The Self Insurer_February

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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-insured plan. Unparalleled underwriting expertise, innovative risk management and in-house claims management, work in sync and in perfect balance for best possible outcomes.

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



By Lauren Vela, Mariana Socal, MD, PhD and Anne Ladd
















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

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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





Written By Lauren Vela, Mariana Socal, MD, PhD and Anne Ladd


hat could a local bank, a regional timber company, an international staffing firm and the State of Tennessee have in common? They all dug into the formulary offered by their PBM and they all found substantial savings by replacing low-value drugs with less-costly, equally effective drugs. There is growing concern among employers – private and public, large and small about the ever-increasing percentage of their total employee compensation going to health benefits. The fastest growing component of health benefits is drug spending. While many drugs provide great benefit to patients, and it is important to cover these drugs, significant savings can be achieved by eliminating certain high-cost drugs that are placed on the formulary simply because pharmacy benefit managers (PBMs) earn greater profits from them, leading to higher spending by self-insured organizations and their employees. “Wasteful” drugs provide no additional clinical value, as compared to lower-cost equally or more-effective clinical options.



Waste Free Formulary Here are success stories of those who have removed these wasteful drugs:


“When our independent data warehouse ran a report showing over 7% of our total drug spend was on a list of 29 wasteful Kim Devore - Jonah Ban drugs we got through our local business coalition on health, we rolled up our sleeves,” said Kim DeVore, then Chief Financial Officer of Jonah Bank ( and now the bank’s president. “First, we tried having a conversation with our existing PBM, but that went nowhere. So, we looked around and found a new PBM that is a much better fit for us.” The result: The cost of non-specialty claims dropped 66% in the plan year ended June 2020 compared to the plan year that ended in June 2019. “Yes, that’s a really big deal for us as a relatively small business,” says DeVore with a wry smile that quickly turns into a hearty laugh filled with both astonishment and pride. She also noted that the company has had three good medical claims years, where the spend has been close to flat.

THE TIMBER COMPANY: Neiman Enterprises ( is a family owned business that runs five sawmills in Colorado, Oregon, South Dakota and Wyoming. “We take pride in our ability to provide health benefits to our employees and their families,” said Sheri Stinson, the company owner charged with managing benefits. “We’ve undertaken several initiatives to control the cost without sacrificing the richness of our benefits, and one of my easiest successes was removing wasteful drugs from our coverage policy.” Neiman Enterprises was already looking for a new PBM as their current vendor was being acquired. They evaluated several and settled on a PBM designed with a separation of powers to eliminate the misaligned incentives that result in chasing rebates and spread pricing. The new PBM took over on August 1, 2019, one month after the new plan year began. In addition to taking wasteful drugs off the formulary, the Neiman family agreed to switch all appropriate prescriptions to lower cost therapeutic equivalents.

Since then, the cost of non-specialty pharmacy claims dropped 20% for the company. Because the plan allowed for a 3-month transition to the new, nonwasteful medications, their spend on wasteful drugs was down 75.8% one year after the switch.


For a large staffing company, getting their $1.86 Million took some insistence. After much wrangling, their consultant ran the data and reported only $780,000 had been spent on low-value drugs. That just didn’t sit right with the benefit team. It just seemed too small. The consultant remined them that they were paying for a service called “counter strategies” which filters out low value drugs, but that a few snuck by. However, the company's benefit managers asked the consultant to double check to make sure others had not also slipped through the automated system. The benefit managers insistence on digging deeper led to the realization that the “counter strategies” service had never been turned on. The result was a refund of $1.8 Million to the plan net of rebates and fees to cover years of overpayment. It is not always straightforward for plan sponsors to get access to their own data and obtain clear information. But, the rewards can be significant. All plan sponsors should make sure to periodically review their utilization and spending information, including double or triple checks if necessary.



Waste Free Formulary This whole exercise made the staffing firm realize that there is more opportunity with the PBM and the need to better understand their contracted engagement, including transparency regarding all fees. It has triggered a larger discovery project.

THE STATE OF TENNESSEE: The State of Tennessee has about 286,000 covered lives on their plan. Like many employers, the rapid increases in drug costs caused them to take a close look at their pharmacy plan, including looking at the list of drugs on the wastefree formulary. Past concerns over employee experience had prevented the State from implementing a restrictive formulary. They were using the least restrictive formulary option offered by their PBM with all drugs covered unless specifically excluded by the plan. One important step was to opt into their PBM’s more restrictive formulary with a list of non-covered drugs and other products that require a medical exception process for approval, which is common in many plans. A predictive analysis of that move shows the state saving $42.3 million in one year. The state also implemented the PBM’s hyperinflation management program which placed additional utilization management controls on drugs with other alternatives. This resulted in an estimated annual savings of $9.5M.

“The wastefree formulary list demonstrated to us that, even with the steps we had taken to manage cost and utilization in our pharmacy program, there were still opportunities, with minimal member impact, to achieve additional savings.”

Kendra Gipson, Director of Vendor Services and Contracts states,

Kendra Gipson

WHAT IS A “WASTEFUL” DRUG? One example of a “wasteful” drug is a more expensive branded drug when a less expensive generic drug is available. Both provide the same clinical benefit, but one is much more expensive. Other examples are fixed-dose combination drugs (“combo drugs”), which are drugs with two or more active ingredients in one pill that can be 100 times more expensive than the individual ingredients purchased in separate pills; and “me too” drugs, when tweaking of a particular ingredient – for example, a slightly different concentration results in a “new,” more expensive drug that adds no clinical value as compared to the less expensive, original version. The reason PBMs place the more expensive drug on the formulary is drug manufacturers are willing to pay the PBMs for favorable formulary placement. Sure, some of that money gets returned to the plan as rebates, but usually not all. Bigger fees paid to the PBM mean bigger profits for the PBM, but more expense for the plan. Worse, patient cost share is often based on the price without rebate – inflating the members’ out of pocket cost. The portion of the rebate returned to the plan benefits all employees, but the sicker employees, those buying more drugs, have pre-paid for a portion of that rebate – and it is rare for a plan sponsor to return those funds to the patient.

On top of these savings, the State asked their PBM to implement strong utilization controls on the drugs identified in the waste-free-formulary as low value, which resulted in an additional $8.8 million in savings.



Waste Free Formulary PROS AND CONS OF


The Pacific Business Group on Health and Integrity Pharmaceutical Advisors analyzed six months of drug utilization by 15 large, self-insured plan sponsors. PBGH and IPA examined more than 2.5 million scripts and found that 6% of all drug claims were for “wasteful” drugs. Wasteful drug claims represented 3% to 24% of companies’ total spend on drug benefits, depending on which drugs were included in the formulary and how often they were utilized. There is always a concern that changing health benefits will cause employee dissatisfaction and this concern causes benefit managers to hesitate to change drug coverage. We have worked with many companies who have adopted “waste free formularies.” When employees understand the cost to them of these “wasteful drugs”, they appreciate their employers being more responsible purchasers. Indeed, complaints about a “waste free” formulary occur infrequently and can be addressed by providing the clinical and financial rationale for excluding wasteful drugs. Self-insured employers hire pharmacy benefit managers (PBMs) to identify which drugs will be included on a drug formulary. PBMs negotiate discounts and rebates with drug manufacturers and distributors in return for the PBM giving the drug favorable formulary placement. In most contracts, PBMs keep a portion of the rebate and/or other fees paid by the manufacturer, creating an incentive for PBMs to prefer more expensive,



highly-rebated drugs, even if there are less expensive drugs available. Additionally, PBMs may pocket the difference between the list price and the price that they actually pay for the drug (“spread”), which also creates an incentive for higher-priced drugs. High list prices are a direct result of rebates and spread revenues that bring profits to PBMs charged with managing formularies for employers.

WHAT CAN SELF-INSURED EMPLOYERS DO? The first step is to analyze your data. It’s helpful if you have an independent, thirdparty do the analysis to ensure the results don’t reflect any conflicts of interest. A starter spreadsheet of 49 of the most egregious “wasteful” drugs, with their NDC codes is available for free here. The same link has a free guidebook to help you understand this issue in more depth. Once you’ve run the NDC codes on this list against your pharmacy claims, you should know what percent of your claims are spent on these wasteful drugs. Depending upon your results, there are a variety of options open to you: • Engage in a conversation with your existing PBM and or consultant. Ask them some hard questions:

o Why are these drugs on the formulary? o Is the PBM willing to remove them? If not, why not? o If so, how will they help you transition existing patients to their new medication(s)?

o How much revenue has the PBM received in rebates or other fees paid by the manufacturer and/or distributor that they have not returned to your plan account?

o Can you audit the PBM’s accounting of their rebates/other fees

paid to them by the manufacturer and/or distributor? Can you choose the auditor, or must you use one the PBM/consultant has “approved?”

• Consulting • Case Management • Big and Small Data Analysis & Predictive Modeling • Claims Audits • Risk Management

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Waste Free Formulary

• If your existing PBM is unwilling to constructively engage in this conversation, you should probably consider looking for a new PBM. This means selecting a PBM that:

o Removes the full list of wasteful drugs from your formulary. o Allows you to modify the formulary as you deem appropriate. o Administers coverage for over-the-counter (OTC) drugs when

the OTC drug is a lower cost alternative to a more expensive prescription drug. (This aligns the financial incentives between you and your covered lives.)

o Passes all rebates and fees paid by the manufacturer and/

or distributor back to your plan. Payments can include monies classified as rebates but also all other monies paid by the manufacturer or distributor to the PBM including marketing fees, distribution fees, handling fees, promotional fees and all other terms.

o Allows you to audit the contracts between the PBM and the drug

manufacturers and/or distributors as well as the PBM and the retail outlets without restricting your choice of auditors.

o Bills your plan the same amount the PBM paid for the drug.

Payment for other services should be explicit, not hidden in “spread” pricing arrangements.

o Offers a pricing model based on lowest net cost drugs and not

rebate maximization. Do not be fooled by low Administrative Services Only (ASO) fees, high rebate guarantees and discounts. Compare overall net per member per month (PMPM) costs.

