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December 2017

The World’s Leading Alternative Risk Transfer Journal Since 1984



EAPs, clinical resources and benefit plan design, along with the right corporate culture, can help self-insured employers manage a host of addictions across group medical and work comp

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The World’s Leading Alternative Risk Transfer Journal Since 1984

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BEYOND Opioids

EAPs, clinical resources and benefit plan design, along with the right corporate culture, can help self-insured employers manage a host of addictions across group medical and work comp Written by Bruce Shutan

4 17


Volume 110

Outside the Beltway SIIA Leads Educational Effort in Maine Stop-Loss Review

19 ACA, HIPAA and Federal Health Benefit Mandates The Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates 24

Opioids and Your Injured Worker An expert explains the real impact of opioid therapy on your workers’ compensation costs

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2017 Self-Insurers’ Publishing Corp. Officers James A. Kinder, CEO/Chairman


Erica M. Massey, President Lynne Bolduc, Esq. Secretary

Reputation risk


Managing Plan Communication During a Time of Legislative Uncertainty


SIIA Endeavors


News from SIIA Members

Written by Karrie Hyatt

December 2017 | The Self-Insurer


BEYOND Opioids

EAPs, clinical resources and benefit plan design, along with the right corporate culture, can help self-insured employers manage a host of addictions across group medical and work comp


he nation’s opioid epidemic is so dire that it is supplanting concern about chronic diseases, cancer and other addictive behaviors such as smoking, warn industry observers and government officials alike. It’s also decimating the group medical, behavioral health and workers’ compensation areas for selfinsured employers, not to mention undermining talent management.

By Bruce Shutan

But a comprehensive and holistic approach that integrates employee assistance programs (EAPs) with clinical resources, coupled with the right plan design and cultures of health and safety, can make a significant positive difference.


“Opioids were over prescribed in the mid-1990s for a variety of reasons,” says Mark Pew, SVP at PRIUM, a division of Genex Services, LLC that seeks to prevent and eliminate directionless work comp claims.

“At some point, the side effects and symptoms from those side effects start compounding instead of dealing with the root cause, which led to a lot of inappropriate polypharmacy regimens.” Fentanyl or Actiq were often prescribed for chronic pain in work comp cases for years. But then Pew says there was a realization that the FDA never approved these drugs “for anything other than palliative care, especially end-of-life care, and it created all sorts of nasty side effects.” People with nonspecific low-back injuries whose pain isn’t going away can end up developing anxiety, insomnia or depression, as well as obesity from lethargy and constipation from drugs to deal with their weight gain, according to Pew. The gateway to addiction for some may have begun with a botched surgery that proved to be unnecessary in the first place. In many instances, he says more conservative treatments involving Aleve or a combination of ibuprofen and acetaminophen, physical therapy, chiropractic care. yoga, tai-chi or meditation “would have been more than sufficient.”

the Blue Cross Blue Shield Association. In fact, a report released by U.S. Surgeon General Vivek Murthy suggested that more Americans take prescription painkillers than use tobacco products and struggle more with this issue than cancer. The scourge of drug abuse is engulfing the workplace. As many as 70% of employers say narcotic painkillers have affected their business operations, reports the National Safety Council. The $78 billion cost of opioid use, abuse and treatment in the U.S. estimated by the National Institute on Drug Abuse in 2013 translates into about $756 per employee per year. Workers’ compensation claims costs are ten times higher when long-acting opioids are involved, noted a New York Times report that cited multiple government sources. 

A most bitter pill With President Donald Trump recently declaring it a national health emergency and the Food and Drug Administration (FDA) seeking to increase medication-assisted treatments for opioid addiction, a new war on drugs is being waged. Opioid abuse skyrocketed 500% in the past seven years, cautions a report by

December 2017 | The Self-Insurer



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drive benefit costs, he says, adding one study concluded that opioid abusers cost about $16,000 on average vs. non-users at just $1,800. “It’s a much more costly affliction or condition than traditional sickness, and probably chronic disease, to some degree,” he warns. About 80% of chronic disease involves opportunities for employers to pick low-hanging fruit from a cost-saving standpoint, “but the reality is 80% of all chronic disease costs are preventable and the result of six lifestyle behaviors,” he explains. About half of all work comp claims two years ago involved opioid issues, Ryan says. Another manifestation of the opioid epidemic is the adverse effect on talent management. He reports that “the rate of sudden abandonment of the job, either by choice, death or some other reason” is extremely expensive, especially in the executive ranks where the tab can swell to $200,000, $300,000 or $400,000. There’s significant data showing that the opioid epidemic is having a direct impact on both group health and work comp claims, notes Bob Mines, Ph.D., a psychologist and chairman of Mines & Associates, which provides managed behavioral health and EAPs. Robert Mines The opioid epidemic is not only a costly in terms of dollars and cents, but also lives lost, observes David Pawlowski, VP of administration at CuraLinc Healthcare, which provides an integrated suite of behavioral health and wellness programs. He says the estimated $20 billion in emergency room visits and inpatient medical care for overdoses includes an average cost of more than $92,000 to self-funded plans just to save the life of those who are admitted to the ICU. On top of that are costs related to higher absenteeism and presenteeism, as well as lower productivity and being more prone to cause an accident. Since roughly two-thirds of opioid abusers are employed, the epidemic “is taking a massive toll” on the workplace and society from multiple angles and is “exponentially getting worse,” cautions Lou Ryan, founder and CEO of SelfHelpWorks, Inc., whose cognitive-based lifestyle and disease management programs seek to improve population health. Half the expense can be traced to lost productivity, while high rates of comorbidity

On the behavioral health side, that includes multiple readmissions associated with high relapse rates that highlight a significant level of addiction with opiates and difficult recoveries. For injuries and surgeries, especially for work comp cases, he references a vicious cycle in which an opiate is prescribed and later replaced by cheaper street drugs like heroin when it’s discontinued by the physician. The dual diagnosis aspect of people with substance abuse issues who also suffer from mental illness is important to highlight, Mines says, because of data suggesting “their costs are 60% to 180% higher for the same medical condition if those comorbid conditions are untreated.”

Alcoholism and other addictions But this crisis may be the tip of a much bigger iceberg. The National Council on Alcoholism and Drug Dependence, for example, estimates that alcoholics are 2.7 times more likely to have injury-related absences at work, while 35% of ER patients with an occupational injury are at-risk drinkers. Moreover, the group labels marijuana “the most commonly used and abused illegal drug by employees, followed by cocaine, with prescription drug use steadily increasing.” It’s also worth noting that positive drug test results reached a 12-year high last spring based on an analysis of 10 million workplace drug screenings by Quest Diagnostics. An argument can be made that the U.S. has become largely complacent about other addictions in the face of an opioid epidemic. Take tobacco, which Pew observes is no longer top of mind because smoking isn’t as widespread as before, while alcohol has become “inculcated into the normal culture” since Prohibition. “Alcohol is by far the most widely abused drug in society,” Pawlowski explains. “It causes more deaths and is more costly than all other drugs combined.” Whereas alcoholism typically can take months or years to reach crisis proportions, he says December 2017 | The Self-Insurer



& Associates whose background is in organizational psychology and human resources, suggests an integrated approach that ties together pain management with the pharmacy benefits management and managed care components of self-funded health plans. “It allows for better continuum of care,” she says, which can lower costs and improve outcomes. In addition, she cites intangible cost benefits when employers not only offer helpful resources to employees and their families, but also allow so-called mental health days to help recharge one’s proverbial batteries.

EAPs to the rescue? Mark Pew the challenge with opioid abuse is that it can become a crisis in a matter of days or weeks. Addiction is often accompanied by a pain management issue, according to Pawlowski, who lament’s the knee-jerk reaction to write a prescription than consider alternative treatments such as mindfulness meditation to manage chronic pain or mental illness. His point is to resolve the underlying issue. Untreated alcoholic or substance abusers also cost their families more on the medical side in terms of stress, Mines adds. Despite repeated warnings about unhealthy foods and beverages by U.S. Surgeon General, Pew says obesity has become an epidemic in children as well as adults. A puritanical view also precludes anyone from even talking about addiction to sex, he adds. Mental illness is another largely unchecked issue, which he laments has led to Xanax and Valium “rampantly overprescribed,” along with Ritalin for children who are diagnosed with attention deficit and hyperactivity disorder. Dani Kimlinger, Ph.D., CEO of Mines 8

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Any fix for the opioid epidemic or other addictions rest with individuals identifying that they have a problem and seeking treatment. “That’s where the EAP is a huge resource,” notes Pew, who earlier this year began helping his employer clients incorporate EAPs into their corporate wellness programs, as well as HR and riskmanagement strategies. He believes this comprehensive view is more effective at helping manage absenteeism, presenteeism and cascading side effects.

and increase the likelihood of follow through with treatment. Finally, it should be fully integrated with the mental health and substance abuse component of the medical plan because opioid addiction will often require longerterm treatment. He emphasizes a variety of outpatient and inpatient treatment options available, including medicationassisted treatment, along with ongoing case management. The thinking is that it will help avoid readmissions that diminish clinical outcomes and spike health care costs. Self-funded employers also can ensure that their pharmacy vendor has the proper monitoring and the rules to red flag a case that could be indicative of a pattern of opioid abuse, Pawlowski says. Another recommendation is to establish protocols to ensure that employees meet regularly with their physician and the appropriate clinicians are prescribing medications to treat these issues. To help erase the stigma associated with seeking help, Mines suggests a multimedia

“EAPs can play a vital role in helping selffunded employers address what really is a unique problem of opioid abuse,” Pawlowski says, “but to be effective, it has to be built and positioned in a very specific way.” For starters, he says it must be an entry point for all mental health and substance abuse services, and it helps to include a toll-free number for the EAP on the back of every insurance card. It also should provide 24/7 access to licensed and experienced professionals who conduct a comprehensive clinical assessment along with evidencebased strategies that enhance motivation

Dani Kimlinger


marketing campaign supported and promoted by an organization’s leadership that encourages the use of behavioral health benefits and drug treatment. It could include benefits forums or health fairs, company newsletters and social media, as well as spotlighting stories on celebrities who have talked about their own recovery process.

a culture of accountability, Pew says employers can expect to see a marked decline in prescription drug and medical costs, as well as the duration or severity of workplace accidents and injuries. Intangible benefits include higher productivity when he says employees are more engaged and less distracted, as well as more physically, emotionally and psychologically fit.

