Self-Insurer Apr 2013 by SIPC

April 2013

www.sipconline.net

understanding

Confidence Intervals

April 2013

The Self-Insurer

www.sipconline.net

April 2013 | Volume 54

April 2013 The Self-Insurer (ISSN 10913815) is published monthly by Self-Insurers’ Publishing Corp. (SIPC), Postmaster: Send address changes to The Self-Insurer P.O. Box 1237 Simpsonville, SC 29681

Features

Editorial Staff

articles 10

ArT gallery: Blast Off in This Trendy Kind of risk Management

PPACA, HIPAA and Federal Health Benefit Mandates: New hIPAA Omnibus rule: Issues for employer Plan Sponsors and group health Plans

Do Private exchanges help or hinder Self-Insured Plans? experts differ on definitional issues, value proposition

PuBlIShINg DIreCTOr James A. Kinder MANAgINg eDITOr erica Massey

SeNIOr eDITOr gretchen grote

Understanding Confidence Intervals by Al Rhodes, ACAS, MAAA

DeSIgN/grAPhICS Indexx Printing

by Bruce Shutan

CONTrIBuTINg eDITOr Mike Ferguson

DIreCTOr OF OPerATIONS Justin Miller

IndUSTry LEAdErShIP

DIreCTOr OF ADverTISINg Shane Byars Editorial and Advertising Office P.O. 1237, Simpsonville, SC 29681 (888) 394-5688 2013 Self-Insurers’ Publishing Corp. Officers James A. Kinder, CeO/Chairman erica M. Massey, President

Foundation Carves Out Important role in Support of the Self-Insurance Industry

The Good, The Bad & The Possibilities of Outcomes-based Incentive Programs by Linda Duffy

TPA’s Beware of Fiduciary liability by Jim Kinder

SIIA President’s Message

lynne Bolduc, esq. Secretary

The Self-Insurer | April 2013

TPA’s Beware of Fiduciary Liability

read with interest Steve Polino’s “From the Bench” column in the February 2013 issue of The SelfInsurer and agree that the court finally got it right. Hopefully all TPAs will take note of this Fifth Circuit Court decision and adjust their administrative practices accordingly. While some may argue this was a narrow decision, I have contended that ever since erISA was passed in 1974 this type of finding of TPA fiduciary liability by the courts may become the new norm. For years TPAs and their attorneys have tried their best to reduce or eliminate their TPA fiduciary duty, claiming that as TPAs they simply do “ministerial” work. however this Texas case Mr. Polino cited clearly disputes this view since in the course of their “administrative” work, TPAs clearly exercise “discretionary” decisions every day and with virtually every claim. Trying to escape this responsibility and function through administrative agreements with sometimes confusing language does little to remove the fact TPAs usually share fiduciary responsibility under an erISA plan. In this case, the court clearly agrees.

by Jim Kinder

Perhaps a little history about erISA may be in order. how many folks really know how erISA came into existence? It was a law that took 10 years to pass following the collapse of a retirement plan sponsored by automaker Studebaker. The mere name of the act should provide TPAs, Plan Sponsors, Providers, Claim Adjudicators, Subrogation Specialists and virtually anyone affiliated directly or indirectly with the administration and management of an erISA plan a clear message: Employee Retirement Income Security Act (ERISA) means any benefit plan established under erISA must provide “Security” to the plan participants! There is repeated reference throughout the law that all dealings with an erISA plan must inure to the benefit of plan participants. So, basic logic (are you smarter than a 5th grader) needs to apply this principle anytime a decision or interpretation of a plan provision, investment decisions (such as in case of retirement plans) is made. Why? Because erISA also provides that persons who have ANY discretionary authority either directly or indirectly with the administration of the plan have a fiduciary duty to the plan participants. Fiduciaries under ERISA as mentioned above are defined as “any person having any discretionary authority” under the plan. TPAs and other service providers have spent tens of millions of dollars over the years trying to craft language within administrative service agreements in an effort to “escape” being defined as a fiduciary, but as this case illustrates, that just is not going to work. It is practically – if not totally – impossible for a TPA to escape having discretionary authority to some degree. Once that is established the only question is, are they acting as a co-fiduciary under the direction of the Plan Administrator or as a party in interest? either way, the fact remains the TPA’s work includes discretionary authority – when they exercise this authority they become a fiduciary. Period. OK, bring on the lawyers, I love a good debate/fight. So, how can a TPA lower their risk of being classified as a fiduciary? Perhaps they really cannot. however they can mitigate it to some degree by, as Steve Polino pointed out, avoiding making discretionary decisions and reserve those decisions solely to the designated Plan Administrator. TPAs would be wise in processing claims on behalf of a plan to put in place

While I am not an attorney, I have none the less consistently argued this point with some of the nation’s top legal experts in this area and have always taken the position that a TPA (regardless of how their administrative agreement is written) cannot escape the fact that they most always perform ERISA fiduciary duties. In other words, if it looks like a duck, quacks like a duck,

procedures for any and all claims that could be subject to denial or benefit

it must be a duck!

not be to the benefit to all plan participants, thus, such action begs the question:

April 2013

The Self-Insurer

reductions to present the facts to the Plan Administrator/Plan Fiduciary for “decision”. TPAs should not try to play attorney/judge on plan interpretation; that is the responsibility of the Plan Administrator, who might also be wise to seek legal counsel before making a claim determination. Of course, as erISA states, a process of appeal (plan document) should also be provided so that every step is taken to make sure the plan inures to the benefit of plan participants. And by that I mean, assume for a moment a decision is made to pay a claim that is clearly not covered by the plan (oh this happens all the time, bosses daughter, son, key employee etc.). Doing so, while it may be to the benefit of the individual plan participant, it would

Could there be a potential breach of fiduciary duty in making an exception? Bottom line… you can’t escape what you are! So, might as well fess up and admit you make discretionary decisions day in and day out and rather than try to be all things to all people, recognize this responsibility can be transferred to the proper party (i.e. plan administrator) to make final decisions on behalf of the plan – and the TPA merely implements/ administrates those decisions. A bit more time consuming but a lot less costly should something like this case goes astray. n

Would you go on a hike without a map?

Jim Kinder served as CEO of Self-Insurance Institute of America, Inc. from 1981 to 2007. He can can be reached at 864-409-8347 or jkinder120@aol.com.

As a Stop Loss expert, Berkley Accident and Health, LLC can put you on the right path. Our innovative approach to risk management can lead to greater stability, transparency, and control with your self-funded plan. When it comes to risk, let Berkley be your guide.

Stop Loss | Group Captives | Managed Care | Specialty Accident Berkley Accident and Health, LLC is the U.S.-based accident and health operating entity of the W.R. Berkley Corporation Member Companies. Coverages are underwritten by StarNet Insurance Company and/or Berkley Life and Health Insurance Company, both member companies of W.R. Berkley Corporation, and both A+ rated by A.M. Best. © 2012 Berkley Accident and Health, LLC BAH AD-20120104

www.BerkleyAH.com

The Self-Insurer

| April 2013

understanding

Confidence Intervals by Al Rhodes, ACAS, MAAA

April 2013

The Self-Insurer

Seeing the Big Picture

hile a loss pick or point estimate produced from accurate analysis by an experienced actuary is valuable information, its usefulness is tempered by the likelihood of how accurate the estimate is. That is, from a statistical standpoint, the loss pick has a certain probability of being correct. That probability, measured in a confidence interval, is another piece of data that can help the end user make an informed decision. While not a perfect mathematical analogy, consider knowing that the weather forecast calls for rain and how much more informed you are if you know that chance of rain is twenty percent or ninety percent. At their best, confidence intervals demonstrate how actual losses may vary from the projection and enable decision makers to assess the risk involved with their loss pick. At their worst, confidence intervals can sway less informed decision makers away from a specific conclusion. With appropriate interpretation, confidence intervals are an important part of a complete actuarial analysis and help you see the “big picture” of the potential for loss. The end user of an insurance program analysis is usually a risk manager or CFO, and the end use of the analysis is to help determine the type of insurance program that will best protect the company. This will depend on: 1. expected losses 2. When those losses will be paid 3. The company’s risk tolerance After the actuary has computed expected losses, the next step in the process is to determine the mathematical probability that expected losses will or will not be exceeded.

This probability has a bearing on how attractive a certain proposed insurance program really is.

defining the Confidence Interval The analysis of an insurance program involves either a retrospective look at the past (reserves) or a prospective look at the future (loss projection or loss pick). The example used in this article will involve a loss projection. Often a loss projection is presented as the one and only answer. A company may analyze its historical loss experience and decide it will have $1,000,000 of losses to cover during the next policy period. This $1,000,000 is then used as input to the decision as to what type of insurance program should be constructed. The $1,000,000 may not be the best number to use for decision making because the probability of the losses being exactly $1,000,000 is very small. A more useful way to look at this projection is to define the probability, or confidence, that $1,000,000 will or will not be exceeded. For example, if a risk manager knows there is a 45% chance that $1,000,000 will be exceeded, then a self-insured program may not seem attractive or feasible. At the lower levels of confidence, we find low loss levels that are not very probable. At the higher levels of confidence are high loss levels that are not likely to be reached. The true loss level lies somewhere within this confidence interval. A smaller or tighter confidence interval will make decision making easier as the range of potential loss levels is reduced. A broader confidence interval will make the decisions more difficult due to the potential for very high or very low loss levels. This range of losses and their probability is also referred to as the spread of loss.

