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Better Medicine? Direct primary care has been lauded for eliminating claims and allowing PCPs to practice medicine without having to handle claims. But skeptics raise the prospect of overpayments and deeper doctor shortages. Either way, the potential for disruption cannot be underestimated

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Table of contents

febrUARY 2019 VOL 124

W W W. S I P C O N L I N E . N E T


4 Better medicine? Direct primary care has been lauded for eliminating claims and allowing PCPs to practice medicine without having to handle claims. But skeptics raise the prospect of overpayments and deeper doctor shortages. Either way, the potential for disruption cannot be underestimated. By Bruce Shutan


Captives and Fronting Arrangements

By Karrie Hyatt

ARTICLES 17 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



News from siia members

24 The Profit Motive – A Necessary Evil? 29

Breaking New Ground through Joint Venture Models

The Self-Insurer (ISSN 10913815) is published monthly by Self-Insurers’ Publishing Corp. (SIPC). Postmaster: Send address changes to The Self-Insurer Editorial and Advertising Office, P.O. Box 1237, Simpsonville, SC 29681,(888) 394-5688

Self-Insurer’s Publishing Corp.

PUBLISHING DIRECTOR Erica Massey, SENIOR EDITOR Gretchen Grote, CONTRIBUTING EDITOR Mike Ferguson, DIRECTOR OF OPERATIONS Justin Miller, DIRECTOR OF ADVERTISING Shane Byars, EDITORIAL ADVISORS Bruce Shutan and Karrie Hyatt, 2018 Self-Insurers’ Publishing Corp. Officers James A. Kinder, CEO/Chairman, Erica M. Massey, President, Lynne Bolduc, Esq. Secretary




Better Medicine? Direct primary care has been lauded for eliminating claims and allowing PCPs to practice medicine without having to handle claims. But skeptics raise the prospect of overpayments and deeper doctor shortages. Either way, the potential for disruption cannot be underestimated


t has been touted and critiqued, but everyone can at least agree that direct primary care (DPC) is leaving an imprint across the selfinsured community. The real question is, can recasting the medical gatekeeper approach without any actual claims deliver better results? This emerging model is transparent relative to the fee-for-service (FFS) space where employers and employees alike have no idea what they’ll eventually pay when claims are submitted since fees vary so widely. That’s because variable claim costs are replaced by fixed fees associated with a per-employee-per-month (PEPM) membership for access to unlimited care. At least 700 DPC practices in 48 states serve more than 250,000 Americans, according to the Direct Primary Care Coalition, though others suggest a slightly higher estimate. Their prices range from about $60 to $150 a month, drawing comparisons to a typical cell phone plan. All patients are seen at least once for a health-risk




Better Medicine? assessment, while sicker members can go as often as needed. The flat-rate pricing model is also seen as a talent-management tool in tight labor markets amid mounting consumer confusion and frustration over their health care.

Emma Passé

Proponents suggest that a subscription approach is superior to FFS. A key selling point is no wait times or rushing patients out the door, as well as an ability to leverage telehealth services and identify behavioral health concerns

before they turn into costly claims. By investing in DPC, they say self-insured employers could reap huge dividends in terms of fewer surgeries, urgent care and ER visits, as well as eliminating overused health care services. They note that primary care physicians (PCPs) are positioned to handle up to 80% of all care needs under this nascent model, which also offers stop-loss carrier underwriters greater visibility of claims that can translate into 10% to 15% lower rates for employer customers.

“DPC doctors spend so much less time dealing with medical records and submission of claims that they spend so much more time practicing medicine,” explains Emma Passé, an account executive for EBMS, a TPA. However, critics argue that DPC could exacerbate an already chronic shortage of PCPs and spike rates in the individual insurance market by luring away healthy patients. Another concern is that people overpaying for their health care if they’re charged a membership fee and also incur claim costs. In addition, the DPC movement has experienced recent setbacks. Two leading industry players, Seattle-based Qliance and Las Vegas-based Turntable Health, shuttered in 2017. Since not all DPC practices are the same, producing contracting standards or industry benchmarks is complicated by varying clinical services and pricing structures. However, there are several baselines to consider. For example, providers must be properly licensed and insured and offer set hours for accessibility by patients, says Dan Thompson, founder and CEO of the Clinical Wellness Network. Mindful of these wild inconsistencies, all DPC practices in his network offer the same list of services with less than 2% variation. Doing so “translates better into something that’s actually sellable to an employer,” he explains.

Courting frustrated physicians Stark marketplace realities are driving the re-imagination of primary care. Look no further than health care costs rising to unsustainable levels alongside high physician burnout. Both have set the stage for the DPC movement, notes Christine Vago, SVP for OneBeacon Health. “Satisfaction in the health care system for both patients and physicians has declined as quickly as costs have increased,” she says. But physician buy-in is critical to the success of DPC entities. That means convincing risk-averse PCPs that their compensation for services rendered will be fair and reasonable. In addition to receiving a fixed rate for managing patients, it also could help if these practices are able to incorporate incentives based on management of the total cost of care for employee populations, according to Glenn McLellan, president of McLellan Consulting Services. That will make “the DPC entity more interested in integrating with the remainder of the plan,” he says. Although a DPC plan member himself, as well as a supporter of the concept, he’s unconvinced that it’s a meaningful strategy for payers and describes it as an island unto itself. More of his clients are dabbling in onsite clinics and patientcentered medical homes than DPC. Also, he cautions that nearly all of the model’s metrics reporting is focused on patient satisfaction when it needs to include quality considerations such as improved outcomes.

Christine Vago



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Better Medicine? DPC can be traced back to the late 1990s when it began as a costly white-glove service known as concierge medicine until about the middle 2000s at which time lower price points were introduced, according to Alex Lickerman, M.D., founder and CEO of a DPC practice called ImagineMD. While acknowledging that abruptly replacing FFS with a DPC model would exacerbate the nation’s PCP shortage, Lickerman argues that it would be temporary and there’s an even bigger problem lurking within the status quo. Medical school students who are saddled with six-figure student loan debt realize they can’t make money in primary care and the lifestyle is disastrous, he explains. “If we don’t do something to make primary care look really attractive to new doctors, the shortage is going to be even worse,” he adds.

How to structure practices Perhaps no one realizes the power of DPC better than new SIIA Chairman Adam Russo, Esq., CEO of the Phia Group, LLC, who began offering the model to his own employees two years ago. The results have been eye opening. “We’ve seen a 20% drop in overall expense as it relates to direct primary care,” he reports. Adam Russo

With 70 of 200 employees now choosing a selfinsured DPC plan option whose PEPM price tag Phia pays, rave reviews have spread across the

“We use it as a huge selling point for recruiting in a tight labor market and to show employees our appreciation for them,” Russo says. office about unfettered access to a personal doctor.

DPC will enjoy tremendous staying power only “if it stays true to its roots,” he cautions. Translation: 24/7 in-person or digital access to a PCP who understands each patient’s health plan design and their employer. Other requirements include a commitment to flat monthly rates without an FFS option, reasonably priced clinical services and the highest possible quality of care. While some DPC doctors still want to accept patients with traditional health insurance coverage lest they lose those customers, Russo believes it sullies the model.

DPC certainly could give traditional medicine a run for its money as long as it’s properly structured and explained. For example, Passé has a large account in South Carolina that will waive out-ofpocket costs for employees on referrals to specialists and labs outside the company’s embedded DPC practice. But any information associated with those visits must be funneled back to the referring DPC doctor for follow-up care. Another client in Denver layers reference-based pricing onto its DPC to manage catastrophic claims associated with specialist care, surgery and inpatient care, which other observes support. But for all its promise, DPC is still a fringe movement. Fewer than a dozen of several hundred EBMS clients, for example, have implemented this model. Passé says part of the problem is that TPAs, brokers and consultants just aren’t embracing it enough and, therefore, aren’t in a position to recommend the appropriate vendors. A stand-alone DPC model is difficult to sustain because many employers can obtain direct primary care from an onsite clinic or local community clinic, Passé believes. It’s also worth noting some practices that are skittish about the financial viability of this new model feature both a monthly membership and FFS.