Removing this stigma is one key to success. Only about 10% of Americans with substance abuse problems receive treatment, Ryan adds.

“Corporations need to be leaders from a cultural standpoint as well as every other way that they were designed to run their businesses,” he suggests, noting how people spend most of their waking life at work. “This kind of abuse and overuse is what created the Roman Empire to fall, and the United States is not too big to fall if these kinds of things begin to dominate.”

Employee wellness programs could be used to warn about the dangers and the risk of developing addiction, as well as realize it’s a biological issue and not about human weakness, Ryan suggests. This stands in stark contrast to addictions involving tobacco, food addictions or sex, which he says start with a cognitive addiction.

Ryan says it’s critical to have ongoing after-care support and check-in meetings with individuals in recovery, especially for safety-sensitive environments.

Self-funded health plans must treat the mental part of a substance abuse problem or “it will almost guarantee recidivism,” he adds. “Pain medication is used to give people relief from emotional or physical discomfort, and people who are addicted to opioids, food, alcohol, or tobacco take those drugs for the same reason.” In short, he says, “cognitive approaches that reprogram the neural pathways are essential for a full recovery.” By aggressively managing addiction issues and creating December 2017 | The Self-Insurer



Nuanced packaging raises concerns Drug packaging is a critical part of the safety equation. “Most people don’t understand they’re getting an opioid because it comes in Oxys and says Narco. It never says opioid,” explains Larry Twersky, CEO of TimerCap LLC, which has developed a mechanism that detects how long it has been since a pill bottle was opened. With more than half of dependents also being covered under a health plan, Twersky cites the importance of clear safety packaging and caps for pill bottles and to keep dangerous scripts away from children. He says there are several safety principles for measuring and monitoring medicine and disposing of unused medications, which can help prevent an accidental overdose of opioids in the home. “There are some things employers can do that could mitigate the risks of their employees becoming long-term addicted,” according to Twersky. One solution is to establish a drug policy to keep employees who are prescribed pain medication from seeking illicit drugs and falling down a slippery slope that undermines workplace safety. In doing so, he says the goal is to fuse a prevention strategy with the need for meaningful treatment and therapy. Another idea is let patients know when a pharmacy benefit is dispensed that they can choose a safe alternative. Whether someone uses a stopwatch or one of his company’s timer caps, he says it’s imperative to measure one’s pain level, interval and what drug is being taken. “We see this work not only for opioids,” Twersky adds, but also to gauge marijuana levels before someone gets back behind the wheel of a motor vehicle. Vital label and safety information is particularly important with a powerful drug like Naloxone, which he says can help prevent workplace injuries. Citing a CDC study that shows 52% of all opioid and heroin addiction started in somebody’s medicine cabinet, he believes it should be mandatory for self-insured employers to offer an opioid prevention kit. At just $2 to $3 per kit, he says this modest investment would be well worth avoiding the $70,000 to $90,000 average cost of a full-therapy opioid treatment and could generate “a huge ROI.”


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Bruce Shutan is a Los Angeles freelance writer who has closely covered the employee benefits industry for nearly 30 years.

Captives Primed to Take On


R e p u t a t i o n

R i s k

uring the last seven years, reputation risk has emerged out of nowhere to become one of the biggest enterprise risk worries for companies of any size.Yet, the coverage is so new that insurance products didn’t really exist for it before 2010. Now, with the widespread use of online tools and the interconnectedness of businesses across the globe, a company’s reputation has become one of its most important assets. Reputational risk is generally defined as the risk a company may experience in the event of negative publicity. The reputation-damaging event could lead to loss of revenue, increased operating or regulatory costs, or loss of company value through such issues as a product recall, environmental incidents, security breaches, poor labor practices, or even mismanaged customer service. December 2017 | The Self-Insurer



Reputational risk is complex in that it is not easily quantifiable, as so much of it depends on public perception, which, at the best of times, is problematic to predict. A company’s reputation is based on consumer trust and if that trust is felt to be betrayed in any way, it could have a severe economic impact. In Aon Risk Solutions’ 2017 Global Risk Management Survey, a biannual survey with nearly 2,000 respondents, the risk that most concerned those surveyed was “Damage to reputation/brand.” The Executive Summary of the survey highlights a combination of factors that often play out together—such as a faulty product combined with social media reviews—as concerns for risk managers and companies.

“Social media has created a rapidly expanding network of new connections between individuals and groups, and technologies have accelerated accessibility,” as stated in the report, “But as more people turn to social media for news or to post stories, organizations are becoming more vulnerable to reputational risks. When the dominos start to fall, they fall fast. Damage to reputation restricts a company’s ability to attract and retain talent, which in turn results in failure to innovate and meet customer needs.” 12

Reputation Insurance Reputational risk insurance coverage is available to insure a company’s valuable reputation, but its reach has not caught up the with need in the market place. According to John J. Kelly, managing partner at Hanover Stone Partners, LLC, “Until recently, reputational risk has been essentially unavailable in the marketplace. Over time, a select few underwriters got their toe in the water with relatively limited coverages that essentially provided indemnification for extra expenses incurred at the time of a major incident…. The business interruption products rely heavily on post-event forensic analyses, and have not gained much traction largely due to the vagaries of the claims process.” Even as CEOs and risk managers fear reputational exposure, there are very few insurers that offer a product solely insuring reputational risk. Using captives to self-insure reputational risk is quickly becoming a popular way to address the gaps in available coverage. Said Kelly, “Companies whose value is enhanced by their reputations for ethics, safety, security, quality, innovation, and sustainability are likely to benefit from reputation insurance [through captives]. This is because captives provide a capital efficient mechanism to address the costs of reputation risk—which have risen 461% over the past five years—and because captives [that are] structured properly signals quality risk financing practices to all stakeholders.” Captives, especially established ones, are in a good position to add reputation risk to their policies. The risk management techniques that go into a well-managed captive makes it easier for captives to create more precise actuarial models of events that could affect reputation, as well as allow them to more accurately underwrite the risk. Captives also have expanding access to reinsurers giving them opportunities expand the risks they cover.

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“What holds for most types of risks also holds for reputational risks in captives,” said Kelly. “The emergence of captives has materially shifted the focus from risk transfer of insurable loss exposures to third-party underwriters to formalized selfinsurance and pre-funding of the enterprise’s holistic risks that includes more reliance on the identification, measurement and quantification of risk exposures, as well as greater recognition across the organization of the organization’s risk profile and the opportunities to eliminate risks and mitigate loss by earlier detection.” Where commercial reputational risk products do exist, they primarily serve large, well-capitalized companies and have policies with large deductibles—one million dollars or more.

While any company could have a lot to lose in a reputational exposure, medium and small-sized companies could be even harder hit. “Reputation is a vital asset that in some companies is a source of significant value. For small to medium-sized companies, reputation resilience is what may allow them to survive an adverse cyber security event, product recall event, ethical breach or other potentially damaging event,” said Kelly. “For them, a captive is even more so important because small to mid-sized companies many times do not have the financial wherewithal to deal with the immediate financial consequences, let alone the potential erosion in market capitalization or net worth.”

Reputation Risk Metrics A big obstacle to getting reputational risk coverage for any company is the lack of actuarial data available for underwriting and pricing. How can actuaries quantify a risk that is based on public perception and was not monitored a decade ago? According to Kelly, “[Combining] big data and the mainstream acceptance of principals of behavioral economics, reputation value can now be quantified in financial terms.”

December 2017 | The Self-Insurer



One company, Steel City Re, has taken the lead in using “big data” to create metrics with which to quantify reputational risk in a product called Reputation Assurance. According to the company’s website, Steel City Re has created this parametric product based on independent data indexing of reputational value and by measuring stakeholder expectations over a 15-year period. “Prior to the introduction of the Steel City Re’s parametric product … captives were unable to price reputational risk with any actuarial credibility. The objectivity of the parametric approach seems to create a much more attractive strategy for both risk financing and risk transfer and has led to a boomlet in demand for reputation risk financing and transfer solutions that are based on Steel City Re’s data,” said Kelly, who serves as a marketing strategy advisor to the company.


