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June 2018


The World’s Leading Alternative Risk Transfer Journal Since 1984

MEWAs Revisiting

Years after insolvency, unpaid claims and fraudulent schemes soiled multiple employer welfare arrangements, regulatory improvements have made them viable again for smaller markets

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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






Years after insolvency, unpaid claims and fraudulent schemes soiled multiple employer welfare arrangements, regulatory improvements have made them viable again for smaller markets

By Bruce Shutan

EDITORIAL ADVISORS Bruce Shutan Karrie Hyatt


Volume 116

OUTSIDE the Beltway: SIIA Members Rally to Support Stop-Loss in New York

22 ACA, HIPAA and Federal Health Benefit Mandates The Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates 28

RRGs Report Nearly $287 Million Profit in 2017, Remain Financially Stable

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


12 34

Conflicting Policies and Courts: When Plan Language Creates More Litigation than Coverage


SIIA Endeavors

The Benefits of Multiple Captives


SIIA’s International Conference in Monterrey, Mexico

By Karrie Hyatt


SIIA’s Self-Insured Workers’ Compensation Executive Forum, Charleston, South Carolina


Member News

June 2018 | The Self-Insurer


MEWAs Revisiting

Years after insolvency, unpaid claims and fraudulent schemes soiled multiple employer welfare arrangements, regulatory improvements have made them viable again for smaller markets


he MEWA acronym used to be a four-letter word in the eyes of regulators who decades ago dismissed multiple employer welfare arrangements as hotbeds of insolvency, unpaid claims and fraud. Key culprits were inadequate reserves, criminal activity or a combination thereof. These self-funded vehicles are still subject to close regulatory scrutiny and pose governance challenges related to the Employee Retirement Income Security Act (ERISA) and state insurance requirements. However, MEWAs also offer a viable and affordable solution for covering diverse employer groups and associations when solvency standards and risk management strategies are deployed. As such, they’re getting a closer look across the self-insured community. There’s no denying the MEWA’s checkered past, including wild tales of embezzlement. “Unfortunately, stories of operators going to Belize with the money were true,” quips William F. Megna, co-chair of the insurance law practice group at Genova Burns and a co-founder of the MEWA Association of America. By Bruce Shutan

The view of MEWAs by many seasoned industry executives “is clouded by what happened in the ’80s when there were a lot of unscrupulous people in the business,” agrees David Wilson, president and senior actuary of Windsor Strategy Partners, Inc.


Describing this period as “ancient history,” he attributes most of those failures to bad pricing and poor management rather than brazen attempts by individuals to enrich themselves at the expense of the plan per se.

the same forms, annual filings and risk-based capital standards as a mutual health insurer.

But much has changed since then.

This small insurer approach provides an early warning system for state regulators to “become actively engaged in either getting the plan back on track from a solvency perspective, or winding down the plan risk so there’s a minimal detrimental fiscal effect for everybody involved,” according to Wilson.

Checks and balances at the state level Many states have enacted reasonable structural regulations for MEWAs that require financial reporting, which was missing in the early days when some operators of these arrangements lacked both insurance expertise and the best of intentions, according to John J. McSorley, president and CEO of RiskEval Resources LLC. Each state, however, will have different requirements for plan documents and benefit inclusions, he adds.

Georgia followed suit, but added some improvements, he reports, while both states tie financial responsibility for solvency of the plan to all members, which means they could be called upon to pay more into the plan to maintain solvency.

Meanwhile in Texas, the fully-funded fees charged to MEWAs must cover up to the aggregate attachment level. Wilson calls it “a

much more prudent approach than the old days where people would charge everybody, which might include stop-loss or reinsurance, and then they would charge basically expected claims.”

There also have been similar efforts involving MEWA oversight at the federal level. For example, the Affordable Care Act (ACA) sought to reduce MEWA fraud and abuse through expanded reporting and stronger enforcement – the latter requiring registration with the U.S. Department of Labor (DOL) prior to operating in a state.