There are several methods that can be utilized to compute a confidence interval or spread of loss. As a starting point, a common method involves Monte Carlo simulation. By defining the frequency and severity of historical claims and fitting this information to certain probability distributions used within the insurance industry, a spread of loss can be calculated. Common frequency distributions include Poisson and negative-binomial. Common severity distributions include log-normal, Weibull and Pareto. These concepts move beyond the scope of this article, but it is important to understand that the actuary uses common mathematical techniques and models to complete the analysis. For further explanation, let’s look at what issues can arise when calculating a confidence interval around our theoretical $1,000,000 loss pick.

The Issues The first issue with confidence intervals is a concept known as parameter risk. This risk is not included in the calculation of the confidence interval. Parameter risk is the risk associated with the possible incorrect estimate of the projected losses. There is always the possibility that the estimate of projected losses is wrong. however, an actuary will use a sound actuarial methodology to project the losses in order to minimize the impact of parameter risk. The second issue involves the selection of an appropriate model for the loss variance. You can read textbooks or buy software to help, but what you really need is a good database of loss experience. For example, if you have three years of loss experience with about ten claims a year, there is not much value in calculating confidence intervals because you simply don’t have enough data to

The Self-Insurer

| April 2013

be statistically significant. If you have five years experience with five hundred claims a year, then you have sufficient information to select an appropriate model. Most companies will have something between these extremes. If there is enough data to generate a valid analysis, then a common approach is to select frequency and severity distributions that best fit the historical data. Then a simulation can be built to generate 100 to 5,000 years of possible outcomes. Ordering the results of the simulation will give the confidence interval. There are also direct analytical methods for determining a confidence interval, which may look like the following. This chart indicates that the $1,000,000 loss pick will not be exceeded 55% of the time. however, this means that there is a 45% chance the $1,000,000 will prove to be low. 80% of the time, $1,250,000 will be adequate to fund the expected loss experience. And, 5% of the time, $1,800,000 will not be enough to fund the expected loss experience. risk adverse clients may be happy with a $1,000,000 loss pick. however, they may balk at the potential of a $1,250,000 loss year. This is where the value of an analysis of confidence intervals is critical to the decision making process.

of potential loss. Because of varying distributions, it is important to utilize historical claim data similar in nature to the expected future claims. n Al Rhodes has spent over 25 years in the actuarial profession and is President & Senior Actuary of SIGMA Actuarial Consulting Group, Inc. located in Nashville, Tennessee. Professional designations include Associate of the Casualty Actuarial Society and Member of the American Academy of Actuaries. Al graduated cum laude and with Honors (B.S. Genetics) from the University of Georgia.

Figure 1

Typical Confidence Interval Confidence Interval

Spread of loss

20%

$450,000

30%

$650,000

40%

$800,000

50%

$950,000

55%

(expected)

$1,000,000

60%

$1,075,000

70%

$1,150,000

80%

$1,250,000

90%

$1,400,000

95%

$1,800,000

99%

$2,500,000

Elements That determine the Confidence Interval Spread The spread around a loss pick will vary by line of coverage, industry, geography and credibility of the inputs. Workers compensation usually has a fairly “tight” spread relative to products liability. But even within workers compensation, differences in the spread occur. For example, heavy manufacturing, with a higher probability of shock claims than many office operations, has a greater variability

April 2013

The Self-Insurer

We can’t stop misfortune. We can stop loss.

Becoming a top tier Stop Loss carrier doesn’t just happen. For 35 years, our dedication to creative solutions has made us the top choice for our clients. Not all Stop Loss carriers are created equal. Today’s businesses have unique needs that demand expert-level service. That’s been the foundation of our Stop Loss offering from the beginning. We know it’s not just the plan; it’s the team behind it. Your business is unlike any other. It’s time for a Stop Loss carrier that’s unlike any other, too.

For more information, contact your local ING sales representative or call us at 866-566-2316.

EMPLOYEE BENEFITS

Your future. Made easier.® Stop Loss insurance products are issued by ReliaStar Life Insurance Company (Minneapolis, MN) and ReliaStar Life Insurance Company of New York (Woodbury, NY). Within the state of New York, only ReliaStar Life Insurance Company of New York is admitted, and its products issued. Both are members of the ING family of companies. Product availability and specific provisions may vary by state. © 2011 ING North America Insurance Corporation. LG9841 12/28/2011

The Self-Insurer

| April 2013

art gAllerY by Dick Goff

Blast Off in This Trendy Kind of risk Management

y adopting the name of a legendary Star Trek spaceship, risk management rose from the cubicles of middle management in corporate America to a higher orbit as a legitimate concern of the executive suite. Now everybody wants to talk about enterprise risk management (erM) – a google search provides 93 million results on the subject. Full disclosure: I did not review them all. erM, according to surveys by organizations such as gen re and Towers Watson, has become a matter of fundamental corporate strategic planning, way up the org chart from the office that buys ordinary P&C insurance. here’s my eye-opener: gen re reported that the 26 corporate participants in its erM survey had more than $148 billion premium in force at the end of 2011 – slightly more than 25 percent of the life/health industry. A Business Insurance whitepaper reported that erM is the process that business organizations use to identify exposures beyond ordinary hazard risks and develop methods to measure, reduce, insure or even just monitor them. erM has become a subset of many organizations’ management teams with its own emerging bureaucracy and set of costs. The Advisen FPN e-newsletter said that in managing their risk appetite,

April 2013

The Self-Insurer

most companies look to reinsurance as the means to manage their exposures. But, to the interests of The Self-Insurer readers, erM has emerged as a driving force of many captive structures. remember: alternative risk transfer (ArT) is the form of insurance that provides the most flexibility in managing risks of all kinds. For us, “enterprise risk” is any organizational challenge that can be actuarially measured and rated in a process that not only can remediate the damages of potential risks, but also brings the opportunities to either save or make money through a captive – making insurance a profit center rather than a cost center. Members of captive structures such as workers’ compensation self-insured groups, risk retention groups, excess employee benefit coverage, or general-purpose group captives covering first-party risk all can use another E-word in pursuing “entrepreneurial risk management.” There are probably as many definitions of “entrepreneurial” as there are of “enterprise risk management,” but my favorite is: entrepreneurial means the prudent risk of capital in the pursuit of profit. Isn’t that example what ART participants do on a daily basis? here are a few examples of erM – with the e meaning entrepreneurial – that come to mind: Insure special, even unique risks: Captive structures can accommodate risks that traditional insurance companies won’t cover, or would only cover at exorbitant rates. here are a few examples of covered claims triggers from a captive of my knowledge: crisis and Pr management; legislative and regulatory changes; loss of licensure; loss of major account; loss of referrals; reputational risk, and the list goes on. Enjoy proﬁ ts downstream: generally, captives are structured to provide the possibility of profit, pending claims experience. Profits accrue in two ways: as excess capitalization through surplus premiums, and as investing returns on capital. Favorable tax treatment: Premiums paid into an approved captive insurance company are generally deductible from income by the captive’s insured company. This is a considerable advantage for captive owners who realize a return on their investment during the first year and all succeeding years of premium payments. Wealth accumulation and transfer: Many captives are ideal vehicles to either accumulate wealth with favorable tax treatment (capital gains rates on dividends, for example) or to transfer wealth on to the following generation through a trust arrangement. erM not only serves as a driving force of ArT but also allows us members of the industry to explore the furthest reaches of self-insurance. Beam me up, Scotty! n I welcome all feedback and opinions! Please feel free to comment to me personally via email or send in article form to our editor at ggrote@sipconline.net. Dick Goff is managing member of The Taft Companies LLC, a captive insurance management firm and Bermuda broker at dick@taftcos.com.

STRATEGIC PHARMACY MANAGEMENTTM DELIVERS REAL SAVINGS

Numerous Specialty Rx Providers 50 State Delivery Seamless Patient-centric Savings Plan 77% Savings Success Rate

The Self-Insurer

| April 2013

ppACA, HipAA and Federal Health Beneﬁt Mandates:

Practical

The Patent Protection and Affordable Care Act (PPACA), 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 PPACA, HIPAA and other federal benefit mandates.

Q&A

new hIPAA Omnibus rule: Issues for Employer Plan Sponsors and Group health Plans

IPAA’s long-awaited “Omnibus rule” (also referred to in this advisory as the “Rule”), published on January 25, 2013, modifies numerous aspects of the hIPAA regulations concerning privacy, security, enforcement, and breach notification.1 The rule is effective on March 26, 2013, and requires compliance for most provisions by September 23, 2013. hhS has advised covered entities and business associates to update their policies and procedures and retrain workforce members, as appropriate, as a result of the changes implemented by the Omnibus rule. While many of the changes are primarily applicable to health care providers, some action will also be required on the part of employer plan sponsors and their group health plans, as well as their business associates and subcontractors.

