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



By Laura Carabello



By Bruce Shutan











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 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



Open the

Digital Health

Front Door For Employees


Written By Laura Carabello


ewly installed digital front doors are opening vistas to improved healthcare access and options for enhanced, more cost-effective and personalized care. With an increasing demand for cutting-edge technologies, cost effective digital solutions are providing comprehensive care to patients in all situations and closing gaps in care that cannot be met by existing resources.

Digital health products and solutions help save time, improve accuracy and efficiency at every stage of the treatment process -- from diagnosis and treatment selection to monitoring outcomes. The Food and Drug Administration (FDA) advises that digital health products “…can empower consumers to make better-informed decisions about their own health and provide new options for facilitating prevention, early diagnosis of life-threatening diseases and management of chronic conditions outside of traditional health care settings” .1



Digital Health Thanks to robust digital health investment which has already reached $21.3 billion across 541 deals in 20212, with an average deal size of $39.4 million, innovative digital products and services can provide self-insured groups of all sizes with opportunities for greater employee engagement: meeting individuals where they live and work and contributing to enhanced physician/ patient relationships that lead to better health outcomes at lower cost. Digital solutions have become particularly valuable in light of reports that health insurance costs for employer rose3 the most in over a decade this year.

Amid dozens of emerging digital health developments, there is even a new proposed category – though not yet a separate category in FDA regulations – of “prescription digital therapeutics” such as those for opioid use and broader substance use disorders4. Many envision that that clinicians would prescribe these solutions as they would a drug or a device.

“Technology advancements are positively impacting the clinical outcomes of specialty patients, making compliance and persistency tools more efficient and user-friendly,” says Belazi. “As self-insured employers Dea Belazi facilitate the next generation of digital health strategies, these innovative health advancements for medication adherence and compliance are especially valuable and support a truly improved health experience for every employee.” GROWING VALUE OF DIGITAL HEALTH SERVICES

This is all positive news for self-insured employers and their consultants that are expecting to further leverage digital solutions that enhance quality and lower the cost of care.

Dea Belazi, president and CEO, AscellaHealth, a global specialty pharmacy and healthcare solutions company, points to the increased adoption of digital solutions and patient engagement strategies that impact the management of complex and/or chronic conditions and rare or orphan diseases.

KEY TRENDS IN DIGITAL HEALTH IMPACTING EMPLOYER BENEFITS 1. Telehealth ‘2.0’ Following a telehealth boom in 2020 propelled by the COVID-19 pandemic, virtual visits for both primary and specialty care – beyond simply providing urgent care -- stabilized but achieved elevated levels compared to pre-pandemic demand. Telehealth use overall has leveled off at levels 38 times higher than before the COVID-19 pandemic, ranging from 13% to 17% of visits across all specialties,



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Digital Health

according to an analysis from McKinsey released last summer5.

Michael Gorton, CEO of Recuro Health, forecasts widespread adoption of virtual primary care given its potential for explosive scalability at little to no incremental cost and with minimal loss of service quality. “The availability of digital data related to diagnostic tests, monitoring devices and treatment compliance programs further amplifies the role Michael Gorton of PCPs conducting telehealth visits. Payers and providers in every payment model – including fee for service or Direct Primary Care – now see the value."

While the COVID19 pandemic did not create the need for telemedicine, it highlighted its importance and the inevitability of its contribution to the future of medicine. Jonathan Wiesen, MD and CEO of MediOrbis, asserts, “Well beyond the acceptance of the improved access to care that telehealth provides, the healthcare community has begun to race to solutions that enhance the modality of care, that provide simplified and streamlined remote solutions for managing chronic and Dr. Jonathan Wiesen complex specialty conditions. Moreover, the impressive satisfaction and promoter scores of these programs speak to their ability to engage patients in their care and allow them to take autonomy of their health."

Mike King

Mike King, SVP of Strategic Partnerships, Teladoc Health, says that today’s consumers have different expectations for the healthcare experience, particularly with how they interact with the system, and employers

“In looking for both modern and affordable plan designs, there is a meaningful opportunity for employers to go beyond urgent and acute care needs and establish more longitudinal, preventative care via virtual primary care,” says King. “This model are taking note.

emerges as a key area of long-term investment for self-insured employers and is expected to gain even more momentum over the next several years as the virtual-first approach can be used to prevent downstream health complications and costs through prevention and screening.”



Digital Health He says for any employer – particularly those who choose to self-insure - the ability to provide a unified, integrated care experience is paramount, adding, “Ultimately, virtual primary care should act as a hub for other virtual care offerings such as mental health, chronic condition management and specialty care, and be paired with a hybrid, in person experience when medically appropriate.”

2. Wearable Technologies to Monitor Health Wearables to monitor individual physiological functioning 24 hours a day have evolved from hospital bedside monitors to wearable electronic devices that consumers can wear. Smartbands and smart watches are designed to continually collect health and track the daily living activity data of users. Increasingly, these technologies are sending the user’s health information to the user’s smartphone or even straight to a doctor or other healthcare professional in real time.

As more consumers share data from these devices with their doctors, wearable ECG monitors and wearable blood pressure monitors will see greater utilization. Monitoring one’s blood pressure or heart rate with wearables allows people to gauge the impact of their lifestyle, including diet or daily activities, and make better, more informed choices that may help to reduce the risk of serious diseases. In fact, heart rate monitors are now standard on most smartwatches, and some have FDA approval for detecting abnormalities such as atrial fibrillation, a major cause of stroke6.



Deloitte predicts strong demand for wearable wellness technology in 20227 with 320 million consumer health and wearable wellness devices expected to ship worldwide in 2022. By 2024, that figure will reach 440 million units, the company predicts. This growth is likely being driven by new offerings hitting the market and more healthcare providers becoming comfortable using them.

3. Mental/Behavioral Health Digital Solutions The stress and anxiety brought about by the COVID-19 pandemic have impacted employers with real-world issues that include increased absenteeism, compromised work performance and more dire outcomes related to depression and substance abuse. The National Institute of Mental Health (NAMI) reports8 that nearly one in five U.S. adults live with a mental illness. In this environment, there is accelerated demand for virtual behavioral health services, including mobile mental health apps.


Buckeye Recovery Network: Many are pointing to the value of behavioral telehealth that allows an individual

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Digital Health to consult with a health care provider via phone or video chat. This approach to treatment reduces costs of services and improves access to services for those who cannot see a mental health professional in person – especially with the shortage of providers: over one-third of Americans live in areas lacking mental health professionals9. Employers simply cannot afford to ignore this tidal surge in demand for mental health support and many are taking a proactive approach even if an employee is not currently experiencing symptoms of anxiety or depression.

Kim Darling

In response to this challenge, Kim Darling, CEO, Competitive Health, projects significant uptake of strategically aimed behavioral health solutions that address critical challenges faced by

“We now recognize the critical need for employees to have access to an innovative, virtual behavioral health platform built specifically for children and teenagers – the entire family unit. More than ever, kids and teens are struggling with issues that fall under the behavioral health umbrella.”

“The problems are still the same: slow or non-existent access, delayed and inaccurate diagnoses, uneven insurance coverage, ineffective use of residential services and the continued impact of COVID on increasing anxiety, depression, and other mental health issues facing employees and their families,” explains Dobro. “Increased demand and ever more limited access to care are driving the need for more effective and more available digital mental health solutions. Behavioral health is as confusing, complex, and costly as any other part of our health care system – that needs to change.”

working parents and their families.

He points to the emergence of technology that is providing exciting capabilities to deliver new and different

She says that pandemic-induced anxiety and stress add to the challenges, and these difficulties are often problematic for parents. “These problems can pose obstacles to job retention and optimal performance. In fact, research found that more than 1 in 5 parents are intending to leave the workforce in 2022 to better care for their children’s needs.” By opening-up needed access to on-demand, virtual behavioral care, parents and caregivers may not be forced to choose between leaving their careers and supporting their families. “Employers, healthcare plans and consultants will deliver a seamless system of access and extraordinary behavioral health care to families, when and where they need it.”

Dr. Jeff Dobro MD, Chief Innovation Officer, Transcarent, anticipates that 2022 is going to be an exciting year for new, different, and better mental health digital solutions.



Dr. Jeff Dobro

prescription digital therapeutics (PDTs), expanding on the known benefits of digital cognitive behavioral therapy, or digital CBT: a branch of online or blended therapy where CBT-based treatments and interventions used to help clients manage mental health symptoms.

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Digital Health “Digital CBT and other modalities are impacting areas like substance abuse, OCD, autism, eating disorders and others,” he explains. “Mental health screenings and AI driven voice biomarker analytics are being embedded in standard telehealth encounters, facilitating real time diagnoses and treatment as well as referrals into appropriate digital tools, rapid access therapy and triage to other services.”