CONCLUSION Transparency, formulary flexibility, and a fee-based contract model are the cornerstones of responsible contracting and management of PBMs. Jonah Bank, Neiman Enterprises, the staffing firm and the State of Tennessee are proof that good formulary management and smart PBM contracting can be done by any organization – large or small, public or private. Organizational leaders must support and expect more accountability in pharmacy benefit management, which is a bellwether for additional opportunities to reduce waste in healthcare spending.



Do you aspire to be a published author? We would like to invite you to share your insight and submit an article to The Self-Insurer! SIIA’s official magazine is distributed in a digital and print format to reach 10,000 readers all over the world. The Self-Insurer has been delivering information to top-level executives in the self-insurance industry since 1984. Articles or guideline inquires can be submitted to Editor Gretchen Grote at ggrote@ The Self-Insurer also has advertising opportunties available. Please contact Shane Byars at sbyars@ for advertising information.

Waste Free Formulary

Anne Ladd Anne Ladd is the Associate Director of Purchaser Innovation for the Pacific Business Group on Health where she has responsibility for identifying, organizing and implementing positive disruptions to the health care delivery system resulting in greater value for employers/ purchasers.

Anne Ladd

Before joining PBGH, Anne spent 12 years as the CEO of the Wyoming Business Coalition on Health. She also has experience in public policy and as a product manager on several healthcare related information technology projects. She started her career in healthcare with Kaiser Permanente in Sonoma County, California, but has also worked for Kaiser in Colorado and served as the Director of Strategic Planning for Blue Cross Blue Shield of Colorado/Nevada. Before entering the health care arena Ms. Ladd spent six years as a reporter and writer for both broadcast and print media on both the East and West coasts covering politics, natural resources and business issues.

Lauren Vela

Born and raised in Wyoming, Ms. Ladd has an undergraduate degree in economics from Williams College in Williamstown, Mass., a Master’s degree in Journalism from the Medill School of Journalism at Northwestern University in Evanston, Ill., and a Master’s in Healthcare Administration from St. Mary’s College in Moraga, California. As a Peace Corp Volunteer in the early 1980’s Ms. Ladd taught vegetable gardening and small animal husbandry in a remote region of Guatemala. She has traveled throughout Central and South America. Also, a bit of an adventurer, Ms. Ladd helped organize and execute an expedition to Mt. Everest through China and Tibet in 1988. Lauren Vela

Mariana Soca

As Senior Director of Member Value, Lauren works directly with the large purchaser members of PBGH to facilitate collaboration and to support their purchaserdriven initiatives impacting healthcare delivery in the US. To that end, Lauren manages the processes of translating PBGH’s ground-breaking work in transparency and accountability into workable solutions for PBGH member organizations. Prior to this role, Lauren was the Executive Director of the Silicon Valley Employers Forum (SVEF), a coalition of high-tech employers that benchmark benefit designs and collaborate for improvement. During her SVEF tenure, Lauren systematized the group’s benchmarking practices and served as a facilitator and strategist for their joint projects with regard to both US-based and international employee benefit programs.

To this day, SVEF and PBGH maintain a strategic alliance and Ms. Vela works closely with purchaser members of both groups. Prior to the SVEF role, Lauren enjoyed a twelve-year tenure with PBGH serving in three distinct areas; multi-stakeholder health information exchange, provider group organization improvement, and employer value-based purchasing. Prior to her work with SVEF and PBGH, Lauren was employed by organizations in the workers comp, TPA, and mental health fields where she held positions in product development, operations, marketing, and provider relations. Lauren earned an MBA from the University of Houston and has completed all necessary coursework for her Dr.PH. with a focus on managed health care and health economics.

Mariana Socal Mariana Socal, MD, PhD is faculty at Johns Hopkins Bloomberg School of Public Health, Department of Health Policy and Management. Dr. Socal’s research focuses on improving pharmaceutical coverage, affordability and access for older Americans and on removing wasteful spending from prescription drug benefits nationwide. Dr. Socal has presented before several U.S. Congressional committees and has testified before the U.S. Congress on issues related to drug pricing and employmentbased health insurance. Dr. Socal has also testified at the Food and Drug Administration on issues related to biopharmaceutical regulation, including insulins. At Johns Hopkins Dr. Socal teaches courses on Comparative Health Insurance and on U.S. Pharmaceutical Policy. Dr. Socal is a physician trained in adult Neurology. She holds a Master’s in Public Policy from Princeton University and a PhD in Public Health/Health Systems from Johns Hopkins University.


Captives Help Drive



Written By Brice Shutan


ith the convergence of captive insurance and a growing gig economy, Corporate America has become increasingly nimble and innovative while workers enjoy greater autonomy. But concerned lawmakers and policymakers alike have taken note of these developments, redefining employment status in the form of controversial new state laws or federal regulations. The challenge is allowing techdriven services and conveniences such as ridesharing or work-fromhome (WFH) arrangements to flourish as long as they don’t come at the financial expense of a more mobile workforce. Captives are seen as a laboratory to absorb emerging risks for new enterprises in an evolving economy where insurance is vital to doing business, but there may be no underwriting history.



Gig Economy While there are varying estimates as to the gig economy’s size, the generally accepted range is 31% to 36% of the U.S. workforce. As many as 57 million Americans are freelancers who contribute nearly $1 trillion dollars to the economy, according to a joint annual study by the Freelancers Union and Upwork. The Bureau of Labor Statistics estimates that there are about 155 million wage and salary workers in all sectors of the economy. The problem for employers is that many standard commercial or even personal lines insurance policies don’t respond well to risks that participating in the gig economy have created, according to Ed Koral, managing director with BDO USA, LLP’s insurance risk advisory group. This has given rise to the use of captives as a testing ground for research and development of new insurance products that enable gig economy venture capitalists to manage business risks. He says some very large ridesharing organizations have created their own insurance organization subsidiaries. In addition, online retailers about 15 years ago created their own captives to manage unique risks related specifically to their organization, such as customers not receiving deliveries or products not resembling advertisements. Ed Koral There are complications for contractors as well.

Gary Osborne However, captives are paving the way for more affordable protections that are as practical as they are innovative. Gary Osborne, VP of alternative risk for Risk Partners, Inc., has been involved with leasing vehicles from 38 car dealerships for $100 a week or less to Lyft drivers whose cars aren’t in the best condition. “The more hours you work, the lower the lease cost is,” he says. Other areas he’s exploring include tying auto insurance rates to mileage and a program called Flexdrive through which consumers can subscribe to a car using a mobile app and drive away without worrying about insurance, maintenance or other activities typically involved in purchasing or leasing a vehicle.

“You have people driving around thinking that they have insurance, but they don’t because their policy excludes this activity,” Koral cautions. “You have people looking for insurance and finding that there’s nothing really available that They also can swap vehicles without the responds to what they do. It’s either overkill or it’s just not commitment of a long-term contract. available.” “It was a commercial policy One serious issue is determining exactly when gig workers for ridesharing services with a charge built into the are on or off the job. For instance, he says they may be driving with or without their lease,” Osborne explains, “and app turned on, responding to a call, carrying a passenger or food, returning home from a fare (which poses ambiguity in the event of a crash), or simply driving around some of that risk was being for personal reasons. taken into our captive.” Their status as an employee or self-employed individual matters a great deal if they’re harmed when behind the wheel, which Koral says has implications not only for their auto liability coverage but also workers’ compensation.

FEBRUARY 2021 13

Gig Economy His larger point is that in writing automobile coverages, it’s critical to provide what’s needed “because these are dangerous vehicles that can kill people,” he says, “and we need to have a big enough balance sheet.” Captives regulators have learned from taxis and trucking the importance of adopting a more cautious approach because small, individual business people must be able to meet their financial obligations through coverages that captives provide, Osborne adds.

EMPLOYEES VS. CONTRACTORS Longstanding efforts to shore up gig worker protection came to a head late last year in California where Koral says Assembly Bill 5 attempted to make employers more responsible or accountable for stitching a financial safety net for workers. He says New Jersey has been working on legislation modeled after AB5, while regulatory activity also continues at the federal level. In reaction to AB5, ridesharing services backed a costly and controversial ballot measure known as Prop 22, which exempted them from having to classify their drivers as employees rather than independent contractors. As a result, the Albertsons and Vons supermarket chains last month replaced their drivers with DoorDash. He says the pandemic has created such uncertainty that gig workers are able to help these giant retailers scale up and back as needed, moving merchandise to customers quickly and efficiently. But legislation aimed at forcing ridesharing companies to treat



contractors as employees defeats the purpose of this gig for scores of working Americans, cautions Osborne. “Some people have made it a full-time job, but it wasn’t necessarily supposed to be full-time,” he says. “That’s the whole idea behind this gig economy. You might be a musician who has to put bread on the table between gigs.” What’s certain is that the customer-service model “has changed dramatically and will remain dramatically altered for at least the next six to 12 months as we remain on various forms of lockdown to gig-oriented businesses,” notes Koral, who expects the U.S. Department of Labor will play a critical role in defining employment over the next 10 or 20 years. A new DOL rule clarifying the standard for employee vs. independent contractor under the Fair Labor Standards Act takes effect March 8, 2021. It comes on the heels of increased litigation over worker misclassification in the gig economy and is expected to protect independent contractor status for millions of workers. Observers say there may be more dramatic changes coming now that Joe Biden has been elected president and the Democrats will control Congress. Whatever happens, it’s clear that traditional insurance is woefully inadequate for handling emerging risks. New enterprises that don’t have the luxury of showing historical loss experience are charged some sort of analogous rate that may not be applicable or oftentimes the coverage isn’t what they may need, according to Foley. This is especially true in the transportation sector. He recalls how in 2015, the broker of a rideshare platform advised the company to Peter Foley buy a hired-not-owned policy. The trouble was that it excluded vehicles being used for commercial purposes, “and all sorts of losses came through,” he explains. His firm was hired to redesign the coverage and matched it up, using an alternative risk structure above the captive and risk retention group. Exposures are clearly changing as the gig economy grows. Peter Foley, managing partner of Rhodium Program Management, LLC and head of insurance for altumAI, cites business-interruption insurance during the pandemic as an example. “To me, that’s a classic structure that you can write a contingent or contractual liability policy for a linear captive to cover that exposure,” he says. One monumental challenge that COVID-19 poses will be California employers having to comply with Assembly Bill 685, which took effect January 1. In essence, they must report within 24 hours anyone who tests positive for the virus and notify those with whom they came in contact with at the workplace. “That is a regulatory nightmare,” Foley opines. “People haven’t woken to that fact yet.”