Several states have established a solid regulatory framework that Megna says place solvency ahead of entrepreneurial aspirations. Examples of MEWA-friendly jurisdictions include New Jersey and Georgia, whose regulations have a risk-based capital component to that’s similar to what commercial carriers follow. Both self-funded MEWAs registered in New Jersey have seen exceptional growth in their membership, he reports. Wilson has been involved with a MEWA in New Jersey that has been operating since the Garden State passed legislation in the early 2000s designed to jumpstart these arrangements once again. Despite some ups and downs, he says it has done quite well. Regulators established solvency standards “that were just slightly looser than for a mutual health insurance company,” he explains. MEWAs in the state are subject to

Texas State Capitol

June 2018 | The Self-Insurer



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In doing so, the ACA gave the labor secretary “authority to issue a cease and desist order when a MEWA engages in fraudulent or other abusive conduct and issue a summary seizure order when a MEWA is in a financially hazardous condition,” according to a DOL guide to federal and state regulation of MEWAs. An exception to ERISA’s broad preemption provisions was made in 1983 to allow for the regulation of MEWAs under state insurance laws. The move was considered “both appropriate and necessary for states to be able to establish, apply and enforce state insurance laws with respect to MEWAs,” the DOL stated, noting a brewing battle over ERISA preemption.

In pursuit of shared risk One motivation behind this regulatory pursuit could be that MEWAs serve as a vehicle for small businesses that, left to their own devices, lack the purchasing power and resources of larger firms. Companies with anywhere from two to 300 lives are a good candidate for a MEWA, Megna notes, while in some cases mixing small and larger employers is helpful to achieve greater diversification of risk and geography. MEWAs tend to turn smaller groups into a larger risk group with enough reserves to help moderate any real fluctuations, explains McSorley, whose experience managing health plan operations runs deep.

He says the impetus starts with an association or group of companies seeking to share risk in providing health benefits on behalf of their employees and dependents. A feasibility study is then performed to actuarially determine whether or not the MEWA will be beneficial, he adds. Other key components include calculating commercial insurance rates, building a good distribution network and hiring experts to oversee the operation. With regard to the last point, McSorley says actuaries conduct periodic reviews on financials and reserves, as well as set rates in the marketplace and analyze health care trend, while an underwriting vendor can also

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assist with the sales function. He cites the role of other players that include the services of a solid third-party administrator and legal input on compliance. Adopting a risk-based, capital formalization in the rate-making process is an extremely helpful best practice that acts as an early warning system to detect any actuarial concerns, Megna explains. Partnerships with a reinsurer and network providers also are critical and require constant monitoring and vigilance, he adds.

“You cannot be an absentee landlord,” he says. “You need an active board that holds the program providers accountable, asks the right questions, and has team members that are responsive and can work well together.” Megna believes MEWA stability has captured the attention of more employers and brokers who are considering it as a viable option. “The criticism that these plans do not provide the coverage that you’d normally find in the commercial market is unfounded,” he says. Acknowledging that the devil is in the details of MEWAs, which must be carefully inspected in

order to live up to their expectations, Wilson also believes they generally provide an attractive alternative to traditional insurance solutions.

Scrubbing claims for discrepancies MEWAs, no doubt, have come a long way since initially earning a questionable reputation, but that doesn’t necessarily mean they’re beyond reproach. Mark Flores, an ERISA claim appeal and compliance specialist who co-founded Avym Corp., estimates that between 30% and 50% of all national claims expenditures never make it to the medical provider. His job is to ensure that doctors and hospitals are properly paid when claims are filed by selfinsured plans, including MEWAs. While all the plan documentation his firm reviews typically is compliant, he has seen “major discrepancies or incongruities” surface when medical claims are denied. A troubling pattern has been that MEWAs and third-party administrators don’t show the actual fees. He says most of them consider contractual payments and fee schedules proprietary so that they’re not undercut by competitors. The inference is that plan administrators inflate claims and siphon out a portion of the self-funded expenditure by rationalizing that physicians charge too much anyway.

“There’s no way for the plan to ever actually verify, A, what the doctor’s real charge was and B, out of the money given to the administrator, how much was actually paid to the doctor,” he says. These circumstances represent a breach of 8

The Self-Insurer | www.sipconline.net

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fiduciary responsibility under ERISA to act in the best interest of plan participants and beneficiaries, according to Flores. It’s particularly vexing in the case of MEWAs because he says “it’s easy to hide money” when there are so many different companies, plans or administrators involved.