WHAT’S AHEAD Additional trends including expansion of digital women's health and evidencebased therapeutic interventions via software, like mobile health and wellness apps. These innovations are projected to replace or complement the existing treatment of a disease. Another harbinger of growth is the entry of traditional retailers entering the digital health space, especially as larger slices of their businesses move toward e-commerce. Giants like CVS Health and Walgreens have introduced consumer-facing health care solutions such as virtual primary care, while regional players such as Hy-Vee, a midwestern chain of supermarkets, is launching a new subsidiary to provide low-cost telehealth and online pharmacy services.



The appetite for employers to adopt digital health is expressed by Chris Michalak, CEO, Virgin Pulse: “More than any other time in recent history, CEOs and C-suite leaders are turning their attention to the health and wellbeing of the workforce. This new focus has been prompted by four fundamental changes affecting the world around us and the businesses we lead: the global pandemic, social injustice challenges, new ways of working and the newfound power of workers in a highly dynamic employment market.

CEOs are focusing on three actions designed to address the whole self, meet employees where they are, and provide all the tools and resources necessary to help employees maximize their engagement and contribution: 1) Delivering the message from the top, 2) Ensuring the company has a health and wellbeing strategy and 2) Providing a comprehensive set of wellbeing programs to address the needs of the workforce

Chris Michalak

However, the rapid expansion of digital health offerings over the last two years has overwhelmed employers with the many point solutions on the market. Organizations that invest in a unified solution that offers a highly personalized, data-driven user experience will be empowered to engage employees in wellbeing initiatives to drive business outcomes successfully. In 2022, organizations that provide better experiences for their employees will ultimately lower overall costs associated with turnover and productivity obstacles due to current challenges both inside and outside the workplace.”

Laura Carabello holds a degree in Journalism from the Newhouse School of Communications at Syracuse University, is a recognized expert in medical travel, and is a widely published writer on healthcare issues. She is a Principal at CPR Strategic Marketing Communications.

Digital Health References: 1) US Food and Drug Administration. What is Digital Health?

2) Hackett, Mallory; Healthcare innovation, digital health rake in big investment dollars in Q3; MobiHealth News, October 7, 2021. healthcare-innovation-digital-health-rake-big-investment-dollars-q3

3) Reuters Employee Benefits and Compensation; Employers' health insurance costs surge in 2021 as elective procedures resume-survey; December 13, 2021; https://www.reuters. com/legal/government/employers-health-insurance-costs-surge-2021-elective-proceduresresume-survey-2021-12-13/

4) Wehrwein, Peter; Digital Therapeutics Shaping the Future of Care; Managed Healthcare Executive, December 14, 2021; December 2021, Volume 31, Issue 12. https://www.

5) Bestsennyy, Oleg, Gilbert, Greg, Harris, Alex, Rost, Jennifer; Telehealth: A quartertrillion-dollar post-COVID-19 reality?; McKinsey, July 9, 2021; industries/healthcare-systems-and-services/our-insights/telehealth-a-quarter-trillion-dollarpost-covid-19-reality

6) Landi, Heather; Apple plans to add blood pressure monitoring, thermometer to smartwatch: report; Fierce Healthcare, September 1, 2021. https://www.fiercehealthcare. com/digital-health/apple-plans-to-add-blood-pressure-monitoring-thermometer-features-tosmartwatch

7) Deloitte Insights; Wearable technology in health care: Getting better all the time; December 2021;

8) National Institute for Mental Health, 2022. mental-illness

9) USA Facts; June 9, 2021.

FEBRUARY 2022 13



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A la carte captive option uses indemnification rather than insure the risk to help manage troublesome medical claims Written By Bruce Shutan


here are all sorts of alternative risk-transfer arrangements on the market – from heterogeneous and homogeneous group captives to single-employer captives. The common denominator is that they take on multiple risks across a group of covered lives and self-insured employers, leading to savings through captive insurance risk-mitigation. But now there’s a unique a la carte option on the menu whose idea is rooted in an approach dating back seven years that allows self-insured health plans to offload the risk of select medical bills that have already been submitted. It also eliminates balance-billing concerns among patients. The captive’s creator describes the approach as a more efficient way of pruning a larger smorgasbord of savings. AMI Indemnity is a captive insurance company with two incorporated cells for both group health and workers’ comp that allows SIIA member WellRithms, a medical bill review company, to transfer the financial risk of high-dollar claims from any payer to a risk-bearing entity so that all parties are protected. What makes this specialized captive stand out is that it’s used to indemnify health plans rather than insure risk on claims that have not yet occurred.



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“Basically, nobody wants to talk about the real or right price of the bill; they only want to talk about who’s responsible [for paying claims],” observes Merrit Quarum, M.D., CEO of WellRithms. One major source of inspiration behind the creation of AMI Indemnity is Tom Mooney, CEO and founder of Mooney Employee Benefits who credits Quarum with elevating his ability to reprice medical bills. Mooney negotiates the settlement of large, complex medical bills in New Jersey. He served as a sounding board for Quarum, advising him to be sure that his numbers will hold up. Merrit Quarum

“Putting together a captive and then basically being able to indemnify the bill, he just jumped on board and helped me find clients, primarily public entities that just don’t have the money to pay the bills,” Quarum reports. To be successful, Mooney says captives have to stop choosing their third-party-claims administrators (TPAs) on the basis of price. “The flaw here is that the people who determine how much you spend on claims are not compensated on the basis of their results,” he explains. “So the challenge is to incentivize administrators and contractors to contain costs.” When AMI Indemnity accepts an assignment, Mooney says the captive is incentivized to manage the money, not to overpay the provider and not to incite

“AMI manages expenses like everyone else, but the difference is that they will put a dollar into expenses if it saves more than that in losses,” he notes.

legal actions.

The chief culprit in self-insured workers’ compensation – and probably health, Mooney surmises – is nobody knows or cares about the average claim cost. “As long as you’re looking at percent-of-savings discounts to measure your success, you’re going to get killed,” he cautions. “When your wife comes home from a day at

the mall and tells you how much she saved, what’s your first reaction? The self-insureds all nod their approval, but they need to look at the dollars spent on medical bills and not how much their TPA saved them today.” Someone who was instrumental in helping set up AMI Indemnity is John Capasso, president and CEO of Captive Planning Associates, LLC, as well as a member of SIIA’s board of directors. He believes WellRithms has created a unique methodology to reprice medical and workers’ compensation claims that goes beyond the market’s standard referenced-based pricing (RBP) options. What’s important in his mind is that this captive demonstrates “the financial strength to support the burden of risk associated with assuming certain medical and workers’ compensation claims on a contractual basis.”

TRUE RISK MANAGEMENT The trouble with group captives that pool heterogeneous or homogeneous groups and then dilute the risk overall is that “they’re not doing anything to truly manage the risk on a bill-by-bill basis like we’re doing,” according to Quarum, who cautions that promises to pay dividends ring hollow. “What they’re doing is capturing the entire premium that these entities would have paid to be fully insured, and then giving back what they say. Well, if you’re self-funded, you’re going to save 30% anyway. So, you know, they’re just basically taking the float on this.”

Tom Mooney

FEBRUARY 2022 15

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Captives, or any self-insured health plan, typically aren’t set up to completely indemnify plan members in the event that a large claim becomes problematic and is unable to be settled at what is considered a fair and

“Though employers or plan members do not want to pay large sums of money on Sally-Ann Polson these claims, sometimes it is necessary in order to settle it without fear of future legal action against them,” explains Sallyreasonable payment.

Ann Polson, President & CEO of MedWatch, LLC, which partners with WellRithms in providing concierge services that includes member advocacy. With the AMI Indemnity captive, she says clients are “totally indemnified and don’t have to worry about these providers coming back for additional payment or settlement six months, a year, or even longer after the services have been rendered. The claim has been completely taken care of by the program which assumed the risk and paid the claim. The plan and the member have no further involvement. You just don’t see that anywhere else.” While others may try and duplicate this concept in the future, the experience and data that WellRithms has at its disposal is proprietary and allows them to confidently take on this risk. MedWatch’s Pathways Concierge services supports WellRithms’ repricing and indemnity process by being the front-line contact for members and providers. Tim Guzinski, the company’s VP of marketing and business development, says laying out the provider’s payment methodology and keeping members informed of their claim status drastically minimizes any noise typically associated with open-access plans.

“With the indemnity program that WellRithms has created, it wraps everything up together, eliminating the risk and questionable outcomes that the plan and its members may otherwise experience,” he reports. In addition, MedWatch provides the utilization management/precertification and case management that rounds out the core of the captive’s offering. While RBP plans may refer patients to an attorney for negotiating balance bills, it’s still their responsibility to pay, explains Anna Quarum, chief operating officer of WellRithms who co-founded the company with her husband.