Unlike McLellan’s critical assessment, he believes DPC combines the best of an onsite clinic, urgent care facility and telemedicine with personalized attention from a primary care doctor. But it shouldn’t be confused with its concierge medicine roots, which he says involves both a flat access fee and additional doctor bill.



Better Medicine? Impact on TPAs and brokers While DPC may be simpler and more palatable for self-insured employers and their employees, it’s more challenging to administer. With no claims to process, TPAs need access to a DPC practice’s medical records in order to make financial projections for self-insured customers for the following year. “Most TPAs are very accustomed to just processing claims from the retail environment, and they do it so well and efficiently,” Passé says. “DPC is much more of a partnership agreement.” It also forces TPAs to engage in a more consultative approach. By both improving benefits and lowering costs, Vago believes brokers, consultants and vendors that promote DPC to their self-insured customers will be better able to retain business and close new sales. “Including the DPC physician in client renewal meetings is a priceless resource when determining benefits and setting strategic plans,” she says. Supported by a legion of 8,500 health insurance brokers, agents and advisers, the Clinical Wellness Network is in the process of scaling DPC to an employer setting across 25 states that have granted the arrangement statutory approval and is eyeing at least 10 other states. Thompson says 97.5% of DPC’s focus is on individuals vs. group health plans. There are several key considerations when selecting a DPC solution, according to Vago. They include examining the background



and credentials of physicians leading the DPC clinic, as well as determining if afterhour access is confined to staffers vs. doctors. She says it’s also helpful to spell out what services are included with the monthly membership fee, and integrating DPC physicians with utilization and care management, referrals, the employee assistance program and pharmacy solutions. As medical gatekeepers, PCPs are no doubt in a powerful position to address untreated behavioral health problems by digging deeper into their patients’ state of mind. Significant results could follow. “I have uncovered an epidemic of stress, anxiety and depression in highly functional people who, for whatever reason, don’t see a therapist or psychiatrist,” Lickerman reports. DPC also can become a tremendous lifeline for some people. Thompson is reminded of a woman with leukemia whose $8,000-plus out-of-pocket max on a traditional health insurance plan seriously eroded her $25,000 yearly

“Participating in DPC meant that she could get her wellness, Pap, imaging and blood work and seeing the doctor regularly,” he says, noting how it helped cure colds and flues. “She actually cried when we did the open enrollment.” income.

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DPC practices typically have low overhead and feature just one or two physicians, as well as a receptionist and/ or medical assistant who serve no more than 600 patients at any time averaging about 10 daily visits, noted a physician blog in 2017. Some nurse practitioners who also recognize a need to change with the times are embracing their own version of this approach. Nice Healthcare in Minnesota, for example, charges a PEPM fee of just $25 to $35 for video or home visits, as well as in-home lab work and x-rays, 30 free medications and unlimited wellness coaching. With immediate access to primary care under the DPC model, Lickerman is relieved that he and his fellow physicians aren’t under any time constraints with patients and, as a result, are able to help reduce ER visits, specialty referrals, inpatient admissions, MRIs and other unnecessary care.


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Leveraged savings vehicles The federal government is poised to play an important role in helping spread DPC. With a new Congress now in session, observers say a key legislative change could help raise the model’s profile. The U.S. House of Representatives passed HR 6199 in 2018, which recognizes that DPC is not health insurance, and therefore, would allow working Americans to use flexible spending accounts (FSAs) and health savings accounts (HSAs) toward DPC memberships. It still needs to clear the Senate before arriving on the president’s desk for his signature. At least 24 states have already followed suit. Employers currently are able to earmark health reimbursement accounts (HRAs) toward DPC expenses. One example is Union County, N.C., which deducted HRA funds for government workers who chose a DPC option over traditional health insurance. Once employees have the ability to use FSAs and HSAs to pay for DPCs, Russo believes the concept will catch fire. He’s confident that federal legislation will pass, noting the potential for bipartisan support.

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

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Fronting Arrangements


he business arrangement of “fronting” is an often-overlooked facet of doing business as a captive. It’s a necessity for almost all captives, just like paying taxes or conducting audits. The basic tenets of fronting have not undergone any substantial change and as each captive must negotiate their own arrangements, the subject is often taken for granted. Yet, during the past year, the necessity of captives and fronting company came to the forefront with the action taken by the Washington insurance department.

In May, the Washington state insurance commissioner issued a cease-anddesist order to Cypress Insurance Company, a pure captive owned by Microsoft Corporation, and domiciled in Arizona. The cease-and-desist order established that Cypress had not paid any premium tax on written policies, was not eligible to sell insurance in the state, and had not placed insurance through a fronting company licensed in the state. The captive was also served a bill for over $2 million in back taxes and fees. While the issue was settled out of court for a reduced amount—and after Cypress had secured a fronting arrangement with a Washington-licensed insurer—the matter dredged up issues about fronting companies and captives.



Fronting What is ‘Fronting’?

Captives are only licensed to operate in their domicile—whether a U.S. state or off-shore entity—while most often they are insuring their parent or members in other states. Most states don’t allow entities doing business in their state to be insured by companies that have not been vetted by the state’s insurance department as admitted carriers or licensed carriers. Captives, while regulated by their own domicile, still have to comply with the laws of the state in which they conduct their business. This is where a “fronting” arrangement comes in.

When a captive cannot legally insure risk in a state where they’re not licensed to do business, it will contract with an insurer who is licensed in the state to write the policies in that state while the captive effectively becomes a reinsurer. It’s an unusual reinsurance situation as the captive will have developed all the relevant data concerning the risk being insured, rather than the issuing insurer providing that information.

A fronting arrangement allows captives to comply with financial liability laws, to show evidence of coverage when contracting with other businesses, to provide evidence of financial strength, and to cover certain risks that are required to have a policy issued by a licensed insurer.

All captives that insure workers’ compensation, healthcare benefits, auto, or any type of controlled lines of risk will need to make an arrangement with a fronting insurer if they aren’t licensed to operate in a state. The fronting insurer cedes almost all of the risk to the captive, retaining only a small amount of the risk. Although, some state insurance departments require the fronting insurer to retain a set amount of risk, such as in California, fronting insurers must retain at least 10% of the risk. In exchange for writing the policies in states where a captive cannot legally issue insurance, the fronting companies charge a fee of six to ten percent of gross written premiums—which depends on the types of services they are providing.

The most common services that are provided are: program administration, claims management, paying premium taxes, interacting with regulators, and auditing. As the fronting company is taking on some of the captive’s risk, they will require some type of collateral—usually letters of credit or a trust account.



Fronting Risks and Benefits for Fronting insurers

Fronting for a captive can engender a significant amount of risk for an insurance company, which is one reason that fronting insurers tend to be among the large national and international companies. While fronting insurance companies take on a small portion of the risk retained by the captive, they are still legally responsible for paying out claims as the company of record on the policy.

If a captive cannot pay the claims as a reinsurer, the fronting carrier will have to lay out the capital to resolve them.

Insurance companies that front captives could lose underwriting capacity of their own. In effect, captives are leasing surplus capital through their fronting arrangement with an admitted insurer. The captive will show up on the fronting carrier’s financial sheets as a nonadmitted reinsurer which can lead to reduced operation capacity.



As the fronting insurer is taking on risk through a non-admitted insurer, this can limit their underwriting ability in the state they are operating in. Although, this is not a likely scenario for large, multinational insurance companies.

The fronting insurer will also bear the brunt of state regulation of the captive’s policies and if those policies are written in more than one state, meeting the regulatory requirements can be a huge burden. In addition, the fronting insurer is responsible for all state taxes and fees, including premium taxes.









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Fronting However, fronting for a captive has its benefits. It can generate revenue and help grow premium for the fronting insurance company. The fronting insurer is providing the paper up front and will profit from the fronting fees without taking on substantial risk.

Captives bring to the table a higher level of risk management and expertise in their own risk, which makes insuring their risk less perilous. The enterprise risk management that captives have been known for helps reduce the risk of claims. The agreement also provides an alternate way for an insurance company to enter a new market by using the knowledge, risk management, and capital of the captive it fronts.

Drawbacks for the Captive

For both the captive and the fronting carrier, the most contentious issue in the arrangement is the collateral that fronting insurers will require before lending their paper. A fronting insurance company can require collateral upwards of 125 to 150 percent of projected losses. The number is usually determined through the fronting company’s actuarial department.

