics, Inc., Jennifer Christian, MD, President, Webility Corporation and Peter Greaney, MD, Medical Director, President & CEO, WorkCare will talk about exciting opportunities for improving outcomes.

OuT FrOnT IdEaS LiVe This interactive session will discuss hot topics with panelists in the Workers’ Compensation arena as a part of the Out Front Ideas webinar series. You don’t want to miss this engaging and informative hour! Kimberly George, Senior Vice President, Senior Healthcare Advisor, Sedgwick will moderate the discussion held by Mark Walls, VP Communications & Strategic Analysis, Safety National.

BaTtLe Of ThE BlOgGeRs Join this exciting panel with Mark Walls, Vice President Communications & Strategic Analysis, Safety National, David DePaolo, CEO/President, Editor-in-Chief, WorkComp Central, Robert Wilson, President and CEO,, LLC and Michael Gavin, President, PRIUM as they discuss hot topics impacting Self-Insureds and SIGs in the workers’ compensation arena. ■ For more information on the program, sponsorship opportunities and registration, please visit

MeDiCaL OvEr DiAgNoSiS: BrEaKiNg ThE CyClE Physicians and employers are taking critical steps in building a winwin model: happier and healthier recoveries for employees AND lower costs. No gimmicks. Not just winning the process game but using the BPSE (biopsychosocialeconomic) model to intervene more effectively, to prevent systemic medical over diagnosis and April 2016 | The Self-Insurer


SIIA would like to Recognize our Leadership and Welcome New Members Full SIIA Committee listings can be found at

2016 Board of Directors CHAIRMAN * Steven J. Link Executive Vice President, Midwest Employers Casualty Co. Chesterfield, MO CHAIRMAN-ELECT Jay Ritchie Senior Vice President, HCC Life Insurance Company Kennesaw, GA PRESIDENT & CEO Mike Ferguson SIIA, Simpsonville, SC TREASURER & CORPORATE SECRETARY* Duke Niedringhaus Senior Vice President, J.W. Terrill, Inc. Chesterfield, MO


Committee Chairs

Joseph Antonell Chief Executive Officer/Principal A&M International Health Plans Miami, FL

ART COMMITTEE Jeffrey K. Simpson Attorney Gordon, Fournaris & Mammarella, PA Wilmington, DE

Adam Russo Chief Executive Officer The Phia Group, LLC Braintree, MA Andrew Cavenagh President Pareto Captive Services, LLC Philadelphia, PA Mark L. Stadler Chief Marketing Officer HealthSmart Irving, TX Robert A. Clemente Chief Executive Officer Specialty Care Management LLC Lahaska, PA David Wilson President Windsor Strategy Partners, LLC Junction, NJ


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GOVERNMENT RELATIONS COMMITTEE Jerry Castelloe Principal Castelloe Partners, LLC Charlotte, NC HEALTH CARE COMMITTEE Leo Garneau Chief Marketing Officer, SVP Premier Healthcare Exchange, Inc. Bedminster, NJ INTERNATIONAL COMMITTEE Robert Repke President Global Medical Conexions, Inc. Novato, CA WORKERS’ COMP COMMITTEE Stu Thompson CEO The Builders Group Eagan, MN *Also serves as Director

SIIA New Members Regular Members Company Name/ Voting Representative

Mark Musser President & CEO Cabot Underwriters LLC St. Petersburg, FL Anthony Hipp Vice President Employee Benefits EIIA Chicago, IL Shawn Eckert COO Integrated Healthcare Management Scottsdale, AZ Brett Rodewald President/CEO Lucent Health Nashville, TN Christopher Mason Sr. Vice President Commercial Lines OneGroup Syracuse, NY David Zanze President Pinnacle Claims Management Inc. Irvine, CA

Silver Member Pete Salveson Marketing Director ELAP Services Chester Springs, PA

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Totally Transformed Learn More at or call 1-877-828-8770. April 2016 | The Self-Insurer




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