Page 1

February 2017

The World’s Leading Alternative Risk Transfer Journal Since 1984



Infertility benefits help prevent multiple births and manage costly treatments, but also elevate recruitment and retention

strength in


balance Experts in coverage solutions for single entities, groups and public entities, our integrated approach gives self-insureds greater stability and control over their self-funded plan. Unparalleled underwriting expertise, innovative risk management and in-house claims management, work in sync and in perfect balance for best possible outcomes.


The World’s Leading Alternative Risk Transfer Journal Since 1984

Self-Insurer’s Publishing Corp.


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

Editorial Staff PUBLISHING DIRECTOR Erica Massey SENIOR EDITOR Gretchen Grote




By Bruce Shutan


Volume 100

16 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 26



Captive Insurers and ORSA

EDITORIAL ADVISORS Bruce Shutan Karrie Hyatt

Editorial and Advertising Office P.O. 1237, Simpsonville, SC 29681 (888) 394-5688

2016 Self-Insurers’ Publishing Corp. Officers


James A. Kinder, CEO/Chairman Erica M. Massey, President Lynne Bolduc, Esq. Secretary

Appealing to



SIIA Endeavors


News from SIIA Members

By Jon A. Jablon, Esq.

February 2017 | The Self-Insurer



GROUND Infertility benefits help prevent multiple births and manage costly treatments, but also elevate recruitment and retention


n rare occasions, self-insured programs carry almost equal weight in terms of fulfilling key objectives for both employers and employees. One such example involves greater coverage of infertility treatments for families that decided to have children later in life. The benefits, which can rein in significant costs and improve health outcomes, also appeal to same-sex couples who increasingly are raising their own children. Many of these couples are counseled on surrogacy or sperm and egg donation. By Bruce Shutan


The Self-Insurer |

Artificial reproductive technologies such as in vitro fertilization (IVF) have helped a growing number of people realize their dream of starting a family. And they’re also elevating recruitment and retention strategies in highly competitive businesses.


“something that should be covered by their health plan,” Ajmani observes. By green-lighting these benefits, employers would be serving both a business and moral imperative on behalf of their employees and dependents.

Better choices

Bernie Dal Cortivo

“More employers see value in providing an infertility benefit,” observes Bernie Dal Cortivo, SVP of sales and marketing at WINFertility. The appeal of infertility treatments reflects changing attitudes and ways of life, says Karin Ajmani, who leads Progyny’s employer and consumer benefits products and addressed the topic at SIIA’s most recent national conference. For example, one in five women now have their first child starting at age 35 or older when both the quality and quantity of a woman’s eggs decline sharply, while many others are waiting even longer to have a second or third child. She attributes this phenomenon to several factors. They include more women joining the workforce or living in urban areas where infertility rates are higher, as well as couples seeking deeper financial security or more of a freewheeling lifestyle before starting a family. As these decisions become more commonplace, there’s a growing expectation by employees that infertility treatments are

Those without this coverage who are infertile end up paying more in so-called downstream maternity, delivery and neonatal intensive care unit (NICU) costs, especially across roughly two-thirds of the U.S. where there are no coverage mandates at the state level. And it can affect what their employer pays, as well as efficacy and outcomes. “Even if an employer’s health insurance benefits exclude coverage for IVF, there are hidden costs of infertility care that are being covered,” cautions Barbara Collura, president and CEO of RESOLVE: The National Infertility Association. “And if the employee decides to pay out of pocket, the health plan will cover the pregnancy, delivery and costs for the new baby.” She says research shows that when patients have insurance coverage for IVF, they make better choices about how many embryos to transfer and have fewer multiple births. A socalled singleton birth is far less expensive to the health care system than a multiple birth or even twins. With multiple births, Dal Cortivo says a benefit budgeted at $25,000 or $50,000 per employee could quickly turn into several hundred thousand dollars a year in claims for patients who end up in the NICU. Also, when these births are premature, they could be accompanied by a chronic illness. The goals are to help someone get pregnant as soon as possible and avoid multiple births.

Companies that cover infertility treatments or adoption services will reap tremendous goodwill for cultivating a family friendly corporate culture, Collura believes. “More people are aware of infertility and its effect on people’s lives,” she notes. “If an employer recognizes this and offers benefits to ease an infertility diagnosis, employees will want to work there and will stay.” More than 7 million Americans are infertile, according to RESOLVE. But their ability to carry a child to term and afford potentially expensive treatments depends in part on where they actually live. Fifteen states require insurance coverage for infertility treatment. They include Arkansas, California, Connecticut, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Montana, New Jersey, New York, Ohio, Rhode Island, Texas and West Virginia. Of those states, eight have an IVF mandate and seven have a mandate to offer, which in essence does not increase access. RESOLVE is advocating for an IVF mandate in New York, and is also hoping to support legislation to add a mandate for fertility preservation in a few states in 2017. The fertility preservation mandates would be the first ever, Collura reports. In New York, whose state mandate includes unlimited coverage for artificial insemination but nothing for IVF, Dal Cortivo says self-insured groups may opt to expand the benefit to better meet their employees’ needs. He notes that infertility benefits typically are offered by fully insured health plans in markets where coverage is mandated. Some of those health plans offer a product rider to spread the risk, which can be very costly, since only a segment of the workforce will be affected.

February 2017 | The Self-Insurer



Employees who are concerned about using up all their benefits allowance or aren’t covered for infertility treatments “tend to migrate toward lower cost, higher risk care, which may not necessarily drive the desired results,” according to Dal Cortivo. Their employer also still will be subject to claims associated with dependents once they become pregnant and have a child, he says, which is why it behooves self-funded plans to become involved.

Secrets to success

With third parties validating and reviewing all self-funded claims, Dal Cortivo points to a deeper level of involvement in the self-insured community with regard to benefits management than fully insured arrangements. But success often hinges on clinical and education support for patients on the front end, which he says “is really critically important to the overall event, and that’s where the case management component comes in.” Ajmani agrees that self-insured employers have more leeway to design an infertility benefits program than fully insured health plans. For instance, they can transcend the basic network model featuring standard coverage with, say, a $10,000 maximum by adding concierge services and providing a value-based bundle on a true per-cycle benefit. Without annual coverage restraints, she says women who are trying to get pregnant needn’t worry about rationing their care, while doctors can practice medicine unencumbered. Many plans, especially those offered through a self-insured arrangement, are typically flatdollar reimbursements that are easier to administer.

“Even though a benefit on the front end may have a flat dollar amount, or even a per cycle attached to it,” Dal Cortivo explains, “those costs are generally manageable because you have some indication of your population, the number of people who may receive care and access claims, and associated fixed dollar amounts.”


The Self-Insurer |

A 2015 Mercer study found that only 25% of employers are providing some sort of infertility coverage, though Ajmani cautions it could be something as simple as pledging to cover drugs associated with treatment options. However, those numbers are expected to swell, and it’s worth noting that her company’s business grew 185% in 2016. While few employers cover infertility benefits, Dal Cortivo agrees that the number is expanding, but that it depends on demographics and industry. “You’re more likely to see coverage in higher income white-collar groups, such as financial services, law firms, technology and pharmaceutical companies,” he reports, noting that traditional industries are joining the mix. Infertility treatments present what he calls “a unique occurrence that involves emotional, clinical and even technology support.” That effort includes the use of pharmaceuticals, which Dal Cortivo says can drive 30% to 40% of the benefits spend. Such treatments fall into the category of specialty pharmacy drugs that are typically mail ordered or shipped to the home.


