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July 2018


The World’s Leading Alternative Risk Transfer Journal Since 1984

Pain-Free Pathways

How treating chronic pain without opioids or surgery in most cases improves clinical outcomes and lowers costly medical and work comp claims

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

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The World’s Leading Alternative Risk Transfer Journal Since 1984

Self-Insurer’s Publishing Corp.


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


Pain-Free Pathways

How treating chronic pain without opioids or surgery in most cases improves clinical outcomes and lowers costly medical and work comp claims



Volume 117


INSIDE the Beltway:

SIIA’s “Fly-In” Participants Find Positive Attitudes among Congress

22 When Benefits and Exclusions Create a Crossroads between Plan and Employer Requirements

By Bruce Shutan

EDITORIAL ADVISORS Bruce Shutan Karrie Hyatt

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

2018 Self-Insurers’ Publishing Corp. Officers


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

Another Success in Court for

RRGs By Karrie Hyatt


Sensitive Health Data Rising Stakes and Sound Security Practices


SIIA Endeavors


Member News

July 2018 | The Self-Insurer


Pain-Free Pathways

How treating chronic pain without opioids or surgery in most cases improves clinical outcomes and lowers costly medical and work comp claims


hronic pain fuels the nation’s troubling and costly opioid epidemic, but it’s also part of a gray area in medical treatment for which some forward-thinking clinicians are trying to add clarity. One such individual is David Hanscom, a renowned spine surgeon, who’s helping thousands of patients treat chronic pain without highly addictive opioids or surgery and saving employers on costly group medical and workers’ comp claims in the process. The average life span of someone with chronic pain is seven years shorter on average than those without it, Hanscom reports, adding that the impact is estimated to be similar to terminal cancer. “My goal is to bring modern neuroscience research into mainstream medicine,” he says.

By Bruce Shutan

His book, “Back In Control: A Surgeon’s Roadmap Out of Chronic Pain” (Vertus Press), and a self-directed care program serve as valuable resources. The recommended road to recovery includes an awareness of the neurological nature of pain, which is an embedded memory, as well as getting seven hours of uninterrupted sleep, stress relief, physical conditioning, meditation, medication management and a positive outlook on life.


After seeing too many lives ruined by unnecessary spine surgery, Hanscom strongly believes that 70% of all back surgeries should never happen and says they simply create more pain and complications for those who are already in pain. Research shows that 80% of patients who follow a self-care program that’s based on his own experience with chronic pain are pain free within three to six months and cancel their spine surgeries.

“What Dave does is nothing short of a miracle,” John Shervey, a safety and work comp consultant, says of his friend, Hanscom. “But

he has a never-ending supply, and the only way I can see that you can be effective in doing that is working on the front end and trying to get motivated people.”

Industry experts note that the body sends messages to the brain that are interpreted as pain and the way the brain responds to incoming stimuli is actually what produces pain. This can increase or decrease the distress and disruption of normal life activities that pain produces. Moreover, certain risk factors make it more likely that the brain’s reaction to incoming stimuli will result in chronic pain. There are now methods to systematically detect the presence of risk factors, as well identify as the specific nature of those risks. However, today’s conventional thinking about chronic pain management is rooted in “an intuitive, informal, unstructured and disorganized method of risk assessment,” according to Christian, who’s also president of Webility Corporation, a consulting firm, and was a board member of the American Chronic Pain Association. The entire bio-psycho-socio-economic (BPSE) context in which an injury begins and unfolds has a profound impact on the health outcome, she says, particularly for musculoskeletal conditions, depression and anxiety. “The fact that workers’ compensation tries to ignore nonmedical issues means the system is ignoring the things that are driving outcomes,” she adds. Data show that between a quarter and half of all doctor visits involve common symptoms that have no pathological basis, Christian notes, describing the phenomenon of medicallyunexplained physical symptoms.

What’s puzzling to Tom Lagen, M.D., a physician who specializes in coordinating returns to work for work comp claimants, is determining why a subset of claimants with a herniated disk or nerve compression experience so much pain vis-à-vis others with the same issue who do not. “That’s the real difficulty of this,” he says.

How the brain processes pain Cracking the code on chronic pain requires new approaches to treatment. “There is a fundamental lack of understanding about the nature of pain and that it is occurring in the brain,” explains Jennifer Christian, M.D., an occupational medicine physician in clinical practice for Multi-Dimensional Medical Care LLC, adding that the kind of disabling chronic pain that ruins a life is rarely due solely to the medical condition itself.

July 2018 | The Self-Insurer


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daily functioning and the ability to participate fully in life. Since the brain is neuroplastic, which means it is constantly changing, she says it can be intentionally remodeled. Once learned patterns become clear, the brain can be retrained to do something different. That may involve developing new thought patterns or practicing new behaviors.

Complicating comp claims Triggers of chronic pain include a number of factors such as sleep, stress, physical conditioning and one’s outlook on life, Hanscom explains. The body responds to anxiety with stress chemicals, muscle tightness, a racing heartbeat, etc.

David Hanscom

In other words, physicians can’t find any evidence of disease to explain low back pain, migraines, stomachaches, chest pain, etc., nor have the doctors been trained to deal with patients whose symptoms have no anatomical basis. Sometimes doctors “medicalize” these benign symptoms by assigning a diagnosis when they are actually being caused by an emotion, stress, mental conflict or even a memory. Opioids are not the only effective way of treating acute pain, says Christian, who’s heartened that surgical specialties are pondering alternatives for treating “real agony.” If more than a 100 million Americans live with chronic pain, according to the Institute of Medicine, she believes it’s “morally bankrupt” for providers and insurers not to suggest alternatives. The good news is that the brain’s processes can be altered so that pain becomes less bothersome and not such an obstacle to

It’s odd and disturbing that workers’ comp will pay easily for CAT scans, procedures, surgeries and injections, but they won’t pay for mental health resources, which actually is the diagnosis,” he adds. With more than three decades of experience as a spine surgeon, Hanscom became active in the work comp system for about 15 years in Washington State. Injured workers are at the mercy of a claims examiner who’s not qualified to make medical decisions, he opines. Their expectation is they’ll be taken care of them when, in fact, he says they’re often harassed and threatened. As if being out of work wasn’t stressful enough, Hanscom says it’s compounded when work comp claimants must wade through a perverse system that doesn’t treat the underlying source of pain. Feeling like a victim, many work comp claimants become angry and frustrated. He also says spine surgery, injections, opioids and random physical therapy don’t work for chronic pain. Surgery on work comp claimants is only about half as successful as those who haven’t filed a claim, Hanscom says. Why so? He cites as the chief culprit for exacerbating pain a sustained, stress-chemical assault associated with anger over the way they’re treated. He says there are nearly 30 symptoms of an adrenalized nervous system that cause migraines, ringing of the ears, fibromyalgia-type symptoms, back pain, neck pain, anxiety and insomnia. His approach includes “expressive writing” of thoughts that are immediately discarded, which he says nearly 1,000 research papers have shown will change the nervous system. Decreasing the body’s adrenaline levels and releasing pent-up anger can pave the way to a pain-free life. Also noting that the antithesis of anger is play, Hanscom points out how critical it is, along with the power of forgiveness, to help injured workers manage or end their chronic pain. Given the work comp system’s regulatory patchwork, some states are having more success than others when it comes to managing chronic pain. For example, Hanscom lauds the July 2018 | The Self-Insurer



leadership of Daniel Bruns, a clinical health psychologist who was instrumental in Colorado becoming the first state to mandate a biopsychosocial medical treatment model for work comp. The effort has led to substantial annual savings totaling hundreds of millions of dollars, he adds. In contrast, he castigates the approach in Washington for “actually promoting treatments that hurt people and actively withholding the correct treatments.” Hanscom has worked extensively with a health plan in the state to establish guidelines for when spine surgery should be considered in rare cases and why surgical outcomes in the work comp population are almost always less successful than the general population. A research paper presented in Baltimore in 2014 suggests that “only 10% of surgeons are assisting the known risk factors that adversely affect outcomes before actually recommending or doing the surgery,” according to Hanscom.