“Steel City Re prices, underwrites, and supports parametric insurance products that protect companies, their officers and directors against financial losses when reputational crises occur,” continued Kelly. “Because the parametric solution is discriminatory for companies that qualify for risk transfer, Steel City Re’s policies, like Federal Deposit insurance or a warranty, express to a wide range of stakeholders both quality and value in a company’s leadership, governance and risk management practices. When paired with a captive insurer, Reputation Assurance’s expressive affirms quality governance and concurrently signals quality risk financing practices.”

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Reputation Risk Emerges Even with the advances made in underwriting reputational risk, it will be years before it becomes standard risk, if it ever does, with products offered for every type of company through the traditional insurance marketplace.

Karrie Hyatt is a freelance writer who has been involved in the captive industry for more than ten years. More information about her work can be found at:

As stated in Aon’s 2017 Global Risk Management Survey, “Risks that are currently difficult to insure are emerging as major concerns for global organizations. This means that the insurance industry will have to be more innovative and expand their products and programs to address some of the most complex and challenging risks.” Captives are already stepping up to meet the needs of emerging risks, offering some of the most innovative products in the marketplace. Reputational risk is no different, with captives carving out a new niche for themselves.

“The underwriting process for captives helps responsible corporate agents understand the relationship between what a business does to create expectations among its stakeholders, how those expectations underpin its reputation, how operational risks can place that reputation at risk, and the return on investment in mitigation strategies.” According to Kelly,

Do you aspire to be a published author? Do you have any stories or opinions on the self-insurance and alternati ve risk transfer industry that you would like to share with your peers? We would like to in vite you to share your insight and submit an article to The Self-Insurer ! distributed in a digital and print format to reach over 10,000 readers around the world. The Self-Insurer has been delivering information to the self-insurance /alternative risk transfer community since 1984 to self-funded employ ers, TPAs, MGUs, reinsurers, stoploss carriers, PBM s and other service providers.

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Byars at for advertising information.


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the Beltway written by Dave Kirby

SIIA Leads Educational Effort in Maine Stop-Loss Review MAINE

The Maine Bureau of Insurance (BOI) has established an apparently collaborative effort with the state’s health insurers and the self-insurance industry to create broad-ranging criteria for stop-loss insurance covering employer-sponsored selfinsurance health plans. “SIIA became involved immediately when the review was initiated,” said Adam Brackemyre, vice president of state government relations. “The State Government Relations Subcommittee of SIIA’s Government Relations Committee provided input on thirteen points of consideration that the BOI provided and we have presented our positions both in a written summary and at informational hearings in Augusta.”

Hearings presided over by BOI Superintendent Eric Cioppa and General Counsel Bob Wake have provided opportunities for testimony representing stop-loss supporters and those who would prefer a more restrictive stop-loss environment. “The BOI leaders expressed an overall objective to serve the interests of Maine consumers and insureds,” Brackemyre reported. “At the same time, they emphasized that they need more knowledge about the stop-loss marketplace. SIIA views this as an opportunity to lead a strong educational effort on behalf of our members and the thousands of Maine employees and dependents who belong to self-insured health plans.” Brackemyre believes the Maine stop-loss insurance inquiry will continue into the 2018 legislative season there. The BOI review was prompted by the legislature after a bill restricting stop-loss insurance was introduced early this year. The committee hearing the bill referred the subject to the BOI for its review.

Robert Melillo “We hope they don’t impose greater restrictions on stop-loss insurance, and the way we can influence that is to demonstrate how stop-loss policies make self-insured plans possible for many organizations,” Melillo said. “Regulators shouldn’t try to over-engineer the industries they oversee. Regulations are the guardrails, but members of the industries have to drive the car.”

The BOI’s approach met approval by SIIA member Robert Melillo, head of stop-loss for Guardian Life Insurance Company. “Maine

appears to be looking at this as a collaboration among the insurance industry and employers,” he said. “The more points of view that are represented, the better the outcome. December 2017 | The Self-Insurer


The Maine points of inquiry questioned whether the practice should be restricted. “We appreciate SIIA’s leadership with state government processes, and their efforts to educate state insurance departments on stop loss insurance,” Long said. At Maine’s first informational hearing in November, New Hampshire was held up by one witness as an example of more restrictive stop-loss regulation that includes two aspects that are opposed by SIIA, per-person aggregates for stop-loss policies and so-called “community rating” of policies. Rodger Bayne, president of Benefit Indemnity Corporation of Towson, Maryland, agrees with SIIA’s opposition to both those points. “A per-person aggregate minimum does not reflect any sound actuarial principle but makes self-funding more burdensome on the employer and even prohibitive in virtually all cases for plans under 100 employees.

Rodger Bayne Bradley Long, Vice President of compliance of Toiko Marine HHC – Stop Loss Group, observes that Maine’s regulatory inquiry fits a longstanding pattern among the states. “There’s nothing in here we haven’t seen before,” he said. Long agrees that Maine’s approach should be informed by as much real-life information as possible. He noted that New York has initiated a data call among the industry and employers to help provide credible and useful information to government lawmakers and regulators.

“Community rating in self-funding is simply another means to demand that the consumer pay more than should be required for their own coverage,” Bayne continued. “This is a methodology that leads to an ultimate death spiral as citizens of the state and employers withdraw rather than pay a subsidy to their neighbors.” Bayne believes that a good head start for educating state governments about self-insurance was provided by a Rand study that contributed to the Affordable Care Act (ACA). “It indicated that even under a system of government involvement, more people will be insured if there exists a robust self-insurance market,” he said. As the Maine stop-loss issue proceeds, SIIA members are invited to get involved by contacting Adam Brackemyre at (202) 463-8161or by email,

“Of course there’s no guarantee of how states will use market data, but it’s always worth the effort to provide it,” Long said. “They know where we are and they have our phone numbers if they think we can help contribute.” Long believes that the Maine government misunderstands the aspect of stop-loss insurance commonly known as lasering. “Until this is explained in detail, they think it’s a penalty rather than what it is, a useful risk management tool for self-funded groups that purchase stop loss coverage,” he said.


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Q& A T

he Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the Women’s Health and Cancer Rights Act) dramatically impact the administration of self-insured health plans. This monthly column provides practical answers to administration questions and current guidance on ACA, HIPAA and other federal benefit mandates. Attorneys John R. Hickman, Ashley Gillihan, Carolyn Smith, and Dan Taylor provide the answers in this column. Mr. Hickman is partner in charge of the Health Benefits Practice with Alston & Bird, LLP, an Atlanta, New York, Los Angeles, Charlotte and Washington, D.C. law firm. Ashley Gillihan, Carolyn Smith and Dan Taylor are members of the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner’s situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation. Readers are encouraged to send questions by E-MAIL to Mr. Hickman at

December 2017 | The Self-Insurer


Come Together: Executive Order Raises Potential Opportunities for Association Health Plans


ftentimes, otherwise unrelated employers may seek to join together to create economies of scale and pool risk for purposes of providing health coverage. Unfortunately, with limited exceptions (e.g., for a controlled group employers) current law imposes significant limitations on what entities can share health risk. An October Executive Order (EO)1 seems to indicate that the ERISA rules may soon become more relaxed for certain association health plan (AHP) arrangements. Current laws regarding AHPs involve a number of different federal and state laws, including ERISA, the Public Health Service Act (PHSA), and the Internal Revenue Code (the “Code”). The starting point is the definition of employer under ERISA § 3(5). The EO specifically directs the Department of Labor (DOL) to review and revise existing guidance under this definition so that more employers may offer coverage through an AHP.

qualifying as a large group health plan (“LGHP”); however, changes from current guidance may also generate controversy. For example, we expect some commentators to be concerned about erosion of the small group market due to the splitting off of lower risk individuals into AHPs, as well as erosion of some ACA consumer protections. In light of some recent high profile MEWA failures, some states may be concerned if DOL action undermines current state laws that regulate selffunded MEWAs. The following is a high-level summary of current law and analysis of possible DOL action, including issues under federal and state law:

Change to ERISA interpretation: The DOL has been directed to enable more employers to form AHPs that are considered a group health plan at the association level, thus presumably allowing the group health plan to be considered a single LGHP (rather than individual small group plans). This will likely be accomplished by relaxing existing tests used to determine whether the association is considered an “employer” under ERISA § 3(5). Currently the DOL (as well as case law) looks to whether there is sufficient “commonality of interest” among the employers unrelated to benefit plans and whether the employers “control” the association. The DOL has issued guidance specifically

A change in DOL position in this area will have a number of implications, the full extent of which will not be known until the DOL acts. Some will welcome greater ability to use AHPs under current law, e.g., some small employers may appreciate lower premiums and fewer insurance mandates as a result of


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relating to general business leagues such as chambers of commerce, and has typically concluded that the nature of the relationship of the employers (which is largely geographical) is not sufficient for a health plan sponsored by the chamber to be a single LGHP. This guidance may be revisited pursuant to the EO.