This advisory focuses on the Omnibus rule provisions that most directly impact employer plan sponsors and group health plans. For a more thorough discussion of other sections of the Omnibus rule, see the Alston & Bird health Care group’s advisory published on January 25, 2013.2 For a helpful general checklist on the new requirements, see the Alston & Bird health Care group’s checklist published on February 1, 2013.3 This advisory is intended to help identify actions that employer plan sponsors and group health plans may need to take as a result of the Omnibus rule. As

April 2013

The Self-Insurer

discussed further in this advisory, the changes most significant for employer plan sponsors and group health plans include changes to the definition of business associate and breach; a more stringent enforcement scheme, including new rules regarding civil monetary penalties; modifications to the content of business associate agreements, notices of privacy practices and breach notifications; and implementation of the prohibition, under the genetic Information Nondiscrimination Act (gINA), on use or disclosure of PhI that is genetic information for underwriting purposes.

Expanded Business Associate definition The Omnibus rule expanded the definition of business associate to include a variety of entities that have access to personal health records and other protected health information, such as patient safety organizations and health information organizations. While employer plans may not interact with all of these types of entities, it is important to be aware that many plan service providers (particularly those interacting with health care providers or insurers) will become business associates as a result of this rule. In addition, under the Omnibus rule, subcontractors that perform services for a business associate are themselves considered business associates to the extent their services involve the creation, receipt, maintenance or transmission of PhI on behalf of the business associate. Such subcontractor entities must obtain satisfactory assurances from their hIPAA-covered subcontractors (i.e., subsubcontractors), in the form of a written agreement, that they will appropriately safeguard the PhI. If the entity only receives PhI to help the business associate with its own management, administration or legal responsibilities,

it would not be considered a business associate. however, even in this situation, the business associate would need to obtain reasonable assurances from the subcontractor for the protection of PhI. As discussed below (see Numerous Changes to Privacy rule), the Omnibus rule requires changes to most business associate agreements, and hhS has provided sample provisions for review and consideration in updating such agreements.4

More Stringent Enforcement rule In addition to significant changes to the business associate rules, the Omnibus rule provides for a more stringent enforcement scheme. The Omnibus rule now requires hhS to conduct an investigation and a compliance review in response to any complaint received if the facts indicate a possible violation due to willful neglect. In addition, the Omnibus rule removed the requirement that hhS attempt an informal resolution of noncompliance (such as through demonstrated compliance or a completed corrective action plan). Therefore, following an investigation or a compliance review that indicates noncompliance, hhS can proceed directly to the use of civil monetary penalties (CMPs). The Omnibus rule also includes notable changes regarding CMPs. First, there is no longer an exception for liability of covered entities when hIPAA violations are committed by business associates acting as an agent of the covered entity. Covered entities are thus now liable for hIPAA violations by business associates if the business associate was acting (or failing to act) in its capacity as an agent of the covered entity. In determining whether a business associate is an agent, hhS follows the federal common law standard, which asks

whether the covered entity had the right to control the agentâ&#x20AC;&#x2122;s conduct. generally, a business associate may be considered an agent if the business associate agreement with the covered entity grants the covered entity the authority to direct the performance of the service provided by the business associate after the relationship was established. even where the business associate agreement does not provide the covered entity with such directive authority, an agency relationship may be found if the parties in fact behave as principal and agent. Business associates themselves face similar liabilities with respect to their subcontractors in the same manner as would covered entities with respect to business associates. Practice Pointer. These changes to CMP liability could lead to potentially huge penalties for covered entities and business associates (each with respect to their business associate agents) through no action of their own, so it is crucial to ensure that any business associates who might qualify as agents follow the HIPAA rules. The Omnibus rule provides, as did the 2009 interim final rule, for a tiered penalty scheme that ranges from $100 to $50,000 per occurrence, depending on the culpability of the covered entity or business associate, with a $1,500,000 maximum penalty for all identical violations during a calendar year. hhS has stated that it will not automatically issue the maximum penalty for every violation, and that the number of occurrences or violations would be determined based on context. The open-ended list of factors hhS will consider includes 1) the nature and extent of any violation, including the number of individuals affected and the relevant time period; 2) the nature and extent of any physical, financial or

The Self-Insurer

| April 2013

reputational harm, including any hindrance to the individual’s ability to obtain health care; 3) any history of prior noncompliance; and 4) the financial condition and size of the covered entity or business associate. In the case of continuing violation of a hIPAA provision, however, a separate violation occurs each day the covered entity or business associate is in violation of the provision. The penalty scheme is set forth in the following chart. Category Violation

Each Violation

Max for Identical Violations during a Calendar year

Tier 1

Did Not Know

$100-$50,000

$1,500,000

Tier 2

reasonable Cause

$1,000-$50,000

$1,500,000

Willful Neglect -Corrected

$10,000-$50,000

$1,500,000

Willful Neglect -Not Corrected

$50,000

$1,500,000

Tier 3

The Rule also clarified the meaning of “reasonable cause,” in Tier 2. “Reasonable cause” exists when the covered entity or business associate knew, or by exercising reasonable diligence would have known, that the act or omission is a violation, but did not act with the conscious intent associated with willful neglect.

Security rule Applies to Business Associates The Omnibus rule revised hIPAA’s Security rule so it applies directly to business associates as well as to covered entities. Business associates, therefore, are now directly liable for Security rule violations, and must 1) implement, review and update administrative safeguards (e.g., risk analysis and management, appointment of security official, training, etc.), physical safeguards (e.g., facility access controls, workstation use and security, device and media controls) and technical safeguards (e.g., access control, individual or entity authentication, transmission security, etc.); 2) obtain security-related written assurances from hIPAA-covered subcontractors by way of business associate agreements; 3) implement and maintain policies and procedures for compliance with the Security rule; and 4) follow all documentation and maintenance requirements under the Security rule. In addition, the Omnibus Rule provides a new definition of electronic media to reflect technological advances. Electronic storage media, now known as “electronic storage material,” explicitly includes intranets and voice transmissions that are electronically stored.

numerous Changes to Privacy rule While certain Privacy rule provisions will primarily affect providers, such as new definitions of health care operations and marketing and new rules about fundraising and the sale of PhI, others are relevant to all covered entities, including group health plans and their business associates.5

Privacy rules Applicable to Business Associates First, the Omnibus rule extended the Privacy rule’s main obligations to business associates, including the prohibition on uses and disclosures of PhI except as permitted or required by the Privacy rule; the requirement to restrict use or disclosure of, or request for, PhI to the minimum necessary to accomplish the intended purpose; the requirement to obtain and document written assurances (i.e.,

April 2013

The Self-Insurer

a business associate agreement) from business associates (or subcontractors, in the case of a business associate); and the threat of CMPs. Second, the Omnibus rule incorporated certain business associate agreement provisions into the Privacy rule so that a business associate’s violation of such provisions would constitute a Privacy rule violation, as well as a contractual violation. Those provisions include, among others, the requirement to use or disclose PhI only in accordance with the business associate agreement or as required by law, the prohibition on use or disclosure of PhI in a manner that would be a Privacy rule violation if done by the covered entity and the requirement to disclose PhI when required by the Secretary of hhS. Third, the Omnibus rule added requirements that apply to business associates, such as a requirement to disclose PhI as necessary to satisfy a covered entity’s obligations relating to an individual’s request for electronic PhI and prohibition against the sale of PhI. Other Privacy rule requirements, such as the notice of privacy practices or the designation of a privacy official, do not apply to business associates unless the relevant contract requires them. The Omnibus rule also makes changes to various authorization rules, including those that make it easier to access the information of decedents. In addition, it permits providers who are not members of an employer’s workforce but who provide healthcare to an individual at the request of an individual’s employer to disclose PhI to the employer.

Contents of Business Associate Agreements The Omnibus Rule modified the content requirement for business

associate agreements. Specifically, it 1) eliminates the requirement that covered entities report to the Secretary of hhS when it is not feasible to terminate a business associate agreement; 2) requires a business associate that is aware of noncompliance by a subcontractor to respond appropriately; 3) adds several new requirements for business associates;6 and 4) where a business associate carries out a covered entityâ&#x20AC;&#x2122;s obligation, requires the business associate to comply with the relevant rules. The Omnibus rule allows for a transition period in which compliant business associate agreements that are in effect prior to January 25, 2013, and not renewed or modified from March 26, 2013, until September 23, 2013, are deemed to be compliant until the earlier of the date they are renewed or modified or September 22, 2014.

Practice Pointer. If you do not have business associate agreements in place, or have business associate agreements in place prior to January 25, 2013, that are not compliant with HIPAA requirements, the deadline for having business associate agreements that comply with the Omnibus Rule is September 23, 2013. For business associate agreements in place prior to January 25, 2013, that are compliant with HIPAA requirements, and so long as they are not modified or renewed from March 26, 2013, until September 23, 2013, the deadline for having business associate agreements that comply with the Omnibus Rule is the earlier of September 22, 2014, or the date the business associate agreement is modified or renewed. If your business associate agreements do not need to be amended, be sure not to accidentally trigger compliance with the new rules by renewing or modifying them before it is necessary to do so.

In connection with the revised business associate agreement content requirements, hhS provided sample business associate agreement provisions on its website, including language for definitions, the obligations and activities of a business associate; permitted uses and disclosures by a business associate, provisions for the covered entity to inform the business associate of privacy practices and restrictions, permissible requests by the covered entity, and term and termination of the contract. Practice Pointer.This is sample language, and using it is not required for compliance. However, it is a helpful guide in developing or updating Business Associate Agreements that would satisfy HHS scrutiny. Covered entities and business associates should follow the language closely, but tailor it to the specific needs of their business.