For more information about MEWAs, please be sure to attend SIIA’s upcoming National Conference & Expo. One of the featured panel discussion sessions is “AHPs, MEWAs and Stop-Loss Captive Programs — So Many Options, So Much to Know.” Event details can be accessed on-line at www.siia.org

That’s why Flores suggests “there must be an independent way to validate and ensure that the amount of money that came out of the employer’s bank account for any given claim is, or equals, the amount of money that was paid to the provider by that claim.”

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



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ONE CAPTIVE, TWO CAPTIVE, THREE— The Benefits of Multiple Captives


aptives have financial and risk management benefits for their parent companies, as has been well proven. Could there be more benefits with more captives? The short answer is yes and no. Owning multiple captives has its uses and benefits, but it is not for every company. However, it is a frequent practice and is continuing to grow.

The Benefits

By Karrie Hyatt

The primary benefit for a company to own more than one captive is to segregate risk. Whether it is by preference, for regulatory reasons, or, in some cases, by chance, multiple captives can help their parent company mitigate their exposures. “Multiple captives are helpful when underwriting different risks,” according to Karin Landry, managing partner with Spring Consulting Group. “As businesses grow, they may want to add additional lines of coverage but keep them separate from what they originally wrote into their captive… An additional captive is also valuable for underwriting third-party risk, such as warranty coverage, or for new lines of business, like reputational risk.”


If a company with a pure captive wants to add another captive that doesn’t mean that they have to form another pure captive. Companies can look to many different types of captives to help them segregate risk, including group captives, cell captives, and special purpose captives. David Provost, deputy commissioner of the Captive Insurance Division, Vermont Department of Financial Regulation, said, “I’ve seen quite a few captive owners that have their own pure captive and participate in a group captive. In at least one instance, I’ve seen a pure captive reinsured by a group captive.” Segregating risk can help companies reduce exposure from subsidiaries or affiliated entities. “[A] company might want to separate its fronted business from its direct lines,” Provost added. “Some organizations use separate captives to segregate their forprofit and not-for-profit businesses.”

a mono-line company, therefore other P&C lines would have to be in a separate captive.” But as multiple captives can help mitigate risk, it comes at a price. The primary downside with owning multiple captives is the additional costs, both initial and ongoing. There are other disadvantages as well.

“Drawbacks include greater complexity, the need for more management time, and additional frictional expenses (legal, accounting, auditing, actuarial and consulting services) that would be increased versus a single captive,” said Landry. “Compliance is also harder as you’ll likely have to reconcile with different domiciles and their respective regulations.” There would be some economies of scale, especially in terms of management. However, each captive is an individual company and will have to comply with the regulation by its domicile. Provost said, “Not everything will be doubled necessarily, but there will be two annual reports, two audits, more work to juggle, etc.”

Another benefit of owning multiple captives is to separate long tail and short tail insurance coverages. Long tail coverages— such as medical professional liability, workers compensation or environmental liability— are exposures generally not reported before the end of a policy and can take years to settle. Short tail coverages, such as stoploss or property, are reported soon after the exposure and can be settled relatively quickly. By putting these types of exposures into two different captives, a company can better manage the intricacies of each risk. The rigors of regulatory requirements can make having two or more captives an appealing solution to meeting those obligations. “In some cases, two captives are needed to meet regulatory requirements,” said Provost. “For example, a bank may own a captive for reinsurance of mortgage guarantee insurance (PMI), which must be in

June 2018 | The Self-Insurer



Multiple Captive Motivations

There are as many reasons for owning multiple captives as there are types of captives. Owning more than one captive can be a boon for companies operating internationally or companies that find it useful to have both an offshore and onshore domicile. Dealing with multi-state regulations is another reason to form multiple captives. According to Provost, “From what I’ve seen, it’s most often a case of necessity, but sometimes it’s management’s preference to separate things. Often, it’s more like an accident—many companies with two captives got them by merger and acquisition activity, not by design.” He related that the most captives owned by one entity peaked at 13 Vermont-domiciled captives—during the economic downturn a bank acquired many smaller entities, each with their own captive. Eventually, the captives were consolidated. “[Mergers and acquisitions] can spark the formation of additional captives, as an organization’s risks and goals may change as a result or may be pooled with those of another entity, calling for another captive,” said Landry. “They may decide to keep or close an existing captive based on the circumstance.” Companies that operate globally often use multiple captives as a strategy to meet the needs of their subsidiaries or clients in different countries. Having captives in different jurisdictions maximizes the benefits that captives offer and can help ease compliance issues.