Behavioral health assessment flaws Cautioning against a cookie-cutter approach, Christian says a formulaic program like “detect biopsychosocial risk and refer to cognitive behavioral therapy” will be ineffective if it focuses on symptom relief rather than the specific obstacles perpetuating distress and impeding functional recovery in that particular individual’s life.

Her concern is behavioral health providers who have not had training in how the body works, the neuroscience of pain, and BPSE model of physical sickness and disability could end up as unwitting enablers of unnecessary distress, as well as overimpairment and functional disability. Christian and a group of physicianpsychologist colleagues wrote a patient education brochure called “If Opioids Have Not Relieved Your Chronic Pain.” The material plainly states a powerful message usually omitted in educational materials: opioids are not the right treatment if they haven’t enabled people to resume a normal rhythm of life and get their life back on track. While serving as president of the Alaska State Medical Association in 1992, Christian says the American Medical Association undertook an initiative to improve pain treatment. At that time, the AMA was aware that acute pain was being under-treated and that chronic pain was being over-treated. Sadly, she says, the latter thought got lost in the rush and led to a national crisis involving opioids. Christian started noticing that the costliest work comp claims include those with poor outcomes due to persistent disabling symptoms, especially chronic pain, despite long-term, high-dose opioids. She became convinced that their lives had been ruined by the narrow bio-medical care model and lack of access to a wide array of resources to manage pain and live good lives. So, she designed a small program to help these claimants take back control of their lives and partnered with an excess work comp carrier to pilot the effort. In a phone call with claims adjusters who had identified some injured workers as


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potential candidates for the program, she shared findings from conversations with the first group of candidates. She expressed sadness that none had known there are alternatives to pills, shots, or surgery. To her dismay, the claims adjusters said they also weren’t aware of other methods. Christian’s self-care model empowers individuals to manage symptoms and improve the quality of their lives rather than creating additional diagnoses and sending them off to other health care specialists. This is partially due to administrative lack of access to mental health care, but also that most psychotherapists are ill prepared to deal with disabling chronic pain.

learning ways to relieve one’s symptoms will move chronic pain into the recesses of the brain where it’s no longer the center of attention. In the end, prevention is the best form of treatment, according to Shervey, who believes improving stay-at-work or return-to-work processes will steer work comp claimants away from the proverbial slippery slope. That means engaging employees in the process and soliciting their suggestions for workplace safety, as well as keeping well-intended service providers from enabling patients to stay in the system longer than necessary.

“Rather than trying to put the egg back together, I’m trying to keep the egg from falling,” he says. “Now, if the egg does fall, then you have to pursue these proactive steps very quickly.” Bruce Shutan is a Los Angeles freelance writer who has closely covered the employee benefits industry for 30 years.

Ounce of prevention for pound of cure When injuries occur, it’s critical to immediately assess the damage and gain an accurate view of someone’s pain level. For example, Shervey says an injured worker who conveys a pain level of eight on a scale of 1-10 “ought to be lying on the floor pounding on the ground” vs. having a discussion. In some cases, he warns, people with chronic pain may have had it “way before accidents” and have personalities that are susceptible to conflicts, which if allowed to fester, could send their case into litigation. There’s a need to recognize faulty pain signals from an individual’s periphery, Lagen explains, and over time, develop new neural pathways or circuitry that rewire the brain. “It’s a difficult process and not a lot of these workers will buy into it,” he cautions. “They keep thinking that there’s a medical solution to everything.” Adds Christian: “We have to stop chasing symptoms and start chasing a resumption of the normal rhythm of life,” noting that


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Another Success in Court for



By Karrie Hyatt

isk Retention Groups (RRGs) were established by Congress under the 1986 Federal Liability Risk Retention Act (LRRA). RRGs are regulated in their state of domicile and, by the intention of the law, can operate in any other state as long as they register to do business in that state. While the intention of the federal law is clear, many states would like to have a hand in regulating RRGs operating in their states and often try to apply state laws to govern a RRG’s business. In May, the Georgia Supreme Court handed down a decision that supports non-domiciled RRGs operate unhindered in states in which they do business. The court decided in favor of OOIDA Risk Retention Group in the case of Reis et al. v. OOIDA Risk Retention Group, Inc. The case revolved around Georgia’s direct action statute and whether or not non-domiciled risk retention groups should be exempted. Direct action statutes are laws that allows an injured party to take legal action against the insurer of a guilty party. There are less than a dozen states that allow for this action.

Details of the Case In February 2015, a car carrying plaintiffs Candace Reis and Melvin Williams was in a collision with a commercial truck driven by Andre Robinson. The truck was owned by James Powell, doing


business as Zion Train Express, Inc., and insured by OOIDA RRG. The truck driver, Robinson, was found to be at fault for the accident.

statutes and are exempted by the LRRA. The Wheeler County Superior Court granted the motion in favor of OOIDA RRG in April 2017. The plaintiffs appealed the case. The Georgia Court of Appeals directed the case to the Georgia Supreme Court as the case dealt with a federal preemption which could conflict with the Georgia State Constitution.

OOIDA (Owner-Operator Independent Drivers Association) is an international trade association that represents owner-operator and professional drivers of heavy-duty trucks and small truck fleets. The organization was established in 1973 and has over 160,000 members. OOIDA Risk Retention Group was formed by OOIDA in the mid-1990s to offer commercial auto liability coverage to members of the association.

Arguments were heard this past March. The National Risk Retention Association (NRRA) stepped in on behalf of OOIDA RRG and filed an Amicus brief. The Georgia Supreme Court affirmed the lower court’s decision with a pronouncement released in May.

In the case of Reis, OOIDA RRG denied the insurance claim because Robinson was not driving as an employee of Zion Train Express at the time of the accident, but as a driver for a repair facility. OOIDA RRG directed that the claim should be covered by the repair facility’s insurance, not the vehicle’s insurance. The repair facility denied employing Robinson. Under Georgia’s direct action statute, injured parties are allowed to directly sue insurance companies, so Reis and Williams sued all the parties involved, including OOIDA RRG.

The Decision

The plaintiffs argued that direct action statutes do not seek to regulate RRGs, but are, in effect, financial responsibility laws. The Court dismissed this argument summarily, asserting that, “The direct action statutes are not financial responsibility laws as they in no manner assure the financial soundness or solvency of a risk retention group. Rather, the direct action statutes provide a vehicle for directly naming a risk retention group as a party in a lawsuit.” The decision relied heavily on Wadsworth v. Allied Professionals Insurance Co., A RRG, a case decided by the 2nd Circuit Court of Appeals in 2014. Allied Professionals RRG (APIC) provides professional and general liability coverage to three risk purchasing groups whose members consist of alternative health practitioners, including chiropractors, acupuncturists,

OOIDA RRG requested a motion for summary judgement claiming that risk retention groups are not subject to direct action July 2018 | The Self-Insurer



and massage therapists. In Wadsworth, a New York chiropractor pled guilty to sexually assaulting several patients. Sexual misconduct is excluded under APIC’s policies, so the insured’s claims were denied. The action in this case was brought by one of the insured’s victims who sought to recover a state court judgment of $101,175 against the chiropractor from APIC in a suit citing New York state’s direct action statute. In the Federal Appeals Court decision, it was stated that the LRRA, “Contains sweeping preemption language that sharply limits the authority of states to regulate, directly or indirectly, the operation of risk retention groups chartered in another state.”

The Supreme Court of Georgia’s decision went into detailed discussion of Wadsworth referring to several of its more salient points. It found that direct action statutes are a form of regulation and would infringe on a RRG’s exemption from being regulated by nondomiciliary states. This would directly impact the business operation of a RRG due to “the additional financial burden of defending unanticipated lawsuits in which they are directly named as parties, in affecting the relationship between an insurer and insured by creating possible conflicts of interest between the insurer and the policyholder, and in limiting their application to insurers of motor carriers.”