The Self-Insurer

| April 2013

notice of Privacy Practices The Omnibus Rule significantly modified the content requirements for notices of privacy practices (NPPs). In addition to existing content requirements, NPPs must now provide 1) that authorization is required for most uses and disclosures of psychotherapy notes, uses and disclosures of PhI for marketing purposes and disclosures that constitute a sale of PhI; 2) opt-out rules if a covered entity intends to contact the individual for fundraising purposes; 3) for health plans (other than long-term care policy issuer) that intend to use or disclose PhI for underwriting purpose, that the covered entity cannot use or disclose genetic information for such purposes; 4) a statement of the rights of affected individuals to be notified following a breach of unsecured PhI; and 5) a statement that a covered entity must

agree to an individual’s request for restriction on disclosure of PhI to a health plan if the disclosure is for payment or health care operations purposes and pertains solely to a health care item or service for which the covered entity has been paid in full by a person other than the health plan. HHS specifically notes that these modifications constitute material changes to NPPs, triggering distribution obligations for covered entities. The Omnibus rule also includes altered distribution requirements for NPPs. A health plan that currently posts its NPP on its website must (1) prominently post the material change or its revised NPP on its website by the effective date of the material change to the NPP and (2) provide, in the next annual mailing, the revised NPP or information about the material change and how to obtain the revised NPP. If a health plan does not have a customer service website, it must

Can you measure the results of your wellness services? WE CAN! Let us show you how Call: 866-756-5434 E-mail: info@attunelife.com

Attune Health Management, Inc. 3608 Preston Rd, Suite 220 Plano, Texas 75093

SIIA-DisplayAd-2013-v4.indd 1

April 2013

The Self-Insurer

Practice Pointer. All covered entities, including all health plans, must have new NPPs posted by September 23, 2013, so it is important to begin working on an updated NPP soon. The Omnibus rule also expanded individual access rights to PhI maintained electronically, whether or not the designated record set is an “electronic health record.” If an individual requests an electronic copy of PhI that is maintained electronically in a designated record set, the covered entity must provide access in the form and format requested, or in another agreed-upon format. Also, as required to be disclosed in NPPs, providers must comply with requests to restrict disclosures to health plans if the disclosure is for payment or health care operations and the PhI relates only to an item or service for which the individual (or anyone other than the health plan) has paid in full. The Omnibus rule also includes new provisions about disclosures to third parties, reasonable fees and timeliness of response.

Changes to Breach determination and notification requirements

visit attunelife.com to learn more

provide the revised NPP, or information about the material change and how to obtain the revised NPP, to its covered individuals within 60 days of revision. Plans should provide both paper- and web-based notices to be accessible to all beneficiaries, including those with disabilities. Finally, as long as the required contents are present, the covered entity may utilize a layered notice, or a short notice with a longer notice attached.

Generally, “breach” is defined as the impermissible acquisition, 3/1/2013 3:36:34 PM

access, use or disclosure of PhI that compromises the security or privacy of PHI. The Omnibus Rule modified the definition of “breach” by removing the requirement to determine the occurrence of a breach by assessing whether the impermissible acquisition, access, use or disclosure poses a “significant risk of financial, reputational, or other harm” to the individual. In its place, the Omnibus rule installed a rebuttable presumption—where there is an impermissible acquisition, access, use or disclosure of PhI, a breach is presumed unless the covered entity or business associate demonstrates, through a risk assessment, that there is a low probability that PhI has been compromised. The risk assessment must consider at least the following factors: 1) the nature and extent of the PhI involved, including the types of identifiers and the likelihood of re-identification; 2) the unauthorized person who used the PhI or to whom the disclosure was made; 3) whether the PhI was actually acquired or viewed; and 4) the extent to which the risk to the PhI has been mitigated. entities may consider other factors, but the analysis must be thorough and in good faith, and it must reach a reasonable conclusion. In addition, covered entities and business associates can provide breach notifications following any impermissible use or disclosure without performing a risk assessment, if they choose to do so. As set forth in the hITeCh Act and now codified in the Privacy Rule, the required breach notice has several content requirements.7 It must include 1) a brief description of the event, 2) a description of the types of unsecured PhI involved, 3) steps individuals should take to protect themselves, 4) a brief description of steps taken by the covered entity and 5) contact information. The notification must be

provided by first-class mail, or electronic mail if agreed to by the individual. In the event there is insufficient or out-of-date information for providing the notice by mail, the Omnibus rule provides parameters for a substitute method of notice that is reasonably calculated to reach the individual. There is a 60-day outer limit in which covered entities or business associates must fulfill the individual notification requirements. Covered entities are responsible for notifying affected individuals of a breach. If they choose to delegate this responsibility to a business associate, the two entities should evaluate which is in the best position to do so. Importantly, hhS has confirmed that when a business associate is acting as an agent of the covered entity, its discovery of the breach will be attributed to the covered entity; as a result, the covered entity is required to provide notification at this point, not when they are notified. If the business associate is not an agent, however, the covered entity’s time for notification begins to run based on the time it is notified of the breach. hhS encourages covered entities and business associates to address the timing of notifications in their business associate agreements. Practice Pointer. Because breach discovery8 by agents is treated as breach discovery by the covered entity or the business associate (as applicable), it is important to have procedures for efficient reporting by agents so that the covered entity can have more time to investigate and inform affected individuals as necessary. The preamble to the Omnibus Rule also provided clarifications regarding breach notifications to prominent media outlets, which is required if more than 500 individuals in one state or jurisdiction are affected by a breach. A press release on the covered entity’s website would not fulfill the obligation to provide notice to the media. While the entity must directly provide notice to the media, it is not required to incur any cost to run a notice, and the media outlet is not obligated to print or run any information about the breach. In addition, with regard to required notification to the Secretary of HHS for breaches involving less than 500 individuals, the Secretary must be notified no later than 60 days after the end of the calendar year in which the breaches were discovered (not the year in which they occurred). The Omnibus rule also eliminated the breach exception for limited data sets that exclude dates of birth and zip codes. This change is significant for employers that currently communicate through limited data set exchanges that are not encrypted. Also, HHS clarified that the Office of Civil Rights (OCR) may impose CMPs against those entities failing to comply with the breach notification requirements. OCr also has the authority to work with covered entities to achieve voluntary compliance, except in cases involving willful neglect.

Provisions required by Genetic Information nondiscrimination Act (GInA) The Omnibus rule implements the changes required by gINA by prohibiting all health plans, except for long-term care policy insurers, from using or disclosing an individual’s PhI that is genetic information for underwriting purposes. This rule applies to all genetic information from the compliance date of the rule, regardless of when or where it originated. In addition, it applies to health plans that are covered entities under the hIPAA privacy rule, including those to which gINA does not expressly apply.

The Self-Insurer

| April 2013

GINA amended the definition of “health information” to include “genetic information,” which is defined as 1) an individual’s genetic tests; 2) genetic tests of family members of such individual; 3) manifestation of a disease/disorder in family members of such individual; or 4) any request for, receipt of, genetic services or participation in clinical research that includes genetic services by such individual or a family member. The Omnibus Rule adopts this definition under GINA, along with other related definitions under GINA (for terms such as “family member,” “genetic services” and “genetic test”) without modification.

how Should you respond?

Alston & Bird health Care Advisory, “Overview of hIPAA/hITeCh Act Omnibus Final rule,” January 25, 2013, at www.alston.com/advisories/healthcare-hIPAA/ hITeCh-Act-Omnibus-Finalrule

3 Alston & Bird health Care Advisory, “hIPAA/hITeCh Act Omnibus rule Checklist,” February 1, 2013, at www.alston.com/advisories/hipaa-hitech-omnibusrule-checklist

hhS, Sample Business Associate Agreement Provisions, January 25, 2013, at www.hhs.gov/ocr/privacy/hipaa/ understanding/coveredentities/contractprov.html.

Now is the time to make sure that your documents, policies and procedures, training material, and relationships with any business associates are compliant with the new rules. n

If your covered entity does engage in marketing or activities which would constitute the sale of PhI, see a detailed explanation of the new rules in the health Care group Advisory at www.alston.com/advisories/ healthcare-hIPAA/hITeCh-Act-Omnibus-Finalrule

Attorneys John R. Hickman, Ashley Gillihan, Johann Lee, and Carolyn Smith 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 Johann Lee 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 E-MAIL to Mr. Hickman at john.hickman@alston.com.

.. .. .

Department of health and human Services, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under the health Information Technology for economic and Clinical health Act and the genetic Information Nondiscrimination Act; Other Modifications to the hIPAA rules, 78 Fed. reg. 5566, at www.gpo.gov/fdsys/ pkg/Fr-2013-01-25/pdf/2013-01073.pdf

These include complying with the applicable Security rule provisions if it handles electronic PhI; reporting breaches of unsecured PhI to the covered entity; and ensuring that any subcontractors that create or receive PhI on its behalf agree to the same restrictions with respect to such information as apply to the business associate. 6

These requirements do not differ from those published in the 2009 Interim Final rule.