Gig Economy account for more than 95% of enterprises and over 50% of employment worldwide.

PROTECTING WORK FROM HOME With WFH arrangements skyrocketing in 2020 and many expected to continue well into the future, the issue poses interesting questions about the health and safety of gig workers. Koral recalls how a very large financial institution in New York 20 years ago would dispatch a team of experts to someone’s home to ensure that their desk was the right height, a comfortable chair was in place and the home office was posture friendly. John Capasso He’s currently in discussions with a California tech company about forming a captive to reduce exposure to any potential liability that arises from coronavirus cases. For example, what happens if an individual with COVID-19 interacted with 24 people in the workplace, but contact tracing fell just short of that mark? The use of captives in the gig economy is part of a larger movement to unbundle typical commercial insurance policies and simply offer what customer wants, explains John Capasso, president and CEO of Captive Planning Associates, LLC, as well as a member of SIIA’s board of directors. “Several carriers have tried but failed to offer micro-insurance, transactional policies that are fully digital and carefully underwritten, as well as unbundling,” he says. “The cost to them is too much because of their inflated overhead.” To appreciate the potential of this approach, Capasso says it’s important to understand the sheer power of two key demographics. At 80 million strong with an estimated spending power of $200 billion, America’s Millennials are a force to be reckoned with and marketed to, while micro and small businesses



Nowadays, he says “a number of firms have actually offered stipends to their employees to beef up the furnishings of their house or equipment to buy a comfortable chair, printer, etc.

“They’re certainly not vetting the safety of your home work environment,” he observes. “So, if you fall on the way to the coffee maker in your house, I don’t think anybody’s filing workers’ comp claims. I think it just remains a big, unsettled issue, and at some point, a case will show up that litigates the issue.” What’s unknow is whether they’re scrutinizing those purchases.

There are larger socioeconomic implications to consider across the gig economy. Foley believes it’s important to remove independent contractors from government programs such as Medicaid by providing them with at least limited health insurance coverage, which can be run through a captive. “Some companies that use independent contractors are looking at captives to work on picking up some of that exposure,” he reports. But given the potential for ambiguity in determining whether contractors working remotely should be covered in certain instances under medical benefits or workers’ compensation, Foley suggests 24-hour coverage as a solution. He says this decades-old, intuitive approach not only would simplify the process and save tremendous time and expense associated with tracking worker behavior, but also break longstanding silos separating HR and benefits administration from risk management. Foley cites a recent case involving someone working from home who took a break to hang Christmas decorations and fell off a ladder. Their injury was declared a workers’

Gig Economy comp obligation. “I’m scratching my head on that one a little bit,” he quips, noting how WFH seriously blurs the line between work and life and can, therefore, complicate claims.

THE PROMISE OF MICRO-INSURANCE Insurance companies can act fast and intelligently by offering micro-insurance as long as the right safeguards are in place, according to Capasso. “People need a simple safety net, so when the unexpected happens, they can bounce back swiftly,” he explains. Captives are considered an ideal vehicle for achieving these objectives because they’re nimble, maneuverable and can be adaptable in many countries. Micro-insurance isn’t just a reduced-cost and specific-risk insurance coverage for people in developing countries, he says. It’s much wider and inclusive, offering what he calls an innovative way of providing insurance that is aligned with customer expectations while covering a specific need or event at the right moment and right price. This type of insurance is designed to help close the protection gap in both developed and underdeveloped countries. In designing micro-insurance products, his firm follows several tenets: • A frictionless customer journey so that people can sign up with a simple click of the mouse. • Relevant and simplified products that are easy to understand and minimize exclusions. • Cloud-based and API-driven technology that can be deployed quickly, as well as administer policies, collect premiums and communicate with clients. • An ability to underwrite and reinsure the risk of products that are created for customers with the help of local insurers in a particular country. • The use of artificial intelligence to speed decision-making by digitally assessing and paying claims via parametric triggers. • Knowledgeable project management to quickly launch products with the help of mobile networks, e-wallets, money flow indices, banks and ride-hailing companies.

Bruce Shutan is a Portland, Oregon-based freelance writer who has closely covered the employee benefits industry for more than 30 years.



Q A 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, Ken Johnson, Amy Heppner, and Earl Porter 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, Carolyn, Ken and Amy are senior 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



IMPACT OF 2020’S FINAL TRANSPARENCY REQUIREMENTS ON EMPLOYER SPONSORED HEALTH PLANS On October 29, 2020, CMS along with the DOL and Treasury issued a final rule on price transparency to enable patients to accurately predict healthcare costs in order to make more fully informed and value-conscious decisions (Transparency Rule). On December 27, 2020, the Consolidated Appropriations Act, 2021 (the “CAA”) was signed into law. In addition to funding the government and further COVID relief, the CAA included significant provisions impacting health benefit coverage including transparency provisions that, to some extent, overlap with the Transparency Rule. We will cover the interactions between the Transparency Rule and the transparency provisions of the CAA in a future article.

SO WHAT? The Transparency Rule employs two significant price and coverage disclosure requirements that require non-grandfathered group health plans and insurance issuers (with certain limited exceptions discussed in more detail below) to:

· individually disclose cost-sharing information to plan participants; and · publicly disclose negotiated rates for in-network providers and allowed amounts for out-of-network providers (OON providers). Plan sponsors only have until January 1, 2022 to prepare for the public disclosure requirements. They enjoy an additional year to prepare for the initial wave of costsharing disclosure requirements and two years to ascertain full compliance.

PRINCIPAL TAKEAWAY When applicable, the Transparency Rule will impose significant disclosure requirements on the plan, and, in turn employer plan sponsors and health plan issuers. However, the Transparency Rule contains several enforcement safe harbors which are only available if the plan is exercising good faith and reasonable diligence.

The creation of a compliance plan, by plan sponsors or issuers, is critical to establish the requisite compliance with the requirements imposed by the Transparency Rule. Taking prudent actions and planning now can help ensure that these responsibilities are timely met.



The Transparency Rule is intended to require similar information to what is generally required to appear on explanation of benefits disclosures (EOBs) and it specifically notes that only costs for anticipated items or services that a person could incur are covered by the Transparency Rule— as opposed to every possible cost imaginable.



The Transparency Rule includes significant new requirements for nongrandfathered health plans and issuers of non-grandfathered health insurance coverage in the group and individual markets:

· Cost Sharing Disclosure: For plan years beginning on or after January 1, 2023, plans and issuers must disclose to enrollees—through a self-service online tool— personalized cost-sharing information and negotiated rates for the identified 500 “shoppable” services. For plan years beginning on or after January 1, 2024, this disclosure requirement will expand to all covered health care items and services.



¡ Public Disclosure: For plan years beginning on or after January 1, 2022, plans and issuers must make publicly available, through three standardized, monthly updated, machine-readable files:

o Negotiated rates for in-network providers. o Historical allowed amounts for OON providers. o Prices for prescription drugs (Rx drugs).

SAFE HARBOR COMPLIANCE AND EXCLUDED PLANS The Transparency Rule is subject to the same enforcement structure as other Affordable Care Act (ACA) requirements. Under this enforcement regime, the triagencies (DOL, Treasury/IRS, and HHS) can generally assess a fine or excise tax equal to $100 per person per day per violation. The Transparency Rule includes a safe harbor for plan sponsors of fully insured group health plans that permits compliance based on a written agreement with the health insurance issuer. Under this relief, the issuer will be liable for noncompliance only if the plan enters a written agreement requiring the issuer (offering the coverage) to provide the required information. The intent of the Transparency Rule’s safe harbor relief is to prevent unnecessarily duplicative disclosures. Similar relief is not available to sponsors of self-funded plans (including most PBMs and level funded plan arrangements); however, plan sponsors should insist on representations as to compliance from their service providers and perhaps indemnification if the standard is not met.



In addition to the fully insured safe harbor, the Transparency Rule provides relief for good faith compliance efforts. A group health plan will not fail to comply with the rule solely because it makes an error or omission, or a website is temporarily inaccessible, as long as it is acting in good faith and with reasonable diligence. However, the plan must correct any error as soon as possible. If a plan acting in good faith and reasonable diligence needs to obtain information from another entity to comply, it will not fail to comply unless it knows or reasonably should have known that the information is incomplete or inaccurate.


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The Transparency Rule also specifically exempts certain types of coverage from compliance including:

· grandfathered health plans (but not so-called “grandmothered” transitional

provider (including an innetwork pharmacy or other prescription drug dispenser) for covered items or services.

relief plans);

· plans providing only excepted benefits;1 · account-based plans (HRAs, QSEHRAs, ICHRAs); · retiree-only health plans; and · short-term limited-duration insurance (STLDI).

THE DEVIL IS IN THE DETAILS This section discusses certain significant requirements, features, and carve-outs of the final rule. Stated differently—this is the time to buckle up, sip some coffee, and enjoy not having to digest the entire Transparency Rule just to appreciate its initial implications.

· Out-of-network allowed amount (OON allowed amount) which is the maximum amount a plan would pay an OON provider for a covered item or service.

· Items and services content list for which cost sharing information is disclosed. For bundled services, health plans would have to disclose a list of each covered item and service and cost-sharing liability as a bundle.