The captive will likely conduct its own actuarial study and then negotiate the amount of collateral needed for the arrangement to go forward. How the collateral will be presented is also a negotiable item and the parties must



decide on a letter of credit or a trust account that can be accessed by both parties. This is the most common way for a captive to provide capital.

Claims management can be another controversial part of creating a fronting agreement. As the fronting company is issuing the policies, and must meet the standards of state regulators, they often require that their own in-house claims management program be used and will have the choice of attorney if litigation is pursued.

One of the hallmarks of captive insurance companies is that the owner(s) retain control over risks, this includes which claims are considered and the selection of a defense attorney if the claim is contested. If a fronting company retains the right to claims management, the captive owner will have little or no say in how claims are handled.

With the success of Washington’s case against Cypress, the insurance commissioner has been emboldened to look further into other captive insurance arrangements in the state. Since Washington’s strategy proved successful, other state’s might be encouraged to look into captives and fronting arrangements in their own jurisdiction, as it could generate extra revenue. Now is a good time for captives to revisit their fronting arrangements.

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.




Q &A &


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, Dallas and Washington, D.C. law firm. Ashley Gillihan, Steven Mindy, 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 john.hickman@alston.com.



Agencies Pump New Life into CDHC With HRA Guidance In late October, the tri agencies (Department of Labor (DOL), Treasury, and Health and Human Services (HHS)) published a much-anticipated proposed regulation regarding health reimbursement arrangements (HRAs). The HRA proposed regulation is a product of an Executive Order issued by President Trump to the agencies to issue guidance making HRAs more flexible.

This proposed regulation, which will be effective for plan years beginning on or after January 1, 2020 (and cannot be relied on before the effective date), makes drastic changes to the rules currently applicable to HRAs offered to active employees. Under the proposed regulations, employers of any size will be able to establish HRAs for active employees that reimburse the employee’s premiums for major medical insurance purchased in the individual market, subject to certain conditions (“Premium Reimbursement HRA”).

Practice Pointer:

Although Premium Reimbursement HRAs are similar to QSEHRAs in many respects, a significant difference is that Premium Reimbursement HRAs will be available to employers of any size whereas QSEHRAs are only available to employers who are not applicable large employers as defined by Code Section 4980H. In addition, employers will be able to set up non-integrated excepted benefit HRAs that reimburse an employee’s general 213(d) medical expenses subject to certain conditions (including that the employee be eligible for other group health coverage sponsored by the same employer) (“Excepted Benefit HRA”). These new excepted benefit HRAs cannot be used to purchase health insurance in either the individual or group market, other than excepted benefit coverage (e.g., dental or vision) and COBRA continuation coverage.

The proposed regulations address the impact of certain health insurance reforms of the Affordable Care Act (ACA) on HRAs. The ACA reforms do not apply to HRAs that only provide excepted benefits (dental, vision) or HRAs covering only former employees (e.g., “stand alone retiree only” HRA). Consequently, such dental/vision and stand alone retiree only HRAs are not affected by the proposed regulations.



Practice Pointer:

The guidance adds two new HRAs to the mix of HRAs types that may be offered by employers: 1)

HRAs that are integrated with other group health plan coverage. These are the HRAs that resulted from Notice 2013-54 and its progeny;


HRAs that provide excepted benefits, such as dental or vision coverage;




Stand alone retiree only HRAs (or, HRAs limited to former employees);


NEW Premium Reimbursement HRA


NEW Excepted Benefit HRA (not to be confused with HRAs that provide excepted benefits, such as dental, vision).

The following is a summary of the proposed rules regarding the two new HRAs.

Premium Reimbursement HRA If the regulations are finalized as proposed, an employer of any size may establish an HRA that reimburses the employee’s premiums for major medical insurance purchased in the individual market (“IM Coverage”) provided that certain requirements are satisfied.

As a threshold matter, the IM Coverage must qualify as minimum essential coverage. This includes both grandfathered and non-grandfathered individual market coverage. IM Coverage does not include dental or vision only coverage. Also, IM Coverage does not include short-term, limited-duration insurance (STLDI), which is not considered individual market insurance. Nevertheless, the agencies request comments as to whether a Premium Reimbursement HRA should be able to reimburse STLDI premiums.

Practice Pointer:

The following are the requirements applicable to premium reimbursement HRAs:

• Only those active employees and their dependents who are actually enrolled in IM Coverage can be eligible for the HRA. Substantiation of IM Coverage is required both initially and when expenses are submitted for reimbursement.

Although various substantiation methods are discussed, the agencies indicate that employee attestation of IM Coverage is sufficient. No specific guidance is provided regarding the timing of the initial substantiation of IM Coverage. Must this be provided as a prerequisite to initial enrollment in the Premium Reimbursement HRA or can employers simply wait until the first expense is submitted for reimbursement? Additional guidance will be helpful.

Practice Pointer:

• The HRA must be offered to all eligible employees within a “designated” class on the same terms and conditions. Benefits within a designated class may only vary by age and family size. The designated classes identified in the regulations are:

o Full-time (as defined

in accordance with Code Section 105 or 4980H).

o Part-time (as defined in accordance with Code Section 105 or 4980H).

o Seasonal (as defined in accordance with Code Section 105 or 4980H).

o Employees subject to

a collective bargaining agreement.

o Employees subject to a waiting period.

o Nonresident aliens with no U.S. source income.

o Employees under

age 25 before the beginning of the plan year.

o Employees whose

principal place of employment is in the same rating area. The rating area is defined as the rating area used for ACA premium rating requirements in the individual market. Essentially this will allow employers to offer or vary the benefits based on worksite location.

o Any combination of two or more of the classes. For example, full-time union employees would be a designated class.



Practice Pointer:

Employers will be able to vary the benefits between designated classes or offer benefits to one more designated classes but not others. For example, employers will be able to offer full-time employees a Premium Reimbursement HRA with a maximum reimbursement of $2000 and offer parttime employees a Premium Reimbursement HRA with a maximum reimbursement of $1000. The IRS also issued Notice 2018-88, which provides a safe harbor under the Code Section 105(h) nondiscrimination rules. Under that safe harbor, a Premium Reimbursement HRA that varies the benefits for different designated classes will not be treated as violating the Code Section 105(h) rules to the extent that all members of the designated class receive the same benefit. • The employer cannot also offer group major medical coverage to the class of employees who are offered a Premium Reimbursement HRA.



Practice Pointer: Another

major difference between the Premium Reimbursement HRA and the QSEHRA is that a QSEHRA sponsoring employer and any other controlled group member could not offer ANY group health plan coverage to their employees (including major medical, dental, vision and Health FSA coverage). A Premium Reimbursement HRA sponsoring employer could not only offer group major medical coverage to classes of employees who are not offered the Premium Reimbursement HRA but the employer could also offer excepted benefits to participants in the Premium Reimbursement HRA. • A “QSEHRA-like” notice must be provided 90 days before the start of the plan year or before the effective date of coverage if the employee becomes eligible after the start of the plan year.

• Employees must be allowed to opt out and waive benefits at least annually.

In a rather surprising twist, the employer may also allow participants in the Premium Reimbursement HRA to pay their portion of any IM premium with pre-tax salary reductions through a Code Section 125 cafeteria plan (“Supplemental Cafeteria Plan”). However, the IM Coverage must not be Exchange coverage. . Under Section 125(f)(3), Exchange coverage cannot be paid for or reimbursed with salary reductions made through the cafeteria plan. As with the Premium Reimbursement HRA, the Supplemental Cafeteria Plan must be offered to all employees in the class on the same terms.

The guidance does not appear to go so far as to allow cafeteria plans to pay premiums for IM Coverage in the absence of a Premium Reimbursement HRA. In other words, it may still not be permissible (following the guidance in Notice 2013-54) to include IM Coverage in a cafeteria plan to the extent that some of the premiums for the IM Coverage are not also reimbursed by the Premium Reimbursement HRA. Practice Pointer:

Since the Premium Reimbursement HRA may be offered by applicable large employers, such employers may wonder how such coverage will be treated for purposes of the employer shared responsibility rules. The proposed regulations and additional subsequent guidance (Notice 2018-88) indicate the following with respect to the intersection of the employer shared responsibility rules and the Premium Reimbursement HRA rules:

• The premium reimbursement HRA qualifies as minimum essential coverage (MEC). Consequently, an employer who offers a Premium Reimbursement HRA (or a combination of group major medical coverage and Premium Reimbursement HRA coverage) to at least 95% of its full-time employees in a month will not be liable for the tax under Code Section 4980H(a) (aka the “sledgehammer”) for that month.