A breach is considered discovered as of the first day on which such breach is known to the covered entity (or its agent) or, by exercising reasonable diligence, would have been known to the covered entity (or its agent).

advancing the care, outcomes and cost management of kidney disease Single Patient Agreements Home Modalities Renal Data Management Expert & Effective Appeals Support Payment Based U&R Service

Now Featuring

Renalogic

A preventative, revolutionary approach to managing CKD in concert with associated diseases.

.. .

Targeted CKD management Improved quality of care Better outcomes

Call us today at 866.265.1719 18

April 2013

The Self-Insurer

AIG Benefit Solutions

Bring on experience The benefits landscape is constantly changing. For generations, AIG Benefit Solutions has offered innovative solutions to help our clients meet their challenges and prepare for tomorrow.

We offer a diverse portfolio of insurance products designed to help businesses offer competitive benefits that protect their employees and families. • Supplemental Medical Solutions for more complete health coverage • Protection Solutions including life, accident and disability plans • Ancillary Healthcare Solutions such as vision and dental • Employer Risk Solutions including stop-loss and captive arrangements

Visit www.aigbenefits.com to learn more about what AIG Benefit Solutions can do for your business.

• Multi-Product Solutions like ProtectPak™ to simplify benefit offerings • Value-Added Solutions for superior benefits management and support

@AIGBenefits

AIG Benefit Solutions

+AIG Benefit Solutions

AIGBenefits

AIG Benefit Solutions® is the marketing name for the domestic benefits division of American International Group, Inc. The underwriting risks, financial and contractual obligations, and support functions associated with products issued by American General Life Insurance Company, The United States Life Insurance Company in the City of New York, and National Union Fire Insurance Company of Pittsburgh, Pa., are the issuing insurer’s responsibility. The United States Life Insurance Company in the City of New York and National Union Fire Insurance Company of Pittsburgh, Pa., are authorized to conduct insurance business in New York. Not all policies are available in all states. © 2013. All rights reserved. AIGB100051 R01/13

The Self-Insurer

| April 2013

The GOOD, The Bad & The Possibilities of Outcomes-based Incentive Programs by Linda Duffy

April 2013

The Self-Insurer

s support for prevention and wellness programs continues to grow, so does the debate on the use of outcomes-based incentive programs. Numerous national surveys have shown that only a minority of health plans currently contain this approach, yet it is a growing trend among employers of all sizes. If a company successfully navigates the legal minefields of the genetic Information Nondiscrimination Act (gINA), the health Insurance Portability and Accountability Act (hIPAA) and a myriad of workplace legal protections, key questions still remain for benefit planners. First and foremost, is this approach cost effective and will it significantly improve the health of the workforce? Second, and a more emotionally charged issue, is the question of fairness. having worked in corporate wellness for over 25 years, we gained a greater appreciation for the arguments brought forward by both advocates and critics of this approach. Outcomes-based incentive programs are not for the feint of heart, or for those looking for a quick fix. Key elements need to be in place before a company can even begin to implement this plan design and it will take a few years to demonstrate significant impact on healthcare costs. however, outcomes-based incentive programs can serve to increase traditionally low participation in wellness programs, reward healthy people to stay healthy and generate higher rates of improved health outcomes.

glaring, programmatic gap became apparent. What were we doing to keep well employees, well? This became an even more profound question after reading Zero Trends: Health as a Serious Economic Strategy, by Dr. Dee edington, PhD. A key point of his research strongly suggests that in order to disrupt the trend of ever increasing health costs and morbidity, an important strategy is to keep individuals with low health risks from becoming individuals at high risk. No surprise that most healthy people view outcomes-based incentive programs in a positive light. Pure and simple, it is a reward for staying healthy. Do some of the “genetically gifted” individuals earn incentives despite engaging in unhealthy behaviors? Absolutely. But, more often than not, we saw outcomes-based incentive programs encourage healthy, young people to participate in wellness programs and increase their interest in preserving their good health. Meaningful incentives also can move high-risk employees to participate. Incentives designed to reward progress toward the standard targets of weight, blood pressure, etc., not just an all or nothing approach- either healthy or not, is an important attribute of a successful program. employers increase the odds of sustained health improvement, when they give employees realistic, attainable health goals and the resources to achieve them. Outcomes-based incentives hold people accountable and rewards results, not just participation. Better health outcomes translate into lower healthcare costs.

The Bad of Outcomes-based Incentive design Much has been written about intrinsic vs. extrinsic motivation, which targets to use for which biometric tests, and how does readiness to change fit into an outcomes-based incentive model that rewards change, ready or not? If executed poorly, there is no question that this approach can be viewed as invasive and heavy-handed. Many critics of outcomes-based incentives are also plan participants who believe that despite their healthy lifestyles, they are unable to meet the established target(s) for earning the reward. They believe that health status (especially theirs) is more likely determined by genetics, rather than lifestyle choices. If an outcomes-based incentive program doesn’t reward progress towards standard health targets and excludes opportunities to also be rewarded for participatory activities, engagement

The Good of Outcomesbased Incentive design After years of implementing disease management, smoking cessation and weight loss programs, a

The Self-Insurer

| April 2013

levels in this population can be low. Another undesired consequence of an outcomes-based incentive program, is the possibility that individuals earn the incentives by methods which couldn’t be further from the behavior changes we want to see. rapid weightloss, abstinence from nicotine only for the time needed to score negative on a cotinine test, and other manipulations of the screening results are possible when the goal is to earn the reward, rather than make a sustained, long term behavior change. Fortunately, the majority of individuals don’t engage in this type of behavior, but those who make an effort and fail can be treated the same as those who make no effort (the genetically gifted individuals), or worse yet, the individuals who manipulate their biometric results. The law requires that there is a reasonable alternative standard for

individuals who are medically unable to meet whatever targets are set in the program. Oftentimes, this includes collecting a waiver from the employees’ healthcare providers. This can be a lengthy and labor-intensive process. In addition, many healthcare providers object to screening apparently, healthy individuals on an annual basis in order to qualify for a premium reduction or an increased employer contribution to a health savings account. Successful implementation of outcomes-based incentive programs requires education and outreach to community providers.

plans. however, it must be integrated with a comprehensive wellness program that offers knowledge, skill building, policy and environmental components. At a minimum, outcomes-based incentive programs must meet these five legal standards:

The Possibilities of Outcomes-based Incentive Programs Offering a well-constructed outcomes-based incentive program can be a strong differentiator for health

1. Must be reasonably designed to promote good health or prevent disease. 2. The maximum reward or penalty is limited to 20% of the cost of coverage (increasing to 30% in 2014). 3. Participants must be given at least one chance per year to earn the reward. 4. Plan participants who cannot meet the standard target due to a medical condition must be offered a reasonable alternative standard.

Excess Employers’ Liability For Single Entities, Groups & Public Entities

Provided by an A.M. Best “A” (Excellent) XIV Rated Carrier Excess Capacity

Self Insured Groups

• $5,000,000

Prefer stable & established (4 or more years), homogenous

Minimum Retention • $100,000 • Lower retentions may be considered

groups with common effective date. Claims and/or Underwriting Audit may be required

Preferred Business Classes: • Healthcare

• Schools

• Religious Institutions

• Contractors

• Utilities

• Auto Dealers

• Agricultural

• Hospitality

• Specialty Artisans

• Manufacturing

• Public Entities

• Retail / Wholesale

• Transportation

• Financial Institution

Jake Harris, Vice President of Marketing 610.828.3847

April 2013

The Self-Insurer

ExcessEL@midman.com midlandsmgt.com

5. The outcomes-based incentive program must be included as part of the group health plan and be disclosed in the summary plan description. More importantly, we learned that regardless of the plan design, the secret to success for any major benefit change is in the implementation. The fundamentals must be in place. Communications must be frequent and transparent. Corporate leaders must serve as role models. The work environment must make healthy choices, the easiest choices. Once the basics are in place, outcomes-based incentive programs may represent a key strategy in healthcare cost containment, if implemented correctly. n

Flat Rate Repricing For Dialysis Claims It Just Makes $ense

Paying your dialysis claims repricer based on a percent of savings just doesn’t cut it anymore.

If your plan document stipulates payment of dialysis claims at a multiple of the Medicare rate or at the Medicare rate, H.H.C. Group will reprice to that rate for just $75 per claim. That’s right, $75. You could be saving thousands of dollars on every dialysis claim. What are you waiting for?

Call Joe Michaud at 301-963-0762 ext. 110 to start saving tens of thousands of dollars or more a year now

Linda Duffy works at Attune Health Management developing their corporate wellness programs and services. Prior to joining Attune Health Management in 2012 as the Chief Health Strategist, Linda Duffy was the Director of the Health, Benefits and Employee (HBE) Services organization at Sandia National Laboratories, a self-insured employer with over 30,000 covered lives.