· Notice of prerequisites to COST-SHARING DISCLOSURE Effective for plan years beginning on or after January 1, 2023, plans and issuers will be required to provide cost-sharing information to participants, beneficiaries, or enrollees (consumers). Advocates for this disclosure point to the substantial overlap between this information and information already required in an EOB. However, the timing (in advance of service) and context (prior to the claim being incurred) of the information disclosure will make it exceedingly difficult for plan sponsors (and even issuers and TPAs) to provide. The information required to be disclosed includes the following:

· Estimated cost-sharing liability for the furnishing of a covered item or service by a particular provider or providers. The ‘estimation’ pertains to the consumer’s share of the cost under the plan or coverage.

· Accumulated amounts which is the financial responsibility that a consumer has due to her accrued deductible or out-of-pocket payment amount, as well as accrued items or services for which the plan imposes a cumulative limitation.

· Negotiated rate, reflected as a dollar amount, for the in-network provider payment amount for an item or service, to the extent necessary to determine the consumer’s cost-sharing liability. Note that the Transparency Rule revised the definition of “negotiated rate” to mean the amount a plan or issuer has contractually agreed to pay for a covered item or service, whether directly or indirectly through a TPA or PBM, to an in-network



coverage. When consumers request cost-sharing information, health plans must inform them if the item or service is subject to concurrent review, prior authorization, step-therapy, fail-first protocols, or other medical management requirements.

· A “disclosure notice” communicating certain information in plain language, including several disclosures2, as follows: (1) an explanation disclosing that out-of-network providers may bill consumers the difference between a provider’s billed charges and the sum of plan payments and copayments/coinsurance (balance billing), if balance billing is permitted under state law; (2) a statement that actual charges may vary from the estimate; (3) a statement that estimated cost-sharing

is not a guarantee of coverage; (4) disclosure of whether copayment assistance counts toward deductibles and out-of-pocket maximums; and (5) a statement that preventive service may not be subject to cost-sharing if the plan cannot determine whether the request is for a preventive or nonpreventive item or service. Plans and issuers must make this cost-sharing information available for the 500 items and services identified by the tri-agencies for plan years beginning on or after January 1, 2023, and for all items and services for plan years beginning on or after January 1, 2024. The list of 500 items and services is available in the Transparency Rule3. In addition, plans and issuers must make the required information available, without a fee, in two ways: (1) through an Internet-based “self-service tool�; and (2) in paper form by mail upon a consumer’s request. The self-service tool must provide realtime responses, be searchable by billing code, descriptive term and provider identity. The tool must interact with consumer input to deliver meaningful cost-sharing information depending on any tiering, network status, location of service, dosage, or other factors. The self-service tool also must permit the consumer to refine and reorder results based on geographic proximity of in-network providers and the

amount of cost-sharing liability. If a consumer requests information in paper form, the plan or issuer must mail the cost-sharing information in accordance with the same requirements applicable to disclosure using an internet-based self-service tool, no later than two business days after the request is received and may limit the number of providers included in the information to not less than 20. Plans and issuers may provide consumers the option to receive the information through other methods, such as by phone, face to face, fax, or email. Whichever method chosen by a plan sponsor or issuer should be prudently documented.




determine provider reimbursement.

Effective for plan years beginning on or after January 1, 2022, plans and issuers will be required to publish three machine-readable files— the first file is for innetwork provider negotiated rates (In-Network File), the second for data outlining the historical allowed amounts for covered items or services provided by OON providers (OON Allowed Amount File), and a new third file for pricing information of prescription drugs (Rx Drug File). The files must be available to the public free of charge and updated monthly. All three files must include the:

· name or identifier for each plan option or coverage (employer identification number or Health Insurance Oversight System).

· billing codes used to identify items or services (including CPT code, HCPCS code, DRG, or National Drug Code (NDC)). The In-Network Rate File must include the dollar amount of the negotiated or other applicable rate for each provider with the provider’s National Provider Identifier (NPI), tax identification number (TIN), and Place of Service Code, and for bundled items and services, the rate by relevant code. The Transparency Rule added a requirement, that plans or issuers indicate whether the rate is subject to an alternative payment arrangement (bundled payment arrangement). It also clarified

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that plans and issuers must include the underlying fee schedule rate4 used to

In a departure from the proposed version, the Transparency Rule requires the reporting of Rx drug pricing in a third, separate machine-readable file instead of as part of the In-Network rate File. Rx drugs that are reimbursed through a fee-for-service arrangement are required to be reported in the Rx Drug File. However, a bundled payment arrangement, inclusive of Rx drugs, remains required criteria of the InNetwork Rate File. The OON Allowed Amount File must include the dollar value of the historically allowed amount for each provider. Historical payments must have a minimum of 20 entries in order to protect consumer privacy. Additionally, this file must include each unique OON allowed amount for covered items or services provided by each OON provider during the 90-day period that begins 180 days before the date of the OON Allowed Amount File’s publication.5 Health plans must also disclose the aggregate actual amount that the health plan paid to the OON provider and the consumer’s share of the cost. The Rx Drug File must include the 10- or 11-digit National Drug Code (“NDC”), the proprietary and nonproprietary name assigned to the NDC, and the dollar amount of the negotiated rate for each in-network provider6 with the provider’s NPI, TIN, and Place of Service Code. The Rx Drug File must also include the dollar amount of historical net prices for each in-network provider for the 90-day period beginning 180 days before the date of the Rx Drug File’s publication. In the Transparency Rule, “historical net price means the retrospective average

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amount a plan or issuer paid for a [Rx] drug, inclusive of any reasonably allocated rebates, discounts, chargebacks, fees, and any additional price concessions received by the plan or issuer with respect to the [Rx] drug.”


Beginning with the 2020 medical loss ratio (MLR) reporting year, the Transparency Rule allows issuers to include shared savings payments made to a consumer—as a result of the consumer choosing to obtain health care from a lower-cost, highervalue provider—in the numerator of the issuer’s MLR. HHS believes that this favorable treatment will preserve the statutorily required value that consumers receive for coverage under the MLR program, while also incentivizing issuers to offer new or different value-based plan designs that support healthcare market competition and consumer engagement.


At first pass, compliance with the Transparency Rule in such a short time seems like a daunting task. However, careful review of the requirements and delegation among service providers will help plans to promptly achieve the requisite level of good faith compliance. The following steps should help guide plan efforts:

· The first step is to get a basic understanding of what the Transparency Rule requires and how it works. While you are off to a good start, 2022 is just around the corner. For further reading, a DOL webpage has additional information about the Transparency Rule, including a fact sheet.

· Second, Plan sponsors should inventory their health plans and determine which are subject to the Transparency Rule. At least for now, compliance is not required for excepted benefits (vision, dental, EAPs, FSAs, fixed indemnity hospital and specified disease coverage), grandfathered plans, retiree medical plans, or certain account-based plans.

· Third, plan sponsors should deliberately assess which aspects of the Transparency Rule requirements it will undertake to assign to insurance issuers and thirdparty administrators and which (if any) it will address in house. Almost no employer plan sponsor will have access to the cost information required



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to satisfy the rule. Moreover, even with access, maintaining the required communication channels will undoubtedly prove to be a burdensome task. Early cooperation with insurers and third-party administrators (including PBMs) is a necessity.

References 1 Excepted benefits include, among other arrangements, vision, dental, EAPs, health FSAs, and certain health indemnity and

· Fourth, plan sponsors should carefully document which parties are responsible for compliance with the Transparency Rule. Remember, an agreement with the insurer is required to absolve the plan sponsor from liability for insured coverage. Contracts with self-funded plan TPAs and PBMs should be revised to address Transparency Rule compliance. Federal agencies generally look to determine whether a health plan has assessed its compliance obligations and prepared a compliance plan. A deliberate compliance plan can demonstrate good-faith efforts and reasonable diligence. A compliance plan would be particularly important where there are multiple internal and external stakeholders required to commonly uphold their contractual obligations in order to secure compliance. Appropriate compliance representations/warranties and indemnification provisions should also be sought.

· Fifth, remember to set aside an adequate budget to address compliance with the Transparency Rule requirements. Issuers and TPAs will undoubtedly pass along their costs of compliance to their client plans.

specified disease policies. 2 This ‘disclosure’ should not be confused with the second main thrust of the Transparency Rule (Public Disclosure Notice). 3 The list of 500 items or services can be found following Page 72182 of the final as found at https://www.federalregister. gov/d/2020-24591 (as visited December 1, 2020). 4 If a fee schedule rate is used to determine cost-sharing liability and that amount differs from the negotiated rate (or comparable derived amount), the Transparency Rule requires the inclusion of the underlying fee schedule rate. 5 To publish a machine-readable file intended on July 1, a plan or issuer must detail each amount the plan calculated in connection with a covered item or service furnished between January 1 and April 1. To publish a machine-readable file intended on July 30, a plan or issuer would update the file with the appropriate amounts for services rendered from February 1 through April 1. On August 30, a plan or issuer would update the file to show such respective payments for services rendered from March 1 through May 1, and so on. 6 Remember, the Transparency Rule defines the term ‘in-network provider’ to include in-network pharmacies or other prescription drug dispensers.



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he COVID-19 pandemic has led to a spike in mental health and substance use disorder (“MH/SUD”) challenges, especially in the employer/employee realm, which highlights the importance of MH/SUD benefits in health plans. Even before the coronavirus pandemic, many health plans struggled in the area of Mental Health Parity and Addiction Equity Act (MHPAEA) compliance, especially since case law is being developed in this area on a regular basis across the country.


The MHPAEA, as amended by the Affordable Care Act (ACA), generally requires that group health plans ensure that the financial requirements and treatment limitations on MH/SUD benefits they provide are no more restrictive than those on medical or surgical benefits. These are also referred to as quantitative and non-quantitative treatment limitations (“QTL” and “NQTL” respectively).



MHPAEA generally applies to group health plans that provide coverage for MH/SUD benefits in addition to medical/surgical benefits. Some self-insured plans are exempt from MHPAEA, such as those with 50 or fewer employees.1 MHPAEA does not require that self-insured group health plans cover MH/SUD benefits; it only requires that if a plan does cover MH/SUD benefits that the benefits are in parity with the medical/surgical benefits.