Nurses are made available 24/7 to help guide and manage patients through the process, including administering and storing these drugs. Dosing management plays a particularly critical role. For example, proper storage could preserve drugs for a second cycle in the event of a failed attempt at pregnancy. Given the Rx layer, it’s common to see flat-dollar allowances on the drug side. “You might have a benefit that covers $25,000 for medical and $10,000 for pharmacy, and those will be lifetime maximums where if you have a per-cycle benefit on the medical, you still may have a lifetime maximum on the Rx,” he explains. The potential cost savings associated with a carefully managed self-insured infertility benefits program can be substantial. WINFertility pledges up to 45% in NICU savings, up to 40% in medical savings and up to 30% in pharmacy savings, as well as a 49% reduction in high-order multiple gestations. In one health plan case study involving nearly a million members since 2003, there was a 25% reduction in infertility costs, more than $30 million in savings reported in 2012, nearly $5 million in NICU savings and more than $200 million in savings since the inception of the employer’s contract.

Women who are pregnant with multiple children have much higher rates of preterm delivery, as well as preeclampsia and gestational diabetes, according to Ajmani. They’re also more prone to emergency room visits. These troubling trends can prove to be both financially and emotionally costly for everyone involved. Those who undergo IVF have higher rates of success, Ajmani says, noting that unlike many industry carriers, her firm doesn’t require the completion of three or six rounds of less costly artificial insemination before moving on to a more expensive technology like IVF. She reports that Progyny’s pregnancy rate per IVF transfer is 64% compared with the national average of 48.5% and its twining of




IS YOUR NEW WORLD BRAVE ENOUGH? HCAA’s Executive Forum 2017 Look for more information:

February 8 th -10 th | Bellagio, Las Vegas

February 2017 | The Self-Insurer



multiple birth rate for ongoing pregnancies is just 4% compared with the national average of 28%. Moreover, her firm’s predicted ROI for employers is about 30% based on their size, geographic reach, patient medical histories and outcomes.

A personal journey For Ajmani, helping infertile women become pregnant is part of a personal mission.

Karin Ajmani

“I’ve lived through infertility,” she explains. “I had my first child at age 30 when I was CEO of a health plan and it came easy. But when I tried having my second child at age 33, I went on to experience seven devastating pregnancy loses.”

The struggle took a serious toll on her physically, mentally and professionally for three years. She eventually had a healthy boy on her first try of IVF. Still, Ajmani laments that she could have saved herself “an immense amount of pain on so many levels” if she had access to a fertility patient advocate who could have intervened much earlier to suggest the right treatment course.


The Self-Insurer |

She recalls how a Progyny customer described in a recent magazine article how providing infertility treatments proved to be its most impactful employee benefit. “People actually picked up the phone and call into the HR department thanking them for rolling out this type of program,” she says. “It’s something that’s highly valued.”

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

Appealing to



By Jon A. Jablon, Esq.

he language is exceedingly common within benefit plans. We’ve all seen it; in order to appeal a denial, a medical provider must be specifically appointed by the patient as the patient’s “authorized representative.” Only members may appeal their own claims, unless they appoint someone to do so. Some third-party administrators and plan administrators even have a form that a member must fill out. These are long-held maxims by many – but are they truly compliant?


In what it has deemed a frequently asked question, the Department of Labor, in its Benefit Claims Procedure Regulation FAQs1, has asked itself “Does an assignment of benefits by a claimant to a health care provider constitute the designation of an authorized representative?” The Department of Labor simply, and helpfully, led its answer with the word “no.” To elaborate on this “no,” the DOL wrote that “Typically, assignments are not a grant of authority to act on a claimant’s behalf in pursuing and appealing a benefit determination under a plan.” But how much does that truly clarify? Without some context, it is fairly unhelpful – and in context, it is revealed that this guidance from the DOL is somewhat inaccurate.

An authorized representative is one who is authorized to act as the representative of another – a description that could scarcely be any clearer. In our sense, an authorized representative is generally used in the context of the right to appeal. To illustrate the utility of this concept, consider three scenarios; in all three, a plan member has received services from a non-contracted medical provider, and in all three the Plan’s available benefits are not quite enough to cover the provider’s full billed charges. Appeals will occur – but the difference in the scenarios hinges on exactly who is appealing, and on whose behalf. In scenario number one, the health plan systemically prohibits all assignments of benefits, and pays benefits directly to the member. The member endorses the Plan’s payment to the provider to compensate the provider for its services – but the provider is dissatisfied with the payment amount. In this scenario number one, the provider may not appeal to the health plan unless the provider appeals on the patient’s behalf, since the provider itself was due benefits from the patient, rather than from the health plan, since there was no assignment of benefits – and in such case the provider would need to be appointed by the member as the member’s authorized representative, since the provider has no independent right to benefits from the health plan in this scenario.

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

February 2017 | The Self-Insurer



In other words, the provider would need to appeal on the member’s behalf, and would therefore need to be the member’s authorized representative to do so. In scenario number two, there is again no assignment of benefits, but the provider decides to balance-bill the member instead of getting involved in the appeals process. The member, rather than the provider, appeals directly to the Plan. Members, of course, are always claimants and are always entitled to appeal to the health plan if the member feels that a greater amount of benefits should be paid. In this scenario two, there is no need for the member to appoint the provider as the member’s authorized representative, since


the member needs no representative if she appeals on her own behalf. Now, consider scenario number three, where there is a valid assignment of benefits from the member to the provider (as is almost universally the case in selffunded health care). Through the assignment of benefits, the provider is invited to submit its claims directly to the health plan, and receives only partial payment of its billed charges in return. In this scenario three, the provider desires to appeal the denial. The provider submits an appeal to the health plan – in accordance with all of the plan’s written and established procedures – and the third-party administrator answers the provider with a letter stating that only

The Self-Insurer |

members may appeal, unless the member fills out a specific form to authorize the provider to appeal on the member’s behalf. How compliant is that, though? Might the health plan be at risk of noncompliance if it denies providers the right to appeal their own claims? An authorized representative, as described above, is one who is authorized to be the representative of another. In a case such as this, a medical provider might be authorized to act as the representative of the member, therefore becoming the member’s personal representative.


Consider, however, federal regulations that afford all claimants the right to appeal; claimant is a term of art that explicitly includes participants and beneficiaries2. A beneficiary is defined as “a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.” Forget the legalese; the important thing is to note that medical providers, if benefits are assigned to them, are beneficiaries, as that term is defined by the regulations – and beneficiaries become claimants when they submit claims to the health plan. If you remember, all claimants are empowered to submit claims to the health plan, appeal a denial of those claims, and even ultimately sue for redress under ERISA. (As one court put it, “there is now a broad consensus that when a patient assigns

payment of insurance benefits to a healthcare provider, that provider gains standing to sue for that payment under ERISA § 502(a).3”) The same regulation that defines “claimant” also provides that:

Every employee benefit plan shall establish and maintain a procedure by which a claimant shall have a reasonable opportunity to appeal an adverse benefit determination to an appropriate named fiduciary of the plan, and under which there will be a full and fair review of the claim and the adverse benefit determination.4

According to these regulations, not only are claimants afforded the right to file claims, but they are also guaranteed the right to appeal, by imposing this responsibility upon the health plan to afford claimants the right to appeal. The relevant regulations unambiguously explain that a claimant may appeal an adverse benefit determination.