In its concluding statement, the Court wrote, “The clear goal of the LRRA is to streamline the operations of risk retention groups like OOIDA [RRG] by subjecting them to consistent regulation overseen by their chartering state. The direct action statutes subject insurers of motor carriers to lawsuits as parties, and thus, exposes them directly to liability and any consequent damages. As such, direct action statutes both directly and indirectly regulate the operations of insurers of motor carriers in Georgia. While this type of regulating may be permissible with respect to traditional insurance carriers, it is not allowed in the case of a foreign risk retention group by the express act of Congress in the LRRA.”

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What It Means

In the last few years the NRRA and some of its member RRGs have been challenging state laws that are being incorrectly applied to non-domiciliary risk retention groups. Since RRGs were enabled by the LRRA, states have sought to regulate non-domiciliary RRGs. In its 32year history there have been dozens of court cases decided both for and against RRGs and the other entity enabled by the LRRA—risk purchasing groups—but very few cases that became influential to the legal cases that followed. The NRRA, to promote solutions that support RRGs operating across state lines unimpeded, established an Amicus committee to focus on supplementing court cases affecting RRGs with Amicus Briefs. While the NRRA is a trade association for a very small slice of the captive insurance sector, it views its main goal as being an advocate on behalf of its members and issuing Amicus Briefs is one important way that it can do that. There are a number of legal experts on the committee that work together to vet cases and choose the ones that will help support the LRRA.

Reis is important because it will help to create case law that in turn will help set precedent for RRGs to operate unimpeded throughout the U.S. Case law are decisions from the higher courts that establish new interpretations of the law and can then be cited as precedents. These precedents can be very influential in deciding lawsuits and other legal actions, sometimes even circumventing a lengthy court trial.


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Building on the Wadsworth decision, which has already proved useful in several other court cases involving RRGs since it was handed down in 2014, Reis adds its own weight to help support risk retention groups operate unhindered by foreign state regulation.

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


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Introduction to Self Funding, Risk Management and the TPA


Stop Loss and Marketing in Self Funding


Cost Containment and Vendor Selection


Accounting, Funding and Tax Consequences


Actuarial, Legal, Reporting and Disclosure


State Regulations and Federally Mandated Benefits




the Beltway written by Dave Kirby

SIIA’s “Fly-In” Participants Find Positive Attitudes among Congress

Todd Archer, Congressman Tom Cole (R-OK), Tom Belding, and Barry Koonce


IIA members made their case for federal government support of a broad spectrum of self-insurance during the 2018 Washington, DC “Fly-In” that matched up key industry figures with the offices of Congressional leaders of both the House and Senate.

“In our Democracy, it remains vitally important to remind elected leaders who we are and what we stand for and to do that we have to put in the work,” said Barry Koonce,Vice President and Chief Government Affairs Officer of American Fidelity Assurance Company in Oklahoma City OK, which writes stop-loss insurance throughout the U.S. “This was a really useful example of being able to get in front of elected officials, particularly as we hope the Senate will pass the Self-Insurance Protection Act (SIPA) which earlier was approved by the House on a bipartisan landslide vote of 400-14,” Koonce said. 18

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in her first SIIA advocacy meetings with members of Congress. “As a member of the SIIA Health Care Committee I focused on advocating for SIPA while our president and CEO John Capasso briefed Congressional offices about the effects of new regulatory filing requirements that the IRS imposed on captive insurance companies,” she said. Gaglioti was gratified that Congressional staff her group visited reflected generally high levels of interest in self-insurance issues to the point of taking detailed notes. “We left the meetings with the impression that self-insurance has registered as an important issue,” she said. “We’re naturally concerned about our industry’s success in influencing government in order to help companies provide the best possible employee health care at affordable rates,” Gaglioti said. “We are encouraged by SIIA’s proactive approach to federal and state legislative issues affecting our industry. “It’s well worth our time to experience our government’s process that affect all our success in serving our clients,” Gaglioti added. Harry Tipper, Gerald Gates, Brady Bizarro, Adam Russo, and Ron Peck

Koonce noted that his group of “Fly-In” participants was greeted with positive attitudes in the Senate offices they were scheduled to visit. “I hope we were successful in convincing additional senators to join as co-sponsors of the SIPA bill when it is scheduled for consideration,” he said. Koonce noted that SIIA is the clear leader among industry support organizations in advocating for self-insurance at the federal level. “SIIA’s staff did a good job of organizing our group and rolling us out to hit the Hill. I saw nothing but positive attitudes about SIPA and association health plans during our meetings,” he said. Debra Gaglioti, Senior Vice President and Chief Operating Officer of Captive Planning Associates of Marlton NJ was participating

Steve Suter, president and CEO of Healthcare Management Administrators, Inc., a TPA located in Seattle WA, said, “There is still a gap of self-insurance knowledge at the Congressional level. Each of our meetings gave us the opportunity to further the education process, to help them understand how important self-insurance is to employers and how government action – or inaction – could be damaging to the lives of many thousands of people.

“In discussing SIPA, particularly on the Senate side, we wanted to make sure they understand how self-insurance and stop-loss mechanisms work,” Suter said. “Our visits provided the opportunity for them to hear what is at stake for many of their constituent employers and a vast number of employees and dependents.”

Steve Suter

July 2018 | The Self-Insurer


SIIA members preparing for their Hill meetings Suter noted the efficiency of combining the “Fly-In” with a Government Relations Committee meeting the day before Congressional visits to review legislative targets and strategies for the coming year.

“We were well equipped with information to support our case for SIPA among Congressional offices where we sought support,” he said. “I was encouraged by the tone of the conversations and general acceptance of a continuing dialogue.” SIIA’s ongoing federal government relations efforts will continue through this session of Congress. Additional in-person advocacy or grassroots activity in representatives’ home district offices are encouraged by SIIA members. Support for those efforts remains available from SIIA vice president of government relations Ryan Work at rwork@siia.org.

SIIA members Steve Suter and Catherine Bresler meet with Elvia Montoya of Oregon’s Senator Merkley office for SIIA’s Fly-In.

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When Benefits and Exclusions Create a Crossroads between Plan and Employer Requirements By: Erin M. Hussey, Esq.


lan Administrators of self-funded plans are able to customize their benefit offerings to meet the needs of the employer group, as long as that customization is compliant. Compliance for self-funded plans subject to the Employee Retirement Income Security Act (“ERISA”) includes federal health-related regulations such as the Patient Protection and Affordable Care Act (“PPACA” or “ACA”) and the Mental Health Parity and Addiction Equity Act (“MHPAEA”).

The lurking problem exposing employers, who sponsor those self-funded plans, to unexpected liability are the federal employer-related regulations. The Equal Employment Opportunity Commission (“EEOC”) and the Department of Justice (“DOJ”) have taken action to enforce compliance with certain employer-related regulations such as the 22

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Americans with Disabilities Act (“ADA”) and Title VII of the Civil Rights Act of 1964 (“Title VII”).

Provided below are examples of when an exclusion in a self-funded plan, such as an excluded medical condition or treatment for that medical condition, can be compliant with the applicable health-related regulations, such as the ACA and MHPAEA, but that same medical condition is still afforded protection under employer-related regulations such as the ADA and Title VII.

ACA and Title VII Compliance Discrimination on the Basis of Sex

The ACA’s Section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age, or disability with regards to certain covered entities’ health programs. A covered entity is one that receives federal funding as outlined in the ACA. The convoluted issue is whether treatment for gender identity is a protected class under the category of “discrimination based on sex.” While Section 1557 does not specifically state that plans subject to it must cover gender transition surgery, the rules do state that the Health and Human Services, Office for Civil Rights (“HHS, OCR”) will investigate any complaints.

recent guidance, while it does not specifically address Section 1557, appears to hint that the current administration is not going to ask a federal judge to lift the current injunction.