Note that despite the DOL position (and the Department of Health and Human Services (HHS)), some states may nevertheless continue to classify association coverage as small group health plans. Even if states do not take enforcement action against the issuer in such cases, this approach creates risks for participating employers, who may be subject to enforcement actions. Clarifying guidance from the DOL can help reduce these risks substantially.

In implementing the EO, DOL could potentially make changes without going through the regulatory process, because existing guidance is in advisory opinions rather than regulations. However, DOL will also need to consider the impact of case law in this area and the likelihood of potential legal challenges.

Impact on PHSA requirements: Under the PHSA, including regulations issued under the Affordable Care Act (ACA), the state-law characterization of association coverage is not relevant; rather, it is necessary to look through the association to determine how the underlying coverage is classified, i.e., as individual, small group, or large group. The Centers for Medicare and Medicaid Services (CMS) has stated their view that only in rare cases will the AHP be considered a single LGHP. Changes to the DOL interpretation of AHP status under ERISA should automatically carry over to the PHSA based on the statutory definition of employer under the PHSA, which cross references the definition of employer.

MEWA issues: Under current law, the DOL considers an AHP to be a multiple employer welfare plan (MEWA), even if the AHP is considered a single plan at the association level. Based on the relevant statutory provisions we do not expect the DOL position to change on this point. Thus, for planning purposes, MEWA status should be considered. ERISA has specific preemption provisions that allow states to regulate MEWAs.

For fully insured plans, states may impose and enforce requirements relating to reserves and contributions.

Permitted state regulation of self-funded MEWAs is much broader. State laws relating to self-funded MEWAs are preempted only to the extent that the state law is inconsistent with ERISA. State laws that provide more participant protections are not considered inconsistent ERISA.

December 2017 | The Self-Insurer


By statute, DOL has the authority through regulations to exempt selffunded MEWAs from state laws. DOL has not ever provided any exemptions; however, it is possible that they will do so in response to the EO. DOL does not have the authority to exempt self-funded MEWAs from state laws relating to reserve and contribution requirements. Depending on what action the DOL takes, new issues may arise as to whether certain of these provisions would become preempted by federal law.

Guaranteed renewability requirements: Under the PHSA, an insurer is not required to renew group coverage offered only through a “bona fide association” in the case of an employer whose membership in the association terminates. The definition of bona fide association for this purpose is distinct from the definition of an employer. That is, even if an AHP is considered a group health plan under new DOL guidance, the exception to the guaranteed renewal requirement will be available only if the association meets the specific definition of “bona fide association” under the PHSA.

The next several weeks should prove interesting as the agencies issue guidance pursuant to the EO directive.


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References: 1


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Opioids and Your Injured Worker

An expert explains the real impact of opioid therapy on your workers’ compensation costs By Edward J. Bernacki, M.D., M.P.H.


s a self-insured employer, one of your biggest challenges and potentially one of the most important contributors to your bottom line, is controlling the cost of your workers’ compensation claims. For many years our research has demonstrated that when an injured employee does not receive prompt care, the duration and costs associated with a claim will be higher. Furthermore, our research has also shown that the longer medical issues such as pain are not resolved the more claim costs will continue to rise.

What has not been well quantified is cost and duration impact on workers’ compensation claims if an injured employee has a prescription for opioids (like OxyContin and Vicodin) to treat chronic pain, as defined by a duration of greater than three months. Opioid addiction has become an alarming social concern in the past 15 years, in large part because physicians have escalated their reliance on them for pain management.


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This reliance on opioids is often coupled with escalating dosing over the course of an injury. Research1 has shown that the estimated total number of opioid prescriptions in the United States increased by 104 percent, from 43.8 million in 2000 to 89.2 million in 2010, with a six percent increase in the likelihood of someone receiving an opioid prescription.

Relating Opioid Use and Workers’ Compensation Claims In 2009, my colleagues and I began to look at the relationship between opioid use and worker’s compensation claims. We studied more than 11,000 lost-time injury claims filed between 1999 and 2002 (and closed by 2009) by the Louisiana Workers’ Compensation Corporation (LWCC). The LWCC is a private mutual insurance company writing workers’ compensation insurance for approximately 25 percent of the fullyinsured market in the State of Louisiana.

Prescribing Opioids in Combination with Benzodiazepines Through this research, we, among other researchers, observed that many of the injured workers who were being prescribed either short-or long-acting opioids for pain management were already using prescription benzodiazepines, like Valium or Xanax. The benzodiazepines were being used to manage long-term depression, anxiety or other psychological conditions, even though well-established guidelines advise against their concurrent use.

Using the same LWCC data set as our 2012 study, our research, published in JOEM in 2014, found that for injured workers who have been prescribed an opioid in combination with their existing benzodiazepine, their claims costs were on average $147,000 compared to $10,000 for claimants who were not prescribed both of these medications.

Managing the Duration of Opioid Use Previous research had shown that it takes longer for a worker to return to the job following an injury when they are being treated with opioids for pain. In research we published in 2015, we noted an association between the use of short-acting opioids, like Dilaudid and OxyContin, during the first 60 days post-injury and increased claims costs along and was also associated with a delayed return to work. However, other research indicated that there were

From our research, published in The Journal of Occupational and Environmental Medicine (JOEM) in 2012, we found that when an injured worker received a prescription for either short-or long-acting opioids, their claims were six times more likely to have a final cost $100,000 more than a claim by a worker not using opioids.

December 2017 | The Self-Insurer


no increased claims costs or lost work time when opioid use was limited to just the first two weeks after an injury.

Here’s what we wanted to know in that study: Is there a time frame in which opioids can be prescribed that is both safe and effective for a patient and does not increase the risk of having a final claim amount of over $100,000 and resulting in the worker being off the job for at least 3 years?

Upon further mining the 11,000+ LWCC lost time workers’ compensation claims, we looked at 7,211 claims that were unresolved for at least 180 days, where short-acting opioids were prescribed across four time frames: 0 to 30 days; 31 to 90 days; 91 to 180 days; and 181 days to 360 days.


The workers’ compensation literature has been fairly consistent in reporting that any opioid use following injury negatively impacts final claims costs and lost work time. That’s why our finding—based on a more comprehensive data set and greater investigative rigor than most similar studies—was so surprising: Our results show that there is no significant difference in claims cost or lost work time for a worker who does not take an opioid after they are injured and one who does, at least if that use is limited to the first 30 days post-injury:

No opioid use

(885 days; $31,331)

1 to 30 days of use

(716 days; $29,455)

That said, we also found that the longer an injured worker has been using an opioid— especially after the first six months post-injury—the greater the likelihood that they will lose more time from work and their final claims costs will exceed $100,000: 31 to 90 days

(853 days; $42,032)

91 to 180 days

(946 days; $54,564)

181 days +

(1,466 days; $113,633)

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Employees Can Return to Work Even While Taking Prescribed Opioids In 1992, I helped open the Johns Hopkins Occupational Injury Clinic to treat employees of the Johns Hopkins Hospital and University who were injured on the job. The Occupational Injury Clinic clinicians work closely with Safety and case managers in order to provide prompt diagnosis and treatment of an injury so employees can regain physical function and get back to their job as safely and promptly as possible.

The management of an injured employee’s pain is a vital component of our rehabilitation process. As a physician, I recognize that short-acting opioids (prescribed far more than long-acting opioids) are an important component in the overall management of someone’s intense pain caused by injury. And in many cases, that pain does not end at 30 days. As a self-insured employer, you don’t want to have to decide when enough pain medication is enough. At the Johns Hopkins Occupational Injury Clinic, we prescribe chronic stable daily doses of opioids for employees as long as they are compliant with their physical rehabilitation and their other medications, and they exhibit functional improvement. The doses of opioid

prescribed on a chronic basis in our Clinic are compliant with the Centers for Disease Control and Prevention Guideline for Prescribing Opioids for Chronic Pain2.

As I mentioned, previous studies have generally equated long-term opioid therapy with increased claims costs and lost work time, particularly when the opioids are prescribed beyond three months postinjury. So, we wanted to conduct another study that would take a closer look at the relationship between how long-term opioid use affected the outcome of workers’ compensation claims.

December 2017 | The Self-Insurer


Our most recent study looked at the opioid prescription patterns and related costs of 4,994 claimants from the Johns Hopkins Workers’ Compensation Claims System (JHWCCS). The JHWCCS is an administrative database that includes information on Johns Hopkins employees who are injured on the job. We constructed from this database three groups:

• Those employees who were prescribed opioid therapy for greater than three consecutive months (112; 64 of whom received opioids for more than a year);

• Those employees who were prescribed opioid therapy for less than three consecutive months (419);

• Those employees who were not

Here’s what our study found:

The opioid costs of the claimants whose prescriptions extended three months and more, compared to those prescribed opioids for less than 30 days, were significantly higher ($8,618 vs. $94), as were the average total cost per claim ($81,510 vs. $21,539). However, the data indicated that opioids did not independently account for this cost disparity.