Contact Joe Michaud for more information about H.H.C. Group’s Dialysis Repricing and Medicare Plus Pricing Programs ■ A One-On-One Consultation ■ A Webinar Demo ■ Assistance with your dialysis plan document

H.H.C. Group

Health Insurance Consultants Visit Us on the Web at www.HHCGroup.com

ACCREDITED

INDEPENDENT REVIEW ORGANIZATION

The Self-Insurer

| April 2013

do Private Exchanges help or hinder Self-Insured Plans? Experts differ on definitional issues, value proposition by Bruce Shutan

ne of the hottest topics for discussion in hr departments is about the private health insurance

exchanges that began operating in January 2013 – a full year ahead of staterun public exchanges for individuals and small businesses mandated by the Affordable Care Act (ACA). But there are differing perceptions about whether these arrangements can be offered on a self-insured basis and avoid the added costs and administrative issues associated with fully insured plans, with the focus clearly on semantics. Paul Fronstin, director of the Employee Benefit Research Institute’s

April 2013

The Self-Insurer

health research and education Program in Washington, D.C., believes the word “exchange” is being used too loosely to describe what these private services offer. “They are not grouping employers together in one marketplace,” he explains. “All they are doing is increasing the number of plans, increasing transparency and changing the financing model to be a fixed or defined contribution.” Self-funded plans on a private exchange are subject to the same regulatory framework under the employee retirement Income Security Act (erISA) as self-funded plans that are not part of an exchange.

Benjamin Pajak, a Stamford, Conn.based Senior vice President of Strategy and Business Development for Towers Watson’s exchange Solutions business unit, opines that “the definition of exchanges is probably one of the most of the butchered in the marketplace today because it can mean so many different things.” In fact, one of the industry’s leading private exchanges actually uses the term “marketplace” rather than “exchange.” An “exchange” is sometimes also referred to as an “organized marketplace,” adds Michael Thompson, the New York metroarea health care practice leader for PricewaterhouseCoopers human resource Services group.

he describes most private exchanges as “an extension of the outsourcing framework, where the outsourcing goes beyond administration to include a plug-andplay marketplace.” When employers participate in a private exchange, Thompson notes that they are “ceding control to a third party who is going to offer best-of-breed [solutions]” and become the plan’s steward. As part of that managerial commitment, the exchange’s operator would assume various administrative responsibilities for the self-insured plan, according to george Pantos, the Self-Insurance Institute of America’s former chief counsel who is now executive Director of the healthcare Performance Management Institute. Therein lies the rub for critics, who cry caveat emptor. richard D. Quinn, III, a health care blogger who worked as a corporate benefits executive for 46 years at Public Service enterprise group in Newark, N.J., dismisses private exchanges as “a money making scheme for consultants” that transfers risk and cost accountability away from selfinsured plan sponsors. however, risk will not be shared under private exchanges and claims will continue to be paid by selfinsured employers as they are in traditional channels. “Self-insured MeWAs are frowned upon,” adds george Katsoudas, Division Senior vice President, Compliance Counsel for Gallagher Benefit Services, Inc. in Itasca, Ill., whose parent company offers a private exchange “New Jersey may be a state where this can happen, but restrictions still apply.”

is offered strictly on a fully insured basis – serving about 100,000 employees of Sears and Darden restaurants in the u.S., as well as Aon employees. Several other operators, including Towers Watson, Mercer, Buck Consultants and the employee benefit consulting arm of Arthur J. Gallagher & Co., say their respective models can be offered on either a fully insured or self-insured basis. Towers Watson and Mercer will offer multicarrier exchanges, although details are still emerging, while Aon Hewitt offers nine unique carriers that include five medical, three dental and two vision vendors. Buck’s rightOpt exchange has two employer clients whose identity it would not disclose and plans to enroll about 125,000 employees from those organizations in the fall. “When you have multiple carriers,” Fronstin says, “that is more of an exchange than a single-carrier model. But you could offer multiple carriers on a self-insured basis because all they are doing is being a TPA at that point and the employer is assuming the risk.” Pajak says the opportunity to stay self-insured within a private exchange helps avoid the frictional cost of moving to a fully insured arrangement, which typically involves anywhere from a 2% to 4% increase in plan premiums. “One of the key opportunities we see for the plan sponsor is an improved efficiency,” Pajak says, as well as unlock value that may not be accessible through their traditional model. “The self-insured private exchange allows employers to leverage the high performance benchmarks, proven tools and plan designs that we have been able to monitor at Towers Watson over the course of the last decade in helping large organizations manage their health care benefits.” An ability to court self-insured clients is a key objective of the Mercer

We offer a fully integrated claim management solution combining medical expertise and health insurance knowledge. Medical Underwriting/Risk Assessments Utilization Management Disease Management PPACA Compliance Support

Case Management Claim Management Specialty Medical Reviews

Siobhan Sullivan Director of Business Development ssullivan@cpr-rm.com 786-457-2781

Up and running There’s no confusion about Aon hewitt’s private exchange, which

The Self-Insurer

| April 2013

Marketplace exchange featuring cloud-based technology developed by Benefitfocus, according to Steve Kreuger, a Morristown, N.J., partner and exchange solutions leader for Mercer. “We are very pleased with the level of interest from clients and prospects across all industry types,” he reports. “There is a tremendous amount of interest in not only trying to reduce costs, but also to provide more flexible choice to employees.” Mercer Marketplace, which will be available for the fall enrollment season for plans that take effect on January 1, 2014, will feature five standard medical plan designs across the spectrum of price points that range in actuarial value. roughly 56% of employers that Mercer surveyed indicated they were

April 2013

The Self-Insurer

interested in considering a private exchange for 2014. Key objectives include reducing costs, simplifying administration and providing a one-stop shopping environment. The service also seeks to help empower employees through a wide range of plan choices as well as decision-support and educational tools that allow them to build a personalized portfolio that best meets their individual or family needs. Mercer Marketplace is scalable down to groups with as few as 100 employees from as many as more than 100,000.

Fuel for consumerism? One of the stronger arguments supporting private exchanges is that they can potentially accelerate

consumerism by letting employees choose between higher and lower cost plans. In this scenario, Thompson says “people will often buy down on their own and make tough choices rather than the employer being the bad guy.” This thinking resonates even more clearly for employers that truly believe the marketplace is moving toward a pre-packaged set of high-deductible health plans. his sense is that the ACA helps give private exchanges some legs because of the bronze, silver, gold and platinum plan and model, as well as role of multi-carriers. Thompson says private exchanges are already very popular for retirees for several reasons. Chief among them: employers have largely capped their liability for

retirees, for whom there’s a national glut in more consumer-oriented medical and prescription drug plans that serve this market segment well. But their value proposition isn’t so clear cut for actives. “The private exchanges for active employees are very diverse at this point and the economics can be complex,” he explains. “employers will need to evaluate the details carefully of each offering.” Pantos believes the private exchange offers “an interesting option” for employers that are concerned only about cost, moving from a risk-based to a price-based model that would use standardized benefits and a defined contribution approach to cap costs. “however,” he hastens to add, “in most cases self-insurance isn’t selected just because of cost. There are many other factors that enter into the self-insurance

battlefield for brokers and TPAs who now provide most of the services to be offered via exchanges.” The operators of private exchanges in effect will be offering self-insured employers an administrative-services-only type arrangement. Kreuger notes that self-insured plans in the Mercer Marketplace will receive administrative services, as well as access to a network of health care provider that will be made available to members.

value proposition, which is that employers have control over the plan and flexibility to offer customized benefits tailored to their specific workforce needs. They also have a closer connection with the employee, which builds loyalty and retention.” While employees may have more benefit choices in a private exchange, Pantos says the downside is that added administrative expense for exchange operators will erode funds that could go toward employee benefits. “In reality,” he adds, “both public and private exchanges will create a new competitive

Gaining traction Beyond the argument over whether private exchanges will help or hinder self-insured plans, one thing is clear: Fully insured plans face an uphill battle from a regulatory standpoint.

We Don’t Just Talk About Successful Teams: We Build Them Teamwork is the foundation of any success story. With the right partner, collaboration and support, you can achieve lasting results. When you team up with Meritain Health, you gain the experience of our 30 plus years in the healthcare benefits industry, for a partnership you can rely on. For more information, contact us today.

1.800.242.6226

www.meritain.com

© 2013. For self-funded accounts, benefits coverage is offered by your employer, with administrative services only provided by Meritain Health, an independent subsidiary of Aetna Life Insurance Company. 2013006

The Self-Insurer

| April 2013

For example, Thompson says they not only cost 5% to 7% more than self-insured arrangements, but that the ACA imposes various new taxes on health insurers that will widen this cost differential to 7% to 9%.

health gathering that private exchanges

He explains that health care reform establishes a baseline “floor” for what type of coverage can be offered, while Cadillac plan taxes place a “ceiling” on such offerings. “The degree of freedom in terms of designing your own plan is being restricted over time,” he says.

the difference between ‘co-pay’ and

Fronstin believes it will take time for private exchanges to have any meaningful traction in the marketplace much like the managed care and consumer-driven health plan (CDhPs) movements – the latter involving only about 20% of the working population, despite being around for more than a decade. “None of these trends happened overnight,” he says, noting their evolutionary change. “They start with a few early adopters that are willing to go out on a limb and try something untested, with a lot of employers that are interested, but sitting on the sidelines.”

employees,” she told the group.