The self-funded plans that are not directly subject to Section 1557, because of the lack of federal funds, must still comply with the ACA. There are no actual benefit mandates for transgender services under the ACA for self-funded plans that are not subject to Section 1557. Therefore, there does not appear to be a direct benefit compliance issue for plans that exclude treatment for gender identity. Regardless, there is the potential for a discrimination issue under Title VII which may draw unwanted attention from the EEOC (as HHS does not have the authority in this case).

Whether a Plan is or is not subject to Section 1557, it would still be a plan’s best practices to cover gender identity services since employers are not shielded from liability under Title VII. Title VII prohibits employment discrimination based on race, color, religion, sex and national origin, and the EEOC’s interpretation of its prohibition on discrimination based on sex, includes discrimination based on gender identity and sexual orientation.

The EEOC, as an independent commission, takes the stance that employees who undergo gender reassignment are protected under Title VII. For example, the EEOC filed an amicus brief on August 22, 2016, arguing that an individual’s gender dysphoria made gender

With that said, the December 31, 2016, U.S. District Court injunction (applicable nationwide) was placed on certain parts of Section 1557, including the prohibitions against discrimination on the basis of gender identity and termination of pregnancy, and that injunction is still in effect. The DOJ’s

July 2018 | The Self-Insurer


reassignment surgery “medically necessary” and that the failure to cover this surgery was a sex discrimination violation of Title VII. The case for which this amicus brief was filed, involved a self-funded health plan that had a sex transformation surgery exclusion. The above-noted case is a perfect example of when an exclusion that complies with health-related regulations can cause a discrimination lawsuit to be brought by the EEOC against the employer. Therefore, Plan Administrators must proceed with caution when excluding treatment for gender identity or dysphoria, even if they are not subject to Section 1557, because the EEOC may still have a discrimination claim under Title VII.

MHPAEA and ADA Compliance Mental Health

The MHPAEA requires mental health and substance use disorder benefits to be covered in parity with the plan’s medical and surgical benefits. The Department of Labor (“DOL”) recently issued proposed FAQs on mental health and substance use disorder parity, and they seem to imply that a plan can compliantly exclude a particular medical condition (i.e., autism), because the exclusion of all benefits for a particular condition would not be considered a “treatment limitation” in the MHPAEA regulations.

Comments on these proposed FAQs should be submitted to the DOL by June 22, 2018. As for the medical condition of autism, there is currently no consensus in the medical community regarding whether autism should be classified as a mental health disorder (psychiatric disorder) or a neurological/ developmental disorder. With that said if a private self-funded ERISA plan chose to explicitly exclude autism there would be no direct violation of the MHPAEA or the ACA.

Excluding the medical condition of autism does not, however, shield the employer from responsibilities they have under the ADA. Pursuant to the ADA, a “qualified individual with a disability” must be provided


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with reasonable accommodations unless the employer can show that the accommodation would impose an undue hardship to them. An employee with autism, who would qualify as a disabled individual under the ADA, may request such reasonable accommodations.

A violation of the ADA could result in a lawsuit being brought by the EEOC. For example, the EEOC filed a lawsuit against an employer in California who did not provide reasonable accommodations to their employee with autism. The employer was subject to a large fine, agreed to change their policies and procedures, and will also submit annual reports to the EEOC regarding compliance.

Therefore, even if the medical condition of autism is compliantly excluded under the plan, the employer still has to comply with the ADA, such as providing reasonable accommodations. In addition, given the EEOC’s protection of individuals with autism, the EEOC may find an exclusion of autism to be discriminatory and employers of self-funded plans must be cautious.

Substance Use Disorder

As discussed above, private self-funded ERISA plans are not required to cover mental health and substance use disorder benefits, but if they do, they must cover them in parity with the medical and surgical benefits. In other words, if a plan chooses not to cover these benefits

at all, the plan would still be in compliance with the ACA and the MHPAEA. With that said, this will pose the same situation as above, because even if these benefits are not covered, employees would still have federal rights under the ADA.

For example, a qualified individual in Massachusetts had sought treatment for opioid use disorder and was denied treatment by a skilled nursing facility, creating action to be taken by the DOJ. The complaint was brought under the ADA because it was determined that these individuals were disabled on the basis of opioid use disorder.

On May 10, 2018, the United States of America entered into a Settlement Agreement with Charlwell Operating, LLC, the skilled nursing facility, wherein the facility was found to be discriminating against individuals seeking treatment for opioid use disorder in violation of the ADA. The outcome of that settlement involved a penalty to be paid by the facility, and they were to adopt policies and conduct training, including training on the ADA itself.

Although this settlement involved discrimination by a provider and not an employer, it brings to light that the ADA protects and encompasses medical conditions that, at the same time, are not covered under the plan. If a medical condition is not covered, the employer must still ensure that reasonable accommodations and potential discrimination issues are being monitored.


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Meeting at the Crossroads

Plan Administrators of self-funded plans should always keep in mind the protections of certain medical conditions that are enforced by the EEOC and DOJ. These protections are outside the realm of health-related requirements but inside the realm of employer-related requirements. When a plan’s benefit offerings or exclusions are compliant with the applicable health-related regulations, it does not mean the employer who sponsors that plan is safeguarded from (1) exclusions that may be deemed discriminatory under the ADA and Title VII, (2) the ADA requirements, such as reasonable accommodations, for those excluded medical conditions, or (3) general workplace discrimination regarding those excluded medical conditions.

Erin Hussey joined The Phia Group, LLC as an attorney in 2017. She focuses on a variety of healthcare issues facing employee benefit plans and their administrators. She provides general consultative advice on matters involving ERISA, ACA, HIPAA, COBRA, FMLA and other regulatory matters. Prior to working at The Phia Group, she worked as an attorney practicing in the area of workers’ compensation where she represented insurance companies at the Department of Industrial Accidents. Erin earned her B.A. from the University of New Hampshire, graduating magna cum laude, and her J.D. from Suffolk University Law School, graduating cum laude. While attending Suffolk Law, Erin interned at the Boston Municipal Court (Dorchester Division) and the United Nations in New York City. She also worked as a law clerk for a personal injury law firm and volunteered at a court service center.

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Sensitive Health Data Rising Stakes and Sound Security Practices


n 2000, global spending on Cyber Security was $3.5 Billion. In 2017, the number swelled to $120 Billion. By 2021, it is estimated the market spend will exceed $1 Trillion. There are many reasons for this explosive growth – increased awareness of cyber threats and elevated sophistication of profit driven cybercrime are two of them. The biggest driver however is the sheer number of new devices connecting daily to the World Wide Web and the resulting attack vectors introduced.

There were roughly 15 billion connected devices in 2016. Intel estimates that number will grow to 200 billion by 2020. That roughly translates to 27 per human being on planet earth. A recent article published on ZDNet1 cites Google Assistant’s ability to connect over 5,000 smart home devices (up from 1,500 in January of ’18). “Turn on the TV”, “Turn off the lights”, and “Preheat the oven” – you get the idea. Each device connected by the World Wide Web has the potential to reach any other connected device. Did each of these manufacturers consider security? Will they release security patches in a timely manner? What happens if one of the manufacturers goes bankrupt and can no longer offer support?


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These modern conveniences have associated risk price tags and we should all be mindful of them. Are there potential consequences caused by this exponential increase in Internet traffic? Could an Internet connected toaster, toilet or toy serve as part of a bot army or be an avenue for a malicious cyberattack? How safe is protected electronic data in an environment with 200 billion connected devices?

The high dollar costs associated with data breaches is forcing boardrooms around the world to focus on cyber security. The average data breach cost across all US industries was an estimated $7.32 million in 2017. If we refine the view to the US healthcare industry, the cost jumps to $123 million making it the costliest type of data breach across all industries. There are several common drivers behind these costs (investigations, notifications, remediation costs, loss of business) but fines related to a healthcare data breach are in a class by themselves. HHS handed out nearly $20 million in HIPAA fines in 20174.