COMPREHENSIVE HEALTH PLAN AND PHARMACY BENEFIT ADMINISTRATORS For effective employee benefit solutions to manage and reduce your Health Care Benefit and Pharmacy costs, contact us at: Charlie Barger, Director, TPA Operations (860) 396-6402

Medical ● Dental ● Vision ● Pharmacy ● HRAs ● FSAs ● COBRA

Native American Owned & Operated

February 2017 | The Self-Insurer



include anyone “designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.” The regulations say one thing, but the DOL’s FAQ seems to say the opposite. The DOL’s answer to its own question yields an absurd conclusion: that a provider that has accepted an assignment of benefits and submitted claims to a health plan is not a

Moreover, the text of ERISA itself provides that “A civil action may be brought…by a participant or beneficiary…to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.5” To simplify, again, claimants can sue for benefits. Since medical providers are claimants if they are assigned plan benefits, then providers can appeal and ultimately sue if necessary. As another court wrote, somewhat more bluntly, “the assignment is only as good as payment if the provider can enforce it.6” This is a matter of public policy, and seems fairly intuitive; if a provider has the right to submit a claim, and the health plan has the right to tender a denial of that claim, practically speaking, why should the provider not also have the right to appeal the denial of its claim?

According to courts and the regulations, the provider does in fact have this right. We now know that medical providers who have been assigned benefits can submit claims, appeal denials of those claims, and sue for redress pursuant to ERIA. It should be noted, however, that although the law on the topic may be established, not everyone is on the same page, as is so often the case in our industry. The DOL’s answer to its own question (“Does an assignment of benefits by a claimant to a health care provider constitute the designation of an authorized representative?”) continues by specifying that “An assignment of benefits by a claimant is generally limited to assignment of the claimant’s right to receive a benefit payment under the terms of the plan.” But how can that be the case? Claimants have the right to appeal, and claimants

14 The Self-Insurer |

claimant. According to applicable law, however, either the provider accepts assignment of benefits and submits claims, and therefore earns the right to appeal and sue – or the provider does none of those things. These rights are not discrete; they are a package deal, inseparable from one another. Each right – the right to submit claims, the right to appeal a denial, and the right to sue under ERISA – has “not for individual sale” marked on its label. The confusion doesn’t stop there, though. Coming back to the Department of Labor’s answer to its own frequently asked question, the Department has stated that “[t]ypically, assignments are not a grant of authority to act on a claimant’s behalf in pursuing and appealing a benefit determination under a plan.” This is a correct statement, although very misleading in context. It is true that an assignment of benefits does not grant a provider authority to act on a claimant’s behalf – because a provider who has received an assignment of benefits is a claimant unto itself, and is not acting on anyone else’s behalf. The provider therefore needs no authority to act on anyone’s behalf.


Where do we go from here? There is conflicting guidance; FAQs are suggestive rather than binding, but most take them as gospel nonetheless, since they are explicitly designed to be written in plain English rather than the legalese of the regulations. The rules surrounding who has what rights and under what circumstances are undoubtedly confusing at times; guidance provided by our regulators is sometimes confusing, vague, and – at times – even contradictory. This is one of those times, and affording all relevant rights to medical providers is an important topic now more than ever in the face of incoming bouts of regulatory scrutiny of the self-funded industry and the fiduciaries who act within this space. As health plans struggle to contain costs, health plan administrators, third-party administrators, and brokers should be careful not to handicap themselves by employing the same thinking as prior decades simply because that’s what has always been done. Performing an in-depth review of claims and appeal processes – and the rest of the health plan to boot – is the best way of staying ahead of the curve and ensuring compliance and viability. Attorney Jon Jablon joined The Phia Group’s legal team in 2013. Since then, he has distinguished himself as an expert in various topics, including stop-loss and PPO networks, focusing on dispute resolution and best practices. In 2016, Jon assumed the role of Director of The Phia Group’s newly-created Provider Relations department, which focuses on all things having to do with medical providers – including balance-billing, claims negotiation, general consulting, and more.

References [1] Benefit Claims Procedure Regulation FAQs, located at

[2] 29 CFR 2560.503-1(a) (“[T]his section sets forth minimum requirements for employee benefit plan procedures pertaining to claims for benefits by participants and beneficiaries (hereinafter referred to as claimants).”).

[3] Brown v. BlueCross BlueShield of Tennessee, Inc., 827 F.3d 543, 547 (6th Cir. 2016) (internal quotations and citations omitted).

[4] 29 CFR 2560.503-1(h)(1).

[5] 29 U.S.C. §1132(a)1)(A).

[6] North Jersey Brain and Spine Ctr. v. Aetna, Inc., 801 F.3d 369, 372-373 (3d Cir.2015).

Great care doesn’t have to mean great cost The BridgeHealth Surgery Benefit Program connects plan members with quality care for less • Little or no out-of-pocket expense • Concierge service • No balance billing


February 2017 | The Self-Insurer




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 16

The Self-Insurer |

Does the self-funded route look a little muddy?

HM Stop Loss gives you the confidence

to see it through. to navigate the course.

Through expert risk assessment and exceptional service delivery, HM Insurance Group provides self-funded groups financial protection to meet the challenges of a changing health benefits market. We know the importance of making informed decisions – that’s why we deliver tips, tools and insights to help our partners and their clients determine the right Stop Loss coverage options and create smart solutions for managing claims and containing costs within the self-funded approach. Prepare for success with self-funding at

STOP LOSS MTG-3045 (12/16)


QSEHRAs: End-of-Year Legislation Provides a New Health Care Option for Small Employers Tucked at the end of the recently enacted 300-plus-page 21st Century Cures Act (Cures Act)1 is a provision that offers certain small employers a new opportunity to help employees purchase individual market major medical coverage and pay for other medical expenses. The new health reimbursement arrangement vehicle, called Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs), is available to employers that are not subject to the Affordable Care Act (ACA) employer responsibility penalties – i.e., employers that have less than 50 full-time equivalent employees and thus are not applicable large employers (ALEs). Many small employers are likely to find QSEHRAs attractive, but there are some features that should be looked at carefully before deciding to move forward. These include a requirement that a QSEHRA can only be funded through direct employer contributions (meaning that no employee salary reduction contributions are permitted), nondiscrimination rules, and a provision prohibiting employers from maintaining another group health plan.


The Self-Insurer |

Note that for insurers, brokers and agents, some states consider individual health insurance paid for by employers to be group health insurance. Thus, insurers, brokers and agents working with small employers should carefully consider state-law implications. Some states specifically prohibit employers from reimbursing individual premiums. We expect that states may review these rules in light of the Cures Act, although it may take some time. This article addresses key features of QSEHRAs:

Why QSEHRAs? The Cures Act provision is designed to overrule agency guidance under the ACA prohibiting employer arrangements that seek to pay or reimburse the cost of individual market major medical insurance purchased by employees. This guidance specifically provides that stand-alone health reimbursement arrangements (HRAs), meaning HRAs that are not integrated with another group health plan, are not permitted. 2 While these restrictions are not clear from the statutory provisions of the ACA, regulations and other administrative guidance preclude this type of arrangement on the basis that they violate one or more ACA requirements applicable to group health plans, in particular, preventive care requirements and/or the prohibition on annual dollar limits on benefits.