• It is also possible for the Premium Reimbursement HRA to be considered affordable and minimum value for purpose of the tax under Section 4980H(b) (aka the “tackhammer” tax). Premium reimbursement HRA coverage that is considered

“affordable” is also considered to provide minimum value. And the Premium Reimbursement HRA coverage is considered affordable for a month if the required contribution (the excess of the self only premium for the lowest cost silver plan in the applicable rating area over 1/12 of the annual reimbursement from the Premium HRA for self only coverage) is less than the product of the required contribution percentage (9.86% in 2019) and 1/12 of the employee’s household income. The IRS has indicated that employers may continue to use the affordability safe harbors set forth in the Code Section 4980H regulations to determine affordability since they will not know the employee’s household income.

Practice Pointer: The

guidance seems to suggest that an employer is considered to make an offer for purposes of the 4980H rules with respect to any employee in a designated class to whom the Premium Reimbursement HRA is offered even if the employee (or dependent child) does not have IM Coverage. Nevertheless, additional clarification would be helpful.



Application of ERISA As is the case with HRAs generally, the HRA itself will be subject to the other group health plan mandates, including ERISA and COBRA.

The DOL has also proposed regulations that would clarify that the individual market policies paid for by the HRA are not subject to ERISA, even though the HRA is, so long as requirements similar to the voluntary plan safe harbor are satisfied. For example, the employer cannot endorse a specific coverage or participate in the selection of the policies offered through the plan.

• The maximum annual contribution is $1,800, adjusted for inflation (does not include carryover amounts, which may be unlimited).

• The employee must also be offered group major medical coverage from the same employer, but the employee does not have to enroll in that coverage.

• The employee cannot also

Unlike the Premium Reimbursement HRA, COBRA does not apply to QSEHRAs. This may make QSEHRAs more attractive to some small employers. On the other hand, QSEHRAs are subject to more restrictive requirements, such as a prohibition against an offer of ANY group health plan coverage by any employer in the same controlled group. Practice Pointer:

Medicare Premium Reimbursement Medicare coverage does not qualify as IM Coverage; however, the current guidance regarding reimbursement of Medicare B and D premiums appears to be largely unaffected by these proposed regulations.

Practice Pointer: It

is worth noting that the agencies did not take the opportunity to add the Medicare premium reimbursement guidance in Notice 2015-17 to either the final regulations issued in 2015 or these proposed regulations—leaving open the possibility that the 2015-17 guidance will go away. Excepted Benefit HRA An employer may also offer a non-integrated HRA that reimburses general medical expenses, including COBRA, STLDI, and excepted benefit premiums, but not other group or any individual market health premiums. Such an HRA is permissible, and will qualify as an excepted benefit, subject to the following conditions:



be offered a premium reimbursement HRA.

• The terms and conditions must be the same for all “similarly situated” classes of employees (as defined by the HIPAA wellness nondiscrimination rules).

Practice Pointer:

Similarly situated classes of employees may be different from the designated classes of employees prescribed for the Premium Reimbursement HRA. For example, hourly employees and salaried employees would be two different similarly situated class of employees whereas neither salaried nor hourly are included in the designated classes of employees.

At AmWINS Group Benefits our team of specialists wakes up every morning committed to bringing your team innovative solutions to the opportunities and challenges you and your self-funded clients face. That’s the competitive advantage you get with AmWINS Group Benefits.


The Profit Motive – A Necessary Evil? written by Andrew Silverio


orking in the self-funded healthcare industry, it can be easy for us to develop tunnel vision and focus on cost containment and affordability at all costs, losing sight of other valid interests within and relating to the healthcare market.

Quality of care is an obvious one – if not done properly, reductions in cost can come at the expense of quality (of course, this isn’t always the case in healthcare, a product which so often has a great deal of inefficiency built in).

But there are other, less directly related interests which we should keep in mind when we zoom out and look at the broader system, for example in forming policy decisions. The healthcare market is an ecosystem, and like in any ecosystem, one organism becoming too powerful can ultimately be a bad thing for everyone. A super-predator in an isolated system can quickly hunt its own prey out of existence and starve.



Speed to Market

We now offer a Conditional Certificate of Authority on the same day the application is received for licensing a Captive Insurance Company. • Recently passed, HB 334 authorizes the Insurance Commissioner to issue conditional certificates of authority (“COA”) to captive insurance company applicants. • These conditional COA’s authorize the captive insurance company applicant to conduct business while the Commissioner completes the review of the application materials. • Conditional Certificates of authority will be issued only upon receipt of evidence of the minimum capital and surplus required by Chapter 69 of Title 18 of Delaware Code and a certification from the captive owner that the application materials comply with the requirements of Chapter 69. • A captive insurance company is granted a Conditional Certificate of Authority for a fee of $3600. • Delaware applies Know Your Customer; only certain managers may submit applications for a conditional license. “Delaware is the first in the nation to electronically offer a Conditional Certificate of Authority as part of the general application. This is a huge step in the right direction for streamlining the process for businesses looking to form a captive in Delaware.” Trinidad Navarro, Insurance Commissioner

STEVE KINION, DIRECTOR Bureau of Captive & Financial Products Department of Insurance

In Delaware, the captive regulators are dedicated exclusively to our captive insurance clients’ needs, and work under the direction of our Captive Bureau leadership, directed by Steve Kinion.

BUREAU OF CAPTIVE & FINANCIAL INSURANCE PRODUCTS 1007 North Orange Street, Suite 1010 Wilmington, DE 19801 302-577-5280 - captive.delaware.gov

Trinidad Navarro, Insurance Commissioner

CNBC published an article recently about a disease called nonalcoholic steatohepatitis, or “NASH.” It develops from nonalcoholic fatty liver disease, which has been estimated by the Center for Disease Analysis to impact 89 million Americans, and can lead to cirrhosis, cardiac and lung complications, liver cancer, and death.

be a few years away – we’re not doctors or medical researchers – but what we can say with confidence is that whatever the timeline is, it would be much longer without that mammoth payoff as motivation.

As a result of the obesity epidemic, particularly around the western world, the disease is becoming increasingly common, and the National Institute of Health now states that as many as 30 million Americans, or 12 percent of adults, have NASH. It’s estimated that by 2020 NASH will surpass hepatitis C as the leading cause of liver transplants in the United States, as increasingly younger Americans, now often in their 20s and 30s, are developing the disease.

This ability of manufacturers to charge and receive such high rates for new drugs has also given rise to an entire new sub-industry based around medical tourism and drug importation. In attempting to get patients access to new specialty drugs at a reduced cost to employers, numerous programs aimed at securing generic versions not yet available in the United States are enjoying success under several different models.

As alarming as these numbers are, there is still no FDA approved treatment for NASH. Yet.

With a global market for a cure estimated at $35 billion (with a b) dollars, pharmaceutical companies are quite literally racing to get new drugs approved and onto the market. There are currently 55 NASH drugs in various stages of clinical trials according to BioMedtracker, so new treatments are clearly on the horizon.

That $35 billion pot of gold is the sole reason so many companies are sinking so much money into just having a shot at being first to market. The market may be months away from a cure, it may



Manufacturers of new specialty drugs are allowed to charge, and regularly receive payment of, absolutely absurd prices. But in some cases, as appears to be the case with NASH, it is precisely because of this that we will soon have treatment for a disease which would otherwise continue taking lives unchecked.

These programs run the whole spectrum, from acting to facilitate shipment by a foreign pharmacy in Canada or Mexico to the American patient, or sending that patient to a border to cross over and pick up a drug themselves, all the way to a concierge service where a patient flies first class to the Caribbean, is put up in a hotel, and receives their treatment in a tropical paradise.