This is the realm of data security programs and Chief Information Security Officers. Before a sound security program can be built and implemented however, all of the issues and variables need to be understood. What are the specific HIPAA and HITECH regulations that apply to my company? How much protected data am I custodian of? Does a business associate or third party handle this data? How is protected data accessed and how is it used? Once the complete scope is understood, a customized security program that flexes with current threats and landscapes can help reduce risk.

Health insurers and managing general underwriters (MGUs) that underwrite employer stoploss coverage work with very sensitive data. These insurers maintain data on patients who have had rare diseases, expensive surgeries, and perhaps use specialty medications. Not only do these carriers encounter Protected Health Information of cases they have inforce, but also on every case they quote for coverage (approximately 25 times the cases inforce). This means that employer stop-loss insurers see PHI on many millions of lives every year. Do breaches occur in the self-insured health insurance space? Absolutely.

A recent conversation with a former executive at a national employer stop loss carrier painted a frightening picture. They relayed a breach incident in which a server containing millions of PHI records was stolen from a data center. This data would later be used as part of a blackmail extortion attempt. A post mortem review of the incident revealed that secure data center protocols were not adhered to and the server’s hard disk drives were not encrypted. While this was a targeted scheme involving a specific network resource, it is important to understand the entire threat landscape. Where are all of the potential breach points?

Consider a few of these recent headlines on the HHS.gov website. “Widespread HIPAA vulnerabilities result in $2.7 million settlement”, “$2.14 million HIPAA settlement underscores importance of managing security risk”, and “$2.5 million settlement shows that not understanding HIPAA requirements creates risk.”

So how can health insurers reduce the high risk associated with a more connected Internet and increased breach costs?

July 2018 | The Self-Insurer


Fayyaz Rajpari, a technical advisor and intelligence liaison at cybersecurity firm FireEye, says “You need to make sure the entire organization is security aware. It needs buy in from all employees”. This can be a challenge at times. Let’s face it - SOC2, AICPA, HIPAA, HITECH – these aren’t the kinds of subjects that most people get excited to talk about though Rajpari suggests making it a part of a company’s culture. FireEye’s consulting arm, Mandiant, responds to the largest and most prolific data breaches in the world and recently published their “M-Trends 2018: The Trends Behind Today’s Breaches and Cyber Attacks report”. 5

Along with Rajpari, we suggest some common sense principles that all employer stop-loss insurers and MGUs should incorporate into their security program to protect from data breaches:


Continual Employee Training - The majority of healthcare breaches are caused by their own employees. Some are careless errors, some are due to ignorance and some are due to malicious behavior. Employees need to understand what the HIPAA/HITECH rules are, what a risky email/website/attachment looks like and what impact a breach could have on their company.


Electronic Data Encryption – sensitive data needs to be encrypted at rest and in motion. Operationalizing this effort is key and cannot be taken for granted. It requires knowing how the data is transmitted, where it lives and how it is accessed. These key findings require constant review and adjustments as necessary.


Current security software – keep your guard up. Any device and any software that has access to protected data needs to have current security software and patches applied regularly.


Limit exposure, limit the attack surface – Only collect data that is needed, and only keep it as long as necessary. Make mindful decisions on who and what is allowed to access the protected data and where it can be stored. For example, many health insurers and other employers do not have a business need to store data on an external device (thumb drive, DVD, etc). Therefore, it is common to implement a group policy that turns off USB access and DVD drives on all PC’s. This is not a silver bullet but it reduces possible breach points in a common sense way. Penetration Testing – Hire external consulting firms to poke, prod and test the network. Continually testing, retesting and adjusting is critical to remaining vigilant of new threats.



Garner outside expert opinion about your security program – The AICPA has published standards on organizational security controls referred to as SOC 2. It is not uncommon for firms to hire certified consulting firms to perform the necessary audits to document adherence to these standards. A SOC2 Type 2 audit requires producing proof throughout a testing period that the firm has the proper security controls in place. What are your published security policies and procedures? What does your incidence response


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Delaware Means ICCIE Trained The International Center for Captive Insurance Education (ICCIE) has designated the Delaware Insurance Department Bureau of Captive and Financial Insurance Products as an ICCIE Trained Organization. Delaware is one of only four domiciles that has applied for and received this recognition. To qualify as an ICCIE Trained Organization, the captive bureau had to meet the following requirements: 1. At least 20% of the captive professionals in the captive bureau must hold the Associate in Captive Insurance (ACI) in good standing; and  

2. At least 30% of the captive bureau’s professionals must be ACIs, Certificate in  Captive Insurance (CCI) holders, or currently enrolled in the ACI or CCI program.

For insurance regulators, ICCIE maintains strict standards for who qualifies as a “captive professional.”  The definition of a “captive professional” is someone who spends at least 20% of  their time on captive insurance work and is either a licensed professional such as an attorney, accountant, actuary, insurance producer/agent, investment adviser/broker dealer, underwriter, or an equivalent to such a position. It does not apply to those whose work is purely administrative. ICCIE’s mission is to be the premier provider of captive insurance education and to offer the pre-eminent professional designation in captive insurance. ICCIE’s program and curriculum have been developed in collaboration with the University of Vermont and reflect the highest  standards of a top-tier educational institution. “This recognition by the ICCIE reflects the education, experience, and professionalism of Delaware’s captive insurance staff. One of my objectives is to build upon a staff of highly competent regulators who know and understand how to regulate insurance for the benefit of my fellow Delawareans. I am proud of the hard work and dedication of the individuals in the captive bureau and heartily commend them.” Commissioner Trinidad Navarro

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

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

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

Trinidad Navarro Insurance Commissioner

program look like? What are your disaster recovery plans? What are the logical and physical controls you have in place to protect sensitive data? These are just a few of the critical security subjects touched upon in a SOC2 audit.

While these are some of the key aspects of a security program, it is important to understand that there is no perfect solution. Being aware of the risks, limiting exposure and designing mitigation plans is not a project that can be completed and moved on from. It needs to be part of the fabric of the company. The more individuals who decide to get out of autopilot and apply a security lens to their digital lives, the more secure that view will become.

Mike Hartnett is the head of Information Systems at Medical Risk Managers. MRM is a stop loss consultant, underwriter and actuary. For more information, visit www.mrm-mgu.com. Getting out of autopilot and thinking about risk is challenging but critical to the overall security of a network. Too often individuals are lulled into a false sense of reality when they are in front of a computer. They become “zombified”. Their guard goes down and their common sense has a tendency to go down with it. As Rajpari states, “Security

can fail by just one weak link regardless of how much security technology is deployed.”

References 1 https://www.zdnet.com/article/google-assistant-now-connects-to-over-5000-smart-home-devices/ 2 Data breach cost estimates gathered from a 2017 IBM sponsored study conducted by Ponemon Institute 3 Data breach cost estimates gathered from a 2017 IBM sponsored study conducted by Ponemon Institute 4 Summarized information gathered from the HHS.gov - https://www.hhs.gov/hipaa/newsroom/index.html 5 https://www.fireeye.com/current-threats/annual-threat-report/mtrends.html?utm_source=lic&utm_ medium=social

Consider how easy it would be for you to write a fictitious return address on an envelope and physically drop it in a mailbox. Now consider this process in digital form. Manipulating the “from” address in an email is vastly easier and it has the potential to reach millions of eyes with a few keystrokes and a click of a button.

Rajpari suggests empowering employees to make cybersecurity awareness both a personal and business goal. Personal training topics such as protecting your children online, shopping online and securing your home network are a few areas that he recommends adding to a security awareness program. If a personal cord can be struck, it is more likely to be embraced. It becomes relevant in a way that hits home and therefore has the tendency to become incorporated into one’s everyday actions.