The U.S. Department of Labor (DOL), specifically the Employee Benefits Security Administration (EBSA), has primary enforcement authority with regard to MHPAEA over private sector employment-based group health plans.

EXPANSION OF THE REGULATIONS The Consolidated Appropriations Act, 2021, (“the Act”) further enhances federal mental health parity protections, with an emphasis on compliance regarding NQTLs on MH/SUD benefits.2 On and after February 10, 2021, health plans that impose an NQTL on MH/SUD benefits must perform and document a comparative analysis of the NQTL’s design and application. The comparative analysis and other plan information (such as applicable plan provisions and evidentiary standards relied upon to design and apply

the NQTL) must be made available to the applicable state or federal agency upon request. At the time of this publication, we are currently waiting for additional guidance from the federal agencies on this comparative analysis documentation requirement. In the meantime, plan sponsors should continue their MHPAEA compliance efforts.

NQTLS NQTLs are generally limits on the scope or duration of benefits for treatment that are not expressed numerically, such as medical management techniques, provider network admission criteria, or fail-first policies. In terms of MHPAEA compliance, plans should ensure that any NQTLs applicable to MH/SUD benefits are comparable to the limitations that apply to the medical/surgical benefits in the same classification. NQTLs are commonly the area where health plans fall short of MHPAEA compliance. In its “Warning Signs” document, the DOL provides examples that serve as a “red flag” that a plan may be imposing an impermissible NQTL.3 The examples include preauthorization and pre-service notification requirements; fail-first protocols; probability of improvement; written treatment plan required; patient non-compliance; residential treatment limits; geographical limitations; and licensure requirements. This is a good resource for plans to use when reviewing their plan documents for MHPAEA compliance. Another helpful DOL resource is its self-compliance tool for evaluating compliance with the MHPAEA, which was just updated in October 2020.4



The tool includes best practices, warning signs/red flags, guidance for developing internal plan compliance procedures, and a table for evaluating provider reimbursement rates in the MHPAEA context. However, plans should note that the self-compliance tool is not intended to be a substitute for full MHPAEA compliance testing. In terms of a Plan’s Plan Document/Summary Plan Description, you will often find NQTL language in the utilization management/pre-certification/preauthorization section as well as in the sections that describe the medical benefits and medical exclusions. Some plans make the mistake, when reviewing their documents for MHPAEA compliance, to only update the medical benefit grids, unaware that other sections of the document have an impermissible NQTL on a MH/SUD benefit.

MH/SUD AND THE CORONAVIRUS PANDEMIC There have been several recent studies on the MH/SUD crisis that is linked to the coronavirus pandemic. A U.S. Centers for Disease Control and Prevention study, published in August 2020, found that almost 41% of respondents are struggling with mental health issues stemming from the pandemic.5

Similarly, the Kaiser Family Foundation (KFF) published its findings from its July 2020 poll, which concluded that “[t] he pandemic is likely to have both longand short-term implications for mental health and substance use, particularly for groups likely at risk of new or exacerbated mental health struggles.”6 A recent article on CNN highlights that many people who had MH/SUD issues before the pandemic are experiencing their levels of uncertainty and fear double.7 The challenges that stem from the pandemic affect eating disorders, can cause drug relapses, as well as lead to increased levels of depression. And those who may not have experienced MH/SUD issues before the pandemic may now have issues with their stress levels, depression, and sleep disturbances.

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COMPLIANCE ACTIONS The DOL and the Centers for Medicare & Medicaid Services (CMS) issues an annual “MHPAEA Enforcement Fact Sheet”. The fiscal year 2019 Fact Sheet was issued on March 16, 2020.8 In fiscal year 2019, the EBSA conducted 183 MHPAEA-related investigations.

As noted above, the MHPAEA does not require that self-insured group health plans cover MH/SUD benefits. Some self-insured group health plans choose not to cover any MH/SUD benefits; however, this is not a common plan design. What these recent studies and polls indicate is that now, more than ever, health plans should consider not only the physical aspects of the pandemic but also the mental health and substance abuse struggles many plan participants are facing. If your current plan design excludes all MH/SUD benefits, maybe now is the time to reevaluate this decision. Alternatively, if your current plan design does cover MH/SUD benefits, it is recommended that you perform of audit of the plan to ensure parity between the medical/surgical and MH/SUD benefits, which also includes any medical necessity standards.



Of these, 68 investigations involved fully-insured plans, 91 investigations involved self-insured plans, and 24 investigations involved plans of both types (the plan or service provider offered both fully-insured and self-insured options). EBSA cited 12 MHPAEA violations in 9 of these investigations. This Fact Sheet gives a glimpse into the kinds of compliance issues that the DOL is seeing in health plans. The main issues for MHPAEA compliance still appear to be dollar limitations/visit limits and NQTLs on MH/SUD benefits that are not similarly applied to the medical/surgical benefits. Employers can use this information to ensure they do not have these same issues in their plans.

CONCLUSION The DOL’s published enforcement reports suggest that the DOL is continuing to investigate compliance with MHPAEA. To ensure compliance, self-insured health plans should consider conducting periodic claims audits and reviews, and can use the DOL’s self-compliance tools to assist with this. This is especially important since the Consolidated Appropriations Act, 2021, added a new requirement for comparative analysis of the NQTL’s design and application (if the health plan has an NQTL on MH/SUD benefits). Due to the coronavirus pandemic, MH/SUD issues will be in the limelight in 2021, which may mean even more health plan investigations by EBSA. Plan sponsors should review costcontainment techniques with counsel to ensure they are designed to mitigate risk in this area while ensuring compliance.

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

References 1 Mental Health and Substance Use Disorder Parity,, (last visited January 5, 2021). 2 H.R.133 - Consolidated Appropriations Act, 2021, December 27, 2020,, (last visited January 5, 2021). 3 Warning Signs – Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance, laws/mental-health-parity/warning-signs-plan-or-policy-nqtls-that-require-additional-analysis-to-determine-mhpaea-compliance.pdf (last visited January 5, 2021). 4 Self-Compliance Tool for the Mental Health Parity and Addiction Equity Act (MHPAEA), October 23, 2020, laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf, (last visited January 5, 2021). 5 Mental Health, Substance Use, and Suicidal Ideation During the COVID-19 Pandemic — United States, June 24–30, 2020, August 14, 2020, https://www., (last visited January 5, 2021). 6 The Implications of COVID-19 for Mental Health and Substance Use, August 1, 2021,, (last visited January 5, 2021). 7 Mental Health is One of the Biggest Pandemic Issues We’ll Face in 2021, CNN Health, January 4, 2021,, (last visited January 5, 2021). 8 FY2019 MHPAEA Enforcement Fact Sheet, March 16, 2020, https://www., (last visited January 5, 2021).





Written By Karrie Hyatt


ast year’s, hardening market and pandemic challenges are bringing more businesses to the captive marketplace in search of alternatives to the traditional marketplace.

According to John R. Capasso, president and CEO of Captive Planning Associates, and the outgoing chair of SIIA’s Captive Committee, “We’ve had one of the busiest years in five years. The hard market has opened people’s minds to looking for alternatives. Brokers are being pushed by their clients to find alternatives. We’re having discussions with potential clients on more complex captive structures. It’s a whole different dynamic of the types of risk captive structures that we’re being asked to design.”

It’s a dynamic time to be in the captive industry with many opportunities to show how flexible and responsive captives can be. However, with the IRS ramping up its audits of captives and aggressively pursuing court cases, captive owners and captive managers must make certain that captives are being used appropriately.



To support both newcomers and industry veterans alike, SIIA’s Captive Committee has big plans in 2021 for educational outreach and for updating the Captive Managers Code of Conduct.



Two of the three agenda items on the Captive Committee’s To-Do list involves education—both an educational campaign to highlight the value of captive insurance and continuing education on specific, specialized content about key topics.

The first part of the Captive Committee’s educational campaign will be to work to educate those who are newer to the industry or who are just starting to look at what captives can offer.

“There is still a misconception out there about who should contemplate going into an alternative risk structure, like a captive,” said Capasso. “I think SIIA can be in the forefront to educate both those new to captives and those who’ve been around awhile.”

According to Harry Tipper, chief operating officer-insurance, CaptiveOne Advisors LLC, and Captive Committee Board member, “We’ve got two real thrusts for the year regarding captive education, and they both grow out of the fact that the pandemic has created a hardening of the marketplace. What that hardening means is that we’ve got a lot of people coming forward who are new to captives, not familiar with how they are used, and the variety of ways they can be used.”

“The Captive Committee is embracing a back-to-basics approach,” said Don McCully, founder of Medical Captive Underwriters and Captive Committee Board member. “There are a lot of people who have come into the business over the last ten years. The industry has not experienced a hard market in a long time. We need to remind and educate industry participants about a hard market and how it is different from the soft market we experienced for so long. We need to reach out and educate about what all captives can do, for large employers and middle market participants alike.”

McCully continued, “Part of the education process is to make sure that people know it’s time to adapt their outlook. The market is hardening, you could see a 50% jump [in premium] tomorrow and have no options. Some captive owners might find that their captive isn’t structured adequately to address those changes.” Focusing on getting the correct information to those new to the captive arena is the

first step. The information will be about the value of captives and how to execute the concept. Tipper said, we want to “Get these new folks up and running. Get that kind of introductory information to the prospective owners and their trusted advisors.”

“It’s important to educate our clients and prospective clients,” said Capasso, “But it’s [also] important to educate the broker community. I think it’s incumbent upon us to continue to educate the brokers many of whom, quite frankly, don’t truly understand how captives enter the risk management equation.”

For the more advanced topics, content will likely be released via a combination of virtual meetings and written white papers. “The materials will vary by the audience, but the goal is to get good solid information out to the people that will benefit the most by it,” said Tipper.

UPDATING THE CODE OF CONDUCT The Captive Committee also wants to focus on more advanced topics, going into detail to describe topics like risk distribution, funding for catastrophe losses, premium pricing, and distinguishing insurance versus business risk. The goal of focusing on this type of education will be to answer questions from those in the industry and in other constituencies, such as federal and state legislatures.