In fact, opioid costs accounted for less than 4 percent of the average total claims costs, although this cost increased up to 14 percent for the long duration claims. The higher cost of long-term claims presumably was due to the increased number of provider visits, medical treatments (including physical therapy, injections, and surgery) and medical surveillance costs required for employees with more severe underlying injury.

Cost aside, the most unexpected finding of our study is that almost all (over 98 percent) of the claimants—even those receiving opioids for more than three years—were released to work safely while continuing their opioid therapy. In fact, it’s plausible that for someone recovering from a particularly severe injury, well-managed long-term opioid therapy may actually facilitate their return to work.

prescribed any opioids as part of their therapy (4,463).

December 2017 | The Self-Insurer



There is evidence that long-term opioid use for some individuals can reduce pain and improve functionality without any cognitive impairment. Of course, employees and employers need to be aware that sustained opioid use might impact an employee’s cognition and safety. For this reason, the employee taking opioids should continue to be monitored closely by an experienced practitioner. 3

Our finding—that long-term opioid use, in and of itself, does not preclude an employee’s ability to work—revolutionizes how we think about managing pain after an employee sustains a workplace injury.

Although there has been much debate about the opioid prescribing epidemic in the United States, our study suggests that physicians do not automatically need to limit their opioid therapy to 30 days or less after injury and that employees can be returned to work safely while taking chronic opioid medications, as long as the prescriber is a trained and experienced clinician and the prescribing remains within the range established by the Centers for Disease Control and Prevention.

About the Author Edward R. Bernacki, M.D., M.P.H., is a past president of the American College of Occupational and Environmental Medicine and has published numerous peer reviewed articles in the field of occupational medicine and worker’s compensation-related issues. Currently an associate professor of medicine at the Dell Medical School of The University of Texas at Austin, he is professor emeritus of medicine in the Department of Medicine and the director of the Division of Occupational and Environmental Medicine at the Johns Hopkins University School of Medicine. While at Johns Hopkins, Dr. Bernacki served as the administrator of the Johns Hopkins Self-Insured Worker’s Compensation Insurance Plan and developed and managed onsite occupational health clinics for large employers across the United States, which deliver to employers $2.80 of health care savings for every $1 spent on employee health care.



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1 PMC3955827/ 2 html 3 html

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As a leader in Group Captives, Berkley Accident and Health can steer you in the right direction. With EmCapÂŽ, our innovative Group Captive solution, we can help guide midsize employers to greater stability, transparency, and control with their employee benefits. With Berkley Accident and Health, protecting your self-funded plan can be smooth sailing. This example is illustrative only and not indicative of actual past or future results. Stop Loss is underwritten by Berkley Life and Health Insurance Company, a member company of W. R. Berkley Corporation and rated A+ (Superior) by A.M. Best, and involves the formation of a group captive insurance program that involves other employers and requires other legal entities. Berkley and its affiliates do not provide tax, legal, or regulatory advice concerning EmCap. You should seek appropriate tax, legal, regulatory, or other counsel regarding the EmCap program, including, but not limited to, counsel in the areas of ERISA, multiple employer welfare arrangements (MEWAs), taxation, and captives. EmCap is not available to all employers or in all states.

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Specialty Accident

Managing Plan Communication During a Time of Legislative Uncertainty By Corrie Cripps


or many employer-sponsored group health plans, this is open enrollment season. This normally busy time of year, coupled with the general public’s uncertainty about potential health care policy changes, has produced a more stressful environment than usual.

What’s happening at the federal level

While the congressional efforts to repeal and replace the Affordable Care Act (ACA) in 2017 have failed, the Trump administration is now taking executive and regulatory action to modify various aspects of the ACA. In addition, other guidance that may affect group health plans in 2018 is still pending. The following is a summary of the recent regulatory actions that will affect self-insured plans in 2018.


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Accommodation/exemption from the ACA’s contraceptive mandate On October 6, 2017, the Department of Labor (DOL) issued interim final rules (effective immediately) on religious and moral exemptions and accommodations to the ACA’s contraceptive mandate.1,2 These interim final rules allow a much broader group of employers and insurers to exempt themselves from covering contraceptives such as birth control pills on religious or moral grounds. While the interim final regulations do maintain the existing accommodations process, the process is now optional. In other words, employers could choose not to request an accommodation, or choose to revoke their current accommodation and instead claim exemption status. The key difference in an accommodation versus an exemption essentially impacts the third party administrator (TPA). Under the exemption, the TPA would no longer be responsible for providing the contraceptive coverage. The rules outline the process if an employer now chooses to revoke its current accommodation (which includes notifying the TPA and plan participants).

from discrimination under Title VII of the Civil Rights Act of 1964.3 It is important to note that the Department of Justice’s (DOJ) recent guidance conflicts with the Equal Employment Opportunity Commission’s (EEOC), an independent commission, stance that transgender employees are protected under Title VII.   The December 31, 2016, U.S. District Court injunction (applicable nationwide) on certain parts of the ACA Section 1557—the prohibitions against discrimination on the basis of gender identity and termination of pregnancy—is still in effect.4 The DOJ’s recent guidance does not specifically address ACA Section 1557. The U.S. Department of Health and Human Services (HHS) is expected to issue a new proposed rule on ACA Section 1557, which will likely include a religious exemption.   Disability claims and appeals rules may be delayed until April 1, 2018 Last December the Employee Benefits Security Administration at the DOL issued a final rule on disability benefit plans claims procedures changes, which are slated to become effective on January 1, 2018.5 There is now a proposed rule to move the compliance date to April 1, 2018 for these regulations. 6

DOJ memo on gender identity/orientation In a memorandum issued on October 4, 2017, to agency heads and US attorneys, Attorney General Jeff Sessions issued guidance to agency heads and US attorneys concluding that transgender individuals are not automatically protected

December 2017 | The Self-Insurer


These regulations are applicable to all Employee Retirement Income Security Act (ERISA) plans that offer disability benefits. The regulations generally align procedures for disability claims with those for group health plans under the ACA.

The withdrawal of this proposed rule does not remove the requirements for covered entities to comply with any of those regulations codified at 45 CFR parts 160 and 162. The other HIPAA Administration Simplification requirement to obtain and use Health Plan Identifiers (HPIDs) has been delayed since October 2014, with no new guidance issued.8

ACA emergency room regulations HIPAA rules



On October 4, 2017, HHS withdrew the January 2, 2014 proposed rule that would have required a controlling health plan (CHP) to submit information certifying compliance with certain Health Insurance Portability and Accountability Act (HIPAA) electronic transaction operating rules and standards.7

The American College of Emergency Physicians (ACEP) filed suit in May 2016 against the Departments of Health and Human Services, Labor and the Treasury (the Departments) regarding the ACA regulation for emergency services, applicable to non-grandfathered plans. Specifically, ACEP is concerned with the part of the rule that sets forth how much insurers/ plans are required to pay out-of-network physicians for emergency health care services.

On August 31, 2017, a federal court ruled that the Departments acted arbitrarily and capriciously in adopting final regulations under the patient protections provisions for emergency services.9 The court stated that the Departments did not “seriously respond” to the transparency and manipulation concerns raised in comments by providers and advocacy groups to the interim final rules. The court’s ruling does not invalidate the final regulations; instead the ruling sends the regulations back to the Departments and requires them to respond to ACEP’s concerns and proposals in a substantive manner.

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Medical stop loss insurance from Berkshire Hathaway Specialty Insurance comes with a most trusted name and the stability of an exceptionally strong balance sheet. Our executive team has 30 years of experience and a commitment to tailoring solutions and paying claims quickly. All of which is key to ensuring your program’s success for years to come. With so many choices, you can make this one with certainty.

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On August 22, 2017, the U.S. District Court for the District of Columbia concluded that the U.S. Equal Employment Opportunity Commission’s (EEOC) interpretation of a “voluntary” wellness program in its regulations is arbitrary and capricious, and has sent the regulations back to the EEOC for reconsideration.10

The EEOC has stated in its status report to the Court that it will need until August 2018 to reconsider its regulations on employer wellness programs and expects to issue a new final rule by October 2019.11 AARP is expected to respond to the EEOC’s status report and argue that revised regulations should be issued sooner.

In AARP v. EEOC, the AARP filed a lawsuit against the EEOC regarding its wellness program rules, which state that employers can cap incentives to participate in the wellness programs at 30% of an employee’s health insurance costs. The AARP argued that these incentives are so high that they are not truly “voluntary”, which means that older plan participants would have to incur financial penalties if they chose not to participate or divulge sensitive medical information in cases where the incentive requirement is that a health risk assessment be completed.

Executive order on health care

EEOC wellness regulation review

The court ruled in AARP’s favor, determining that the EEOC did not justify its conclusion that the 30% incentive level is a reasonable interpretation of voluntariness. However, instead of vacating the regulations the court remanded them to the EEOC for reconsideration.