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VISIT WWW.GUARDIANANYTIME.COM/STOPLOSS The Guardian Life Insurance Company of America®, 7 Hanover Square, New York, NY 10004. 1. As of 1/2017 and subject to change. Source: Vital Signs. Comdex is a composite of all ratings that a company has received from the major rating agencies (A.M. Best, Standard & Poor’s, Moody’s, and Fitch). 2. Upon receipt of complete information from the payer. Guardian’s Stop Loss Insurance is underwritten and issued by The Guardian Life Insurance Company of America, New York, NY. Policy limitations and exclusions apply. Optional riders and/or features may incur additional costs. Plan documents are the final arbiter of coverage. Financial information concerning The Guardian Life Insurance Company of America as of December 31, 2016, on a statutory basis: Admitted Assets = $51.9 Billion; Liabilities = $45.7 Billion (including $39.4 Billion of Reserves); and Surplus = $6.2 Billion. Policy Form #GP-1-SL-13. 2017-43335 (07/19)



London Calling for SIIA Members


IIA held a timely Transcontinental SelfInsurance Symposium June 4-6th at the iconic offices of Lloyd’s of London.

The event was organized to help selfinsurance industry executives from the U.S., U.K. and EU better understand key industry trends and the implications for business opportunities for all entities involved with alternative risk transfer arrangements.

Lloyd’s of London


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The event kicked off with the session “American Politics and the Implications for the U.S. Self-Insurance/Captive Insurance Marketplace” with Michael W. Ferguson, President & CEO of SIIA, giving a brief view of SIIA’s perspective on the most current political developments, including Association Health Plans. Steve Kinion, Director of the Captive Bureau of the Delaware Department of Insurance, added further insights from the regulator’s perspective on a variety of issues,

including the NAIC’s view on self-insured health plans and the growth of cyber insurance coverage in captive market. Mr. Kinion also spoke about Covered Agreements, which is defined as “an agreement entered into between the United States and one or more foreign governments, authorities or regulatory entities which relates to prudential measures with respect to the business of insurance or reinsurance that achieves a level of protection for insurance or reinsurance consumers that is ‘substantially equivalent’ to the level of protection under state law.”

He described how reinsurers from EU countries that are not Qualified Jurisdictions (for example France, Germany, Ireland, Switzerland, and the United Kingdom) do not have to post collateral if they satisfy the Covered Agreement’s standards. This means that such reinsurers will have parity with Certified Reinsurers. Reinsurers from nonEuropean Union jurisdictions will seek parity with EU domiciled reinsurers.

In “Introduction & Update --The U.S. Self-Insurance Marketplace” Larry Thompson, CEO of Inventavis discussed the current state of the market in the United States, explaining to the UK and EU-based attendees how the US healthcare system is expensive and inflating while self-insurance is growing and innovating. Smaller employers are self-insuring to fight rising premiums. Durg costs are also rising and are expected to be over 18% of spending next year.

Self-insured regulation is a continued battle, but stop loss is growing and profitable, and captives are continuing to gain popularity.

One of the program’s highlights was the session “European Insurance/Reinsurance Market Post BREXIT” featuring Ben Speers, COO of Miller Insurance Services LLP, Kenneth Underhill, Director at Implement Compliance Solutions & Resources Ltd and Hayley Spink, Lloyd’s Program Director for BREXIT.

Mr. Underhill started the session by reviewing the current state of affairs for the EU. The core principles governing the Single Market for services are the freedom to establish a company in another EU country (Article 49 TFEU*) and the freedom to provide or receive services

Mr. Kinion stated that collateral is not going away; the Covered Agreement does not prohibit any ceding company from demanding that its reinsurer establish a collateral account. Some ceding insurers want a collateral account, and a collateral account is negotiable.

For U.S. domiciled captive insurers, the Covered Agreement will create new reinsurance opportunities. “However, due to Solvency II’s requirements, I do not anticipate that U.S. domiciled captive insurers will reinsure their parents’ risks in the European Union.” Mr. Kinion stated.

July 2018 | The Self-Insurer


(trade) in an EU country other than the one where the company or consumer is established. This is achieved by using passporting.

Passporting is defined by the Bank of England as: “A firm authorized in an EEA (European Economic Area) state can carry on permitted activities in any other EEA state by either establishing a branch or agents in an EEA country or providing cross-border services.”

key for the UK means that you can setup a company here in the UK, you can regulate it here, and then you are able to provide insurance across the EU. You have open access to the 27 Member States instantly. You don’t have to have a branch in those countries; you can issue policies here.” He went on to state that, “The interesting thing is that passporting process applies for banks, wealth management firms, and insurance. However, off all of the passports that are issued almost 60% of those are in relation to the sales of insurance.”

voted to leave the European Union, serving the official letter on March 29, 2017, giving 2 years to negotiate its exit. Several key issues have been agreed in principle, such as the amount to be paid by the UK to the EU in respect of already committed contributions and a 21-month transition period.

He explained, “The

So what exactly is BREXIT? Article 50(2) of the Treaty on European Union states: “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.” On June 23, 2016 there was a referendum in the UK, and they


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Many significant issues remain unresolved, including the detail of the transition, immigration arrangements, security, atomic energy, space and cross border trade arrangements. If details are not reached by March 29, 2019, then they hit hard BREXIT, which could mean no more cross-boarded trading.

“Most people tend to think at this stage that it’s not going to happen, although most businesses are preparing for the event that it does happen” Underhill stated.


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Ben Speers went on to explain that insurers are generally advanced in BREXIT planning, and intermediaries have taken a wait and see approach, but the clock is ticking.

“Imagine a wall goes up between the UK and the EU. Unless you have a license on both sides of that wall your ability to trade is limited and the ability for branches and London to provide combined services falls away as well…the solution to most people’s problem on this front is to establish a properly regulated entity in the EU…By establishing a subsidiary it gives you a license on both sides of that wall and allows you relatively trade freely across both territories,” said Speers. When deciding where to establish an EU subsidiary, Speers recommended to focus on what works best for your clients. Some issues to consider include existing infrastructure, access from London, approach of local regulator, language, insurance environment, EU future of Member State, corporate tax & VAT rate, prohibitive employment laws, social security and access to key markets.

Insurers’ most popular EU choices so far have been mostly Belgium (on the basis of an accommodating regulator and sound infrastructure), Luxembourg (based on accommodating regulator and tax position), and Ireland (familiarity of language and good tax position). Other jurisdictions utilized include France, Germany, Spain, the Netherlands and Malta.

Haley Spink discussed Lloyd’s plans for dealing with BREXIT, explaining that the day after the UK triggered the Article 50 letter, Lloyd’s announced its Brussels subsidiary, and on May 15, 2018 Lloyd’s Brussels was granted authorization from Belgium regulator.

“BREXIT is not a huge threat to Lloyd’s and Lloyd’s market overall but is definitely an important part for that book of business, and that’s why we are looking to make sure we maintain access into the EU market, and in particular, make sure our customers still maintain access through our brokers and coverholders to the underwriting expertise that sits here at Lloyds” Spink stated.

Attendees in sessions in the Old Library at Lloyd’s of London


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Lloyd’s Brussels (opening January 1, 2019) will be a fully capitalized insurance company reporting to Belgian regulator and will be based and staffed in Brussels. It will have the same financial ratings and access to the central fund (subject to confirmation from rating agency). The current extensive branch network will remain with an additional branch in the UK, enabling EU risks to continue to be written from London. They will maintain underwriting expertise and distribution network relationships of the Lloyd’s market.


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EEA risks will be placed using Lloyd’s Brussels stamp and reinsured back to Lloyd’s, and global risks will have split slips. The policies with EEA risks will be renewed into Lloyd’s Brussels, and EEA coverholder binders will be set up with Lloyd’s Brussels.