The federal tri-agencies (Department of Labor, Department of Health and Human Services, and Internal Revenue Service/ Department of the Treasury) use the broad term “employer payment plan” to encompass the types of arrangements prohibited under this guidance. In some cases, even post-tax arrangements for the cost of individual market major medical insurance are not permitted, depending upon the level of employer involvement in the arrangement. Prior to enactment of the Cures Act, employers that adopted these types of arrangements were subject to a $100 per person per day excise tax under Internal Revenue Code § 4980D (for private employers) or a $100 per day penalty under Public Health Service Act § 2723(for governmental employers).

The Cures Act allows small employers to adopt this type of HRA arrangement, provided the requirements in the Act are followed. QSEHRAs are not subject to the ACA market reforms and are not subject to COBRA requirements.

Eligible Employers An employer is eligible to adopt a QSEHRA if both the following requirements are met:

(1) The employer is not an applicable

large employer (ALE) as defined under the ACA employer responsibility penalties under tax code § 4980H. Under 4980H, ALE status is determined on a controlled group basis, so that for an employer to be eligible for a QSEHRA, the entire controlled group must collectively employee less than 50 full-time equivalent employees in the prior calendar year.

February 2017 | The Self-Insurer


(2) The employer does not maintain a

“group health plan” for any employees.

The Cures Act does not specifically define “group health plan” for purposes of the requirement that a small employer adopting a QSEHRA cannot offer a group health plan to any employee. The definition of group health plan in the tax code is fairly broad and includes more than just major medical coverage. For example, health flexible spending arrangements (FSAs) and supplemental benefits such as dental and vision plans are considered group health plans for some purposes (e.g., COBRA). It is most likely that such arrangements were not intended to be prohibited. The purpose of the requirement that the employer could not offer both a group health plan and a QSEHRA is to prevent “cherry picking;” that is, offering a group health plan to some “healthy” employees but not others, with the potential result that higher-risk individuals would be in the individual health insurance market. Supplemental coverage does not present this same risk.

Permitted Contributions Salary reduction contributions to a QSEHRA are not permitted. Thus, a QSEHRA must be funded solely by the employer. Moreover, as discussed below, the prior agency guidance would seem to continue to prohibit employees from paying any additional cost of the individual major medical coverage on a pre-tax basis.


Nondiscrimination Requirements In general, a QSEHRA must be provided on the same terms to all eligible employees. However, the employer can vary the amount of reimbursements available under the arrangement based on age of the eligible employee (and family members if the arrangement covers family members) or the number of family members of the employee covered under the arrangement. Any such variation must be made in accordance with the variation in price of an insurance policy in the relevant individual health insurance market. For this purpose, any variation must be determined by reference to the same insurance policy with respect to all eligible employees. “Eligible employee” means any employee of the employer. However, a QSEHRA may exclude the following employees: • • • • •

Employees who have not completed 90 days of service; Employees who have not attained age 25; Part-time or seasonal employees; Employees covered by a collective bargaining agreement; and Nonresident aliens who receive no earned income from the employer from sources within the United States.

“Proof of Coverage” Requirement Part of the definition of a QSEHRA is that the arrangement provides for the payment or reimbursement of medical expenses as defined under tax code § 213(d) “after the employee provides proof of coverage.” The term “coverage” is not defined for this purpose. While the overall objective of the legislation is to enable small employers to offer their employees a means of paying for individual market coverage on a pre-tax basis, the statutory language does not on its face restrict coverage in this context to individual market coverage. Thus, it appears that any type of health coverage would potentially meet this coverage requirement. Supplemental indemnity coverage would not be eligible due to the IRS’ interpretation that such coverage does not qualify as a 213(d) eligible expense even though such coverage may qualify as an excludable § 106 accident or health plan under when funded by the employer directly or through a cafeteria plan. It is not entirely clear how this requirement will be enforced. Because this is part of the definition of a QSEHRA, it appears that arrangement will not be exempt from the ACA requirements if the employer does not obtain proof of coverage from the employee. While the statute does not address what steps an employer would need to take to verify coverage, relying on a certification from the employee could be a reasonable approach. As noted above, if the individual does not have minimum essential coverage (MEC), any reimbursements are taxable to the employee.

The Self-Insurer |

We appreciate the positive response our medical stop loss coverage has received coast to coast. We look forward to bringing our iconic brand name, stellar balance sheet, and decades of underwriting experience to the medical stop loss marketplace for years to come.

Thanks. Asheville | Atlanta | Boston | Chicago | Houston | Irvine | Indianapolis Los Angeles | New York | San Francisco | San Ramon | Seattle | Stevens Point Auckland | Brisbane | DĂźsseldorf | Hong Kong | Macau Melbourne | Singapore | Sydney | Toronto

Permitted Benefits Reimbursements that are permitted under a QSEHRA are expenses for medical care as defined under tax code § 213(d). Thus, reimbursement of individual major medical health insurance premiums, as well as other § 213(d) expenses, is permitted. Premiums paid by the employee on a pre-tax basis for coverage under a group health plan of another employer (e.g., the spouse’s employer) would not qualify for tax-free treatment. The maximum amount available under a QEHRA for any year cannot exceed $4,950 ($10,000 if the arrangement provides for payments for medical care for family members). The dollar amounts are prorated if an employee is covered under


the arrangement for less than a full year. The dollar amounts are indexed in $50 increments for inflation after 2016, based on changes in the Consumer Price Index for All Urban Consumers (the same index used for purposes of determining rate brackets under the income tax rules).

Tax Treatment of Reimbursements Reimbursements are tax-free to the employee if the employee has MEC for the month in which the expense is incurred. MEC is defined under the ACA rules under tax code § 5000A(f). The QSEHRA itself is not MEC, so the employee must have some other type of coverage (e.g., in many cases, the individual major medical coverage they are purchasing) to qualify for tax-exempt treatment. The language does not restrict MEC to any particular type of coverage and thus, for example, would appear to include individual market coverage whether purchased on or off the Marketplace, group health plan coverage through another employer, and Medicare.

The Self-Insurer |

Cadillac Plan Tax Benefits under a QSEHRA are taken into account for purposes of the so-called Cadillac plan tax under tax code § 4980I, currently scheduled to go into effect in 2020. For Cadillac plan tax purposes, the value of the coverage under a QSEHRA is the maximum amount of permitted benefit available under the arrangement to the employee and not the specific amounts reimbursed. Even though QSEHRAs are subject to the Cadillac tax, it seems unlikely that the tax would apply with respect to such arrangements, assuming that the tax does go into effect. This is for two reasons. First the maximum permitted benefit is significantly less than the Cadillac plan tax thresholds, which are $10,200 for single coverage and $27,500 for family coverage. These are the 2018 amounts; the thresholds will be higher in 2020 and are indexed in subsequent years. In addition, because QSEHRAs are available only to employers that do not have another group health plan (other than possibly certain types of supplemental coverage), no other coverage of that employer is likely to push the value over the threshold.