With many businesses still working remotely in 2021, due to the pandemic, face-toface meetings are not going to be an option. The Captive Committee will have to rely heavily on virtual meeting platforms or web forums. According to Capasso, “We’ve talked about doing webinars and video conferencing. With the pandemic, people are now used to going on Zoom or Microsoft Teams or other online interactive formats. It won’t be as difficult in the future to set up virtual meetings and get people to participate join in.”

The third item that the Captive Committee wants to take on this year is a detailed update of the Captive Manager Code of Conduct. The committee first released the Code in 2019 in an effort to help guide captive managers to a high standard of ethical conduct and to help strengthen the reputation of the captive industry. The Captive Committee and SIIA sought to take a proactive approach to answer any questions about the validity and effectiveness of captives with the Code.

It was developed and released at a time when the IRS was first ramping up its attacks on 831(b) captives and was meant to be a living document—changing as the market and industry changed. While the document has been tweaked in the last two years, the Captive Committee now wants to give the document a more comprehensive update.

According to Tipper, “I want to make sure that when we review and, perhaps, modify the Code that we do it in the context of new court cases or other matters that have happened since the previous review. I want to look at those to see if we need to enhance or otherwise change a section of the existing Code or provide some sort of guidance.”



The committee wants to make sure the Code is answering the right questions—the questions that are being asked by captive managers and their clients. They want to establish a sturdy framework so that any captive manager can use the Code to guide them in conducting their business.

Committee members have to walk a fine line in order to create a document that can articulate the needs of their industry, yet not attempt to regulate it. As a trade association, regulation is not SIIA’s job, but by creating the Code the association is working to offer guidance where needed and answer questions where there is confusion. “To me,” said Tipper, “The purpose of the Code is to articulate custom and practice as opposed to standards of behavior.”

According to McCully, “We want to continue to grow and expand the captive manager code of conduct to suit all the needs of all the constituents who would rely on that document to make an informed decision.”

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.

There is some ongoing discussion within the committee about how far the Code of Conduct should go, with some members preferring a more general expression of how to conduct captive business and other members preferring the document to be more specific. However, each member of the Captive Committee wants to make sure that the document can answer any question about baseline standards for good management.

For Capasso, “I still think the Code of Conduct can be strengthened in areas regarding communication and captive manager procedures and protocols within our own industry. Then [from there] try to build some consistency in how we form and manage captives.”

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s we enter the 117th Congress under a Democrat majority and President Biden begins his first 100 days in office, the Self-Insurance Institute of America, Inc. (SIIA) is taking this opportunity to provide initial analysis of what this new political dynamic will mean for health care policy generally, and how those positions may impact the self-insurance industry specifically. Through a number of federal elections and majority party changes, SIIA has maintained a steady course in changing times, strengthening advocacy activities and lending a strong voice to protect the industry when it was needed most. In 2021 and beyond, SIIA is in a better position than ever to be a vocal and active advocate on behalf of the self-insurance industry in Washington, D.C. through established relationships with policymakers, ongoing engagement, and the wherewithal to build relationships in a constantly changing political environment. While SIIA is already engaging with policymakers and implementing a carefully crafted advocacy strategy, SIIA members also have a number of ways to advocate and to become involved themselves. Talking to and educating policymakers, engaging employer clients, and supporting SIIA with resources and time are just a few possibilities to help increase political and policy impact. In addition, SIIA’s government relations team will be updating members on policy impacts and perspectives as part of the ongoing monthly Advocacy in Action webinar series, sponsored by Tokio Marine HCC Stop-Loss. Mark your calendars to attend the monthly webinar the second Tuesday of every month and watch your inbox for more details.



In addition to the webinar series, SIIA is launching a focused self-insured employer narrative campaign designed to ensure that a prioritized group of members of Congress understand the importance of self-insurance to employer constituents in their states and districts. Lastly, SIIA will continue to provide up to date and insightful analysis on critical policy areas to your business and clients. In a change from the last 4 years, Congress and the White House will have a single party structure, meaning that the self-insurance industry will face a number of concerning policy proposals and, perhaps, direct threats. These potential policy threats include:

路 Advancement of a public-option health plan; 路 Medicare expansion; 路 ACA interpretive changes/ employee opt-out of employer plans; and

路 Insurance regulation, mandates, taxes on self-insured plans.

The adverse impacts of these potential changes mean that creating a bulwark, including increased involvement by SIIA members, is needed more than ever to continue to strengthen and protect the industry.


In the biggest political shakeup of the election, Democrats have now found themselves taking back the majority in the U.S. Senate with critical and narrow wins by Joe Ossoff and Raphael Warnock in Georgia. This will drastically change the political trajectory of Washington until the 2022 midterm elections. However, it is important to note that with Senate control tied at 50-50, Vice President- Kamala Harris will be the key tie-breaking vote. That single vote majority with the Vice President does not mean a political referendum, but an extremely narrow path for Democrats, perhaps the narrowest in US history. This means that Democrats in both the House and Senate will need to govern carefully and not be able to fully press their entire policy agenda.

FEBRUARY 2021 41

While House Democrats may try to pass major health care policy changes that will not garner 60 votes in the Senate, the Democratic House and Senate will attempt to work together to pass other health care changes ranging from requiring free coverage for COVID “treatment” to allowing the government to negotiate drug prices.

included in the Biden Plan are intended to “improve” the ACA.

With such a narrow majority, individual Senators will wield incredible power as a single vote will be crucial. Any one Senator can deliver a victory or a loss to leadership in an institution where many do not vote party-line at all times.

For example, the Plan calls for expanding access to the ACA’s premium subsidies currently available to low- and middleincome individuals and families purchasing an individual market plan through an ACA Exchange.


Despite a Democratic majority, such a tight margin in both the House and Senate, makes it unlikely that Congress will pursue Medicare-for-All, particularly because President Biden campaigned against such a disruptive change to our health care system. Instead, we expect that the Biden Health Care Plan (‘the Plan’) will be back on the table for consideration. As discussed more fully below, many of the proposals

In particular, the Plan would allow any individual at any income level to access an even more generous premium subsidy than under current law, irrespective of whether this individual is offered an employer health plan that is considered an affordable/minimum value plan.


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Below is a summary analysis of specific components of the Biden Health Care Plan that could impact the self-insured industry.


· Biden’s proposal could eliminate the employer “firewall,” moving more employees to the ACA’s individual market.

· Larger ACA premium subsidies could increase the appeal of enrolling in a government-subsidized plan among low- and middle-income employees, including younger/healthier employees.

· The result of Biden’s Plan: An employee at any income level would be allowed to (1) opt-out of their employer plan, (2) purchase individual market plan through an ACA Exchange, and (3) qualify for a more generous government subsidy irrespective of an employer plan offering.

option plan with a generous government subsidy.

· Even if a public option is not available to those with an employer plan, the public option would increase the current costshift between public-subsidized health programs and privateemployer-sponsored health plans.

· Reimbursing hospitals and providers at lower rates would only exacerbate the current cost-shift, resulting in increased costs for employers, and creating perverse incentives to move towards a Medicare for All-type system.


· The Biden Plan would allow employees to “buy into” a public option plan,

(60-64 YEAR OLD’S)

having a significant impact on the employer-sponsored health system as more employees (1) opt-out of employer plans and (2) “buy into” the public

· The Biden Plan could allow employees between the ages of 60 and 64 to enroll in a Medicare “Buy In” Program, thereby allowing older employees to leave the employer risk pool.


This proposal may add to the current cost-shift, and reduce health care utilization and overall cost to the employer sponsor.


However, a Biden Administration may seek to claw-back a portion of savings through an “employer tax.”



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While eliminating the Senate filibuster is uncertain due to moderate Democrats like Sen. Joe Manchin (D-WV) already opposing such a move, Democrats do have an oft-used procedural tool at their disposal to push through a vast number of policy changes, including healthcare, through a legislative vehicle known as reconciliation.

In addition, SIIA will continue to advocate through virtual Hill and congressional town hall meetings, as well as local meetings in states and districts. Initial State/ Senate priorities include:

· Arizona · Georgia

This procedure has been used in the past to push forward major policy initiatives without the need to gain a super majority in the Senate, a majority Democrats know they will not be able to garner votes for. In the past, Republicans have successfully used reconciliation to enact Tax Reform (2017) and Senate Democrats used the reconciliation process to enact the ACA (2010). With Democrats controlling both the White House and Congress, they could very well use the reconciliation process to enact broad changes to the ACA and healthcare in general. However, it is important to note that the reconciliation process can only include provisions that impact revenue (i.e., taxes) and spending.

· Idaho · Minnesota · Montana · Nevada · North Carolina · Nevada · New Hampshire

With this in mind, programs such as Medicare, which includes payroll taxes for revenue and government spending that would be germane to a reconciliation package, and certainly a Medicare-like public option, would fit into that category.

· Ohio

Similarly, a potential public option in the individual market would likely include tax increases and government spending, also making it germane in this process, as would increasing the ACA premium subsidy amounts and expanding eligibility to access these subsidies.

· Pennsylvania

· Oregon

· Texas · Virginia · Washington

SIIA CONGRESSIONAL ADVOCACY & POLICYMAKER ENGAGEMENT To maximize impact and engagement throughout 2021, SIIA plans to focus on federal policymakers in a handful of key states that will make a difference in both national politics and on jurisdictional committees in the Senate. While continuing to maintain relationships with House leadership and key members on the House Ways & Means, Education & Labor and Energy & Commerce Committees, the main focus will be in the U.S. Senate, including the Committees on Finance and HELP. In addition, SIIA will leverage advocacy activity along with political coordination through the Self-Insurance Industry Political Action Committee, or SIPAC. The SIIA Government Relations Team continues to focus time and resources to partner with SIIA members, as well as current Hill relationships, to engage moderates and members of jurisdictional committees on an ongoing basis.