“At the moment all of our plans are geared toward regardless of what happens, if there’s a hard BREXIT and no deal and the EU and the UK part company we will be able to still maintain that access into the EU at the end of March, moving forward” she said.

The program continued with “London Market and Employer Stop-Loss – Then, Now & the Future” with Neil Warren, Miller Insurance Services, LLP, Charlie Boyd, Senior Underwriter at Ark Syndicate Management Ltd., Stuart Liddell, Senior Vice President of Sirius America, and J. Brady Young, President & CEO of Strategic Risk Solutions, Inc.

The panel discussed a variety of topics including a stop loss market overview, touching on the growth of employee benefit captives. They also discussed how the Lloyd’s market doesn’t always prize volume and is results oriented.

In “Solvency II & the Impact on EU-Based Captive Insurance Companies” Stuart King, President and CEO of Strategic Risk Solutions (SRS Europe) and Malcolm Cachia, ACII, General Manager of Ark Insurance Management PCC Limited discussed how EU-based captives have been adapting to the Solvency II regulation, which was shaped from market failures, the increasingly dynamic and changing nature of global insurance markets, and a move to rules-based instead of principles-based approach to regulation. They gave an overview of the challenges and benefits and the policies and procedures involved. They believe captive owners are overcoming the onerous nature of requirements of Solvency II and getting benefit from the ORSA process which is driving interest in new product.

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That evening Oxford Insurance Brokers Ltd and Strategic Underwriters hosted the group for a unique networking reception on the rooftop garden of their office building, providing attendees with stunning views of London. Duncan Hopegood, Divisional Director of Oxford said, “We are proud to support SIIA and their members and being able to host events like this is just one way we can demonstrate our commitment. It’s fantastic to see so many people make the journey to London for the conference and we’re delighted with how successful our own event proved to be.” The next morning the educational program continued with “Workers’ Comp Reinsurance – The U.S. –Lloyd’s Connection,” a panel that included Richard Bird, Chief Operating Officer of Midlands Management Corp., Charles C. Caldwell, Chief Executive Officer of Midlands Management Corp., William

Attendees enjoying the rooftop reception

July 2018 | The Self-Insurer


“It is important and it is incumbent to adequately calibrate models for these unforeseen, multiclaimant assumption events, rather than just relying on standard industrial accident type exposure models. I think this is something we really need to thinking about now,” he continued.

Reception hosted by Oxford Insurance Brokers Ltd and Strategic Underwriters

Green, Head of Specialist Lines Department at Faraday Underwriting Limited, Adrian Mortley, Divisional Director of Oxford Insurance Brokers, and Ryan Ward, Senior Class Underwriter at Chaucer Syndicates. During the debate the panel discussed the history of Workers Comp in the reinsurance market, updates from the market and the latest emerging trends.

One of the current issues that can have an impact on reinsurers in the form of a multiclaimant catastrophic event is workplace violence. Of all the mass shootings in the US in the last 50 years, 29% have occurred at the workplace, and the perpetrator is often a formal disgruntled employee who returns for some sort of revenge.

“In those cases, subsequent injuries from that event are more than likely to compensable under the workers compensation act. Its further estimated that 25% of all companies are unprepared for active shooters incidents, and this poses an even greater risk to the workers comp carrier,” stated Ryan Ward. 42

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The program concluded with Les Boughner, Chairman of Advantage Insurance Management (USA) LLC presenting the session “Captive Insurance Trends & the Lloyd’s Market”.

After outlining the basics of captives, Mr. Boughner spoke about current trends and threats to the captive market, including the continued soft market, Solvency II, BEPS (Base Erosion and Profit Shifting), 831b’s, and BREXIT. While there is declining growth for non-US captives, US captives are continuing to grow. Other areas of continued growth in captives are employee benefits, particularly in medical stop-loss and multi-national pooling and difficult to place perils, such as cyber coverage.

The event was a great success, enjoyed by SIIA members from both sides of the pond.

SIIA President & CEO Mike Ferguson offered a closing observation, “We were very pleased to make this event possible for our members to help them better understand important transatlantic insurance developments and make important business contacts.”

“this event provided an excellent opportunity for us to discuss relevant industry themes with an audience that is engaged with the subject of self-insurance. The quality of presentations over the duration of the event has been exceptionally high and I am pleased to have been able to throw my own opinions into the ring.”

On speaking at the event, Adrian Mortley said,


July 2018 | The Self-Insurer



from SIIA



SIIA Diamond, Gold & Silver Member News SIIA Diamond, Gold, and Silver member companies are leaders in the self-insurance/ captive insurance marketplace. Provided below are news highlights from these upgraded members. News items should be submitted to Wrenne Bartlett at wbartlett@siia. org. All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at www.siia.org. For immediate assistance, please contact Jennifer Ivy at jivy@siia.org. If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy and jivy@siia.org. 44

The Self-Insurer | www.sipconline.net

Diamond Members Berkley Accident and Health Expands Account Management Team to Support Group Captive Growth Berkley Accident and Health, a Berkley Company, is expanding its account management team to support its rapidly growing Group Captive business. Berkley Accident and Health is proud to welcome Christopher LaDelfa as Program Manager and Teresa Brinkman as Account Manager. Chris and Terri are talented industry veterans who have joined the team to help guide and support the momentum built over the past ten years. Stop Loss Group Captives are an innovative approach to employee health care that lets companies manage their costs through alternative risk sharing. Called EmCap, Berkley’s solution provides small and midsize companies with all the benefits of self-funding, paired with the added stability of a group captive program. Launched ten years ago, EmCap has experienced extraordinary success and is poised for continued growth, as more and more companies call for transparency and control over their health costs.

“Chris excels at understanding the client’s needs, adapting customized insurance and business solutions to meet those needs, and becoming a trusted business partner,” explained Christopher Brown, President and CEO of Berkley Accident and Health. In his new role, Chris will be responsible for supporting the unique needs of his assigned programs by functioning as primary liaison to program members and their trusted advisors as they develop their strategic direction and enhance their health risk management strategies. Chris holds a BSBA in Technical Management from Western New England University and holds a NJ life/health producer license. He is based out of our Hamilton Square, NJ office. Teresa Brinkman joins the company as an Account Manager. She has been responsible for a wide range of employee benefit functions, including claims, client services, stop loss, and reporting. Prior to joining Berkley, Terri held an operations management position with a managing general underwriter (MGU) and an executive leadership position with a thirdparty administrator (TPA). “Terri’s experience with TPA/MGU operations provides a valuable combination of superior problem-solving and highly focused customer-service skills that makes her an ideal member of the Group Captive team,” stated Lorraine Byrnes, Assistant Vice President for Program Management Services. In her new role, Terri will be responsible for providing day-to-day account management to Stop Loss policyholders and their advisors through all stages of customer support, including implementation, policy, claims, and premium.

Chris LaDelfa joins Berkley Accident and Health as Program Manager. Chris is an accomplished insurance professional who has held a variety of roles in employee benefit account services and sales, in addition to program management at one of the world’s largest national brokerage/consulting firms. He has a range of experience with both large, complex self-funded clients and smaller, more focused clients.

July 2018 | The Self-Insurer


Terri brings over 30 years’ experience to her role, across multiple segments of the insurance industry and will be based out of Berkley’s Lansdale, PA office. About Berkley Accident and Health Berkley Accident and Health is a member company of W. R. Berkley Corporation, a Fortune 500 company. Berkley Accident and Health provides an innovative portfolio of accident and health insurance products. It offers four categories of products: Employer Stop Loss, Group Captive, Managed Care (including HMO Reinsurance and Provider Excess), and Specialty Accident. The company underwrites Stop Loss coverage through Berkley Life and Health Insurance Company, rated A+ (Superior) by A.M. Best. Contact Linda King, Director, Marketing, at LKing@berkleyah.com and visit wwww.BerkleyAH.com .