Coordination with ACA Premium Tax Credits There is a special rule for coordinating QSEHRAs with eligibility for premium tax subsidies. An employee who is provided a QSEHRA is not eligible for a premium tax credit if the QSEHRA is “affordable.” Affordability for this purpose is computed in a manner similar for other employer coverage. The QSEHRA is considered affordable for a month if excess of the self-only premium under the second lowest cost silver plan offered in the relevant individual health insurance market over 1/12 of the employee’s permitted benefit under the QSEHRA does not exceed 1/12 of 9.5 percent of the employee’s household income. The 9.5 number is indexed. The legislation did not provide any safe harbors for employers to determine household income. However, further guidance would be welcome from the IRS on what safe harbors it might allow, such as those it developed to determine affordability of coverage under tax code § 4980H(b). If QSEHRA coverage does not meet the affordability standard, then the monthly premium tax credit is reduced by 1/12 of the annual benefit under the QSEHRA.

Consequences for Failing to Meet QSEHRA Requirements The requirement that QSEHRAs be funded by the employer (with no salary reduction contributions), the nondiscrimination rules, and the proof of coverage provision are all part of the definition of a QSEHRA. An arrangement that does not satisfy these requirements is not a QSEHRA and will be

February 2017 | The Self-Insurer


This isn’t our first



Being in the medical self-insurance stop loss

market isn’t new to Houston International Insurance Group (HIIG). The experts and seasoned employees that founded the Company have decades of experience in this industry. In fact, HIIG was built using strategy, sound judgment, and business savvy from some of the same leaders who made this industry great from the very beginning. Don’t get thrown for a loss. Make HIIG Accident & Health your partner in stop loss.

Learn more at or call us at 800.796.9165.

subject to the ACA market reforms and other requirements applicable to group health plans. Thus, an employer that fails to meet the applicable requirements could be subject to the $100 per person per day excise tax or penalty (as applicable). Employers adopting a QSEHRA may also be subject to penalties for failing to meet applicable reporting requirements.

Effective Date and Transition Rule The QSEHRA provisions are effective for years beginning after December 31, 2016. In addition, the legislation extends transition relief previously provided under IRS Notice 201517 to any plan year beginning on or before December 31, 2016. The federal tri-agencies have issued a FAQ describing how this transition relief applies after enactment of the Cures Act. 3The FAQ states that consistent with Notice 2015-17, the relief from penalties does not extend to stand-alone HRAs or other arrangements that reimburse medical expenses other than insurance premiums. Further, the FAQ clarifies that pre-Cures Act agency guidance continues to apply for employer arrangements that reimburse individual major medical premiums that are not QSEHRAs (e.g., employer payment plans and non-QSEHRA HRAs).

Notice, Reporting, and Substantiation Requirements Employers are required to notify eligible employees of a QSEHRA 90 days before the beginning of the year in which the employer will fund the arrangement. The notice must include the amount of the benefit under the QSEHRA and also inform the employee that payments may be taxable if the employee does not have MEC. Employers must report the permitted benefit on the employee’s Form W-2 for the year. Employers will also likely need to have procedures to substantiate the medical expenses that are reimbursed under the QSEHRA. The Cures Act specifically authorizes the Treasury Department to adopt substantiation rules.

References [1] The text of the Cures Act may be found at The QSEHRA provision is in section 18001. The act was signed by President Obama on December 13, 2016.

[2] The agency guidance prohibits pre-tax salary reduction and most other forms of employer reimbursement of individual major medical insurance. Other than as specifically allowed for QSEHRAs, this prior agency guidance continues to prohibit such “employer payment plan” arrangements.

[3] ACA FAQs part 35, available at

If Yo u r P l a n D o e s n ’ t Wo r k

Change The Plan But Never The Goal We have the solutions and expertise to help you succeed this year. L e a r n m o r e t o d ay a t w w w.w i n d s o r s t r a t e g y. s o l u t i o n s

February 2017 | The Self-Insurer


Captive Insurer and ORSA Written by Karrie Hyatt


uring the last few years, the term ORSA has become a watchword. ORSAs (Own Risk and Solvency Assessment) are becoming an important component to an insurer’s Enterprise Risk Management (ERM) framework. Captives are not yet required to conduct ORSAs, but the time may not be far off when they will be.Yet many industry professionals recommend captives add ORSAs into their roster of risk assessment and solvency tools.

“All insurance companies, including captives, need to be able to identify, measure and manage their major risks in order to stay in business,” said Kate Boucher, Director of Captive Management with Premier Insurance Management Services, Inc. “An ORSA evaluation can also help an insurance company, captive or otherwise, with planning for future growth.”


The Self-Insurer |

YOUR BEST PARTNER IN A COMPLEX BENEFITS WORLD Meet the bigger, brighter Sun Life. It’s simple: Sun Life picks up where today’s health care coverage leaves off. We do it with a robust product portfolio for businesses of all sizes. With a new focus on workforce productivity and cost containment. With America’s second-largest dental network.* And with our commitment to doing the right thing. Want to feel “benefits confidence”? Go with the best partner. Ask your broker how Sun Life can help you.

Life’s brighter under the sun LIFE | DISABILITY | DENTAL/VISION | VOLUNTARY | STOP-LOSS * The Ignition Group, LLC. Data as of September 2015, based on unique dentist count. For more information, please visit Group insurance policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) and by Union Security Insurance Company (USIC) (Kansas City, MO) in all states except New York. Insurance products underwritten by Union Security Insurance Company (USIC) (Kansas City, MO) are administered by Sun Life Assurance Company of Canada (SLOC) (Wellesley Hills, MA). In New York, group insurance policies are underwritten by Sun Life and Health Insurance Company (U.S.) (Lansing, MI) and Union Security Life Insurance Company of New York (Fayetteville, NY). Insurance products underwritten by Union Security Life Insurance Company of New York (Fayetteville, NY) are administered by Sun Life and Health Insurance Company (U.S.) (SLHIC) (Lansing, MI). Product offerings may not be available in all states and may vary depending on state laws and regulations. © 2016 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. Visit us at BRAD-6104a SLPC 27572 07/16 (exp. 12/16)

What is ORSA?

Launching an ORSA

At its most simplistic, ORSA is an internally conducted survey of current and future risk borne by an insurance company. However, it is not a one-off assessment, but an on-going evaluation that is intended to evolve as a company grows and changes. It can be a key component to a company’s ERM structure and can help a company anticipate potential capital needs.

No two companies will conduct the same ORSA—there is no set way to pursue it. The four steps involved in an ORSA are: identifying major risks; establishing a process for measuring those risks; managing and alleviating major risks; and documenting the assessment process and results. These basic guidelines will allow companies developing an ORSA to adapt the process to their individual needs and to adapt the assessment based on changes to their business. “ORSA is not something to be done once and put on a shelf—it is an ongoing process,” said Tim Cremin, Consulting Actuary with Milliman, Inc.

According to Sandra Bigglestone, Director of Captive Insurance with the Vermont Department of Financial Regulation, “ORSA is about determining future solvency needs based on risk measurements and reporting the results.” ORSA was initially developed as part of Solvency II, the directive initiated by the European Union that addresses the levels of capital European insurers must have. In 2012, the NAIC’s Financial Condition (E) Committee passed the Risk Management and Own Risk and Solvency Assessment Model Act. This act, which became effective January 1, 2015, requires medium-tolarge insurers to “regularly perform an ORSA and file a confidential ORSA summary report” with their regulator upon request. In addition, starting January 1, 2018, ORSA will be required of state insurance departments for NAIC accreditation.