But under AMI Indemnity, WellRithms is contractually obligated to pay the claim. In essence, patients cannot be harassed or sent to collections because the captive has taken over the bill. The Quarums considers themselves a significant disruptor in the RBP arena where companies that refer patients to legal services or patient-financing solutions aren’t incentivized to lower medical bills. “We believe that claim care is as important as patient care,” she says, “and that’s really what makes us different from other captives that are looking at creating a large pool to aggregate large amounts of data. We’re looking at things on an individual basis.” In choosing to tackle individual bills, WellRithms leverages ITs expertise in medical bill review, as well as understanding of CPT codes, medicine, technology and the legal ramifications of disputed billing. The company helped reduce a $4.4 million bill to $1.2 million for a physicians’ captive last year that was extremely complicated and required an enormous amount of medical expertise. In just 60 days, one patient saw 134 physicians at one of the nation’s premier hospitals. Substantial savings also were secured for a Taft-Hartley client whose $11.4 million bill was contractually reduced to $4.3 million. Then a third-party audit review slashed it further to just $600,000. “No one could come anywhere close to those kinds of savings without the expertise,” adds Merrit Quarum, a former practicing physician and medical director. In addition, AMI Indemnity saved an estimated $16 million for one

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A-rated, Midwest-based monoline workers’ compensation company that works with WellRithms and has about $120 million in work comp premium. Two states where the captive has been deployed for this client are Iowa and Missouri, where providers have more freedom over what they charge for services because there’s no medical fee schedule. Indeed, prices paid for professional services in states without medical fee schedules were John Capasso anywhere from 42% to 174% higher than the median of states with fee schedules studied in 2020 by the Workers Compensation Research Institute for determining its medical price index. Those states also include Indiana, New Hampshire, New Jersey and Wisconsin. Without the captive’s expertise in arguing what’s usual, customary and reasonable to charge, “we might be forced to pay outrageous amounts for some of these medical charges,” says the company’s executive vice president who spoke on the condition of anonymity due to client-confidentiality concerns. AMI Indemnity, which is domiciled in North Carolina, is a legal entity that is certified to take on risk and shield patients from the ramifications of computer-generated balance billing. Both underwriters and actuaries have determined the likely premium, reserves and payout for each of AMI Indemnity’s contracts based on state requirements where those claims have incurred. WellRithms signed one contract of indemnification through its new captive insurance arm midway through 2020, which was followed by more than 100 contracts the following year. Since each bill ends up being a contract, some may be with the same entity.

MEMBER SATISFACTION In terms of what the future holds for captive solutions like AMI Indemnity and his own efforts, Mooney is reflective: “We really don’t know what we started yet, and I think it’s going to evolve, and there’ll probably be some court cases that will help us define what it is.” Looking ahead, Polson predicts other players in the self-insurance industry will attempt to duplicate AMI Indemnity’s captive model, though their success will remain to be seen. “A lot of people hopped into the reference-based pricing market as it became an excellent option to the typical PPO,” she observes, “but the one thing that we see



consistently not being done well is customer service and taking care of the patient before, during and after the claim occurs. A lot of payers hold on to these types of claims while they are being disputed, but do not keep the plan or member informed of the activity that is taking place. This causes a huge amount of member stress and dissatisfaction with the plan.”

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

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lot of consideration goes into choosing a domicile when a captive is established. A domicile is chosen because it can offer the structure and regulation a new captive will need.

Yet, too often captives will stay with their initial domicile, even when circumstances have changed—either for the captive or for the domicile. Established captives need to reconsider their domicile with some regularity to make sure that the goals of their charter are still aligned with the regulation of their domicile.

With more choices in domiciles than ever before, captives have a smorgasbord of domiciles to choose from. Some newer U.S. domiciles are even catering to captives considering redomiciling.



For example, North Carolina, one of the newest captive domiciles, actively pursues established captives to redomicile in their state. Their captive law offers taxation and financial benefits for captives redomiciling there. Last year, Connecticut amended its captive law to appeal to Connecticut-based business to bring their captives to the domicile.


There are as many reasons for captives to redomicile as there are captives. The reason could be something as simple as a change in ownership, or a merger or acquisition. With a new parent company or new owners, the captive’s original domicile might not be the right choice.

state. Home state captives are generally taxed at the admitted insurer rate rather than the often higher nonadmitted rate. With a captive operating in the same state as its owners, there are fewer travel costs and no need for separate in-domicile managers or legal teams.

As an example, soon after New Jersey passed captive legislation in 2011, BASF America Corporation redomiciled its captive, Lumerica Insurance Company, from Vermont to New Jersey in a show its commitment to its home state.

For some captives seeking to redomicile, the reason might be because the goals of the captive no longer align with the regulation by their original domicile.

This could be due to several reasons. The legislative landscape may have changed— such as increased taxes or more onerous reporting requirements—or their current domicile’s focus may have changed and it is no longer as dedicated to captives as it once was.

If political instability strikes a domicile, a captive would likely wish to remove itself from that situation. It is the same for international perception. As the field of domiciles has expanded, established captives might want to change domicile for geographic reasons. A parent company located in California with a captive domiciled in Bermuda might see benefit in domiciling their captive closer to home because of time zone issues as well as ease of access.

Another geographic advantage for captives considering changing domiciles would be to operate in their parent company’s home



If a domicile gets a black mark from a supervising association regarding their ability to regulate captives, many captives are likely to want to redomicile to keep up their reputation.

Such was the case for University of Vermont Health Network (UVHN). In 2019, VMC Indemnity Company, Ltd., the medical malpractice captive owned by the UVHN, redomiciled from Bermuda to Vermont. Established in 1993, the captive board found that Vermont had become less expensive to operate from and was geographically friendlier.

While not political instability, Brexit posed issued for many European-domiciled captives as the laws surrounding insurance changed dramatically with the UK no longer part of the European Union. For European-based captives, as Brexit approached, there was a flurry of redomestication. Gibraltar lost and gained several captives, particularly with Malta. With Brexit, Gibraltar retained access to the UK insurance market, but lost access to the European Union market. While Malta remained connected with the EU.

In the U.S., federal legislation can also cause captives to redomicile for financial reasons. The Nonadmitted and Reinsurance Reform Act (NRRA) passed in 2010 and the “base erosion and antiabuse tax” (BEAT) that was implemented as part of the Tax Cuts and Job Act passed in 2017 are both examples of federal law that could encourage captives to change domicile.

If another domicile has legislation that is more favorable to the regulation of a captive, captive owners should consider redomiciling. The reason could be strictly for financial reasons, such as taxation rates or annual fees, or it could be because a different domicile allows for certain types of captives or coverages. While redomiciling has its costs, if a captive chooses to redomicile for financial reasons, the captive board likely foresees long-term financial benefits.

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Particularly in the case of BEAT, where pure captives domiciled offshore would have distinct financial benefits by redomiciling onshore. Continuous IRS scrutiny into captives has also led offshore captives to redomicile onshore.

In most cases of a captive redomiciling, there will be a number of reasons behind the decision, as was the case of International Paper redomiciling their captive to Tennessee.

In December 2020, Tennessee Department of Commerce & Insurance Captive Insurance Section announced that Memphis-based International Paper had redomiciled their original captive from Vermont to Tennessee.

In a statement released by the department, David Arick, International

We have worked with the state for the past six years on our second captive and have a lot of confidence in the state as a fair and effective regulator. As a Memphisbased company, moving our captive to Tennessee will streamline administration and reduce operating costs.” Paper Assistant Treasurer, said, “


Once the decision is made to seek a new domicile for a captive, the captive board and managers should undergo an evaluation similar to the initial process to choose a domicile. Although, this time around, the board should have a lot more experience with the management of captives and a better understanding of the insurance business.

Captive boards considering changing domiciles need to think about the financial aspects and operating costs in a new domicile, such as taxation and annual fees, as well as capitalization, surplus, and investment requirements. They also should look at how invested a domicile is in attracting quality captive insurance companies.

It should be easier to consider a domicile’s captive regulation when redomiciling considering that captive directors will have had experience in this aspect of running a captive and can better estimate how a domicile’s regulatory body will affect their management.

If a captive board is looking at a domicile that is not their home operating state, then considerations regarding travel and in-domicile meetings need to be considered.



These are just a few of a long list of things that captive boards looking to redomicile should consider.

Evaluating the captive’s current domicile should be an annual focus for a captive board. If a captive’s domicile is not to be re-evaluated every year, it should be revisited every three to five years as part of its regular “health checkup.”

When the decision to redomicile has been made and the choice of new domicile is decided the process is straightforward. Redomiciling a captive will require not only working with the newly chosen domicile, it also requires the approval of the captive’s current domicile.

The approval from the current domicile is commonly known as a “letter of no objection.” The captive may also require from their existing domicile a certificate of good standing and a certificate of discontinuance before gaining an insurance license in their new domicile.

To be approved as a captive insurer in the new domicile, the captive will have to go through the application process as designated by the domicile’s legislation. For some domiciles, the process has been streamlined for existing captives redomiciling, but several domiciles will require the full application process.



The process of changing domicile can cost $3,000 up to $7,000 and usually takes around two months.