Silver Members Crowe Horwath LLP to become Crowe LLP Effective June 4, 2018, Crowe Horwath LLP will begin practicing under a new name, Crowe LLP. The firm will continue to operate as Crowe Horwath LLP in certain states, pending final review of its name change application in those states.

CHAN Healthcare, already part of Crowe Horwath LLP, will now become Crowe Healthcare Risk Consulting LLC. The CHAN leadership, culture, values and commitment to clients will remain the same, but the company will now refer to itself as Crowe. The Crowe Horwath Global Risk Consulting and Crowe Horwath Cayman Ltd. entities will not be changing their names. All entities will align with the Crowe name and logo. Founded by Fred Crowe and his partners in South Bend, Indiana, Crowe draws on more than 75 years of name recognition. Today, the global accounting, consulting and technology firm has more than 4,000 people, but its values have remained the same.

At Meritain Health, we are your Advocates for Healthier Living. We strive to help our members

health and well-being.

visit www.meritain.com.


The Self-Insurer | www.sipconline.net

“As we’ve grown, we’ve stayed true to our core purpose, and our commitment to our clients is as strong as ever,” said CEO Jim Powers. “In recent years, we’ve been on a transformational journey, focused on our talent and our technology offerings to deliver on our brand promise, ‘Smart decisions. Lasting value,’ and to simplify the lives of our people and our clients. Changing our name to simply Crowe, which is shorter and easier to recall, is just one more step in that journey.” Crowe LLP will also continue to serve clients worldwide as part of the Crowe Horwath International network, which is rebranding as Crowe Global effective June 4. This network, one of the largest in the world, consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world.

Gold Members American Fidelity Receives A+ Financial Strength Rating American Fidelity Assurance Company, headquartered in Oklahoma City and serving more than 1 million Customers in 49 states, has again earned an A+ (Superior) rating from A.M. Best Company. A.M. Best, considered one of the nation’s leading insurance rating services, bases its ratings on an analysis of the financial condition and operating performance of insurance companies in such vital areas as: competency of underwriting, control of expenses, adequacy of reserves, soundness of investments and capital sufficiency. Each year since 1982, American Fidelity has met these standards to receive an A+ rating.

financial security,” said Chief Financial Officer Robert Brearton. “It’s vital to have a history of financial stability ourselves, and having the A.M. Best rating allows us to demonstrate that strength.”

About American Fidelity American Fidelity has served the employer stop loss market for more than 25 years under the stable ownership of the Cameron family. More information can be found at www. americanfidelity.com/stoploss. American Fidelity Assurance Company is a supplemental benefits provider serving more than 1 million Customers across 49 states with a focus on offering a different opinion for Customers in the education, public sector, auto retail and healthcare industries. Visit www.americanfidelity.com. American Fidelity has earned an “A+” (Superior) from the A.M. Best Company since 1982. One of the nation’s leading insurance company rating services, A.M. Best conducts a strict review process for financial stability every year.

Unum Hires John Rycroft as Stop Loss Account Executive Leading benefits provider Unum (NYSE: UNM) has hired John Rycroft as a stop loss account executive supporting the Western region. Rycroft has over a decade of experience in the stop loss and employee benefits industry, holding previous positions at Tokio Marine HCC, AIG, and Sun Life Financial. He is based in the Glendale, California, and his territory includes California, Nevada, Utah, Colorado, and Arizona. “John has a track record of success in the stop loss market,” said Chris Quinn, vice president and general manager of stop loss at Unum. “His ability to navigate the self-insurance market will be extremely valuable to employers as he limits their exposure to losses, creates efficiencies, and aids in designing effective health and benefits plans.” Unum entered the stop loss market last year to broaden the scope of financial protection it provides employers. Policies are available in all regions of the country. For more information about Unum’s stop loss policies, contact Rycroft at (949) 698-3216 or jrycroft@unum.com.

“American Fidelity focuses on providing supplemental benefits and risk management solutions to help support our policyholders’

July 2018 | The Self-Insurer


20 Plus years of industry knowledge, expertise, and unsurpassed service Strength of Liberty Mutual which holds an A rating by both Best and S&P Plan Mirroring availability Disclosure statements no longer required on renewal business Liberty Mutual entered the Employer Stop Loss Market through its acquisition of TRU Services, LLC in April 2017.

Since then we have merged our brands and are issuing

Specific Advance Funding ability with enhanced features for qualified producers

the Liberty Insurance Underwriters Inc. (LIU) Policy. You will receive the same service you have grown to

152 Conant Street

know of TRU, but with the strength of Liberty Mutual.

2nd Floor Beverly, MA 01915

For more information please contact: Rocko Robinson, Senior VP of Underwriting and Sales

Email: Robert.Robinson01@libertyIU.com

Phone: 978-564-0200 Fax: 978-564-0201 Website: www.truservices.com


Chairman of the Board* Robert A. Clemente CEO Specialty Cace Management LLC Lahaska, PA

Nigel Wallbank Chairman Heidi Leenay President

President/CEO Mike Ferguson SIIA, Simpsonville, SC

Freda Bacon Director

Chairman Elect*

Les Boughner Director

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

Alex Giordano Director

Treasurer and Corporate Secretary* David Wilson President Windsor Strategy Partners, LLC Princeton, NJ

Directors Gerald Gates President Stop Loss Insurance Services AmWins Worcester, MA Mary Catherine Person President HealthSCOPE Benefits, Inc. Little Rock, AR Kevin Seelman Senior Vice President Lockton Dunning Benefit Company Dallas, TX

Jeffrey K. Simpson Attorney Gordon, Fournaris & Mammarella, PA Wilmington, DE

Robert Tierney President StarLine East Falmouth, MA

INTERNATIONAL COMMITTEE Robert J. Repke President Passport For Health Novato, CA

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

WORKERS’ COMP COMMITTEE Mike Zucco Business Development AL Trucking Association Fund Montgomery, AL

GOVERNMENT RELATIONS COMMITTEE Lawrence Thompson CEO BSI Fresno, CA HEALTH CARE COMMITTEE Kari L. Niblack, JD, SPHR CEO ACS Benefit Services Winston-Salem, NC

*Also serves as Director July 2018 | The Self-Insurer


SIIA New Members Regular Corporate Members Sheri Kitchin VP, Business Development b.well Connected Health Baltimore, MD

Lori Logan National Director, Managed Markets BioScrip, Inc. Denver, CO

Laura Carabello Principal CPR Strategic Marketing Communcations, Inc. Hasbrouck Heights, NJ

Mark Mixer CEO Health One Alliance Dalton, GA

Bryan Fine Percentric Norfolk, VA

William Hepscher Executive Director, Sales & Marketing Rx Manage Zephyrhills, FL

Jenna Johnson Executive Assistant to CEO Zenith American Solutions Tampa, FL

Do you aspire to be a published author? Do you have any stories or opinions on the self-insurance and alternati ve risk transfer industry that you would like to share with your peers?

Silver Corporate Members

We would like to in vite you to share your insight and submit an article to The Self-Insurer !

Bridget Gielis Chief Sales & Marketing Officer Concord Management Resources Somerset, NJ

distributed in a digital and print format to reach over 10,000 readers around the world. The Self-Insurer has been delivering information to

Kelli McCurry Senior Vice President of Marketing & Sales HealthTrio LLC Tucson, AZ

Claire Suaverdez One Contact Center Inc. Van Nuys, CA

Trish Quarles PayneWest Insurance Boise, ID

Tom Witter President Virtual Benefits Administrator Germantown, WI

the self-insurance /alternative risk transfer community since 1984 to self-funded employ ers, TPAs, MGUs, reinsurers, stoploss carriers, PBM s and other service providers.

Articles or guideline to Editor Gretchen Grote at ggrote@sipconline.net also has advertising opportunities available. Please contact Shane

Byars at sbyars@sipconline.net for advertising information.


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Data on File. Zelis Healthcare. 2018.


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Self Insurer July 2018  

Self Insurer July 2018