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On October 12, 2017, the President issued an executive order on health care, which directs the Departments of Health and Human Services (HHS), Labor, and Treasury (the Departments) to develop regulations and guidance that could permit new health insurance options for employers and consumers.12

The executive order seeks to allow the Departments to look for ways to make it easier for small businesses to join Association Health Plans, expand on the availability and use of Health Reimbursement Arrangements (HRAs), as well as allow the sale of insurance across state lines.

The executive order does not specify a date in which a proposed rule from the Departments will be released.

IRS will reject individual tax returns that are silent on health coverage question The Internal Revenue Service (IRS) announced it will not accept electronically filed tax returns, and may suspend paper returns, where the individual does not answer the health coverage question. 13 Employers will need to ensure they are furnishing the Form 1095-B or the Form 1095-C, whichever is applicable, to certain employees by January 31, 2018.

What are the public’s concerns Two recent studies show that Americans rank health care policy changes as one of their biggest concerns. 14,15

The Transamerica Center for Health Studies study found that more than two-thirds (67 percent) of Americans reported having at least one chronic health condition, and 42 percent say losing health care because of a pre-existing condition is among their biggest fears.

The uncertain political environment around health care and the rising costs of health care undoubtedly cause stress, which ultimately affects the individual’s health status. In addition, many individuals are not taking advantage of the incentive programs and/or wellness programs offered by their employers, even though more employers are offering such programs. 16,17

How to communicate plan changes and spread awareness of incentives In order to neutralize the impact of uncertainty on plan participants, plans will need to engage more authentically with plan participants. For example, if a plan is removing coverage of a benefit, the plan administrator, or representative, should articulate the reason for the change, and be responsive to the plan participants’ feedback. And if new benefits or programs are being added to the plan, those should be communicated as well. As the results from the Transamerica Center study indicate, while employers might believe that their wellness and incentive programs are clear as day to their employees, many employees aren’t even aware that these programs exist in their employer-sponsored health plans.

In addition, there are notice requirements under ERISA and the ACA that plans need to follow when making plan changes. A recent lawsuit from the DOL reiterates the importance of complying with the ERISA documentation requirements.The DOL filed suit against Macy’s and two of its TPAs alleging violations of ERISA’s fiduciary duties. 18 The DOL states that at some point the plan changed the formula to calculate reimbursement of out-of-network claims, but Macy’s did not update its plan documents to notify plan participants of this change.The lawsuit states that this caused plan participants to overpay on certain claims.

December 2017 | The Self-Insurer


This lawsuit shows the continued importance of keeping ERISA plan documentation up-todate and ensuring that plan administration is consistent with the written terms of the plan.

References 1 Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the


Affordable Care Act, 26 CFR Part 54, 29 CFR Part 2590, 45 CFR Part 147, October 13, 2017, https://www.,

For plans and TPAs, being well-informed on regulatory developments is always of the upmost importance, but is particularly important for this renewal and open enrollment season due to rapid changes in the regulatory landscape. In addition to keeping plan documents updated, employers and plans should also clearly communicate any changes to help ease the transition for plan participants and avoid liability landmines.

(last visited November 6, 2017). 2 Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 26 CFR Part 54, 29 CFR Part 2590, 45 CFR Part 147, October 13, 2017, https://www.gpo. gov/fdsys/pkg/FR-2017-10-13/pdf/2017-21852.pdf, (last visited November 6, 2017). 3 Office of the Attorney General, Revised Treatment

Corrie Cripps is a plan drafter/compliance consultant with The Phia Group. She specializes in plan document drafting and review, as well as a myriad of compliance matters, notably including those related to the Affordable Care Act. 

of Transgender Employment Discrimination Claims Under Title VII of the Civil Rights Act of 1964, October 4, 2017,, (last visited November 6, 2017). 4 Section 1557 of the Patient Protection and Affordable Care Act, section-1557/index.html, (last visited November 6, 2017). 5 Claims Procedure for Plans Providing Disability Benefits, 29 CFR Part 2560, https://www., (last visited November 6, 2017). 6 Claims Procedure for Plans Providing Disability Benefits; Extension of Applicability Date, 29 CFR Part 2560, https://www., (last visited November 6, 2017).


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Healthy employees build strong businesses. What are you doing to strengthen yours?

As featured in the September 2016 issue of Self-Insurer Strengthen your business with In-Sight, the first truly integrated Employee Benefits, Workers’ Compensation and Health Management program. In-Sight puts the administrative and cost control efforts of these programs into the hands of a single, integrated team. Why? Integration allows us to eliminate administrative oversight, prevent duplicate claims and address potential health issues before they become costly problems. The result? Reduced claims spending and a healthier, more productive workforce. Call IPMG at (888) 470-9569 to learn how In-Sight can strengthen your business.


References (cont.) 7 Administrative Simplification: Certification of Compliance for Health Plans; Withdrawal, 45 CFR Parts 160 and 162,, (last visited November 6, 2017). 8 HPID,, (last visited November 6, 2017). 9 United States District Court for the District of Columbia, American College of Emergency Physicians v. Thomas E. Price, MD.,, (last visited November 6, 2017). 10 United States District Court for the District of Columbia, AARP v. United States Equal Employment Opportunity Commission,, (last visited November 6, 2017). 11 AARP v. United States Equal Employment Opportunity Commission, Defendant’s Status Report, https://gallery. wellness_regs_status_report.pdf, (last visited November 6, 2017). 12 Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States., October 12, 2017, (last visited November 6, 2017). 13 ACA Information Center for Tax Professionals,, (last visited November 6, 2017). 14 Transamerica Center for Health Studies, Healthcare Consumers in a Time of Uncertainty: Fifth Annual Nationwide TCHS Survey,, November 1, 2017, (last visited November 6, 2017). 15 American Psychological Association, Stress in America™: The State of Our Nation, press/releases/stress/2017/state-nation.pdf, November 2017, (last visited November 6, 2017). 16 Transamerica Center for Health Studies, Healthcare Consumers in a Time of Uncertainty: Fifth Annual Nationwide TCHS Survey,, (last visited November 6, 2017). 17 Fidelity Investments® and the National Business Group on Health®, Embracing a Broader Definition of Well-Being: Eighth Annual Employer-Sponsored Health and Well-being Survey, default/files/NBGH%20Fidelity_2017_WellbeingWebinar_Presentation05022017.pdf, March 2017, (last visited November 6, 2017). 18 Acosta v. Macy’s Inc., S.D. Ohio, No. 1:17-cv-00541


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As a successful 2017 comes to an end, we now look ahead to 2018. To help you stay informed and engaged in 2017, SIIA has an excellent line up of educational and networking events planned for the coming year.

Kicking things off for 2018 is the Self-Insured Health Plan Executive Forum, scheduled for March 5-7, 2018 at the Belmond Charleston Place in Charleston, SC. This popular SIIA event has been re-invented for 2018 to be faster-paced and highly interactive educational program, which will be enhanced by new technology features that will actively engage audience members from the beginning to the end. We have also created an appealing and centralized networking area adjacent to the educational sessions to help facilitate attendee connections. Participants are expected to include senior executives representing self-insured employers, third party administrators, stop-loss insurance carriers/MGUs and a variety of industry service providers. December 2017 | The Self-Insurer


The LatAm International Conference will be April 17-19, 2018 at the Quinta Real in Monterrey, Mexico. This event is designed to help attendees identify and understand selfinsurance/captive insurance business opportunities in Latin America — including counties that are considering allowing employers to self-insure, captive insurance company formations and medical travel partners.

Self-Insured Workers’ Compensation Executive Forum, May 15-17, 2018 at the Belmond Charleston Place in Charleston, SC is the country’s premier association sponsored conference dedicated exclusively to self-insured Workers’ Compensation. In addition to a strong educational program focusing on such topics as risk management strategies and innovative ways to prevent and manage loss, 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.

New in 2018 is Transcontinental Self-Insurance Symposium, June 4-6, 2018 at Lloyd’s of London in London, England. The political and business environments on both sides of the Atlantic have seen significant change in the past few years. This new event has been organized to help self-insurance industry executives from the U.S., U.K. and EU better understand key trends and the implications for business opportunities for all entities involved with alternative risk transfer arrangements.

We wrap up the year with SIIA’s 38th Annual National Educational Conference & Expo, September 23-26, 2018 at the JW Marriott Austin, in Austin, TX. The SIIA National Conference & Expo is the world’s largest event focused exclusively on the self-insurance/ captive insurance marketplace and typically attracts more than 1,700 attendees from around the United States and from a growing number of countries around the world. 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 fast-paced, activity-packed days. This is truly a can’t miss event!

For more information, including registration, networking and advertising opportunities and exhibiting info, please visit


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YOUR BEST PARTNER EARNS YOUR TRUST EVERY DAY Employers of all sizes experience high-cost medical claims. As an independent stop-loss provider with strong financial ratings, we’re here for you. Listening to you. Helping you design a stop-loss plan that meets your needs with specialized options. Delivering hassle-free claims reimbursements. Want a partner that earns your trust every day? Go with Sun Life. Ask your Sun Life Stop-Loss specialist how we can put our expertise to work for you.