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. •

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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 Laurie Kirkwood 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, Amy, and Laurie are senior members in the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner’s situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation. Readers are encouraged to send questions by E-MAIL to Mr. Hickman at john.hickman@



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BROKER AND CONSULTANT DISCLOSURES FOR HEALTH CARE SERVICES On December 27, 2020, the Consolidated Appropriations Act, 2021 (CAA) was signed into law. The CAA contains new service provider disclosure requirements for “brokerage services” and “consulting” services and requires group health plan fiduciaries to take action if they do not receive those disclosures. These new rules apply to contracts and arrangements entered into, extended, or renewed on or after December 27, 2021 (one year from the date of enactment). The U.S. Department of Labor (“DOL’) announced a temporary enforcement policy in Field Assistance Bulletin No. 2021-03 (“FAB 21-03”) on December 30, 2021, noting that while they do not intend to issue comprehensive implementing regulations, they are requesting input as to whether any of the new statutory provisions would benefit from notice and comment regulations. This article is an updated version of our earlier article on the subject, with added clarification and confirmation provided in FAB 21-03.

BACKGROUND ERISA Section 406 provides that furnishing services between a plan and a “party in interest” is a prohibited transaction. A party in interest includes any person providing services to a plan. Looking at ERISA Section 406 alone, this would make almost all arrangements between plans and plan service providers prohibited transactions. There is an exception, however, in ERISA Section 408(b)(2) for contracts or arrangements for services with a party in interest if the arrangement is reasonable, the services provided are necessary for the establishment or operation of the plan, and no more than reasonable compensation is paid. Current DOL regulations require retirement plan service providers to disclose both the direct and indirect compensation they receive. The DOL reasoned that it is impossible for a “responsible fiduciary” to know whether compensation or an arrangement is reasonable unless that plan fiduciary knows what compensation the service provider receives for each service rendered. Therefore, under those regulations, an arrangement with a service provider where such disclosures are not made is not “reasonable” and could generally result in a prohibited transaction (with certain exceptions when the plan fiduciary takes action for the service provider’s failure to disclose). Finding that there were significant differences between service provider arrangements with welfare plans and with retirement plans, the DOL did not issue guidance for welfare plans at that time. The CAA now institutes disclosure requirements for certain service providers to “group health plans” by amending Section 408(b)(2) of ERISA. In FAB 21-03, the



DOL underscored that “a significant goal” of the new disclosure requirements is to enhance fee transparency, particularly for those arrangements that involve the payment of indirect compensation to service providers from third parties. The DOL recognizes that service provider arrangements and compensation structures for group health plans are complicated and often required to conform to state law. These new statutory requirements and terminology, in many ways, mirror the regulatory requirements applicable to retirement plans and are modeled on the regulatory provisions. Some of what is below, therefore, may be familiar for plan fiduciaries and plan sponsors who are acquainted with the required retirement plan disclosures. The CAA’s rules will likely be new for many group health plan brokers and consultants, and the DOL encourages covered service providers to review Notices published in connection with the DOL’s 2012 final rule governing pension plan disclosures in order to gain a better understanding of the new rules.


COVERED SERVICE PROVIDERS The CAA’s amendment to ERISA Section 408(b)(2) covers “group health plans,” which are defined as employee welfare plans that provide “medical care.” Significantly, the CAA does not exempt what are known as “excepted benefits” from this definition of a group health plan. In FAB 21-03, the DOL reasoned that the policy underlying the new disclosure requirements applies equally to limited scope coverage, like dental and vision, as it does to other group health coverage.

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So the CAA sweeps in not only traditional fully insured and self-funded group medical plans but also dental and vision plans, health FSAs, on-site clinics (except those that are limited to only rendering first aid to employees during working hours), many employee assistance programs, and health reimbursement arrangements (HRAs). Examples of plans that are not group health plans are group term life insurance, accidental death and dismemberment insurance, long- and short-term disability insurance, and small employer health reimbursement arrangements, or “QSEHRAs”. Also, while HSAs are generally not group health plans, the HDHP that accompanies an HSA is a group health plan. Disclosure is required only if the service provider receives $1,000 or more in certain types of compensation pursuant to the consulting or brokerage contract or arrangement. Compensation includes “direct compensation” from the covered plan itself or “indirect compensation,” which is compensation from any source other than the covered plan, the plan sponsor (often the employer), the service



provider, or an affiliate of the service provider. In other words, if the only compensation that the service provider receives derives directly from the employer, then disclosure is not required. This could arise, for example, with a consulting agreement for a self-funded group health plan where the employer is responsible for all fees associated with the agreement, no fees are paid with plan assets, and the service provider does not receive compensation from any other source for the plan. Plan assets can take the form of amounts paid from a formal trust or amounts paid with any participant contributions. Care must be taken to ensure that the service provider is not paid with any participant contributions (and that it does not receive indirect compensation) in order to avoid inadvertently subjecting the service provider to the disclosure requirement. For example, if a service provider receives indirect compensation related to stoploss coverage, and if payments for stop-loss premiums include any participant contributions rather than being paid entirely from employer assets, the indirect compensation would need to be disclosed. Disclosure will be required for an insured arrangement, where a portion of the premiums that generate the insurance commissions are paid by plan participants, because those commissions will be deemed to be paid by the plan. Disclosure is required regardless of whether the services are performed, or the compensation is received, by the service provider, its affiliate, or its subcontractor. In this regard, rather than just reviewing compensation received by service providers traditionally thought of as providing consulting or brokerage services, a plan fiduciary may want to take inventory of all entities that receive any kind of compensation related to the plan, and then evaluate whether the entities satisfy a broad reading of the definitions of the services in the new rule.

The CAA’s amendment to ERISA Section 408(b)(2) covers two types of services as “covered service providers”: brokerage services and consulting. The definition of brokerage services includes a “selection of insurance products (including vision and dental), recordkeeping services, medical management vendor, benefits administration (including vision and dental), stoploss insurance, pharmacy benefit management services, wellness services, transparency tools and vendors, group purchasing organization preferred vendor panels, disease management vendors and products, compliance services, employee assistance programs, or third party administration services.” Consulting services are nearly identical but do not need to involve “brokerage” and include services “related to the development or implementation of plan design, insurance or insurance product selection (including vision and dental), recordkeeping, medical management, benefits administration selection (including vision and dental), stop-loss insurance, pharmacy benefit management services, wellness design and management services, transparency tools, group purchasing organization agreements and services, participation in and services from preferred vendor panels, disease management, compliance services, employee assistance programs, or third party administration services.” The consulting category appears especially broad. While it was initially unclear whether consulting just includes advising on the selection of service providers such as TPAs or pharmacy benefit managers or whether it also applies to the service providers

themselves when they “consult” (e.g., a TPA consults on plan design or a pharmacy benefit manager consults on a plan’s drug formulary), FAB 21-03 makes it clear that there is no requirement for brokers or consultants to be licensed as such in order for them to be providing consulting or brokerage services under the disclosure rule. Whether the disclosure requirements cover a particular service provider appears to be driven more by the subject matter of the services than by how a service provider markets itself. For now, it is advisable for plan fiduciaries and service providers to take an expansive approach when determining whether the new rule covers a particular provider. The parties will be held to a reasonableness and good faith standard when making such determinations. If service providers “reasonably” expect to receive indirect compensation from a third party but then still claim to be exempt from the disclosure requirement, the DOL has warned that in the event of an audit, such service providers will be expected to explain “how a conclusion that they are not covered service providers is consistent with a reasonable good faith interpretation of the statute.”. With this standard in mind, the disclosure requirement would potentially include not only insurance brokerage firms serving in a consulting capacity to self-funded plans but a host of other service providers, including: •

TPAs (both for self-funded group health plans and for health FSAs and HRAs).

Stop-loss carriers, stop-loss panels, and stop-loss consortiums.



Pharmacy benefit managers.

Wellness vendors.

Disease management vendors including data analytics.

On-site clinic managers.

Any entity providing “compliance services” (including attorneys and actuaries).

Employee assistance program vendors.

WHAT MUST BE DISCLOSED The covered service provider must provide the following information (including the information of any affiliate or subcontractor): •

A description of the services provided.

If applicable, a statement on whether the covered service provider will serve as an ERISA fiduciary.

A description of all direct compensation the covered service provider reasonably expects to receive in connection with the services. There are several different ways compensation can be expressed, including a monetary amount or a formula.

A description of all indirect compensation that the covered service provider reasonably expects to receive. This includes “compensation from a vendor to a brokerage firm based on a structure of incentives not solely related to the contract with the covered plan.” We will need to wait for further guidance on what this would include, but it could relate to items such as a vendor providing brokers with gifts, trips, etc., for the amount of business they place with the vendor or even the vendor being a financial sponsor at a clientfacing event held by the brokerage firm.

A description of the arrangement under which the indirect compensation is paid.

Identification of the services for which an indirect compensation will be received.

Identification of the payer of the indirect compensation.