The Self-Insurer |

According to Boucher, “The ORSA model requires an insurance company to go a bit further than a basic risk self-evaluation and requires that the insurer tie the risk

assessment to its risk capital and solvency. An insurer would be expected to stress test its capital based on the risks identified and make sure there is adequate capital to withstand adverse scenarios. In addition, the insurer should be able to demonstrate it has sufficient capital to implement its business plan, even in an adverse scenario.” At this time, captives with $500 million plus in premium are subject to the NAIC’s Act. However, many captive regulators and others in the industry endorse the idea that other captives and risk retention groups would benefit from voluntarily conducting ORSAs. “ERM experts have advised that although ORSA may not be required for risk retention groups and captives,” said

Bigglestone. “It could be an effective capital assessment tool for monitoring ongoing capital needs and enhance corporate strategies for mitigating solvency risks.”

What’s In It For a Captive? While the majority of captives are not currently required to conduct an ORSA by their regulator, voluntarily adopting the practice can help expand their ERM program as well as being ready for regulatory inquiries. “ORSA is applicable for insurers who write $500 million or more in premiums annually with the goal of providing a group-level perspective on risk and capital,”

US Office

said Bigglestone. “Captive regulators and companies will find value in knowing how a company will respond in the event the captive’s surplus falls below company targets and/or regulatory minimums.” Cremin believes that, “ORSA can benefit a captive by providing an ongoing process for identifying, measuring, and mitigating the captive’s risks so that the probability of an insolvency is reduced to a tolerable level.” ORSA should be considered a component of a captive’s ERM framework and can be an important way for a company to internally assess its risk. According to Bigglestone, “If a captive follows a formal ERM process, perhaps integrated with the captive owners’ risk management program, then ORSA

7301 Carmel Executive Park Suite 101 Charlotte, NC 28226, USA +1 704-945-6620 : Tel +1 704-945-6621 : Fax

Cayman Islands Office PO Box 699 3rd Floor, Whitehall House 238 North Church Street George Town, Grand Cayman Cayman Islands KY1-1107 +1 (345) 945-5556 : Tel +1 (345) 945-5557 : Fax

February 2017 | The Self-Insurer


might serve to foster a more effective level of ERM.” Cremin has a similar thoughts about the assessment, “Once the ORSA process is established, future iterations can be used to expand and/or fine-tune the analysis as needed. Additional risks can be identified and incorporated into the plan.” Yet developing and regularly conducting an ORSA is not a solution for every captive. According to Bigglestone, “Implementation of a formal ORSA process is a complex undertaking. Unless the company is already employing formal ERM practices, the price tag would be quite high if the ORSA model and reporting were required for captives.” “Presumably a captive insurer is already doing its own risk assessment and risk management,” said Boucher. “A captive may require some assistance with the next step in developing a model to test the key assumptions in the risk assessment and prepare financial projections. Assistance may be available from the parent company or from advisors to the captive, such as 30

the actuary, investment advisor or other insurance consultants. The price tag will depend on where the resources will come from and what work the captive has already done.

Should Captives Adopt ORSA? As ORSA becomes more widely used and regulators begin to look to the assessment as a reliable tool for evaluating capital, captives will probably want to consider developing an ORSA program. Bigglestone said, “Companies should already be looking at their own unique risk profile, and identifying major risks, and perhaps some actually have a process for measuring, managing and mitigating the major risks. If captives identify the need for a capital assessment tool, a cost-benefit analysis should help determine whether an ORSA-type approach would be worth the trip down that road.” Bigglestone continued, “ORSA is not a one-time exercise, but an ongoing process whereby a company documents the process and results to track changes over time. Since there’s a cost to implement such formal processes, it won’t make sense for every company to adopt an ORSA, so that decision should be left to the individual companies.” Boucher suggests that, “With ORSA there is not a one-size fits all evaluation, so every insurance company, including every captive, should be doing some sort of ORSA to ensure its surplus position is in sync with its business plan. The depth of analysis and testing should be tailored to the captive depending on the type and amount of risk it is insuring and what its plans are for future growth.”

The Self-Insurer |

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.


“I think having an ORSA process in place is another way for a captive to show that it is appropriately capitalized and is being managed in a responsible manner consistent with the approach used by the most highly regarded commercial insurers,” said Cremin. “Insurance regulators are taking a more risk-focused approach to financial examinations, and the ORSA process directly addresses the concerns of this type of examination.” Cremin added, “Beyond the benefit of regulatory compliance, the ORSA process provides a useful tool that enables the captive’s Board and management to identify, measure, and mitigate the risks that arise from the captive’s operations.” While ORSA is not required for all captives at this time, it may be some time in the near future. Until then, it can be an important tool to enhance risk management practices. Industry opinion is mixed about whether or not captives should be required to conduct ORSA examinations by their domicile regulator, but most agree that ORSA is an important tool for risk assessment. “I think that it should be encouraged as a best practice,” said Boucher. “Just as every ORSA is different, every captive is different, so a captive should determine based on discussions with its board, regulators and rating agencies just how extensive an ORSA is needed.”


The Self-Insurer |

“The concept of ORSA is relevant and should raise awareness that captives can and should look at their own risks to measure future solvency needs,” said Bigglestone. “At this point in time, I don’t believe that a formal mandate requiring captives to implement ORSA would improve the reputation of the captive insurance industry.”

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: www.karriehyatt. com.

No matter your industry, Delaware’s award-winning Captive Insurance Bureau can help your business gain the upper hand...

Call us today to begin a conversation about your goals and our solutions.

BUREAU OF CAPTIVE & FINANCIAL INSURANCE PRODUCTS The Nemours Building | 1007 Orange Street, Suite 1010 | Wilmington, DE 19801

Phone: 302.577.5280 | Fax: 302.577.3057 Web:

Insurance Commissioner Karen Weldin Stewart



The Self-Insured Health Plan Executive Forum (formerly known as the TPA/MGU Excess Insurer Executive Forum) is March 28-29, 2017 at JW Marriott Tucson Starr Pass Resort & Spa, in Tucson, Arizona. Executives involved with the establishment, management and/or support of self-insured group health plans will find this educational conference exceptionally valuable. Anticipated attendee profiles include: corporate benefit directors, third party administrators, brokers/consultants, stop-loss insurance carriers/MGUs, captive managers and industry service providers. Make sure to get there early and help support the Self-Insurance Education Foundation, by participating in their always popular golf tournament the morning of the 28th.The golf tournaments are open to all conference registrants, and promise to be an excellent opportunity to network with executive-level industry colleagues and peers. The tournaments will be a scramble format and you can either sign up as an individual or reserve a foursome. All skill levels are welcome! Contact Shane Byars for more information at

JW Marriott Tucson Starr Pass Resort & Spa, in Tucson, Arizona. 34

The Self-Insurer |





Just having group benefits expertise is not enough. At AmWINS, we have taken specialization one step further by creating a practice that enables our team of specialists to collaborate with one another quickly, helping you give the best options to your self-funded clients. That’s the competitive advantage you get with AmWINS Group Benefits.

Highlights of the Forum’s educational program include the follow sessions: Legislative/Regulatory & Political Advocacy Update As of this date, most state legislatures will be back in session, there will be a new presidential administration and Congress, and SIIA’s lobbying team will be running fast to represent the interest of the membership. Ryan Work, Vice President, Federal Government Relations for SIIA and Adam Brackemyre, Vice President, State Government Relations for SIIA will provide detailed updates of important legislative/regulatory developments and the association’s political advocacy strategy at both the state and federal levels.