The fact that this third option can actually still be significantly less expensive than the patient simply picking up the American version of a drug at the pharmacy down the street from his or her home is quite telling.


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Other types of cost-containment efforts take aim at getting the amounts a plan has to actually pay for these drugs under control. Again, these programs vary greatly and can take the form of exclusions for certain specialty drugs, exclusions for all specialty drugs, or unique cost-sharing structures where copayment amounts change based on whether payment might be available from another source or based on the particular drug.

Seemingly recognizing the impossibility of an individual without insurance paying for these drugs out of pocket, manufacturers implement assistance programs to help cover patient copayments, or offer discounts or rebates for those who pay completely out of pocket. Other programs aim to identify when these programs might be available and steer that monetary benefit back toward the health plan.

The fact that all these different approaches are necessary illustrates an important principle which is often overlooked – the profit incentive to develop new drugs and therapies.

America is a global leader in developing new therapies and is by far the biggest healthcare spender per capita and arguably guilty of the greatest waste. Can the former continue to be true without the latter?

If not, to what extent are we willing to sacrifice innovation and the development of new therapies for those few with no remedies available for their illnesses, in order to ensure that the masses can receive vital routine care in an affordable way?



Food for thought.

Andrew Silverio joined the Phia Group, LLC as attorney Third Party Liability Lawyer in the summer of 2014, dealing with a variety of issues such as Medicare recovery and Medicare COB, class action recovery, and other opportunities to recoup funds for benefit plans. In addition to conducting research into novel and developing areas of the industry, he expanded his focus into provider relations, dispute resolution, and cost containment. He now serves as the company’s Compliance and Oversight Counsel, handling some of the most complex consulting issues and assisting with compliance and regulatory issues, both internal and external. Andrew attended Berklee College of Music in Boston, earning his B.A. in professional music. He then attended Suffolk University Law School, graduating with an intellectual property concentration with distinction. There, he took the step into the healthcare realm of the legal world, serving first as an editor and content contributor, and then on the executive board of the Journal of Health and Biomedical Law. Andrew is licensed to practice in the Commonwealth of Massachusetts.

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Written by Genevieve Caruncho-Simpson

Breaking New Ground through Joint Venture Models


nrollment season is upon us and people are determining what style health plan would meet and exceed their needs from a member and employer perspective. The ideal plan provides members with the highest level of personalized care while protecting cost efficiencies for employers through a seamless, comprehensive workflow. In terms of a traditional Accountable Care Organization (ACO) product options, the benefits can be considered a bit restrictive and siloed, which can leave members and employers in a position seeking more from their health care plan. The ACO model, which does not address the lack of strong financial and operational alignment between health plan and provider entity, is not for everyone. Through the voluntary platform, ACO plans lack a level of personalization and coordination that other plans offer. More recently, joint venture health plans have made their mark in the health care industry by breaking new grounds and setting the bar at a higher level for members,



brokers and employers through hightouch, integrated solutions. Additionally, the combined resources provide even more opportunities for member care and reduction of costly care options. For some plans, the focus stays on the cost effectiveness without providing many alternatives. In the joint venture health plan model, the efforts are united to decrease the total cost of care of the member through utilization of personalizing patient needs on a holistic level, saving time and money for the employer while providing custom health alternatives to the member. The goal is to keep it easier for the member, leaving the complexities of managing accurate and timely customized treatments and health maintenance options to the professionals on the back end.

Additionally, combined with a high-performance provider network, this structure offers an extended footprint for members while integrating the highest quality resources and maintaining the costs for members and employers, drawing in new business and increasing the number of members. These efforts aim to connect the members with a long-term, highly engaged primary care provider and reduce the overall cost incurred each year caused by a lack of early detection and treatment and effective chronic care and disease management. Integration of resources is the backbone of a joint venture. It’s through the utilization of shared resources to serve all parties that makes this style of a health plan stand out. In addition to increased resource options, the joint venture health care model makes services and programs that are easier to access and more effective by connecting key components of the system – from benefit design to post-hospital discharge care coordination. By taking a ‘no-wrong-door’ approach to the care experience –allowing for quick, convenient, and integrated access points via text, call, video chat, or in person—it ensures members are getting the timely support and guidance they need and don’t miss vital primary care visits.

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For health plans offering joint venture resources like a locally-based care team, the benefits include a dedicated medical director, nurses, pharmacists, diabetes educators, social workers, and behavioral specialists who support the members and their families with their complex needs, often face-to-face. These personalized clinical care coordination teams are equipped with resources to cater to the 5% highest risk patients that typically drive as much as 50% of overall costs. This holistic approach includes a community-based focus that seeks to address a broad range of social, economic and environmental factors that shape an individual’s engagement in health behaviors. It’s an all-in-one plan that focuses on educating and caring for the members while maintaining costs for employers. The more handson, local support the member and their families receive, particularly if they have a complex, high-cost condition, the less likely they are to struggling navigating an often-complex health system that decreases member engagement and increases overall cost and dissatisfaction. Researchers have found that in 1 out of every 7 visits1, important data is missing. Situations like these have can adversely impact patients and the quality of care they receive. Through personalized care and the utilization of patient data analytics solutions, physicians are provided a seamless workflow, avoiding gaps in care coordination and compromised care. Patient data combined with claims data that are regularly analyzed provide proactive, comprehensive insights tailored to the patient across various sites of care. Utilization of this data within aligned hospital and providers ensure that coordination of care occurs, regardless of the hospital or medical group that the patient sees. This directly reduces significant resource waste, saving both employer and member costs for what’s important. Partners in the joint venture sector are continuously working to improve the data sharing platforms to maximize member satisfaction, decrease employer costs and maintain the health and happiness of all participants. Additionally, duplication of efforts are no longer an issue within the business model. Resources in the joint venture structure provide seamless, coordinated, precise information down to the prescription level through cost transparency. The goal of this is to equip providers with information and options to prescribe medications that fit the members both clinically and health plan



benefits-wise through effective updates and communication within the member’s health plan. Joint venture partners aim to reduce member and employer costs by linking up with forward-thinking primary care physicians and securing valuebased arrangements that reward them for high-quality, efficient care for all members without the disadvantage of driving up costs that impacts all parties. This also provides them with tools and resources that help physicians simplify their practices and focus on delivering great care to our members, offering timely appointments, often with sameday / next-day availabilities; enhanced data to ensure members’ care is efficiently coordinated especially after an ER or inpatient visit; with no referral requirements to in-network specialists.

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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This healthcare model extrapolates data from a health plan and health system partner and supports all sides by catching data that might fall through the cracks, creating new, novel solutions and risk analysis. Real savings are created and quality improvement is enhanced. Instead of avoiding complex health care needs, this structure aims to solve them through personalized, local, integrated initiatives. It’s a comprehensive snapshot of health care from the provider side that leads to a high-touch, accurate process and connection to member and employer needs from the insurance side.

Genevieve Caruncho-Simpson is the chief operating officer of Texas Health Aetna. Leveraging the strengths of two leading organizations, Texas Health Aetna is blurring the lines of traditional health care plans and health systems to create a truly integrated solution that’s simple to navigate and puts the member’s experience first. The local health plan is committed to providing affordable, high-quality health care services and delivering customized care to members throughout the Dallas-Fort Worth metroplex. For more information about Texas Health Aetna, visit www.texashealthaetna.com.

References 1) https://www.medpagetoday.com/ pediatrics/preventivecare/427



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IIA’s 2018 Self-Insured Health Plan Executive Forum will take place March 18-20th at the Westin Charlotte in Charlotte, North Carolina.

This popular SIIA educational and networking event brings together senior executives representing key business partners supporting self-insured group health plans, including third party administrators (TPAs), stop-loss carriers/MGUs, brokers/ consultants, captive managers and leading service providers, with the objective of promoting improved collaboration in order to grow the self-insurance marketplace in a responsible way.