For more information on SIIA Government Relations activities, if you have policy questions, and to find out what you can do to support the SelfInsured Employer Narrative Campaign, please email Dakota Jackson at

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SIIA is pleased to announce several Connect from Anywhere (CFA) events – SIIA’s re-branded and improved version of “virtual” events – for the upcoming year. Preliminary information is provided below with more details to follow in the coming months. Please note that we are not soliciting speaker applications at this time.

Government Relations Webinar Update Series - Second Tuesday of the Month With a new Administration and new Congress in Washington, DC, 2021 promises to be a very active year with regard to legislative/regulatory developments affecting the companies involved in the self-insurance/captive insurance marketplace. To keep members informed about what they need to know, SIIA’s government relations team will be holding a monthly webinar series from January through June.



ENDEAVORS CFA Members Only Networking Forum Series - The last Thursday of each month from January through June – 5:00 p.m. to 7:00 p.m.

SIIA Future Leaders CFA Summit April 20-22, 2021 (2.5 hours per day)

While we wait for public health conditions to improve enough to allow for the inperson networking functions that so many SIIA members value, the association is pleased to announce monthly CFA members’ only networking forums to be held from January through June to facilitate important connections via the Zoom video platform. The casual, after hours, format will allow for participants to be randomly rotated among multiple small group video chat rooms to maximize connection opportunities.

The self-insurance industry has started to witness a significant generational change, with an increasing number of its long-time leaders transitioning into retirement. Coming up the ranks behind them are many talented younger members who will lead our industry in the years and decades ahead. SIIA is encouraging this transition through its SIIA Future Leaders (SFL) initiative. The highlight of this initiative in 2021 will be a SIIA Future Leaders CFA Summit that is being designed to help prepare these younger members (under 40) for the challenges and opportunities ahead of them.

Medical Travel CFA Seminar Series - February/March/April 2021 (Specific dates TBA) SIIA is developing a CFA seminar series to specifically highlight medical travel destinations – both domestic and international – that provide low-cost/high quality health care treatment services for self-insured employers. This will provide selfinsured payers and advisors information to get head start on identifying potential provider partners while we wait for travel to return to normal.

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Direct Contracting CFA Executive Forum - May 18-20, 2021 (2.5 hours per day) Direct contracting arrangements between health care payers and providers have become the subject of increased interest in recent years. To help accelerate the growth of this market segment, SIIA has pulled together several of the brightest minds representing leading payers, advisors and providers to develop detailed “best practices” recommendations that will be shared as part of a Direct Contract CFA Executive Forum to be produced in 2021.

Hot Topic Webinar Series - Various dates from January through June, 2021 SIIA has taken several of the hottest topics from recent educational programs that will be produced via a live format with enhanced content. They will be scheduled on various dates from January through June.

CFA Mentor Connection Forum - June 17-18, 2021 Produced exclusively by SIIA, this event connects younger SIIA members (under age 40) with several of the most successful self-insurance/captive insurance industry executives in small group “Zoom Rooms.” This format provides attendees unique access to those who can provide important career advancement advice, including how they can be more valuable to their employers. The program also facilitates interaction among attendees to help them build their professional networks.

CFA National Conference & Expo - October 3-5, 2021 SIIA’s 2020 Virtual National Conference was widely considered a big success, with 93% of participants reporting that they had a positive experience according to a post-event survey. We expect that it will be an even better CFA event for 2021. As mentioned previously, if public health conditions improve sufficiently later next year, SIIA will supplement the CFA format with in-person components to allow for an additional option for those who would like to participate in that way. Watch for announcements likely later next spring.

IN THE MEANTIME SIIA wants to take this opportunity to thank its members for their support and patience during a very tumultuous 2020. If your company is not a member, we invite you to join at this time so that you can take advantage of highly discounted registration fees and/or complimentary registrations for our 2021 events, among



other benefits. For immediate assistance, please contact Jennifer Ivy at jivy@siia. org. Should your company be interested in sponsoring any of the 2021 events listed above, please contact Justin Miller at

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2021 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 All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy and





ADVISORY BOARD AT BOSTON UNIVERSITY SCHOOL OF MEDICINE WELLESLEY, Mass. -- Dan Fishbein, M.D., president of Sun Life U.S., has been appointed to the Boston University School of Medicine's (BUSM) Dean's Advisory Board. As an advisory board member, Fishbein will provide insight on school matters such as curriculum, professionalism in medicine, industry partnerships and research to BUSM Dean Karen Antman, M.D., in support of the School. He will also serve as an ambassador for the school, offering experiential expertise and guidance.

illness or injury, supplemental health offerings, which help close financial gaps in health insurance, and insurance protection for employers who self-fund their health plans through Sun Life's industry-leading stop-loss business. The BUSM Dean's Advisory Board members are selected to serve for three years, and include many prominent M.D.s, M.D./PhDs, M.D.s in politics and business, and parents of students. Board members also provide philanthropic support to the school – Fishbein will be supporting the M.D./ MBA program and the Rebecca Lee Crumpler Scholarship Fund, named for the first Black woman to receive a medical degree in 1864.

"I am humbled and honored to join Dr. Antman's advisory board at my alma mater," said Fishbein. "Although I chose a business path in the employee benefits industry, I draw on my medical education from BUSM every day to help She graduated from the New England ensure our products and services both complement and Female Medical College, which would support the health and wellbeing of every covered member. become BUSM after incorporation into the university in 1873. The Rebecca Lee I look forward to working with the board to help the school Crumpler scholarship raises funds to continue its success in both educating new physicians and help Black women attend BUSM. conducting groundbreaking research." "I am excited to help bring Upon graduation from BUSM, Fishbein decided to pursue a career in business, first more diverse students into focusing on managed care, addressing health and wellness for people covered under the field of medicine, an employer medical plans. important step to improving In his early career at Mass Mutual, he helped establish one of the first insurer physician and hospital networks. With New York Life, he led development of products access to healthcare and and provider networks nationally, and then led the company's NYLCare Health Plan of Maine, broadening healthcare options for the state and across New England. addressing health disparities At Aetna, Fishbein led health plans in New England, created new business models, in the U.S.," added Fishbein. and led the company's Specialty Businesses. Fishbein joined Sun Life U.S. as president in 2014, contributing his medical insights and expertise to Sun Life's broad portfolio of insurance products and services. These include Sun Life's Work is Healthy (WisH) philosophy, a goal-oriented approach to helping disabled members return to gainful employment following an

FEBRUARY 2021 53

NEWS "I am delighted to have Dan Fishbein join the School's advisory board, as he brings a unique group health perspective to our school," said Dean Antman. "As an alumnus who chose to pursue a business path, Dan understands how medical training can be applied to various disciplines in impactful ways. I look forward to working with him and engaging his expertise." Fishbein also currently serves on the Board of Collective Health (San Francisco), and is a board member of Spurwink Services, a large non-profit behavioral health provider in Maine.

About Sun Life Sun Life is a leading international financial services organization providing insurance, wealth and asset management solutions to individual and corporate Clients. Sun Life has operations in a number of markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of September 30, 2020, Sun Life had total assets under management of C$1,186 billion. Visit In the United States, Sun Life is a leading provider of stop-loss medical insurance ... and is one of the largest group benefits providers, serving more than 60,000 employers in small, medium and large workplaces across the country. Sun Life's broad portfolio of insurance products and services in the U.S. includes



disability, absence management, life, dental, vision, voluntary and medical stop-loss. Sun Life and its affiliates in asset management businesses in the U.S. employ approximately 5,500 people. Group insurance policies are issued by Sun Life Assurance Company of Canada (Wellesley Hills, Mass.), except in New York, where policies are issued by Sun Life and Health Insurance Company (U.S.) (Lansing, Mich.). Visit us. About Boston University School of Medicine Originally established in 1848 as the New England Female Medical College, and incorporated into Boston University in 1873, Boston University School of Medicine (BUSM) today is a leading academic medical center with an enrollment of more than 700 medical students and 950 students pursuing degrees in graduate medical sciences. BUSM faculty contribute to more than 668 active grants and contracts, with total anticipated awards valued at more than $693 million in amyloidosis, arthritis, cardiovascular disease, cancer, infectious diseases, pulmonary disease and dermatology, among other areas. The School's teaching affiliates include Boston Medical Center, its primary teaching hospital, the Boston VA Healthcare System, Kaiser Permanente in northern California, as well as Boston HealthNet, a network of 15 community health centers. Visit bumc.


platforms. Together, we enhance our ability to deliver end-to-end analytics, technologies, reporting, reconciliation and administrative services to any entity taking or managing healthcare risk.”

Greenwich, CT and Lexington, MA - Cedar Gate Technologies (Cedar Gate), a leading value-based care performance management company, today announced its acquisition of Deerwalk, a powerful healthcare data management, analytics, and business By acquiring Deerwalk, Cedar Gate intelligence company. expands its employer-based offerings with the ability to actively engage Together, the companies create an unparalleled value-based care analytics and employers and ASOs as they manage administration platform empowering all healthcare constituents to deliver the most rising healthcare costs. The combined cost-effective, highest-quality care. suite of offerings improves the patient experience and delivers financial The combined company’s actionable insights, intelligent reporting, and administrative solutions serve the needs of payers, providers, employers, and Administrative Services sustainability. Organizations (ASO), including health plans, third party administrators (TPAs), brokers, consultants, and others. “This acquisition solidifies Cedar Gate as the industry-leading value-based care platform company at a crucial time when healthcare is migrating away from feefor-service to various forms of fee-for-value and risk-based alternatives,” said David B. Snow, Jr., Chairman and Chief Executive Officer of Cedar Gate Technologies. “Deerwalk’s SaaS solutions and capabilities are highly complementary to our current

“Deerwalk now becomes part of Cedar Gate’s vision to provide end-to-end analytics to the healthcare industry and I am very excited about this next phase for Deerwalk’s employees and customers,” said Rudra Pandey, Founder and Executive Chairman of Deerwalk.