STOP-LOSS | DISABILITY | DENTAL/VISION | VOLUNTARY | LIFE For current financial ratings of underwriting companies by independent rating agencies, visit our corporate website at For more information about Sun Life products, visit Group insurance policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states except New York, under Policy Form Series 07-SL REV 7-12. In New York, group insurance policies are underwritten by Sun Life and Health Insurance Company (U.S.) (Lansing, MI) under Policy Form Series 07-NYSL REV 7-12. Product offerings may not be available in all states and may vary depending on state laws and regulations. Š 2017 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. BRAD-6503f SLPC 28097 02/17 (exp. 02/19)



The Self-Insurance Institute of America, Inc. (SIIA) has announced that it is ramping up its social media presence. For the latest updates, highlights, and information regarding the self-insurance industry, be sure to follow us on each of our platforms: Twitter: Follow @SIIA_selfinsure and use #SIIA17 Facebook: Instagram: Follow @SIIA_selfinsure and use #SIIA17 LinkedIn: Follow the group page for updates and discussion You can also find links to all accounts using the buttons below. Be sure to let us know if you or your company has a social media account that SIIA should follow. For any questions or comments, please contact Wrenne Bartlett at




For more information contact: 800.851.7789 or

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SIIA Diamond, Gold & Silver Member News

SIIA Diamond, Gold, and Silver member companies are leaders in the self-insurance/captive insurance marketplace. Provided below are news highlights from these upgraded members. News items should be submitted to Wrenne Bartlett at All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at For immediate assistance, please contact Jennifer Ivy at If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy and Diamond Members Zelis® Healthcare Announces Acquisition of EthiCare Advisors Zelis® Healthcare, a market-leading healthcare information technology company, is pleased to announce the purchase of EthiCare Advisors. EthiCare is a healthcare cost management company based in Succasunna, NJ. As a trusted partner of employers, labor funds, third-party administrators and health plans, EthiCare has provided a holistic approach to high-dollar claim review since 2002. Additionally, EthiCare’s expertise in servicing stop-loss and reinsurance carriers is unsurpassed in the self-insurance group health market. December 2017 | The Self-Insurer


EthiCare derives healthcare cost savings through its high-dollar claim review product and its dialysis product offering, among other services. “At EthiCare, we pride ourselves on our comprehensive approach, our client tenure, our results and our experience in the industry. Zelis was a natural fit for our organization, as we share similar expectations of service and performance excellence,” said Mark Hartmann, Managing Partner & CEO of EthiCare Advisors. The EthiCare acquisition further enhances Zelis’ product portfolio supporting payer clients to achieve greater savings on high-dollar in-network and out-of-network healthcare claims. EthiCare is now a part of the Zelis Claims Integrity business unit led by Lori Sempervive, President. “EthiCare is well-known in our industry for its ‘white glove’ service approach to highdollar claims, and we look forward to providing payers with the same level of service they know and expect. We welcome our new team members to the Zelis Healthcare family, as we continue to extend our fully integrated solution for healthcare cost and payment management,” said Lori Sempervive, President of Claims Integrity for Zelis Healthcare.

“We are delighted to add the EthiCare product line to the Zelis portfolio. Bringing EthiCare into the Zelis family further enhances our ability to deliver better service and better performance for all payers as they endeavor to manage the cost of healthcare,” said Doug Klinger, CEO of Zelis Healthcare.

To learn more about Zelis Healthcare, visit us on Facebook, follow us on Twitter or connect with us on LinkedIn. About Zelis® Healthcare Zelis Healthcare is a healthcare information technology company and market-leading provider of end-to-end healthcare claims cost management and payments solutions. Zelis Healthcare focuses on network analytics and access, claims integrity and electronic payments for healthcare payers, providers and consumers in the medical, dental and workers’ compensation markets nationwide. Zelis Healthcare is backed by Parthenon Capital Partners. For more information, visit About EthiCare Advisors Founded in 2002, EthiCare Advisors, Inc. is an innovative medical claims settlement, cost containment and consulting services company that helps medical claim payers save money by focusing on the claims that ruin loss ratios, namely, catastrophic claims over $100,000 and dialysis claims. EthiCare is a three-time honoree of the Inc. 500|5000 award as one of the fastest growing privately-held companies in America. MEDIA CONTACT: Heather Ingram Zelis® Healthcare +1 (678) 341-1635


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Symetra Names David Attride Underwriting

Attride attended the University of Alabama. He earned a bachelor’s degree in business management from the University of Massachusetts Boston.

Regional Group Manager,

About Symetra

Stop Loss David Attride has joined Symetra Life Insurance Company as an underwriting regional group manager for medical stop loss insurance, with responsibility for the central/north Florida and Georgia markets. He is based out of Symetra’s Norcross, Georgia office.

Symetra Financial Corporation is a diversified financial services company based in Bellevue, Washington. In business since 1957, Symetra provides employee benefits, annuities and life insurance through a national network of benefit consultants, financial institutions, and independent agents and advisors. Symetra Financial Corporation had $40.3 billion in assets at Dec. 31, 2016. The company has offices in 20 cities, approximately 2.0 million customers and over 1,500 employees nationwide. Symetra is a wholly owned subsidiary of Sumitomo Life Insurance Company. Visit

Attride was most recently vice president, regional underwriting manager, southeast region, for stop loss and group life products at HCC Life Insurance Company in Kennesaw, Georgia. His 26-year background in medical stop loss underwriting also includes roles at Swiss Re (formerly GE Insurance Solutions) and SAFECO.

December 2017 | The Self-Insurer


AmWINS Group, Inc. Completes Acquisition of Multiple Insurance Programs from Willis Towers Watson AmWINS Group, Inc. (“AmWINS”), a global distributor of specialty insurance products and services, is pleased to announce that it has completed the acquisition of 15 insurance programs from Willis Towers Watson. The addition of these programs further strengthens AmWINS as the leading U.S.-based specialty insurance distribution firm, with more than 4,300 employees across 12 countries and over $14 billion in annual premium placements. The programs will become part of AmWINS Program Underwriters (APU), which currently underwrites 20 programs with over $150 million of premium. The 15 acquired programs have a team of over 110 experienced professionals with offices in Portsmouth, New Hampshire; Burlington, Vermont; Tampa, Florida; Detroit, Michigan; Denver, Colorado; Salt Lake City, Utah; and Hartford, Connecticut. Among the programs being acquired by AmWINS are MountainGuard, which provides underwriting, claims, and loss control services to the majority of ski resorts in North America, and DealerGuard, which provides Dealer Open Lot and Comprehensive Package coverages for franchised and independent auto, truck, and RV dealers.

About AmWINS Group, Inc. AmWINS Group, Inc. is the largest independent wholesale distributor of specialty insurance products in the United States, dedicated to serving retail insurance agents by providing property and casualty products, specialty group benefit products and administrative services. Based in Charlotte, N.C., the company operates through more than 100 offices globally and handles premium placements in excess of $14 billion dollars annually. To learn more, visit www.amwins. com. About AmWINS Program Underwriters AmWINS Program Underwriters (APU) is a managing general agency (MGA) specializing in affinity and program management. For over a quarter century, APU has built a reputation of developing and maintaining programs for a variety of niche markets that provide broad-based property and casualty coverage. For more information, visit About Willis Towers Watson Willis Towers Watson is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential.

To learn more about the 15 acquired programs, visit Terms of the transaction were not disclosed.


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Silver Members

About Golden Triangle

Golden Triangle announces Specialty Pharmacy Network:

Celebrating 10 years of secure cost management success 2007 – 2017. Our mission - Providing secure medical cost management solutions for our payor clients as well as reimbursement security and support for our provider clients; by doing the right thing, for the right reason in all situations. Call 615.712.6174 or email

GTRx Golden Triangle Specialty Network, LLC. (GTSN), a leading national dialysis cost management company, is excited to announce the addition of a Specialty Pharmacy Cost Management Network: GTRx. GTRx is focused on passing contracted discounts and significant savings to our clients. Working together we are creating significant savings on expensive medications typically billed on the medical spend of a health plan. GTRx is not a PBM. GTRx partnered with multiple Specialty Pharmacy providers for Reference Based contracts. GTRx impacts not only Rare and Orphan drugs, but Cancer, MS, Hemophilia, genetic disorders and other drugs & therapies often identified as high cost, frequent repetition, or lifelong needs. GTRx is headed by Hy Byrd, Vice President. Byrd was instrumental in growing the negotiated one-off program into a full-fledged national network.

“Hy has been a great asset to Golden Triangle,” shared Scott Williams, Senior Vice President. “He was able to take our existing program to the GTRx Specialty Network level very quickly and our clients couldn’t be more pleased with the results.” For more information about GTRx National Specialty Network contact Hy Byrd at or call 615.712.6289.