Regulatory Compliance “Hot Spots” for Self-Insured Health Plans Chris Condeluci, Esq., Washington Counsel for SIIA, will take a deeper dive on current regulatory developments affecting self-insured employers with specific compliance guidance that will be useful to employers and their business partners. How Self-Insurers Can Help Restore the American Dream by Curbing the Healthcare Heist In this TED-style talk, Dave Chase, Executive Producer of The Big Heist, will connect the dots on how healthcare’s status quo represents a significant threat to the American Dream and how employers who sponsor self-insured health plans are playing an increasingly important role in providing real solutions that bring hope to a

Winning Technology Strategies for the Self-Insurance Marketplace Corporate technology is often seen from a tactical perspective –mostly employed to advance operational objectives. But for an increasing number of successful companies in the marketplace generally, and in the health care space specifically, technology investments are embedded as part of the strategic planning process. Joe Hodges, President, Inetico, will moderate a discussion of senior executives of companies operating within the self-insurance marketplace guidance on how to view and evaluate technology strategies in a way that will help them grow their business and strengthen their corporate brands.

dysfunctional health care system.

Self-funding options for small to mid-sized groups with GBS HealthyAdvantage.

The Time Has Come for Level-Funded Health Benefits

If you have fully-insured clients looking for an alternative, HealthyAdvantage is ideal for you. GBS HealthyAdvantage offers: • Lower Fixed Costs: Most businesses realize immediate monthly savings • Claims Fund: You own the claims fund and receive 100% of it back • A-Rated Stop-Loss Carriers • Wide variety of customized benefit designs including HSA, HRA & FSA plans • Claims reporting • Online quoting and underwriting platform • Level-funding and traditional Self-funded Benefit Plans—Available in most states

Visit the Healthy Advantage website at to access our quoting tool and online underwriting platform, or call 800.638.6085 to speak with a sales representative.


The Self-Insurer |

Guardian® in sync

Stop Loss

Your carrier should have a history of financial stability. How does 155 years sound? We’ve been around a very long time, for a very good reason. We make it our business to be there when you need us. Whether you’re facing a claim of $10K or $10M, you can count on Guardian Stop Loss to protect you. We have a: Track record of financial stability and exemplary financial ratings

Turnaround time of just 2–3 days for processing stop loss claims1

Long tradition of putting customers first because we’re owned by our policyholders









ASO The Guardian Life Insurance Company of America®, 7 Hanover Square, New York, NY 10004. GUARDIAN® and the GUARDIAN G® logo are registered service marks of The Guardian Life Insurance Company of America and are used with express permission. 1

Upon receipt of information from the payer.

Guardian’s Stop Loss Insurance is underwritten and issued by The Guardian Life Insurance Company of America, New York, NY. Policy limitations and exclusions apply. Optional riders and/or features may incur additional costs. Plan documents are the final arbiter of coverage. Financial information concerning The Guardian Life Insurance Company of America as of December 31, 2015 on a statutory basis: Admitted Assets = $48.1 Billion; Liabilities = $42.0 Billion (including $37.0 Billion of Reserves); and Surplus = $6.1 Billion. Ratings as of 02/16 and are subject to change. Policy Form #GP-1-SL-13. File # 2016-21397 Exp. 8/17

• Defending Against Balance

Breakout sessions include:

Billing in Connection With Reference Based, Medicare Plus and Other MetricDriven Reimbursement Strategies with Stewart Karge, Esq, Chief Legal Officer, Advanced Medical Pricing Systems and Ted Lavender, Esq., Attorney, Fisher Broyles

• Oncology Coverage

and Patient Care Considerations for SelfInsured Health Plans with John Hennessy, Senior Vice President, WellRithms

• DOL Audits – How to

Avoid Mistakes with Jenn McCormick, Esq., Vice President, Consulting, The Phia Group

• Stop-Loss Captive

Programs – Opportunities for Self-Insurance Industry Service Providers with Mike Madden, Division Senior Vice President, Artex Risk


For more information, registration and sponsorship opportunites, please visit We look forward to seeing you in Tucson!

The Self-Insurer |


high expectations


enhanced capabilities


peace of mind

We’ve got your back. Four words that anyone seeking to self-fund healthcare benefits needs to believe, particularly when contemplating the financial risks associated with catastrophic medical events. That’s why we’re firm believers at Swiss Rwe Corporate Solutions in building strong relationships, understanding exactly what our partners expect of us, and creating innovative ways of fulfilling those expectations. And that’s also why we’ve integrated IHC Risk Solutions into our business. The result is a powerful combination of expertise and capabilities that offers brokers, advisors, payers and their employer clients enhanced value – not to mention extra peace of mind. Now, more than ever, we’ve got your back. We’re smarter together. Insurance products underwritten by Westport Insurance Corporation and North American Specialty Insurance Company.


from SIIA



SIIA Diamond, Gold & Silver Member News SIIA Diamond, Gold, and Silver member companies are leaders in the selfinsurance/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

Robby Kerr

Diamond Members

Robby Kerr joins AIG as the National Sales Director for the Organ Transplant product Robby comes to AIG with a wealth of experience in the self-funded industry, which will enable him to significantly expand Organ Transplant sales and distribution. Most recently, Robby served as Executive Vice President and Chief Marketing Officer at Group Resources, a nationwide third-party administrator, as well as a pooling partner for AIG.  In addition, Robby is an accomplished leader, currently serving on the Self Insurance Institute of America (SIIA) Health Care Committee. 


The Self-Insurer |

“Robby will operate as a Subject Matter Expert on our Organ Transplant program for ongoing education of our producers and customers in the market. The product has proven to be an essential element of financial protection for self-funded employers, both large and small,” states Russ Jehs, Senior Product Director and Head of Organ Transplant. Bill Edrington, Vice President of Stop Loss and Voluntary Distribution, AIG Consumer Insurance, said, “He brings to AIG solid, long-standing relationships with TPAs and brokers across the country. I am confident that his experience and expertise in the self-funded industry align perfectly with our strategic focus on growing AIG’s Organ

Transplant business with our key strategic distribution partners.” Robby is based in AIG’s Atlanta office and can be reached at 

Silver Members POMCO Promotes Stephanie Fraser as Manager, Appeals POMCO, one of the nation’s largest benefits administrators, has announced that it has promoted Stephanie Fraser to the position of Manager of Appeals. Fraser has been with POMCO for seven years. Over time, she has held positions as a Claims Associate, Service Improvement Specialist, and most recently was the Supervisor of Operation Services, Call Center. In Stephanie’s new position, she will be providing direction and leadership to the Appeals Department staff. Fraser will also be responsible for ensuring that procedures that are currently implemented for appeals are within company policy and compliance of all state and federal laws and regulations.

February 2017 | The Self-Insurer


“Stephanie is an outstanding choice as the Manager of Appeals,” said Kathleen Lamb, Esq., General Counsel and Vice President, Compliance at POMCO. “She brings a wealth of knowledge to the department and we are fortunate to have her as the leader of our team.” Stephanie plans to apply and draw from her knowledge, information, skills, and management capabilities both from working at POMCO, as well as prior professional experiences.