LAST YEAR, CHRONIC KIDNEY DISEASE CLAIMS COSTS AMOUNTED TO MORE THAN $100 BILLION FOR COMMERCIAL HEALTH PLANS. Cost containment alone is no longer the gold standard when it comes to managing risks associated with Chronic Kidney Disease (CKD). It is better to avoid catastrophic dialysis and CKD claims costs altogether. Now, makes putting an end to surprise dialysis claims possible, and that is only the beginning.


FEBRUARY 2021 55


“By joining Cedar Gate, we now have an excellent opportunity to enable the acceleration of value-based care across the country,” added Jeff Gasser, Deerwalk’s Chief Executive Officer. “By combining companies, our ability to create highperforming value-based systems across the entire spectrum of care is unmatched.” Cedar Gate supports all facets of value-based care contract management including primary care attribution, retrospective & prospective bundles, primary care capitation, specialty capitation and global capitation. Using its cloud-based SaaS platform and administrative systems, Cedar Gate enables payers, providers and self-insured employers to reduce medical spend, re-capture revenues and create high-performance provider networks to improve clinical and financial performance.

About Cedar Gate Technologies Cedar Gate Technologies is a leading value-based care performance management company founded in 2014 by David B. Snow Jr., a nationally recognized Fortune 50 CEO, in partnership with GTCR, a leading Chicago-based private equity firm. In 2018, Ascension Ventures, a strategic healthcare venture firm, became part of the ownership group. Cedar Gate provides high-performance analytic, technological, administrative and advisory services to providers, payers and self-insured employers to exceed performance thresholds of value-based care contracts, networks and programs Based in Greenwich, Connecticut, Cedar Gate leverages its deep healthcare expertise and nationally-recognized platform to deliver end-to-end systems and services empowering any healthcare organization, at any point on the value-based care continuum, to excel at value-based care. Visit

About Deerwalk, Inc. Deerwalk is an innovative population health management, data management, and healthcare analytics software company based in Lexington, Massachusetts. Founded in 2010, Deerwalk is privately held with over 300 employees worldwide, including a technology campus in Kathmandu, Nepal.



Deerwalk Partners with industry leaders responsible for making decisions for the health of a population to optimize costs and improve the quality of care. Deerwalk offers a complete population health management suite built on a foundation of data integrity that delivers reliable data insights and actionable intelligence. Visit



UTILIZATION MANAGEMENT BUFFALO, NY – Nova Healthcare Administrators, Inc. (Nova) is proud to announce that it has earned URAC accreditation in Health Utilization Management. URAC is the independent leader in promoting healthcare quality through accreditation, certification and measurement. By achieving this status, Nova has demonstrated a comprehensive commitment to quality care, improved processes and better patient outcomes. The URAC accreditation process demonstrates a commitment to quality services and serves as a framework to improve business processes through benchmarking organizations against nationally recognized standards.

“We are proud of this achievement and thrilled to have again earned URAC accreditation in Health Utilization Management,”

WE ARE HERE FOR YOU Now, more than ever, it is important to do business with partners you can depend on. For more than 35 years, self-funded employers have trusted Sun Life to deliver flexible stop-loss options and seamless claim reimbursement. Helping you make the best decisions for your business is our business. Our team of dedicated experts is ready to support you with innovative solutions, tools, and resources to help you manage your self-funded plan every step of the way. Ask your Sun Life Stop-Loss Specialist about what is new at Sun Life or click here to learn more!












For current financial ratings of underwriting companies by independent rating agencies, visit our corporate website at For more information about Sun Life products, visit Stop-Loss policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states except New York, under Policy Form Series 07-SL REV 7-12. In New York, Stop-Loss policies are underwritten by Sun Life and Health Insurance Company (U.S.) (Lansing, MI) under Policy Form Series 07-NYSL REV 7-12. Product offerings may not be available in all states and may vary depending on state laws and regulations. Š 2021 Sun Life Assurance Company of Canada, Wellesley Hills, MA 02481. All rights reserved. Sun Life and the globe symbol are trademarks of Sun Life Assurance Company of Canada. Visit us at BRAD-6503-n

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“Nova’s continued dedication to incorporate these standards into the services we offer demonstrates our commitment to quality, safety and improvement in health care management.”

said James Walleshauser, president of Nova.

“Appropriateness and efficiency are words to live by in meeting new value-based goals for population health. Nova’s URAC accreditation shows an ability to abide by the gold standard when it comes to performing Health Utilization Management functions,” said URAC President and CEO Shawn Griffin, M.D. “URAC’s utilization management accreditation standards promote an evidence-based and reasonable review of services that respect both patients and providers.” About Nova Founded in 1982 and headquartered in Buffalo, NY, Nova is one of the largest third-party administrators of self-funded employee benefit programs in the nation, providing the health care solutions our clients need in the way they need them. And we go far beyond the basics. We are creative problem solvers who build custom solutions. Nova provides a unique, comprehensive array of services, including medical, dental, vision, COBRA, reimbursement account administration, and private-labeled solutions. Nova also offers award-winning, in-house, integrated medical management programs. We are the stewards of our clients’ benefit plans, offering best-in-class partnerships, customized solutions, and personalized service. Nova partners with more than 500 clients to promote health, wellness, and financial management while providing easy access to high quality, cost-effective benefits to more than 230,000 individuals. Visit

About URAC Founded in 1990, URAC is the independent leader in promoting healthcare quality through leadership, accreditation, measurement, and innovation. URAC is a nonprofit organization using evidence-based measures and developing standards through inclusive engagement with a range of stakeholders committed to improving the quality of healthcare. Our portfolio of accreditation and certification programs span the healthcare industry, addressing healthcare management, healthcare operations, health plans, pharmacies, telehealth providers, physician practices, and more. URAC accreditation is a symbol of excellence for organizations to showcase their validated commitment to quality and accountability.





Franklin, TN -- Brentwood Capital Advisors (“BCA”) is pleased to announce that it served as the exclusive financial advisor to Healthx, Inc. in its merger with Zipari, Inc. The merger was sponsored by Zipari’s new partner, Thoma Bravo, through a strategic growth investment that values the combined company at more than half a billion dollars. Headquartered in Indianapolis, Indiana, Healthx has been providing self-funded healthcare payers with a trusted platform of engagement solutions for over 20 years. The Company’s portals and growing suite of targeted technology offerings power payers’ engagement tech stacks. Payers can enhance engagement, reduce call center costs, and improve clinical outcomes with market leading solutions from Healthx. Used by 170 healthcare payers to manage more than 27 million lives, Healthx is a proven partner for engagement needs. “We are excited to join Zipari and move our common mission forward. This combination will offer our clients the most comprehensive platform in the market and our team looks forward to working together to deliver just that.” said Mark Rapoport, CEO of Healthx. “BCA was our trusted advisor, playing an important role in this transaction process. Their healthcare technology domain expertise and transaction experience were valuable in closing an optimal deal with the right partner for our employees,

NEWS clients, and shareholders.”

About Brentwood Capital Advisors

“Healthx’s industry leadership over the last 20 years, combined with its deep connectivity within the payer and TPA ecosystem, created a compelling combination opportunity with Zipari,” added Jack Jeong and John Kibler, Managing Directors and Co-Heads of Healthcare Technology Investment Banking at BCA. “We were thrilled to work with the Healthx and JMI Equity teams, and we look forward to seeing the industry-leading consumer experience platform that Healthx and Zipari create together in their partnership with Thoma Bravo.”

Headquartered in Franklin, Tennessee, Brentwood Capital Advisors is one of the nation’s leading independent investment banks, specializing in providing financial advice on mergers, acquisitions, corporate divestitures, and capital raising to growth-oriented, middle-market healthcare, technology, and tech-enabled services companies. Visit About Healthx Healthx is a provider of cloud-based digital engagement platforms intended for healthcare payers. The Company's healthcare member engagement orchestration platform connects members, providers, and payers integrating all tech tools into one platform, enabling them to lower costs and improve health. Visit About JMI Equity JMI Equity is a growth equity firm focused on investing in leading software companies. Founded in 1992, JMI has invested in over 150 businesses in its target markets, successfully completed over 100 exits and raised more than $4 billion of committed capital. JMI partners with exceptional management teams to help build their companies into industry leaders. Visit

FEBRUARY 2021 59


CHAIRMAN OF THE BOARD* Robert Tierney President StarLine Osterville, MA


Mike Ferguson SIIA Simpsonville, SC


DIRECTORS Thomas R. Belding President Professional Reinsurance Mktg. Svcs. Edmond, OK John Capasso President & CEO Captive Planning Associates, LLC Marlton, NJ

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

Laura Hirsch Co-CEO Aither Health Carrollton, TX


Elizabeth Midtlien Vice President, Emerging Markets AmeriHealth Administrators, Inc. Bloomington, MN

Peter Robinson Managing Principal EPIC Reinsurance San Francisco, CA

Lisa Moody President & CEO Renalogic Phoenix, AZ Shaun L. Peterson VP, Stop Loss Voya Financial Minneapolis, MN

*Also serves as Director Please forward any changes to your contact information to Amy Troiano at


Directors Freda H. Bacon Les Boughner Alex Giordano Virginia Johnson Dani Kimlinger, PhD, MHA, SPHR, SHRM-SCP


in healthcare waste & errors too much?

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Stability for those balancing risk and reward.

Those who self-fund a health plan seek autonomy and control over their benefits program and costs. It can be rewarding, but it does come with risk. Stop Loss protection from HM Insurance Group works to mitigate that risk for self-funded employers should high-dollar claims arise – delivering steadiness to the performance and confidence in the outcome. Find more on

CONNECT WITH ONE OF OUR EXPERTS ON OUR REINSURANCE OPTIONS: Employer Stop Loss: Traditional Protection • Small Group Solutions • Coverage Over Reference Based Pricing Managed Care Reinsurance: Provider Excess Loss • Health Plan Reinsurance

In all states except New York, coverage may be underwritten by HM Life Insurance Company, Pittsburgh, PA, or Highmark Casualty Insurance Company, Pittsburgh, PA. In New York, coverage is underwritten by HM Life Insurance Company of New York, New York, NY. The coverage or service requested may not be available in all states and is subject to individual state approval. MTG-3355 (12/20)

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