Landry offered this example, “In order to get a prohibited transaction exemption in the US, your captive must be domiciled in the U.S., and typically workers’ compensation is underwritten by an admitted carrier which must be admitted in the state of the insureds. In this instance, it would be advantageous for an organization to set up a captive in the U.S. even if its base was in another country, and vice versa.”

“If you have an offshore insurance company,” continued Landry, “You may decide to start a branch captive to fund a line of coverage, such as employee benefits risk, onshore to be subject to the U.S. course instead.” This set-up is not restricted to international companies. Even U.S.-based companies can make use of the multi-captive strategy to minimize taxes and effectively deal with excess and surplus lines requirements in different domiciles. Landry said, “If an organization’s home state is different from its captive’s domicile state, a client may decide to start a captive as the ‘fronting company’ for the out-ofstate captive to pay a lower premium tax versus an excess and surplus lines tax.” Growing in popularity are the use of cell captives by owners of established captives. Cell captives, with their quick start-up time and lower capital requirements, are a way that many companies can make use of


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the multiple captive structure. According to Landry, “Cell captives will be a strategy that will continue to grow in popularity.”

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.

Size Doesn’t Matter Reasons for owning more than one captive are varied and the benefits that multiple captives provide are equally unique. It might seem, due to cost and management considerations, that owning multiple captives would only be under the purview of large companies and corporations, but that is not the case at all. Small to medium-sized companies can also benefit from segregating their risk through multiple captives. It really depends on the nature and volume of their business. With the rapid growth in cell captives, and more and more domiciles enacting legislation to allow for them, smaller companies can take advantage of the benefits in risk segregation offered by multi-captive structures. “Large companies would certainly be more able to take advantages of economies of scale,” said Provost, “But the benefits should be the same if you can overcome the extra costs.”

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SIIA Members Rally to Support Stop-Loss in New York


IIA members and staff continued their several years-long quest to maintain and permanently restore stop-loss insurance availability for self-insured New York employee groups of 51-100 with a Lobby Day round of meetings with legislators and regulators in Albany. Despite a notable challenge, they left the New York capital with a modicum of encouragement. “Nobody can predict with any certainty what a state government will do, but our message was heard and understood by key members of New York’s government,” reported Adam Brackemyre, vice president of state government relations. A 2016 New York law denied new stop-loss policies to groups of 51-100, putting the state in a lone minority of one as all others have assured that availability. SIIA was instrumental in gaining a two-year grandfather period for existing stop-loss plans that expires at the end of this year. Further, SIIA has initiated bills to set the permanent minimum stop-loss policy at 51 members; that bill was passed by the NY Senate and now awaits action by the Assembly.


The Self-Insurer | www.sipconline.net

insurance options,” he said. “New York could be losing out on premium taxes and its general economic health.” If New York disallows stop-loss coverage for existing plans and prevents new policies, the New York self-insurance community would be thrown into chaos, said Mindi Smith of StopLoss Insurance Services, an AmWINS Group Company, wholesaler of stop-loss policies from multiple carriers to the New York market. “Comparable coverage would be impossible for employers to find in the traditional commercial market,” she said.

Bob Madden The challenge SIIA faced in the recent round of Albany meetings was a report commissioned by the Assembly from insurance industry consultant Milliman that, when delivered earlier this year, lacked any New York-specific data that legislators were waiting to see. “That was the challenge that we intended to address by putting selfinsuring employers and industry members into direct contact with key legislators,” Brackemyre said. Participating in 15 meetings with members of the New York Assembly were SIIA members Allied Benefit Systems, AmWINS, The Guardian Life Insurance Company, Lawley Benefits, Leading Edge Administrators, Tokio Marine HCC and York International Group. Bob Madden of Lawley Benefits, a broker serving employers in New York and surrounding states, says he is puzzled by the New York legislature’s reluctance to allow stop-loss policies for groups of 51-100. “I would think New York would encourage employers to stay in the state rather than risk seeing them move across a border such as Pennsylvania’s to gain more complete