Brokers will also benefit from the web portal, as they will now be able to create an account in order to quickly and easily submit RFPs. In addition, brokers will be able to contact UME from within the portal. Anne Marie Chapman, Chief Executive Officer, says, “We are excited about the possibilities opened up by the creation of this application. We strive to remain relevant and address the changing needs of our partners and clients, and I believe that will lead to greater efficiency and client satisfaction, as well as provide future opportunities to meet the changing needs of those we strive to serve.” Once the app has been launched, brokers will be able to access the site using individual login credentials that will be issued by UME.

About UME

“It is a privilege to have had the opportunity to develop and grow as an individual and in my career,” said Fraser. “I am extremely excited to help lead POMCO’s claims strategy team and I look forward to this opportunity.”

Underwriting Management Experts (UME), is a full service managing general underwriter (MGU) of employer stop-loss coverage. We provide flexible, innovative stop-loss, captives and life products that meet the unique needs of our partners. UME offers professional expertise, personalized service and creative solutions to an ever-changing market place.  Contact Samantha Gallagher at 267-519-1900 Ext. 703 or and visit


Gold Members

Management Experts Launches App for Medical

Eldorado, INETICO and CareValet Jointly Announce a Newly


Formed Strategic Partnership to Support Consumer Directed

UME announced the release of MyUME. com, a mobile application and web portal designed for submission of medical application questionnaires and RFPs. The app was launched January 1, 2017.

Eldorado, a provider of enterprise core administrative platforms, announced the strategic partnership with INETICO Inc. and CareValet, LLC to offer clients of its Javelina and HEALTHpac systems the latest technology available to allow them to take control of their healthcare. CareValet is a consumer driven mobile application that changes the way members select providers & schedule appointments for their healthcare services.

The app will feature a dual benefit for both brokers and applicants. Applicants will now be able to fill out and submit their medical application questionnaires online through the mobile web app or via their desktop computer. When members submit their questionnaires, copies will be sent to both UME and the broker, facilitating the communication between parties.


Care Management Services via CareValet

The new partnership supports the consumer being in control of their own healthcare with the power to make the best decisions for themselves and their family. Members are empowered to make in-network provider decisions based on cost and quality. An electronic provider scheduling component sends medical ID cards & plan information to the provider at time of scheduling. Members can select hospitals, emergency rooms, specialists, primary care providers and more. Patients will pre-certify themselves by selecting a provider and activating care nurses for Utilization Management, Care Management & Disease Management. INETICO provides access to their own care givers or to independent teams.

The Self-Insurer |

Consumers can receive messages directly, for triage purposes on their smart phone, and pop up messages will appear to remind them of appointments and medical follow up. The application is telemedicine enabled and can even schedule transportation if necessary.

Specialty Care Management

“We are very excited to be at the forefront of this consumer driven technology,” says Joseph Hodges, President of INETICO Inc. and Care Valet, LLC, “The consumer guided experience, we feel, is the clinical solution to appropriate healthcare and cost exposure.”

Specialty Care Management, LLC (“SCM”), the premier source of innovative catastrophic claim cost containment services, is pleased to announce that it has formally developed a strategic alliance with The Phia Group, LCC.

Sally Else, President, Eldorado added, “It is with this type of leading edge technology that U.S. healthcare will be transformed and all members of the healthcare landscape will be best served. The digital world is here and we, as industry leaders, must embrace it and make it accessible to all consumers of healthcare. We are delighted to be partnering with INETICO and CareValet to bring this technology to our Javelina and HEALTHpac customers.”

Media Contact: Cheryl Richards Eldorado Marketing Coordinator 602 604 3100


and Phia Group Announce Strategic Partnership

The Phia Group is the self-funded industry’s most acclaimed provider of plan support services, including plan document products, claim recoupment, and consulting. Headquartered in Braintree, MA, The Phia Group is a pioneer in healthcare costcontainment, continually working to reduce, “the cost of plans through its recovery strategies, innovative technologies, legal expertise, and focused, flexible customer service.” 


hen it comes to claims savings, you want a bulldog – someone

who’s guaranteed to protect your best interests. That’s why third-party administrators and self-insured groups rely on HHC Group to save the maximum amount of money possible on their medical claims. Armed with advanced technology and driven by a dogged work ethic, our resourceful team never gives up on your medical claims.





INDEPENDENT REVIEW ORGANIZATION (EXTERNAL) Claims Negotiation & Repricing | Claims Editing | Medical Bill Review (Audit) | Reference-Based Pricing DRG Validation | Utilization Reviews and Independent Reviews | Independent Medical Examinations

February 2017 | The Self-Insurer


This strategic alliance with The Phia Group keeps SCM on the cutting edge; emphasizing the management of catastrophic claims with a special focus on dialysis care, and combating excessive treatment and billing presently associated with it.   “Our joint venture with The Phia Group allows SCM to expand and enhance the array of services we already provide with an eye toward developing unique programs to further cost containment,” explains Rick Garrison, President of SCM.  “This alliance adds a new dimension to SCM’s business and gives us the opportunity to offer even more robust cost containment strategies.”


With The Phia Group, SCM will now offer a Renal Claims Defense program, eliminating exposure to legal and medical costs associated with renal dialysis claim analysis, repricing, and containment. Both The Phia Group and SCM have proven records of innovation and performance, and are excited to bring forth new programs and strengthen existing ones.  “The Phia Group is pleased to work with Specialty Care Management,” remarked Ron E. Peck, The Phia Group’s Senior Vice President and General Counsel, “because SCM appreciates the importance of powerful plan document language, and they understand the need to operate in accordance with those terms.  They have worked with us to prepare a potent defense strategy – protecting both benefit plans and participants.”  For more information about Specialty Care Management LLC, please contact Rick Garrison at 267-544-0365 or email at For more information about The Phia Group, please contact The Phia Group’s Sales Executive, Garrick Hunt, at 781-535-5644 or

The Self-Insurer |

SIIA would like to Recognize our Leadership and Welcome New Members 2016 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, PAKennesaw, GA

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

HEALTH CARE COMMITTEE Kari L. Niblack Executive Vice President of Client Engagement & Services Apex Benefits Indianapolis, IN INTERNATIONAL COMMITTEE Robert Repke President Global Medical Conexions, Inc. Novato, CA WORKERS’ COMP COMMITTEE Stu Thompson CEO The Builders Group Eagan, MN

GOVERNMENT RELATIONS COMMITTEE Lawrence Thompson Senior Vice President, Sales & Client Services POMCO Group Syracuse, NY

February 2017 | The Self-Insurer


SIIA New Members Regular Corporate Members Linda Van Dillen Chief Communications Officer CompAlliance Merriam, KS Andrew Seger Imprise Financial PCC Inc. Strongsville, OH David Fear President Shepler & Fear General Agency Roseville, CA


The Self-Insurer |

Silver Member

Employer Member

Raymond Holst Partner Clark & Gentry P.L.L.C. New York, NY

Malcolm Costa Trustee GOHIO Akron, OH Michael Larsen Executive Director MCSIG Salinas, CA James Perna Viking Insurance Ltd. Washington, DC

Better Service. Better Performance.

Experience Zelis Healthcare.

Network Solutions

Claims Integrity


Provides Discounts and Access to Networks

Ensures Appropriate Reimbursement for Care

Efficient and Timely Payment and Data

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 2016 Zelis Healthcare. All rights reserved.

Another $500,000 claim? We can help. EthiCare saves claim payers money. Period.


Profile for SIPC

Self insurer feb 2017  

Self insurer feb 2017