A separate description of any compensation that is set on a transaction basis (such as commissions, finder’s fees, referrals, or other similar incentive compensation based on business placed or retained) that will be paid among the covered service provider, affiliate, or subcontractor.

A description of any compensation that the covered service provider will receive upon termination of a contract or arrangement.

The DOL reiterates in FAB 21-03 that resolving ambiguities or uncertainties with respect to what and how to disclose should be done with the principal objective of the disclosure requirement in mind, which is to provide plan fiduciaries with



the information needed to evaluate reasonableness of compensation and evaluate conflicts of interest. The requirement to disclose cannot be avoided simply because services are “bundled” for a single fee, without any charges being attributable to distinct categories of services. If specific amounts are unknown, compensation can be disclosed in ranges, particularly if the occurrence of future events or other features of the services arrangement could result in compensation varying within a projected range. In that regard, the DOL quotes guidance from pension plan disclosure

“However, such ranges must be reasonable under the circumstances surrounding the service and compensation arrangement at issue. To ensure that covered service providers communicate meaningful and understandable compensation information to responsible plan fiduciaries whenever possible, the Department cautions that more specific, rather than less specific, compensation information is preferred whenever it can be furnished without undue burden.” regulations:


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Under either approach, submission or signature must be done in the “ordinary course” and not in a manner designed to avoid disclosure obligations under the new rule. The DOL indicates that further guidance may be provided on the BOR issue.



Upon discovery of a disclosure violation, a responsible fiduciary can avoid a prohibited transaction by taking the following actions.

TIMING OF DISCLOSURE Disclosures must be made to the responsible plan fiduciary “reasonably in advance” of the date of entering into, extending, or renewing any contract or arrangement. Changes to the information disclosed must be provided as soon as practicable, but generally not later than 60 days from the date on which the covered service provider is informed of the change. If, however, a covered service provider acting in good faith and with reasonable diligence makes an error or omission with disclosure, the contract or arrangement may still be reasonable if the correct information is provided within 30 days after the error or omission is discovered. The effective date of this provision is December 27, 2021. Contracts entered into before this date are not subject to these requirements, even if the effective date is on or after December 27, 2021, but any renewal or extension of a contract after the effective date is covered. For example, if a contract or agreement is executed on December 15, 2021, but not effective until January 1, 2022, then these new disclosure requirements would not apply unless and until the new contract or agreement is renewed or extended. As for situations where an agent or broker enters into a contract or arrangement with a plan fiduciary though the use of a “broker of records” (“BOR”) agreement, the date the contract or arrangement will be considered entered into is the earlier of (i) the date on which the BOR agreement is submitted to the insurance carrier or (ii) the date on which the group application is signed for insurance coverage for the following plan year.



First, the responsible fiduciary should request, in writing, that the covered service provider make full disclosure. Second, if the covered service provider refuses to make full disclosure or does not respond within 90 days, then the DOL must be notified of the failure within 30 days following the earlier of the refusal to respond or the lapse of the 90-day period to respond. Section 408(b) (2) specifies the information that must be provided to the DOL. Finally, if the disclosure failure relates to past services, then the responsible fiduciary must make a determination on whether to retain the covered service provider based on ERISA’s fiduciary prudence standards. If the failure relates to future services, then the responsible fiduciary must terminate the contract or arrangement as expeditiously as possible as consistent with those prudence standards.

SUMMARY AND ACTION ITEMS The clear intent of the CAA was to mirror the disclosure requirements of retirement service plan providers. Plan sponsors and fiduciaries may be familiar with this process from their experience with their retirement plans, but work still needs to be done. Actions for plans sponsors and fiduciaries include: •

Identify any person or entity that consults in any way with a group health plan and all brokers for any group health plan and determine if they are a covered service provider. It may also be prudent to identify any service provider that receives any compensation at all related to the plan, especially indirect compensation, regardless of whether the plan has historically viewed the providers as consultants or brokers, and reevaluate their status in relation to the plan and under these new rules.

Determine whether any covered service provider receives any direct compensation from any group health plan and the amount of that compensation.

If known, determine whether the covered service provider receives any indirect compensation and the amount of that compensation.

Prepare, once effective, to make a demand to any service provider that has not provided adequate disclosure.

Establish and document that a responsible fiduciary actually reviews the disclosures and determines that the compensation arrangement for consulting or brokerage services is reasonable.

Group health plan brokers and consultants have a much heavier burden. They will need to analyze all instances when they receive either direct compensation or indirect compensation. The identification of any indirect compensation is especially crucial because the reason for this provision was a belief that group health plan brokers and consultants are receiving forms of “hidden” compensation. Also remember that these disclosures apply to all group health plans regardless of size as long as the compensation threshold is met. Finally, the disclosures must be designed and formatted to include all required information. This may require new software or revisions to existing software to automate these extensive disclosure requirements.





Written By Micah D. Iberosi-Parnell


he long-term struggle over the price of health care services between providers and payers is a tale as old as time. On one side, providers want to preserve the status quo, fee-for-service payment (FFS) system, which triggers unnecessary treatment and wasteful health care spending.

Meanwhile, payers have been consistently pushing new payment models that attempt to tie spending with results. Collectively, these models are often referred to as “value-based care” (VBC) or “alternative payment models.”

In 2020, 40.9 percent of all health care payments in the U.S. were paid through some form of VBC model – an all-time high – according to the Health Care Payment Learning & Action Network (LAN).



Traditional Medicare and Medicare Advantage plans were the main drivers of this achievement, as 85 and 62 percent of their payments, respectively, were value-based.

Meanwhile, with only 49 percent of payments tied to VBC, employers and commercial payers lagged significantly behind Medicare. The survey did not measure the difference between selfinsured employer plans and large commercial plans like UnitedHealth, but employer VBC payments are likely lower than the LAN survey suggests.

This gap translates into real-world disparities between Medicare and group plans including:

Group plans pay hospitals double the Medicare rate for inpatient services and triple the rate for outpatient services;

Inpatient hospital prices for groups grew 42 percent from 2007 to 2014, while physician prices for inpatient care grew 18 percent;

Employer dollars spent per employee for healthcare increased twice as fast as Medicare after the ACA was passed in 2008.


The chief causes of the VBC gap have nothing to do with a lack of trying from within the self-funding industry and boil down to basic principles of market position and bargaining power.

At the highest level, self-funded groups must lease provider networks through one of a few national carriers, which impose mandatory FFS rates and prevent plans from steering patients to better value in-network providers or directly contracting with outside providers.

A 2013 antitrust lawsuit against a California-based provider network, Sutter Health, provided an up-close example of how these practices work. The plaintiffs accused Sutter Health of using coercive contracting practices to require group plans to penalize (either directly or through forfeited discounts) participants for using nonnetwork providers or risk being completely frozen out of the in-network rates.



One of the contract provisions at issue was:

of group plans in these arrangements today is akin to one person trying to negotiate Apple’s terms and conditions.

Sutter Health shall require each group health payer accessing Sutter Health providers through the [health plan] network to actively encourage members obtaining medical care to use Sutter Health providers … If Sutter Health or any provider learns that a payer ... does not actively encourage its members to use network participating providers, … Sutter shall have the right … to terminate that payer’s right to the negotiated rates … [The] terminated payer shall pay for covered services rendered by providers at 100% of billed charges until … Sutter reasonably believes that the payer does in fact actively encourage its members to use network participating providers …

Anti-competitive network language like this is commonplace and generally legal; Sutter Health won its case.

Unless a plan is willing to cut all network ties (which has its own drawbacks), most group plans must tolerate all-or-nothing network agreements. The bargaining power

Provider demands underpin these one-sided networks agreements. Increasingly-consolidated provider chains are the main source of high prices and resistance to VBC. Today, nearly 90 percent of all U.S. metro areas are “highly concentrated” in terms of provider competition.

For context, the U.S. soda market between Coke and Pepsi is also considered “highly concentrated.” Large providers leverage their monopolization of regional markets to demand higher reimbursements and one-side contract arrangements from the networks, which then offset the costs upon group plans.

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Medicare has always counteracted these forces because of its market position as America’s largest health insurer (by enrollees) and political power. That is a major reason why Medicare has historically paid lower prices than groups plans. In recent years, though, the disparity between the two has accelerated because Medicare has gradually deployed VBC reforms that have helped curb rapidly rising health care prices.

Providers cannot do much to stop Medicare’s VBC efforts aside from lobbying Congress. Meanwhile, group plans must tolerate unilateral network agreements or find alternative solutions that may increase the risk of balance billing on plan members.

By this point, it might seem impossible for group plans to overcome coercive network agreements and provider monopolies – especially for mid-tosmall-size employers. There is light on the horizon, however. Group plans and employers can still contain health costs and boost coverage with a balance of available VBC solutions and thoughtful plan design.


The first category of “supply-side” interventions seeks to change providers’ incentives to increase prices.