Fronstin reports that he has spoken about private exchanges to employers in Dallas, with future stops slated for Chicago, San Francisco, St. louis and Boca raton, Fla. “There is a lot of interest in it,” he says, especially with employers increasingly

describe its private exchange as a

eager to pursue more aggressive action on taming health care costs.

experiences in the vein of Amazon.com

be simple and accommodating. “We have employees who don’t understand ‘co-insurance,’ so offering five different plans from six different carriers we don’t think actually helps meet the needs of Confusion also may reign among selfinsured employers about whether they would relinquish control over their health plans by participating in a private exchange. Kreuger says it was “definitely a conscious decision” for Mercer to “marketplace.” The thinking was to reflect a desire for consumer-oriented and other well-known online

Based on this early level of interest, as much as 25% of employer-sponsored coverage could be available through private exchanges in just a few short years, eric

shopping brands. n

Grossman, Senior Partner in Mercer’s health and benefits business, recently predicted. Any such success, no doubt, must be tied to careful communication, which has

Bruce Shutan is a Los Angeles freelance

been a missing ingredient with CDhPs. Sherri Bockhorst, a Principal with the Buck

writer who has closely covered the

Consultants health Insurance exchange, suggested at a Midwest Business group on

employee benefits industry for 25 years.

PROVIDING SERVICE TO THE INSURANCE INDUSTRY FOR OVER 35 YEARS IN OVER 30 STATES Audits Tax Preparation, Compliance and Minimization NAIC Annual Statements, assistance and preparation Management Consultation Expert Witness Regulatory Matters

Contact: William L. Shores, CPA 17 S. Magnolia Ave. Orlando, Florida 32801 (407) 872-0744 Ext. 214 Lshores@shorescpa.com

April 2013

The Self-Insurer

HELP YOUR CLIENTS

TO THE BENEFIT OF BENEFITS. Do a good deed today. Back in the day, “benefit” meant “good deed.” Sun Life helps you help your clients deliver group and voluntary benefits. Our plans are easy for employers to administer and easy for employees to understand—and value. When your clients get coverage— life, short- and long-term disability, cancer and critical illness, dental, stop-loss—we help them see that benefits aren’t just about attracting and keeping employees. Benefits do good for people. And that feels great.

Life’s brighter under the sun

sunlife.com/wakeup Group insurance policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states except New York. In New York, group insurance policies are underwritten by Sun Life Insurance and Annuity Company of New York (New York, NY). Product offerings may not be available in all states and may vary depending on state laws and regulations. Cancer/Critical Illness products are not available in New York. © 2013 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

GVAD-3173 SLPC 24719 01/13 (exp. 01/15)

The Self-Insurer

| April 2013

Foundation Carves Out Important role in Support of the Self-Insurance Industry

he Self-Insurance educational Foundation (SIeF) has been around for more than 20 years, but its

involved in the self-insurance/alternative risk transfer industry. This has included the production of high quality publications providing reference information about self-insured group health plans, group self-insured

work in support of the self-insurance

workers’ compensation programs and captive insurance companies. Since the initial

industry has really gained traction over

publication dates, thousands of copies of the publications are now in circulation.

the past couple of years. It’s poised

SIeF recently announced the release of a new report entitled “Policy

to take an even higher profile in the

Characteristics in the employer Medical Stop loss Market,” which provides objective

months and years ahead.

information about stop-loss coverage for self-insured employers nationwide.

Originally established as 501(c)(3)

The foundation retained Milliman to aggregate policy data from eight of the

organization affiliated with the Self-

country’s largest employer stop-loss insurance (eSl) carriers, representing an

Insurance Institute of America, Inc. (SIIA),

estimated 50% of the total marketplace. Based on the data aggregation results,

SIeF has in the past sponsored essay

Milliman found the following:

contests and internship programs geared

• employers with 100 or fewer covered employees represent approximately

for college students pursuing degrees in

one-quarter of the eSl market if the market is measured by count of

insurance and/or risk management.

employers. If measured by covered employees, however, that same segment

More recently, organization’s mission

has been modernized in way to provide more direct value to those currently

April 2013

The Self-Insurer

represents only 2% of the eSl market.

• Most eSl purchasers obtain both specific and aggregate stop loss. however, employers with over 1,000 employees are more likely to purchase specific

upcomingeVeNts

stop loss without aggregate. very few employers found in the underlying data purchased aggregate coverage without specific stop loss. • The data included employers that purchased specific deductibles ranging from $5,000 to $2,000,000. however, 81% of employers purchased deductibles of $50,000 or greater.

27th Annual Legislative/regulatory Conference April 17-18, 2013 • Washington Marriott at Metro Center • Washington, DC SIIA’s Annual legislative and regulatory Conference is your opportunity to hear directly from the policy-makers who will shape the health policy agenda in 2013 and beyond. Experience the political process first hand by participating in SIIA’s popular “Walk on Capitol hill.” Meet with your federal legislators in their Capitol Hill offices and let your voice be heard. SIIA staff will set up your appointments, provide you with “talking points” and lobbying materials in advance of your meetings.

• The median specific deductible found in the calendar year (CY)

Self-Insured Workers’ Comp Executive Forum

2012 data across all plans was

May 29-30, 2013 • Chase Park Plaza Hotel • St. Louis, MO

$80,000. For groups with 50 or

SIIA’s Annual Self-Insured Workers’ Compensation executive Forum is the country’s premier association sponsored conference dedicated exclusively to self-insured Workers’ Compensation funds. 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 self-insured/alternative risk transfer industry.

fewer covered employees, the median deductible was $35,000. For groups of 51-100 employees, the median was $45,000. • Less than 0.2% of specific stop loss policies had specific deductibles of $10,000 or less. About 0.3% of specific stop loss policies were written with specific deductibles of less than $20,000. • The data included employers that purchased aggregate corridors ranging from 110% to 200% of expected claims. By far, the most

International Conference June 10-12, 2013 • Newport Beach Marriott Hotel & Spa • Newport Beach, CA Beyond Emerging: Innovations in Self-Insurance Around the Pacific Rim 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.

common corridor (found on 90% of policies with aggregate coverage)

33rd Annual national Educational Conference & Expo

was 125% of expected claims.

October 21-23, 2013 • Sheraton Chicago Hotel & Towers • Chicago, IL

SIIA members can download the entire report for free on-line through the members’ only section of the association’s web site at www.siia.org. Non-SIIA members may purchase a

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 four fastpaced, activity-packed days.

PDF of the report for $100.

The Self-Insurer

| April 2013

This report would not have been possible without contributions and support from:

Mgu excess Insurer Forum). Their participation would not have been possible without the foundation’s involvement. Additional projects are now in the planning stage and will be announced later the year.

• Berkley Accident & health

It’s important to note that SIeF’s funding comes from voluntary contributions

• Companion life Insurance Co.

and through participation in fund-raising events, such as the popular SIeF golf

• hCC life Insurance Company

tournaments that are typically held in conjunction with the SIIA’s educational

• hM Insurance group

conferences and events.

• ING Employee Benefits

The foundation will be holding its next fundraising even this Fall in conjunction

• Optum

with the SIIA National Conference & expo in Chicago. But this time, the activity be

• Sun life Financial

a little different...watch for details coming soon.

• Symetra Financial SIeF has also coordinated multiple educational sessions on Capitol hill, which have been designed to help congressional staff members understand the basics about selfinsurance and captive insurance. The foundation is uniquely positioned to hold such briefings because 501(c) (3) organizations can sponsor food & beverage services in conjunction with these events, where as SIIA would be restricted from doing so because it is a lobbying organization. This educational initiative directly supports SIIA’s lobbying efforts because before members of Congress and their

All contributions to SIEF are full tax deductible, so by financial supporting the foundation you can also reduce your company’s tax liability – a true win-win situation. The foundation is governed by a board of directors comprised of well-known industry leaders including: • Freda Bacon, Administrator Alabama Self-Insured Workers’ Compensation Fund • Dick Goff, Managing Member The Taft Companies, llC • Heidi Svendsen, vice President, Clinical Programs Optum healthcare Solutions • Nigel Wallbank, President New horizon Insurance Solutions • Alex Giordano, vice President of Marketing elite underwriting Services For more information about foundation, please call 800/851-7789 or e-mail erica Massey at emassey@siia.org. n

staffs can be effectively lobbied, they need to understand the basics of how specific industries function. And selfinsurance is certainly no exception. SIeF has sponsored the keynote presentation of several nationally-known speakers for the past several SIIA National Conferences, such as robert Stevenson, who received rave reviews, and Fox News Political Commentator Steve hayes. Most recently SIeF sponsored the travel expense for rachel Leiser Levy, of the Office of Tax Policy with the uS Department of the Treasury at the Self-Insured health Plan executive Forum (formerly known as the TPA/

April 2013

The Self-Insurer

Mind over risk.

The secret weapon of businesses that dare to venture.

For firms with self-funded health plans, the potential risk of a catastrophic loss can shatter an enterprise. For nearly 35 years, HCC Life has been providing medical stop loss products — allowing our clients to take on opportunity with confidence. Our experience, underwriting talent and industry-leading financial ratings prove our strength, stability and commitment to our clients. We call it Mind over risk.

HCC Life Insurance Company hcc.com/life

For more information, visit us online at hcc.com/life. A subsidiary of HCC Insurance Holdings, Inc.

msl2162 - 03/13

The Self-Insurer

| April 2013

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 SelfInsurer has been delivering information to the selfinsurance/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 ggrote@sipconline.net. The Self Insurer also has advertising opportunities available. Please

contact Shane Byars at sbyars@sipconline.net for advertising information.

April 2013

The Self-Insurer

Trusted Partners, Ensuring Your Success.

Successful employee benefit sales requires a team effort. As one of the nation’s largest direct writers of medical stop-loss, IHCRS is a business partner you can count on.