About GTSN Golden Triangle Specialty Network, LLC (GTSN) is a national secure cost management and consulting company focused on dialysis, specialty pharmacy, behavioral health and out-ofnetwork cases of all types. With headquarters in Nashville, TN, the goal of GTSN is to create fair, secure financial arrangements between providers and payors. We serve Group Health Plans, Fully & Self-Insured Plans, TPA’s, Stop Loss & Re-Insurance, MGU’s, Brokers, Consultants and Case Management organizations in all 50 states. Contact Scott E. Williams, Senior Vice President, at 615.712.6753, williamsS@ and visit

December 2017 | The Self-Insurer


Gilsbar One of America’s Top 100 Healthiest

To be considered for this honorable award, Gilsbar was scored on the following six critical elements of workplace wellness:


Culture and leadership commitment

Gilsbar selected out of 8,000 participating employers for the second year in a row. Gilsbar is honored to be the recipient of the prestigious “Healthiest 100 Workplaces in America Award.” This award is one of the highest, most-coveted distinctions, with only 100 companies in the US earning the designation each year.

“Gilsbar believes health is more than a business issue and the executives work to keep this at the forefront of our company culture,” said Mary Ann Loeffler, a Marketing

Foundational components Annual planning Communications and marketing Programming and interventions Reporting and analysis About Gilsbar, LLC Established in 1959, Gilsbar, LLC® is one of the largest privately-held insurance services organizations in the country. Recognized as a catalyst for creating healthy businesses, Gilsbar, LLC® offers self-funded and fully-insured benefit plan management services, along with Wellness, Advocacy, and overall Population Health Management. Gilsbar, LLC’s integrated delivery model improves the health and well-being of its members, resulting in significant health plan savings for its clients.

Coordinator and Gilsbar employee of

“Throughout our last few years of significant growth, our culture of health continues to be important to the executive team and is wellcommunicated to employees.” over 10 years.

“We’re at an important moment in health.” said Phil Daniels, Co-Founder of the Healthiest Employer awards program. “The confluence of data, technology and rise of specialized vendors are giving employers the tools they need to help stabilize cost and improve their population’s health. What organizations choose to do in this moment will shape the future of healthcare in America.” 50

The Self-Insurer |

Gilsbar, LLC® has been honored by Inc. magazine for its sustained growth, Modern Healthcare and Business Insurance magazines as a Best Place to Work, and WELCOA and the American Heart Association for its proven wellness methodology. Visit

2017 Finalist, Excellence in Design (Architecture) – Design-Build Institute of America

About Healthiest Employers®

2017 Outstanding Economic Development Project – Illinois Chamber of Commerce

The Healthiest Employers® is the nation’s leading worksite wellness recognition program, with participation from over 18,000 employers that represent 60 million employee lives. Through the Springbuk® health analytics platform, Healthiest Employer enables employers to unify health data, target engagement and improve outcomes in their population. Visit www. and

Gold Members Zurich Insurance celebrates significant reduction in carbon footprint at 1-year anniversary of North American Headquarters Reduces water and electricity consumption by more than 30 percent On the one-year anniversary of its LEED Platinum® certified North America headquarters, Zurich Insurance reports a more than 30 percent decrease in energy and water consumption compared to its previous location. These reductions are mainly attributed to the use of higher efficiency systems, contributing to operational costs savings of more than $800,000 in the first year. Zurich also continues to source 100 percent renewable electricity for the HQ.

“Celebrating our first anniversary in our North American headquarters is extra special because we know we are making a difference by reducing our carbon footprint,” said Mike Foley, CEO, Zurich North America. “I’m proud our initial focus on sustainability has made a measurable impact in our first year.” The sustainability of Zurich’s North American headquarters was an important factor in the building being recognized by several organizations. The building’s design and positive impact on the community also contributed to Zurich’s North American headquarters winning twelve awards: 2017 International Architecture Award – The Chicago Athenaeum

2017 Finalist, Merit Award for New Construction Suburbs – Chicago Building Congress 2017 Merit Award for Interior Build-Out – Chicago Building Congress 2016 Intelligent Buildings Conference, 2016 Digie Award – Corporate HQ or Campus 2016 Award of Merit – Structural Engineers Association of Illinois 2014 Office Development of the Year – NAIOP Chicago Chapter Zurich officially opened the doors to its 783,800-square-foot North American headquarters in Schaumburg, Ill., on Oct. 3, 2016. In addition to being environmentally friendly – both inside and out – the facility was designed to enhance employee collaboration and productivity for years to come. For more information about Zurich’s North American headquarters, go to http://www. Zurich Insurance Group recently announced it has reached a great milestone in its ambition to limit its global operational environmental footprint. To learn more about its environmental targets, go to

2017 Best Green Project – Engineering News Record Midwest 2017 Build to Suit Project of the Year – Chicago Commercial Real Estate Awards 2017 National Award of Merit, Office Buildings – Design-Build Institute of America 2017 Building Team Silver Award – Building Design & Construction Magazine

December 2017 | The Self-Insurer


About Zurich Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With about 54,000 employees, it provides a wide range of property and casualty, and life insurance products and services in more than 210 countries and territories. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, as well as multinational corporations. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at In North America, Zurich is a leading commercial property-casualty insurance provider serving the global corporate, large corporate, middle market, specialties and programs sectors through the individual member companies of Zurich in North America, including Zurich American Insurance Company. Life insurance and disability coverage issued in the United States in all states except New York is issued by Zurich American Life Insurance Company, an Illinois domestic life insurance company. In New York, life insurance and disability coverage is issued by Zurich American Life Insurance Company of New York, a New York domestic life insurance company. For more information about the products and services it offers and people Zurich employs around the world go to 2012 marked Zurich’s 100 year anniversary of insuring America and the success of its customers, shareholders and employees.




ost cost-containment companies won’t pursue claims lower than $5,000, but we will. That adds up, especially when you consider more than 85% of most groups’ claims are for amounts less than $5,000. At HHC Group, we pursue the maximum available savings – with bulldog tenacity – for Great Dane sized claims down to claims as low as one dollar. In fact, our pursuit of small-dollar claims produces an average of 25% more savings for our clients than they would save otherwise.


“Key Facts About Small-Dollar Claims,” at




INDEPENDENT REVIEW ORGANIZATION: INTERNAL & EXTERNAL EXPIRES 04/01/2020 Claims Negotiation & Repricing | Claims Editing | Medical Bill Review (Audit) | Reference-Based Pricing DRG Validation | Utilization Reviews and Independent Reviews | Independent Medical Examinations


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SIIA would like to Recognize our Leadership and Welcome New Members Directors Adam Russo Chief Executive Officer The Phia Group, LLC Braintree, MA Joseph Antonell CEO/Principal A&M International Health Plans Miami, FL Kevin Seelman Senior Vice President Lockton Dunning Benefit Company Dallas, TX Andrew Cavenagh President Pareto Captive Services, LLC Philadelphia, PA Mark L. Stadler CEO BridgeHealth Denver, CO Mary Catherine Person President HealthSCOPE Benefits, Inc. Little Rock, AR David Wilson President Windsor Strategy Partners, LLC Princeton Junction, NJ

Committee Chairs CAPTIVE INSURANCE COMMITTEE Michael P. Madden Senior Vice President Artex Risk Solutions, Inc. San Francisco, CA

2017 Board of Directors CHAIRMAN* Jay Ritchie Executive Vice President Tokio Marine HCC – Stop Loss Group Kennesaw, GA PRESIDENT/CEO Mike Ferguson SIIA, Simpsonville, SC TREASURER & CORPORATE SECRETARY* Duke Niedringhaus Senior Vice President, J.W. Terrill, Inc. Chesterfield, MO CHAIRMAN-ELECT* Robert A. Clemente CEO Specialty Care Management LLC Lahaska, PA

Committee Chairs (cont.) GOVERNMENT RELATIONS COMMITTEE Lawrence Thompson CEO BSI Fresno, CA HEALTH CARE COMMITTEE Kari L. Niblack Chief Executive Officer ACS Benefit Services, LLC Winston-Salem, NC

SIEF Board of Directors Nigel Wallbank Chairman Heidi Leenay President Freda Bacon Director Les Boughner Director Alex Giordano Director

INTERNATIONAL COMMITTEE Robert Repke President Global Medical Conexions, Inc. Novato, CA WORKERS’ COMP COMMITTEE Mike Zucco Business Development AL Trucking Association Fund Montgomery, AL

December 2017 | The Self-Insurer


SIIA New Members Regular Corporate Members Charles Bernier President ECBM, LP West Conshohocken, PA Fred Newman CEO Interface EAP, Inc. Houston, TX


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William Green Chief Legal Officer Homestead Smart Health Plans Philadelphia, PA

Employer Corporate Members Jim Parrish Deputy City Manager City of Plano Plano, TX Will Puczylowski Risk Manager True World Group LLC Nyack, NY

Lexi Dykes Marketing and Sales Specialist SIHO Insurance Services Columbus, IN


Silver Members




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Better Service. Better Performance.

Experience Zelis Healthcare.

Network Analytics & Design

Claims Cost Management

ePayments & Compliance

Zelis Healthcare is a healthcare information technology company that provides solutions which address pre-payment to payment needs across the claims life cycle.

Find out what Fully Integrated Healthcare Cost Management can do for you! Visit us at Copyright 2017 Zelis Healthcare. All rights reserved.

Unbundled, duplicate and upcoded charges?

We can help. EthiCare saves claim payors money. Period.


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Self Insurer Dec 2017  

Self Insurer Dec 2017