The second category of “demand-side” solutions targets participants’ incentives to choose more efficient care through benefits design and education. Supply-side solutions include many traditional VBC models such as capitation, bundled payments, etc., and can be highly effective in combatting wasteful provider practices, especially unbundling and upcoding.

In the self-funding space, employers who implement supply-side solutions typically agree to prepay providers, often on a per employee per month (PEPM) basis, for the care. Direct primary care (DPC) – where an employer directly contracts with a primary care physician practice that provides comprehensive treatment to eligible employees for a set fee – is probably the most widespread VBC solution among employers today.


The solutions that help employers contain group plan expenses and increase the value of coverage come in two flavors based on whom they target.

Primary care is hardly the only type of medicine where employers can experience significant savings; bundled payments may enable employers to reduce health expenses for certain complex treatments.



For example, recent research by the RAND Corporation showed that self-insured employers save up to 11 percent of health by switching to bundled care services for complex operations – including total knee and hip replacement, spinal fusion, and bariatric weight loss procedures.

Aside from the financial benefits, many supply-side solutions can also boost employee satisfaction with the plan since it usually increases low-cost access to necessary care.

As discussed above, network contracts often block employers from employing these solutions. Employers should carefully examine their network agreement and weigh their own comfort level prior to implementing most VBC solutions.

Aside from networks, participants not utilizing prepaid DPC services or other VBC services can be a financial risk for employers. This can be counteracted by making employees aware of the program and reducing the number of participants enrolled in the program to those who will actually use it.

The Phia Group incorporates some of these demand-side nudges into its own plan, such as waiving cost-sharing when a generic alternative exists for a brand-name drug or using urgent care over emergency departments for nonemergent conditions.

Other models have been developed by public health researchers and can already be seen in Medicare Advantage plans and on the ACA Exchanges. Specifically, the “VBID-X Model” offers a good starting point for plans to reference when tailoring cost-sharing to the value of certain services. The basic framework of the plan design is built upon the below principles:

Favor services with the strongest evidence-based and external validation;

• A practical consideration for employers interested in DPC, bundled payments, or other supply-side solution is whether the provider contract includes two-sided risk factors.

Favor services that are more responsive to costsharing;

In other words, employers may want to consider VBC arrangements that financially penalize the provider for poor-quality care and reward them for improved-quality care. These carrot-stick arrangements are already popular with public payers and can help better align plan costs with health outcomes and care quality than PEPM and other set fee arrangements. They also are generally more adaptable to patient demands and surges in care that have become a mainstay in the COVID-19 era.

Favor services with a high likelihood to be high or low-value (e.g., services with the least nuance in value are the easiest to implement);

Considering how the plan design features intersect with related reforms and initiatives (e.g., favor services already rewarded under value-based payment models);

Focus on areas with the most need for improvement;

Additional compliance considerations dependent on the specific VBC program and group plan may also exist and should be analyzed on a case-by-case basis.

Next, while supply-side solutions are effective, providers still often cave to patient demands even in the face of a financial penalty. This is why it is crucial for employers to consider the value of health care when designing benefits. A simple way that employers can do this is by tying cost-sharing to the value of specific treatments, which then nudges participants to utilize more clinically and cost-effective health care.



Consider equity, adverse selection, impact on special populations, and the risk pool.

The designers of the VBID-X were able to use these principles to increase the actuarial value of a group plan’s coverage without increasing the actual plan costs. Importantly, designing plan benefits based on value is significantly less likely to conflict with network agreements and is the easiest way for employers to decrease plan expenses without decreasing coverage.

Overall, as rapidly rising prices impact employees through rising premiums and deductibles, participants are likely to demand better value coverage. Beginning to implement VBC payment arrangements and high-value plan design can help employers take control of their future health care costs now.

Micah Iberosi-Parnell, Esq. joined The Phia Group, LLC as an attorney in the summer of 2021. He is a member of Phia Group Consulting’s Independent Consultation & Evaluation (ICE) team, working on consultation, plan document and contract reviews, and regulatory compliance with state and federal laws, including ERISA, NSA, CAA, ACA, HIPAA, and more.

Micah attended college at Oklahoma State University in Stillwater, Oklahoma, graduating with a B.A. in Broadcast Journalism. He earned a joint Juris Doctor and Master of Public Health degree from Boston College Law School and Tufts University School of Medicine, respectively, where he focused on health law and rising health care costs. After law school, Micah worked briefly as an attorney representing harassment and personal injury clients. He is currently licensed to practice in the Commonwealth of Massachusetts.


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A B O U T@ L I T C H F I E L D M G U . C O M







oin leading industry leaders at SIIA’s Price Transparency Collaboration Forum, February 28-March 1 at the Sheraton Dallas Hotel in Dallas, Texas for a unique opportunity to take a deep dive into the various federal price transparency requirements now applicable to self-insured health plans.

The Forum will promote idea sharing between industry executives and partners from across the self-insured space. From the Transparency in Coverage regulations to the No Surprises Act, this Forum will provide an interactive opportunity to learn what these new rules and regulations mean for your business and clients, from strategy to implementation.



ENDEAVORS Program highlights include:

Policy Primer: Self-Insured Plans and Federal Price Transparency Rules SIIA’s Government Relations Team will provide insights and need to know analysis on current federal price transparency activities, ranging from the Hospital Price Transparency and Transparency in Coverage Rules to the ongoing implementation of the No Surprises Act. Panelists: Ryan Work Vice President Government Relations Self-Insurance Institute of America, Inc.

Chris Condeluci Washington Counsel Self-Insurance Institute of America, Inc.

Matt Litton Office of Health Plan Standards and Compliance Assistance U.S. Department of Labor

A Conversation with Regulators: Price Transparency Viewpoints & Directions

Lindsey Murtagh Director, Market-Wide Regulation Division, Center for Consumer Information and Insurance Oversight (CCIIO) Centers for Medicare & Medicaid Services

Key federal agency regulators will discuss details on federal transparency rules, in addition to insights into future guidance and implementation recommendations.

Panelists: Deborah Bryant Special Advisor for the Consumer Support Group Center for Consumer Information and Insurance Oversight (CCIIO) Centers for Medicare & Medicaid Services

What Surprise Billing Payment Strategies Work? Calculating the Payment Amount through QPA and Database Usage The dust has settled and providers are receiving payments under the No Surprises Act. What are the early learnings around QPA pricing and the portion of claims that use a network-based or plan-based QPA versus an external database? Is the industry coalescing around certain QPA pricing standards? How has the provider community been reacting? Are there more QPA considerations for health plans in order to comply properly based on any initial good faith efforts? Ultimately, will the use of the QPA help drive down the cost of healthcare in the long-term? Panelists will review experience with audience participation and stories.



ENDEAVORS Panelists: Amy Gasbarro Chief Operating Officer Válenz

Troy Sisum Senior Vice President, Chief Counsel ELAP Services

Brian Wroblewski Executive Vice President ClearHealth Strategies

Winning Strategies to Tackle the Surprise Billing Arbitration/ IDR Process With surprise billing protections just beginning, how can industry and plan participants work together to strategize through arbitration process. Are specific tools available or being developed to manage the IDR process? Could the public availability of pricing data result in the development of new tools that could be leveraged in provider negotiations? What are the potential negotiations strategies that can help drive down prices?

Liz Longo, Esq. Vice President, Subrogation & Arbitration Solutions MultiPlan, Inc.

Brad Roehrenbeck General Counsel MedCost

The Real World: Price Transparency & Surprise Billing Case Studies A self-Insured health plan team, including a TPA, broker and stop-loss carrier, will walk through example ‘real-life’ surprise billing scenarios from start to finish, including payment strategies, QPA calculations, arbitration approaches, and final payments. Panelists will also discuss how to handle claims under the new surprise billing and federal transparency rules.

Panelists: Panelists: Scott Bennett Vice President, Provider Relations The Phia Group, LLC



Christine Carlson Senior Vice President, Claims Tokio Marine HCC – Stop Loss Group

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• Provider directories

Panelists: Healthcare Payor Preparedness: Are You Ready for Transparency in Coverage Requirements? New requirements established in the No Surprises Act (NSA) and Transparency in Coverage Rule (TiC) place a heavy burden on healthcare payors. Now, more than ever, there is clear need for these payors to understand how they will meet regulatory requirements, and even the consequences of non-compliance. Do payors think the new regulations help them reduce payments and costs? Join industry peers to discuss requirements, deadlines and capabilities that payers must implement for: • Evolution of Out-of-Network Reimbursements • Price Comparison • Defense in an Independent Dispute Resolution • Machine Readable Files



Christine Cooper CEO aequum, LLC

Lisa LaMaster Vice President of Business Solutions Out-of-Network Zelis Mary Piecuch Senior Vice President, Member Advocacy

HCC Life Insurance Company operating as Tokio Marine HCC - Stop Loss Group

We Know... Risk We study it, research it, speak on it, share insights on it and pioneer new ways to measure it. With underwriters who have many years of experience as well as deep specialty and technical expertise, we’re proud to be acknowledged as experts in understanding risk. We continually search for fresh approaches, respond proactively to market changes, and bring new flexibility to our products. Our clients have been benefitting from our expertise for over 45 years. To be prepared for what tomorrow brings, contact us for all your medical stop loss, captive, Taft-Hartley and organ transplant needs.