Find us at www.ihcrisksolutions.com.

Policies underwritten by Standard Security Life Insurance Company of New York . IHCRS 2-13

The Self-Insurer

| April 2013

SIIA PreSIDeNT’S MeSSAge Les Boughner

t. louis, Missouri is known as the “gateway to the West.” It will also be the “gateway to relationships” May 29-30th at SIIA’s 15th Annual Self-Insured Workers’ Compensation executive Forum, the country’s premier association-sponsored conference dedicated exclusively to selfinsured Workers’ Compensation funds. expected attendees include group Self-Insured Workers’ Comp Fund executives/Directors, Workers’ Compensation Self-Insurers, Third Party Administrators, excess Insurance Carrier/reinsurers, Attorneys, Accountants/ Actuaries, risk Management Consultants and Industry Service Providers. As with all SIIA events, there will be tremendous networking opportunities that are specifically designed to help you strengthen your business relationships within the self-insured/alternative risk transfer industry, along with a superior educational program. educational sessions include:

Good, Bad and Ugly An interactive panel with Lyndon Gross, M.D., Ph.D., Orthopedic Surgeon, John Krause, M.D., Orthopedic Surgeon, Patricia Hurford, M.D., Physical Medicine & rehabilitation, James Coyle, M.D., Spinal Orthopedic Surgeon, Michael Banahan, J.D., Senior Partner, Defense Attorney, evans and Dixon, and John J. Larsen, J.D., Plaintiff Attorney, larsen & hess Cheryl Kane discussing a variety of case scenarios depicting aspects of a workers’ compensation claim that most industry experts would view as a “Bad or ugly” decision, report, medical evaluation, treatment, etc. The role of this multi-disciplined panel is to comment on the “Bad or ugly” scenario and discuss what should have been done (“The good”). The panelists are all highly respected members of their respective professions.

Excess Work Comp Carrier Claim Partnerships: Don’t just make a 911 call for a catastrophic claim, make them your new BFF Mark Sidney, vice President of Claims, Midwest employers Casualty Company, Mitch Neuhaus, vice President – Claims, Safety National, Mary Faith Green, Team Manager, Broadspire and Lynn Rogers, RN, CCM, Area Manager II, Broadspire FCM will host a claims panel discussion of strategies for claim managers to leverage their excess carrier partnership beyond the required claim reporting requirements. Approximately 90% of all excess Work Comp claims slowly develop over 5-10 years. learn how your excess carrier can help not only for catastrophic claims but to identify early strategies to utilize for claims that may have adverse loss development.

Don’t Let Age Become a Statistic:What Every Employer Needs to Know About Older Employees and Loss Prevention Gary T. Anderberg, PhD, Practice leader, Analytics and Outcomes of Broadspire will outline for employers how to develop age sensitive loss control,

April 2013

The Self-Insurer

safety training, and career development programs. The presentation will highlight three case studies and focus on on-the-job accidents, but will also look at other aspects of auto and general liability.

Different Expert Perspectives on Opioids and Workers’ Compensation The use of opioids has become a costly and concerning trend nationwide and is particularly difficult to manage in the Workers’ Compensation system. even though opioids can be highly addictive, five out of the top fifteen most commonly prescribed drugs in Workers’ Compensation are opioids. While intended primarily for acute care and end of life pain management, long term use is common within the workers’ compensation system. hear from an individual who has firsthand experience with this issue as she became heavily dependent upon opioids while recovering from an injury. She is no longer dependent upon opioids and will share the story of how opioids affected her life. Marcos A.

Iglesias, M.D., Medical Director, Midwest employers Casualty Company will then share how MeCC collaborates with business partners to manage opioid costs and improve the quality of life for the injured employee.

Is It Worth It to Construct and Maintain a WC PPO Network or Should Self Insurers Identify and Try to Avoid Cost Intensive Providers? Edward J. Bernacki, M.D., MPH, Professor of Medicine, Director, Division of Occupational Medicine, Johns hopkins university, School of Medicine and executive Director, health, Safety and environment, The Johns hopkins health System and university will discuss how many self-insured programs continue to rely on the traditional PPO network model of driving medical care based on achieving in-network PPO provider/ facility discounts. Alternatively a few enlightened Work Comp program leaders have engaged strategies that drive improved total claim costs by engaging outcome based medical analytics. he will demonstrate how you can learn to reduce total costs while providing high quality care & treatment for your employees while achieving better total cost outcomes. If you are looking for cutting edge strategies to differentiate the quality of care and improve the results of your WC program, this session will provide you with solutions.

roundstone Management, ltd and Marc R. Poulos, executive Director and Counsel, Indiana, Illinois and Iowa Foundation for Fair Contracting • Tips and Tactics - A Guide to Executive Safety Management, presented by John Primozich, CSP, ARM, loss Control Manager, The Builders group of Minnesota and Terry S. Buckhout, regional AvP risk Control, Meadowbrook/TPA Associates • The Annual Self-Insured Group Panel Discussion with Terry Duke, AgComp Self Insurance Fund (SIF), David G. Johnson, Esq., Corporate Counsel, Self Insured Solutions, Edward G. Wright, New York lumbermen’s Insurance Trust Fund • Solutions are Plentiful, Leadership is Scarce, presented by Frank Pennachio, The WorkComp Advisory group • What can Self-Insured Workers’ Comp Payers Learn from the Self-Insured Group Health World? presented by Jennifer Christian, M.D., MPH, President, Webility Corporation, Carrie Hatch, AmeriBen, David Iskowe, Founder and Chairman, enableComp, and Robert Jackson, COO, Stratose, Inc. • Captive Insurance Strategies for Group Health Risks, presented by Andrew Cavenagh, President, Pareto Captive Services, llC The conference will conclude Thursday, May 30th with a conference party that is not to be missed! For more information on SIIA’s 15th Annual Self-Insured Workers’ Compensation executive Forum, including registration and sponsorship opportunities, please visit www.siia.org or call (800)851-7789. n

Breakout Sessions will include: • Healthy Employees Mean Healthier Productivity, presented by Randy Gardner, 4g Biometrics • Taking Your Claims From Good to Great, presented by Mark Walls, vice President – Claims, Safety National • Union Carve Out and other Unique Programs, presented by Donald McCully, vice President Sales,

The Self-Insurer

| April 2013

SIIA would like to recognize our leadership and welcome new members Full SIIA Committee listings can be found at www.siia.org

2013 Board of directors

Committee Chairs

ChAIrMAN OF The BOArD* John T. Jones, Partner Moulton Bellingham PC Billings, MT

ChAIrMAN, AlTerNATIve rISK TrANSFer COMMITTee Andrew Cavenagh President Pareto Captive Services, llC Conshohocken, PA

PreSIDeNT* les Boughner executive vP & Managing Director Willis North American Captive + Consulting Practice Burlington, vT vICe PreSIDeNT OPerATIONS* Donald K. Drelich, Chairman & CeO D.W. van Dyke & Co. Wilton, CT vICe PreSIDeNT FINANCe/ChIeF FINANCIAl OFFICer/COrPOrATe SeCreTArY* Steven J. link executive vice President Midwest employers Casualty Company Chesterfield, MO

directors ernie A. Clevenger, President Carehere, llC Brentwood, TN ronald K. Dewsnup President & general Manager Allegiance Benefit Plan Management, Inc. Missoula, MT

ChAIrMAN, gOverNMeNT relATIONS COMMITTee Horace Garfield vice President Transamerica Employee Benefits louisville, KY ChAIrWOMAN, heAlTh CAre COMMITTee elizabeth Midtlien Senior vice President, Sales Starline uSA, llC Minneapolis, MN ChAIrMAN, INTerNATIONAl COMMITTee greg Arms Co-Leader Mercer Marsh Benefits global leader, employee health & Benefits Practice Marsh, Inc. New York, NY

SIIA New Members regular Members Company name/ Voting representative

Jenni villane vice President, Operations Ahart Benefit Insurance Services Fresno, CA Myrna harris CeO Crescent health Solutions, Inc. Asheville, NC lauren Murphy vice President, Business Development Magellan Pharmacy Solutions Orlando, Fl Chad Wischmeyer Partner Oliver Wyman Actuarial Consulting, Inc. Atlanta, gA Donald Davis CFO Proximiti Communications, Inc. Tampa, Fl

ChAIrMAN, WOrKerS’ COMPeNSATION COMMITTee Duke Niedringhaus vice President J.W. Terrill, Inc. St louis, MO

elizabeth D. Mariner executive vice President re-Solutions, llC Wellington, Fl Jay ritchie Senior vice President hCC life Insurance Company Kennesaw, gA

| Self-Insurer The Self-Insurer April 2013 | The

Bridge the Gaps with HM Stop Loss

As a leader in employer stop loss, HM Insurance Group offers a range of plan design options to create risk management solutions for self-funded groups. We’ve built our reputation on strong service, expert underwriting and prompt claims payment from our dedicated team of specialists. Put HM’s expertise to work to provide financial security by bridging the gaps for your self-funded clients.

STOP LOSS ▪ WORKSITE: Critical Illness · Accident · Disability Income · Term Life ▪ LIMITED BENEFIT MEDICAL www.smarteranswersfaster.com

The Self-Insurer

| April 2013

April 2013

The Self-Insurer