ENDEAVORS Come in early to participate in the Self-Insurance Educational Foundation’s (SIEF). Golf Event. Monday, March 18 from 12:00 pm - 3:00 pm. SIEF is 501(c)(3) nonprofit organization affiliated with the Self-Insurance Institute of America, Inc. The mission of the foundation is to create and underwrite educational initiatives that serve to promote a greater awareness and understanding of self-insurance/alternative risk transfer. Past Foundation-sponsored educational initiatives and projects have included:

• Producing and maintaining a website that serves as on online hub for objective information about self-insurance (www.siefonline.org)

• Self-insurance briefings for congressional staff members on Capitol Hill • Sponsoring the participation of high profile, professional and government speakers to participate at SIIA conferences

• Underwriting an annual survey report of the stop-loss marketplace

You can help support the SIEF by participating in their TopGolf event! TopGolf is a premier golf entertainment complex where the competition of sport meets Charlotte’s local hangout. No golfing ability? No problem! Topgolf is a game that anyone can play (and win). Score points by hitting micro-chipped golf balls at giant dartboard-like targets on an outfield. The closer you get your ball to the center or ‘bullseye’ and the further the distance, the more points earned. The fun and games don’t stop there; come and indulge in a delicious hosted lunch and drinks. No shoes, no club rentals, no skill needed, what could be better?

• Published: “Understanding Group Self-Insured Workers’ Compensation Funds”

• Published: “Understanding Self-Insured Group Health Plans” • Published: “Managing Corporate Risks Through Captive Insurance Programs”

Registration for this event is $199 per person and can be done when registering for the conference. This is a great way to support the foundation dedicated to ensuring the development of tomorrow’s leaders in the self-insurance/ART industry, all while having fun!

Also at the beginning of the Self-Insured Health Plan Executive Forum is a special mini-program for the SIIA Future Leaders (SFL) on Monday, March 18th from 1pm4pm. This mini-program will combine a structured networking session with a featured speaker specifically geared for SFL members (under age 40).

SIIA launched the SIIA Future Leaders (SFL) initiative in fall of 2018, designed to encourage talented younger professionals to become involved with the association and the self-insurance industry.




There is no cost for SFL mini-program and you do not need to be signed up for the Executive Forum (full conference), but advance separate registration is required. Registration for the SIIA Future Leaders Forum will include access to the Legislative/ Regulatory Update session and Executive Forum’s welcome reception that evening.

The special SFL mini-program sessions include:

Power 90 Networking One of the keys to becoming a successful future leader is to develop a professional network of other up and upcoming “A players” within the self-insurance industry. Get a head start on building such a network by participating in a structured, 90-minute networking session where you are assured to make multiple new connections.

Working SIIA - What You Need To Know, with Duke Niedringhaus, Senior

Vice President, J.W. Terrill, a Marsh & McClennan Company Many of the most successful executives within the self-insurance industry have been active SIIA members – that is no coincidence. SIIA offers multiple involvement and networking opportunities that can help you build a positive professional reputation, contribute to your organization’s financial success and advance your education. The featured speaker for this session has done it all within SIIA for more than a decade– committee member, committee chairman, speaker, moderator and director. Based on this experience, he will share his insights on how to “work SIIA” to further your career advancement goals while adding current value to your employer.

Every benefit plan needs a hero CoreSource saves members from excessive healthcare expenses by helping them make smart, informed decisions when accessing healthcare. And when members make better decisions, employers see an improvement in their bottom line. That’s the kind of hero every benefit plan needs.

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If you have Future Leaders in your company that you would like to direct to this initiative, or if you are a future leader yourself, we invite you to join the SIIA Future Leaders LinkedIn Group at www. linkedin.com/groups/12098226. More information on SIIA’s Future Leaders initiative and the SFL mini-program at the Self-Insured Health Plan Executive Forum, including registration, can be found at www.siia.org.

There will also be a pre-conference session Legislative/Regulatory Update pre-conference session on Monday, March 18th. Ryan Work, Vice President, Federal Government Relations for SIIA and Adam Brackemyre, Vice President, State Government Relations for SIIA will provide the latest updates on federal and state legislative/regulatory developments affecting the selfinsurance marketplace.

The full conference educational program kicks off Tuesday, March 19th with Welcome Remarks & The Hot Industry Issues Audience Poll moderated by SIIA President & CEO, Mike Ferguson. We will get off to a fast and fun start by offering your anonymous opinions on the hottest industry issues of the day and see aggregated audience results in real time via SIIA’s attendee polling technology. You will also have the opportunity select which exhibitors should be given a five-minute live pitch opportunity during the hosted luncheon.

Other sessions in the educational program include:

Technology Strategies Shaping Tomorrow’s TPAs, with Cheryl Kellond, CEO & Co-Founder Apostrophe Health and Alex Arnet, Chief Commercial Officer, Lucent Health This session will feature a recent entrant into the TPA marketplace who has incorporated specific technology strategies from day one, along with a more established TPA who has real world experience transforming legacy systems as part of a growth strategy under-pinned by technology. These two presenters will share their insights on what successful TPAs of tomorrow will look like.

Preparing Employers for Stop-Loss Captive Programs, with Joe DiBella, EVP - Managing Director, Health & Benefits Practice, Conner Strong & Buckelew and Jesse Crary, Attorney, Primer Piper Eggleston & Cramer A growing number of employers are considering joining or forming a group stoploss captive with other like-minded employers to help control the cost of offering employee health. In order to maximize the advantages of making this shift, employers



ENDEAVORS need to understand the ins and outs of structuring a self-insured plan that will position them to take full advantage of being grouped with other individually selfinsured employers. They also need to know how to vet and compare various types of group stop-loss captives in order to select a program best suited to meet their goals from a financial, risk management and governance perspective. This session will feature broker/advisor and legal perspectives on how employers should prepare and position themselves to optimize the upside of participating in a group medical stoploss program.

Self-Insurance Claims Classroom, with Adam V. Russo, Esq., CEO, The Phia Group, LLC During this interactive session, attendees will be presented with various real-world scenarios where something has gone wrong as part of the claims administration and/or stop-loss reimbursement process and then be requested to provide their anonymous opinions on the appropriate course of action via SIIA’s real-time polling technology. Expert analysis will be provided for each scenario along with commentary about audience polling results.

Making it Work with the Third Wheel – Legacy Vendor Arrangements, with Brian Connelly Director of Product Development & Strategy, Gilsbar, LLC, Jonathan Logan, President, Logan & Associates of Louisiana, Inc., Dan Myers, Vice President of Client and Business Development, EBMS, Erin Weenum, Chief Strategist, Employee Benefits, Leavitt Group An increasingly common friction point between TPAs and brokers/ consultants working together to set up a new selfinsured health plan, and/or making substantive changes to an existing plan, is when one of them has an established vendor and/or provider relationship that they insist must be part of the deal. This session will discuss real world examples provide practical advice on how best deal with these “Third Wheel” situations.

Beyond Disruptors and Rock Stars – Let’s Talk Execution, with Mark Gaunya, Co-Owner and Chief Innovation Officer, Borislow Insurance, Kevin Trokey, Founder, Q4intelligence, Jim Rinere President, CWI Benefits, LLC, Arlene Cayetano, FLMI, President & CEO, Managing Member, Greymatter Risk Management, LLC There has been a lot of positive energy recently in the broker/advisor space related to self-insured health plans, which is a welcome development for our industry. But while health care “disrupters” and “rock stars” are great, effective execution and coordination makes all the difference when transitioning employers into selfinsurance, or when making substantive changes to a current plan.



ENDEAVORS This panel will discuss what is going right and where there is room for improvement on how brokers/advisors, TPAs and stoploss carriers work together in serving the interests of plan sponsors.

TPA Best Practices – Peer Review Session, with Ron Dewsnup, President, Allegiance SIIA is in the early stages of developing a best practices framework for its TPA members, with a specific focus on claims administration and stoploss reimbursement submissions. A preliminary draft will be shared with the attendees at this session in order to solicit feedback to assist with further development. All attendees are invited to participate.

Stop-Loss Carrier/MGU Best Practices – Peer Review Session, with Pat Campola Windsor Strategy Partners, Inc. SIIA is in the early stages of developing a best practices framework for its stop-loss/ MGU members, with a specific focus on claims review/reimbursement. A preliminary draft will be shared with the attendees at this session in order to solicit feedback to assist with further development. All attendees are invited to participate.

There will also be an “Audience Choice” Hot Topic Open Discussion. Attendees will choose the topic via real-time polling for an open discussion among session attendees.

We look forward to seeing you in Charlotte! More information, including registration and sponsorship opportunities can be found at www.siia.org.