Visit us online at

Tokio Marine HCC - Stop Loss Group A member of the Tokio Marine HCC Group of Companies TMHCC1169- 12/2021


Operations & Product Strategy Payer Compass, LLC

Empowering Employers and Patients: Consumerism, Protections, Perspectives & Understanding Many of the new price transparency requirements are designed to empower consumers by protecting them from surprise bills and making healthcare costs more transparent. These provisions, from Advanced EOBs to the patient portal, are complex.

Will this new spate of regulations aimed at increasing transparency pressurize providers to lower prices? Could the public availability of pricing data result in the development of new tools for patients to more aggressively shop for services? Will consumers utilize and understand this, what benefits will ultimately come to fruition, and what does the industry need to do now for development and implementation?

Panelists: Dawn Cornelis Co-Founder ClaimInformatics

Mark Galvin CEO TALON

For more information, including registration, sponsorship and exhibiting information, please visit




NEWS FROM SIIA MEMBERS 2022 FEBRUARY 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










New York – Swiss Re Corporate Solutions has acquired TMS Re, Inc. (TMS Re), a leading independent ESL managing general underwriter (MGU). The transaction includes TMS Re's operations, its team of experts and business portfolio, including new and renewal business. Through this arrangement, Swiss Re Corporate Solutions broadens its ESL capabilities in the self-funded healthcare benefits segment. The transaction enhances the company's underwriting expertise, while strengthening its product distribution through TMS Re's direct broker and third-party administrator relationships. Ivan Gonzalez, North America CEO of Swiss Re Corporate Solutions, said:

"TMS Re is an MGU partner that shares our strategic view and commitment to customer service and operational excellence. Its team has extensive experience and deep expertise. Combining our distribution, underwriting and capital management capabilities will expand our reach in the US A&H market." Mike Shevlin, Chairman and CEO of TMS Re, said: "We're excited to join the Swiss Re team to further leverage the resources of a global reinsurance organization and enable more producers and their clients to access the risk expertise of a recognized leader in the A&H space." Travis Micucci, President and COO of TMS Re, said: "This acquisition is great news for our producers and policyholders. Mike and I founded this company by building



Vālenz ® Solutions Suite

Clinical & Member Advocacy

Validation, Integrity & Accuracy

Care Management Clinical Review Member Concierge Navigation

Reimbursement Reliance Payment Assurance Claim Transparency

Simplify the complexities of self-insurance Partner with Vālenz®. As a health data tech company with deep roots in member advocacy and a decades long commitment to the validity, integrity and assurance (VIA) of claims, Valenz simplifies the complex issues of health insurance. Through our data-rich Valenz ecosystem, we provide unrivaled transparency and solutions that improve cost, quality and outcomes for you and your members. By engaging early and often, we keep providers, payers and members informed and aligned for smarter, better, faster healthcare. To see how you can achieve significant savings and make your business strong, vigorous and healthy, visit or call (866) 762-4455.

23048 N 15th Ave., Phoenix, AZ 85027 • (866) 762-4455 • Proud to be a Diamond Member

NEWS long-term relationships with brokers and clients, which will complement Swiss Re's strengths and enhance the value proposition." It is the intention of Swiss Re Corporate Solutions that, in due course, ESL business produced by TMS Re will be written through Swiss Re Corporate Solutions' US carrier, North American Specialty Insurance Company, rated A+ (Superior) by AM Best and AA- by Standard & Poor's. Swiss Re Corporate Solutions and TMS Re have agreed to not disclose any financial details of the transaction. TMS Re staff will immediately become employees of Swiss Re Corporate Solutions. The acquisition has received all necessary regulatory approvals. About Swiss Re Corporate Solutions Swiss Re Corporate Solutions provides risk transfer solutions to large and midsized corporations around the world. Its innovative, highly customised products and standard insurance covers help to make businesses more resilient, while its industry-leading claims service provides additional peace of mind. Swiss Re Corporate Solutions serves clients from offices worldwide and is backed by the

financial strength of the Swiss Re Group. Visit corporatesolutions.swissre. com or follow us on company/swiss-re-corporate-solutions and Twitter @SwissRe_CS. About TMS Re, Inc. TMS Re, Inc. provides comprehensive excess loss products and services tailored to the insurance needs of employer and provider groups. Established as Cairnstone, Inc. in 1996, TMS Re was acquired by one of the world’s largest reinsurers, and, in July 2018, was purchased through management buyout. Its team of highly experienced underwriting, actuarial, claims, and medical management

1 in 7 members have chronic kidney disease (CKD). The costs of CKD and dialysis are catastrophic for members and health plans, but proactive and preventative action pays off. Renalogic solutions enable health plans to identify and get ahead of hidden CKD risk.

It’s time to think proactively about kidney disease risks and dialysis costs.



Learn More


professionals work closely with clients to understand their long-term objectives and design the optimal stop loss solution to minimize their risk. Visit

VĀLENZ® UNVEILS SOLUTION TO HIGH AIR AMBULANCE COSTS PHOENIX, AZ — To help self-insured employers comply with requirements of the No Surprises Act (NSA) – and to protect plan members from sky-high surprise medical bills for out-of-network emergency air transport –Vālenz® has rolled out a new VMS™-validated solution within its ever-expanding ecosystem. The air ambulance solution creates a defensible qualified payment amount (QPA) for air ambulance services using Valenz’ proprietary repricing methodology. The result is fair pricing that assures a uniform level of protection for out-of-network air ambulance services.

“Recognizing that the January 1 requirements of NSA have a lot of employers chasing new solutions popping up in the market, we want Valenz clients to rest assured that the repricing methodology behind the Valenz air ambulance solution is completely tried and true,” said Rob Gelb, Chief Executive

Officer. “In keeping with our longstanding commitment to transparency and balance billing protections, we are thrilled to apply our proven repricing methodology to combat runaway costs for emergency care, including air transport.” The need is real – and dire. Over the last decade, the median billed charges for air ambulance services have doubled and even tripled (depending on the provider), with a staggering 71% of all air ambulance rides involving an out-ofnetwork charge. As a result, the average cost for an air ambulance has soared to $50,000-$75,000 for helicopter and fixed wing transports, respectively. By embedding its market-sensitive repricing methodology into air ambulance claim and cost review, Valenz is well ahead of the curve, said Gelb. “While others are working to develop new

FEBRUARY 2022 53


solutions, Valenz has always used this innovative repricing methodology to lower costs, enhance care and improve outcomes through quality-first care delivery – now we’ve just extended it to air ambulance. It’s all part of our promise to engage early and often for smarter, better, faster and more transparent healthcare.” For more information about Valenz and how the Valenz ecosystem supports NSA compliance and balance billing protections, visit About Valenz Valenz enables self-insured employers to make better decisions that control costs across the life of a claim while empowering their members to lead strong, vigorous and healthy lives. Valenz offers transparency through data to pinpoint members at highest risk, address gaps in network designs, ensure appropriate and accurate charges, and expertly navigate employees to optimal care solutions for substantial cost savings and improved health outcomes. Visit Valenz is backed by Great Point Partners.


BELLEVUE, WA -- Healthcare Management Administrators (HMA), a pioneer in self-funded health benefit programs and one of the nation’s largest third-party

administrators, announced a new partnership with Lyn Health to make Lyn’s industry-leading clinical care model available for its members with multiple chronic conditions. Lyn provides human-centric healthcare created for people with multiple chronic conditions, delivering clinical, advocacy and care coordination services via a single point of contact, 24/7. Leveraging virtual capabilities and in-person resources, Lyn improves quality of care and lowers cost for the polychronic population. “Employers are demanding more progressive solutions to address the increasingly complex healthcare needs of employees and their families,” said Lindsay Harris, President of HMA. “Lyn’s unique model brings much needed hope for those managing multiple chronic conditions through its relentless focus on unburdening the member of all the pitfalls across the healthcare ecosystem. For the last 35 years, HMA has been

INNOVATIVE STOP LOSS AND ANCILLARY SOLUTIONS At BenefitMall, we know that employer groups benefit most from treating their health plan as an investment rather than an expense. Our team of self funded consultants can help you succeed by offering: • Reporting, Compliance Services and Plan Document Review • Billing and Premium Collection • Ancillary Products and Services

• Unbiased Expertise and Review • Initial Placement, Implementation and Renewal of Coverage • Claims Audit, Submission, Tracking, and Resolution Services

©2020 BenefitMall. All rights reserved.




CELEBRATING 5 YEARS OF BEST-IN-MARKET SOLUTIONS For the past five years, AccuRisk Holdings has led the way in health solutions innovation. As we celebrate our recent milestones, we do so knowing that the best is still to come.

2016 Created AccuRisk254 to bring a new product to the Texas Nonsubscription market Formed AccuRisk Ancillary Solutions to evolve our portfolio of solutions Partnered with Brella Insurance Expanded to 10 offices with a nationwide reach Joined Ardonagh Global Partners 2021

With a history of breaking the mold, our full spectrum of solutions allows us to tailor our services to the unique needs of each client. • • • • • •

Underwriting Data Analytics Claims and Policy Administration Distribution Benefit Plan Design And More

Keep an eye out for us in 2022,

We’re Just Getting Started. | | (312) 857-9100



HMA will begin offering access to Lyn’s services in early 2022. About Healthcare Management Administrators (HMA)

bringing forth innovation, creativity, and energy to effect the best health outcomes for our members. Partnering with Lyn further expands upon our core care management products and provides even greater value to our customers.” Currently, more than 34 million Americans meet the clinical definition of polychronic, growing to an estimated 83 million Americans by 2030. Lyn is poised to solve this problem.

“The partnership between Lyn and HMA establishes a new industry standard for member care,” said Rick Abbott, Founder and CEO of Lyn. “Through our integrated care delivery model, we are well- positioned to leverage the vast resources within both of our companies to improve the member experience for polychronic patients. It is no longer sufficient to simply hope that members find their path to better health. We must work on their behalf to ensure they have the resources they need to live a lasting and fulfilling life.” 56


HMA is Proving What's Possible in Healthcare®. Our team of caring experts design and deliver high- quality, innovative, and affordable health plans for self-funded employers. We are the service-oriented partner employers trust to protect two of their most important assets; their people and their health plan dollars. With over 30 years of industry experience and a team of proactive, highly-skilled professionals, we help employers improve their bottom-line. We call this "Winning Together" because we're on the same side and share the same goals – healthier outcomes for members at the best possible value. Contact Kathleen Callahan at kathleen. and visit or follow us on LinkedIn. About Lyn Health Lyn is human-centric healthcare created for people with multiple chronic conditions, delivering clinical, advocacy and care coordination services via a single point of contact, 24/7. Leveraging virtual capabilities and in-person resources, Lyn improves quality of care and lowers cost for the polychronic population. The unique business model collaborates with employers, health plans and providers to augment the current healthcare system, not replace it. Lyn is customized, holistic care designed with love, empathy and


compassion. Contact Steve Andrzejewski at and visit hello.


HHC GROUP RECEIVES ISO 9001:2015 CERTIFICATION HHC Group, one of the country’s healthcare insurance consulting companies, announced today that the International Organization for Standardization has approved its application for ISO 9001:2015 certification. ISO 9001 is the international standard that specifies requirements for a quality management system (QMS).

“Receiving ISO 9001 certification validates that HHC Group has a quality management system dedicated to making continual improvements to better serve our clients today and for years to come,” said Dr. Bruce Roffe’, HHC Group’s president and CEO. “We have been and will always be committed to meeting our clients’ needs, exceeding their expectations and delivering the exceptional customer service they deserve.”

To achieve ISO 9001 certification a company must demonstrate its ability to consistently provide products and services that meet customer and applicable statutory and regulatory requirements. Additionally, it must prove its commitment to enhance customer satisfaction through the effective application of the system, including processes for improvement of the system and the assurance of conformity to customer and applicable statutory and regulatory requirements.

The buzz in the air at this year’s SIIA conference felt even stronger than usual as we all came back together. There’s nothing quite like connecting with peers in person—the energy and comradery ignites unparalleled enthusiasm. SIIA serves as a powerful change agent for the self-insured employer and provides a platform to create, collaborate, and promote the business interests of companies involved in the self-funding industry. HPI is grateful to be part of the SIIA community and we look forward to participating in SIIA’s 2022 initiatives. – Andrew (Drew) Rozmiarek

Innovative solutions built around you. At HPI, we invest in our infrastructure—so we can deliver creative solutions with proven results Here’s how we’re paving the way forward: • Investing in our state-of-the-art technology, analytics and people • Specializing in scalable, market-specific, or “niche” solutions • Evolving our plans to meet the needs of the employer and plan members • Offering numerous network options, including custom-built • Offering best-in-class Referenced-Based Pricing options • Enhancing the member experience with full-service navigation tools and concierge services

See what sets us apart from other third-party administrators.

FEBRUARY 2022 57


About The International Organization for Standardization

About H.H.C. Group

The International Organization for Standardization is an independent, nongovernmental organization, whose members are the standards organizations of the 165 member countries. It is the world's largest developer of voluntary international standards, and it facilitates world trade by providing common standards among nations. More than twenty thousand standards have been set, covering everything from manufactured products and technology to food safety, agriculture, and healthcare.

H.H.C. Group is a leading national health insurance consulting company providing a wide range of cost containment solutions for Insurers, Third Party Administrators, SelfInsured Employee Health Plans, Health Maintenance Organizations (HMOs), ERISA and Government Health Plans. H.H.C. Group utilizes a combination of highly skilled professionals and advanced information technology tools to consistently deliver targeted solutions, significant savings and exceptional client service.

Use of the standards aids in the creation of products and services that are safe, reliable, and of good quality. The standards help businesses increase productivity while minimizing errors and waste. By enabling products from different markets to be directly compared, they facilitate companies in entering new markets and assist in the development of global trade on a fair basis. The standards also serve to safeguard consumers and the end-users of products and services, ensuring that certified products conform to the minimum standards set internationally.

H.H.C. Group's services include Claim Negotiation, Claim Repricing, Medicare Based Pricing, DRG Validation, Medical Bill Review (Audit), Claims Editing, Medical Peer Reviews/ Independent Reviews, Independent Medical Examinations (IME), Case Management, Utilization Review, Data Mining, Disease Management and Pharmacy Consulting.

Protecting plans and patients across the U.S.




On average,

aequum has

aequum has handled

aequum resolves

generated a savings

claims in all 50 states

claims within 297

of 97.2% off

days of placement

disputed charges for self-funded plans

1111 Superior Avenue East Suite 2500 Cleveland, OH 44114

P 216-539-9370

No Guarantee of Results – Outcomes depend upon many factors and no attorney can guarantee a particular outcome or similar positive result in any particular case.



For additional information about H.H.C. Group and our services, visit www. or contact Bob Serber at or 301-9630762 ext. 163#.

Corporate Solutions You want unparalleled customer service. Employers need the right stop loss coverage. At Swiss Re Corporate Solutions, we deliver both. We combine cutting-edge risk knowledge with tech-driven solutions and a commitment to put our customers first. We make it easy to do business with us and relentlessly go above and beyond to make stop loss simpler, smarter, faster and better. We’re addressing industry inefficiencies and customer pain points, moving the industry forward – rethinking employer stop loss coverage with you in mind.

Employer Stop Loss: Limit Health Care Exposure. Advancing Self-funding Together.

Insurance products underwritten by Westport Insurance Corporations and North American Specialty Insurance Company. © Swiss Re 2020. All rights reserved.




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

Laura Hirsch Co-CEO Aither Health Carrollton, TX


Deborah Hodges President & CEO Health Plans, Inc. Westborough, MA

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


John Capasso President & CEO Captive Planning Associates, LLC Marlton, NJ


Lisa Moody Board of Directors Chair Renalogic Phoenix, AZ

SIEF BOARD OF DIRECTORS Nigel Wallbank SIEF Chairman Dani Kimlinger, PhD, MHA, SPHR, SHRM-SCP, SIEF President

DIRECTORS Freda H. Bacon Les Boughner Alex Giordano Virginia Johnson

Shaun L. Peterson VP, Stop Loss Voya Financial Minneapolis, MN

Thomas R. Belding President Professional Reinsurance Mktg. Svcs. Edmond, OK Amy Gasbarro Chief Operating Officer Vālenz Phoenix, AZ

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



The right solution Self-funded health plan administration The speed of change in the health care industry is expanding the definition of health care and redefining roles for traditional players. New and emerging technologies led by single point solution vendors, rising health care costs, regulation, and non-traditional market entrants have many payers and health systems evaluating their options.

Let us build the right solution for you. Email us at

At AmeriHealth Administrators, we have a proven history of working with employer and payer clients to address their challenges and have the vision, technology, and people to meet the needs of our customers and partners. © 2021 AmeriHealth Administrators

1599500 11-21


Doug Morse-Schindler President HealthJoy Chicago, IL

Victoria McDiarmid Vice President, Managed Care InfuCare Rx Secaucus, NJ

Joseph Kennedy Chief Revenue Officer Perspecta Tampa, FL


Dave Parker Vice President of Sales & Marketing TrueScripts Management Services Washington, IN



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.

Price Comparison Machine Readable Files Provider Directories

Copyright 2022 Zelis. All rights reserved.

Qualified Payment Amounts Arbitration Defense Advanced Explanation of Benefits

Pay for care, with care.

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 INSURANCE AND 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 (R3/21)