We have a track record for helping organizations successfully enter the healthcare market, launch creative new products, and properly price and manage their risk portfolios. You can count on our expertise to be your risk management partner through all stages of the business cycle.

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NEWS FROM SIIA MEMBERS 2019 FEBRUARY MEMBER NEWS 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 membernews@siia.org. All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at www.siia.org. For immediate assistance, please contact Jennifer Ivy at jivy@siia.org. If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy at jivy@siia.org. 44


NEWS Diamond Members

The company is one of the largest providers of medical stop-loss nationally.

Companion Life Awarded

About A.M. Best

17th Consecutive A+ Rating from A.M. Best Columbia, SC - A.M. Best Company, which describes itself as the world’s oldest and most influential insurance rating and information source, designated Companion Life Insurance Co., (including its subsidiaries Niagara Life and Health and Companion Life Insurance Co. of California) an A+ (Superior) rating for the 17th consecutive year.

A.M. Best annually reviews and ranks 3,500 companies in 90 countries. For more information on the ratings, including an overview of its rating process and rating methodologies, visit: http://www.ambest.com/home/ratings.aspx. About Companion Life Headquartered in Columbia, Companion Life has specialized in employee benefits since 1971. The company markets life, dental, disability, accident, specialty health — including medical stop-loss, limited benefit health plans and group supplemental retiree prescription drug plans — as well as other insurance programs, through a network of independent agents and brokers, general agents and managing general underwriters. Companion Life is licensed in 49 states and the District of Columbia. It holds an A.M. Best Rating of A+ (Superior). Visit www.CompanionLife.com

A.M. Best attributed this outstanding achievement to Companion Life’s strong risk-adjusted capital position, stable premiums and earnings growth. It also noted the company’s diversified portfolio that includes numerous accident and health and ancillary products. According to Companion Life President Phil Gardham, maintaining this level of excellence and having it recognized is meaningful to our distribution partners, employees and policyholders. He said, “The A.M. Best rating is an important metric. It is one more validation that our strategy is on point, our leadership team is executing that strategy successfully, and our customers are receiving the service and benefits of a focused and financially stable organization in a volatile marketplace.” Companion Life (including subsidiaries) is licensed in 49 states and the District of Columbia.




HM Insurance Group Welcomes New Account

Prior to that, he held sales and account management positions of increasing responsibility at Healthplan Services over the span of 19 years.

Manager, Julian Faedo

About HM Insurance Group

Julian Faedo has joined HM Insurance Group (HM) in the role of account manager, Tampa Regional Sales. In this role, Julian is responsible for managing HM’s existing accounts and working with producers in the Tampa region to support the growth of the company’s Florida business. Julian has been in the insurance industry for 20 years, working with brokers on medical and ancillary products and helping them with new business sales and retention of group clients. He comes to HM from United Concordia Dental where he served as a sales manager.

HM Insurance Group (HM) works to protect businesses from the potential financial risk associated with catastrophic health care costs. The company provides reinsurance solutions that address risk situations confronting employers, providers and payers. A recognized leader in employer stop loss, HM also offers managed care reinsurance nationally under the name of RBS Re. HM Life Insurance Company and HM Life Insurance Company of New York are rated “A” (Excellent) by A.M. Best Company, one of the country’s oldest and most respected rating agencies. Through its insurance companies, HM Insurance Group holds insurance licenses in 50 states and the District of Columbia and maintains sales offices across the country. Visit hmig.com.


Point6 delivers Financial Savings, Risk Reduction, Growth, Innovation, Value and Efficiency to entities Managing Large Complex Medical claims and Stop Loss Insurance for employers.



NEWS Gold Members Collective Health Bolsters Commercial Team with Enterprise Software and Healthcare Industry Leadership - Following strongest year in revenue growth to-date, Collective Health adds to leadership team to support expanding client base and accelerate growth San Francisco, CA - Collective Health is announcing the addition of two new executives to bolster its leadership team as the company’s platform continues to transform the healthcare experience for employers and their people. This includes the introduction of a Chief Commercial Officer, a new role that will be filled by Kevin Francis. The company has also brought on Michael Nikunen as Vice President of Strategic Accounts, who will help expand and diversify the company’s client base, which currently includes selffunded companies across a wide array of industries.

Kevin Francis brings more than 25 years of extensive sales experience, and most recently led commercial teams at Oracle, Workday, and Skuid. At Workday, Francis was part of a critical chapter of growth, helping the company scale from roughly 350 employees to more than 9,000 employees. As Chief Commercial Officer at Collective Health, Francis will be responsible for accelerating customer and revenue growth, while overseeing the entire commercial function including Sales, Customer Success, and Business Development.

“Collective Health has done something incredibly challenging in getting employers to break from the healthcare status quo,” said Kevin Francis. “Not only does Collective Health already have traction in a large market, but it’s showing tangible results in its ability to demonstrate cost savings while improving the consumer experience. Healthcare impacts all of us, and Collective Health’s mission to meaningfully change how we understand, navigate, and pay for it is important for everyone. I’m excited to play my part in helping the company continue to grow.”

“I couldn’t be more excited to welcome both Kevin and Michael,” said Ali Diab, Co-founder and CEO of Collective Health. “Each brings a unique skill set to the company at an important time in our growth. Kevin is no stranger to driving rapid adoption of software solutions in large enterprises, and his experience helping scale sales and alliances at world class technology organizations like Workday and Oracle will be invaluable to our team. In parallel, Michael’s track record creating and driving innovative employee healthcare strategies for Fortune 100 companies speaks for itself, and his contributions will help us expand our client base and increase our influence across the industry.”

FEBRUARY 2019 47

NEWS Michael Nikunen brings more than 25 years of experience in healthcare consulting and benefits strategy. Most recently, Nikunen spent eight years at Mercer as a partner and leader of the Pacific Northwest region. Previously, he spent more than 15 years at Towers Watson managing high performing teams of consultants to serve the human resource needs of large enterprises. At Collective Health, Nikunen will be responsible for helping the company continue to grow its client base with some of the largest, most innovative enterprises in the country. “Our country’s self-funded employers— who provide health coverage for over 100 million Americans—are desperate for transformation,” said Michael Nikunen. “Increasingly, they’re looking for solutions

to the challenges around rising costs and declining consumer trust that persist in today’s healthcare status quo. I believe Collective Health represents the next generation of employee healthcare and has proven it can deliver technology solutions that arm employers with the data they need to bend the cost curve, and the products and services their people need to bolster trust.” Francis and Nikunen both joined Collective Health in December and bring their unique backgrounds to an executive and leadership team that already includes talent from top tech brands like Apple, Google, and SAP as well as leading healthcare and consulting organizations like Anthem, UnitedHealthcare, and Willis Towers Watson.

About Collective Health Collective Health is powering the Employer-Driven Healthcare Economy with the first Workforce Health Management System—giving employers a platform to simultaneously manage their healthcare investment and take better care of their people. With more than 200,000 members and 45 enterprise clients, Collective Health is reinventing the healthcare experience for self-funded employers and their employees across the U.S. Founded in October 2013 and headquartered in San Francisco, Collective Health is backed by NEA, Founders Fund, GV, Sun Life, and other leading investors. For more information, visit https://www. collectivehealth.com.

Only WellRithms has the medical, legal, and data expertise to accurately review medical bills. Start saving REAL dollars and experience the WellRithms diierence today. Find out more at www.wellrithms.com



Being Powerful. Being Human. Being PharmPix.

Partnership is within your grasp.

Discover why PharmPix has been revolutionizing PBM since 2009. Schedule a personalized demo at www.onearksuite.com


NEWS Silver Members Spectrum Equity Leads Majority Recapitalization of Payer Compass - Investment in Leading Healthcare Price Transparency Platform to Support Growth and End Market Expansion Payer Compass, a leading provider of healthcare reimbursement technology and price transparency solutions, announced that it has received a significant investment from Spectrum Equity, a growth equity firm focused on the information economy, and Health Enterprise Partners (HEP), a healthcare- focused investment firm. This investment positions Payer Compass to continue its rapid growth while further extending its comprehensive product offering serving health plans, self-insured employer groups, third-party administrators and brokers. Payer Compass’ core software platform, VISIUMTM, is a purpose-built healthcare pricing engine and contract management system focused on addressing the complexities of Medicare, Medicaid and Commercial claims pricing. With the rise of healthcare costs and shift to self-funded plans, Payer Compass enables employer groups and health plans to realize significant cost savings by utilizing a Medicarebased reimbursement method as it is more closely tied to the true cost of providing care.

“We are extremely proud of the success Payer Compass has achieved to date as we have grown the company to serve over 125 payer customers, representing nearly 1,000 employer groups and over two million covered lives. We are excited to partner with Spectrum and HEP as their experience scaling leading healthcare technology companies will allow us to take advantage of the large market opportunity in front of us in broader healthcare cost containment and price transparency,” said Payer Compass CEO Greg Everett. “We are seeing rapid adoption of our solutions across key markets given the growth of government-sponsored healthcare and reference-based pricing and will continue to see expanding use cases for our unique pricing technology going forward.” 50


“We are thrilled to partner with Payer Compass as the company continues to scale rapidly and impact more of the cost containment landscape,” said Jeff Haywood, Managing Director at Spectrum Equity. “The company’s proprietary pricing technology and data are highly unique resulting in more accurate pricing, increased auditability and greater provider acceptance.” Steve LeSieur, Managing Director at Spectrum, added, “Payer Compass sits squarely at the intersection of several key investment themes for Spectrum within healthcare as the company’s platform addresses the rising costs of healthcare faced by self-insured employer groups and health plans as well as the fundamental need for greater healthcare price transparency. We look forward to working with Payer Compass management to expand the company’s go-to-market and product efforts to fully capitalize on this growing opportunity.” As part of this transaction, Jeff Haywood, Steve LeSieur and Michael Radonich from Spectrum Equity, as well as David Tamburri from HEP, will join Payer Compass’ Board of Directors. Financial terms of the transaction were not disclosed. About Payer Compass Payer Compass is an innovative healthcare technology company providing the most trusted healthcare reimbursement technology and price transparency solutions utilizing both proprietary technology and unsurpassed customer service. The company’s core software platform, VISIUMTM, is used by a wide variety of customers including health plans, self-insured employer groups, third-party administrators

NEWS and brokers to manage complex healthcare reimbursement and pricing strategies for Medicare, Medicaid and Commercial through its proprietary contract management system and claims pricing engine. The company’s single-source reference-based pricing solution, INNOVATE360, consists of not only renowned claim pricing and editing technology, but also the full gamut of provider outreach, patient advocacy and balance bill strategy with appeals support. For more information, visit www.payercompass.com

About Spectrum Equity Spectrum Equity is a leading growth equity firm providing capital and strategic support to innovative companies in the information economy. For over 25 years, the firm has partnered with exceptional entrepreneurs and management teams to build long-term value in market-leading software, information services and Internet companies. Representative investments include Ancestry, Bats Global Markets, Definitive Healthcare, GoodRx, Grubhub, Jimdo, Lynda.com, SurveyMonkey, Teachers Pay Teachers and Verafin. For more information, visit www.spectrumequity.com About Health Enterprise Partners Health Enterprise Partners invests primarily in privately held, middle market companies in health care services and health care information technology. Central to HEP’s strategy is its unique and extensive hospital system and health plan network, 36 members of which are investors in HEP’s funds. HEP seeks to invest in companies that improve the quality of the patient experience, expand access and reduce the cost of health care. For more information, visit hepfund.com

How many catastrophic claims can your balance sheet survive? Finding the perfect balance between risk management and cost savings is an essential part of being self-insured. Whether you’re an employer group, single-parent or group captive, we’ll work with you to tailor a solution that fits your needs. We combine our diverse product offerings, highly rated financial strength, best-in-class underwriting team and comprehensive claims services to offer you innovative alternative risk structures.

Our Accident & Health solutions include: • Medical Stop Loss • Stop Loss Captives

• Special Risk Accident • Organ Transplant and Critical Illness

Learn more about QBE at qbe.com/us

QBE and the links logo are registered service marks of QBE Insurance Group Limited. Coverages underwritten by member companies of QBE. © 2018 QBE Holdings, Inc. 139013-AD (11-18)




high expectations


expert 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 Re Corporate Solutions in building strong relationships, understanding exactly what our partners expect of us, and creating innovative ways of fulfilling those expectations. By working closely together, we combine our expertise and capabilities with our brokers, payers and advisors to provide enhanced value for your clients – not to mention extra peace of mind. When it comes to employer stop loss solutions, now, more than ever, we’ve got your back. We’re smarter together. Corporatesolutions.swissre.com/esl Insurance products underwritten by Westport Insurance Corporations and American Specialty Insurance Company. © Swiss Re 2018. All rights reserved.

SIIA 2019 BOARD of directors & committee chair ROSTER

Chairman of the Board*


Committee Chairs

Adam Russo Chief Executive Officer The Phia Group, LLC Braintree, MA

Kari L. Niblack, JD, SPHR CEO ACS Benefit Services Winston-Salem


Mary Catherine Person President HealthSCOPE Benefits, Inc. Little Rock, AR

CAPTIVE INSURANCE COMMITTEE John R. Capasso, CPA, CGMA, PFS President & CEO Captive Planning Associates, LLC Medford, NJ

Chairman Elect*

Kevin Seelman Senior Vice President Lockton Dunning Benefit CompanyDallas, TX

Mike Ferguson SIIA Simpsonville, SC

David Wilson President Windsor Strategy Partners, LLC Princeton, NJ

Treasurer and Corporate Secretary* Gerald Gates President Stop Loss Insurance Services AmWins Worcester, MA *Also serves as Director

SIEF Board of Directors Nigel Wallbank Chairman Heidi Leenay President Freda Bacon Director

Jeffrey K. Simpson Attorney Gordon, Fournaris & Mammarella, PA Wilmington, DE Robert Tierney President StarLine East Falmouth, MA Peter Robinson Managing Principal Integro Re San Francisco, CA

GOVERNMENT RELATIONS COMMITTEE Steven B. Suter President & CEO Healthcare Management Admtrs., Inc. Bellevue, WA Chair, International Committee Liz D. Mariner Ford Senior Vice President Re-Solutions, a Risk Strategies Company Minneapolis, MN Chair, SIIA Future Leaders Committee Craig Clemente Chief Operating Officer Specialty Care Management Lahaska, PA Chair, TPA Best Practices Task Force Ron Dewsnup President Allegiance Benefit Plan ManagementMissoula, MT Chair, Workers’ Comp Committee Mike Zucco Business Development ATA Comp Fund Montgomery, AL

Les Boughner Director Alex Giordano Director



SIIA new members FEBRuary 2019

Regular Corporate Members Elisabeth Wasson CEO and Principal Prodegi Corporate Benefit Services Laramie , WY

Todd Roberti CEO Ringmaster Technologies Overland Park, KS

food k n u j s s e l gym e h t o t o g ney o m e r o m save

Brent Macy Director, Strategic Alliances WellRight Chicago, IL

Over 30 years ago, we resolved to help clients save money with advanced PBM solutions, limitless plan customization options and unparalleled experience. Three decades later and we’ve been succeeding in our goal every day since. At Script Care, we believe that the unique requirements of every client matter and we’re committed to creating a plan that fits your organization.

SCRIPT CARE Visit www.scriptcare.com to find out more !




Through our integrated PREPAYMENT REVOLUTION Zelis is the market leader in integrating network solutions, payment integrity and electronic payments to deliver insights that drive even greater savings before a claim is paid. Working in a prepayment environment, we price the claim correctly before you pay, avoiding unnecessary costs, time and reducing member and provider abrasion. In fact, 85% of the time we find claim savings that other vendors don’t. We do this by focusing on every step of the pre-payment claim cycle and delivering value-driven solutions from payment to reconciliation.

Contact Zelis today at 888.311.3505 or visit zelis.com to find out how our pre-payment solutions are helping control the rising cost of healthcare.

Better Service. Better Performance.


Copyright 2018 Zelis Healthcare. All rights reserved Copyright 2017 Zelis Healthcare. All rights reserved.

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Profile for SIPC

Self Insurer February 2019  

Self Insurer February 2019