Participating in her first SIIA Lobby Day event, Smith reported that Assembly members on the meeting schedule seemed to “get it” in their small group sessions with the SIIA delegation. “I asked Assembly members who are not co-sponsors of the bill how they felt about it after our meetings and most seemed on board with us,” she said. “But we know this is just one step in a continuing process through this year,” she said. “Our company will follow up by encouraging clients and employers to make sure their legislators know how important this issue is to their employee health plans.” The lack of New York-specific information in the Milliman study was puzzling to many industry members for its inclusion of points that have in the past been made by some self-insurance opponents in the traditional full-insured benefits industry. An example was Milliman’s assertion that disallowing stop-loss policies in the small group New York market would have the effect of lowering fullyinsured premiums. But without New Yorkspecific data, there was no basis offered for that conjecture. Reports filtered in from SIIA members that some offered to provide stop-loss data when the survey was launched, but apparently no one on the consultant firm was receptive to information from anyone involved with the New York stop-loss market. David Kane of York International Agency estimates that if the stop-loss ban for groups of 51-100 stands, smaller groups would be facing doubled or tripled benefits costs.

David Kane

“New York would become the only state in the country to hold to the 100-member minimum for this purpose,” he said. Kane noted that in visits with legislators in Albany, stop-loss insurance does not appear to be a partisan issue. “We didn’t get the feeling that Democrats see this as a Republican ‘big business’ matter,” he said. “Legislators know that most businesses have fewer than 100 employees. I spoke to a representative from Queens about a company employing 75. He said, ‘That’s a big business. June 2018 | The Self-Insurer


It shouldn’t be forced to buy insurance in just one way, without options.’ ” Kane said SIIA members were encouraged by the level of interest in their issue reflected by leading members of the Assembly Insurance Committee and their staff. “We had the opportunity to meet with staff members who may not previously have had the opportunity to learn about small business health benefits, and we were able to give them a clear and deeper understanding of the issue.” David Antalek of Allied Benefit Systems, a national TPA serving many New York employers, believe it’s vitally important to permanently restore the availability of stoploss insurance to groups in the 51-100 range. “With health costs out of control, employers need any ability for more access and more transparency,” he said. “Health plans are huge line items for employers, and we believe events such as the Albany Lobby Day are the best way we can serve our clients and our future clients in that space.” Antalek said that most New York legislators on the SIIA group’s meeting schedule appeared to be “on board” with SIIA’s goal. “Some seemed surprised to learn that New York could end up as the only state putting employers under this restriction,” he said. SIIA continues to be in contact with New York Assembly leaders, with the goal of passing legislation to protect the self-insured plans of employers in the 51-100 range before the deadline at the end of this year. Members can learn how to participate in grassroots advocacy from Adam Brackemyre at the Washington, DC, office, (202) 4638161 or abrackemyre@siia.org.


The Self-Insurer | www.sipconline.net

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Q& A T

he Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the Women’s Health and Cancer Rights Act) dramatically impact the administration of self-insured health plans. This monthly column provides practical answers to administration questions and current guidance on ACA, HIPAA and other federal benefit mandates. Attorneys John R. Hickman, Ashley Gillihan, Carolyn Smith, and Dan Taylor provide the answers in this column. Mr. Hickman is partner in charge of the Health Benefits Practice with Alston & Bird, LLP, an Atlanta, New York, Los Angeles, Charlotte, Dallas and Washington, D.C. law firm. Ashley Gillihan, Steven Mindy, Carolyn Smith and Dan Taylor are members of the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner’s situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation. Readers are encouraged to send questions by E-MAIL to Mr. Hickman at john.hickman@alston.com.


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DOL issues comprehensive compliance guidance for Mental Health Parity and Addiction Equity Act (MHPAEA) The Mental Health Parity and Addiction Equity Act (MHPAEA) amended ERISA, the Internal Revenue Code, and the Public Health Service Act to require most group health plans to satisfy certain requirements with respect to financial and treatment limitations. These requirements are generally designed to ensure parity between medical/surgical and mental health and substance use disorder benefits—and in some cases, to ensure better treatment for mental health and substance use benefits. Since the enactment of the MHPAEA, the DOL has issued final regulations and numerous FAQs to assist stakeholders with MHPAEA compliance. Then, in 2016, Congress passed the 21st Century CURES Act, which—among other things- amplified certain notice and disclosure requirements in the MHPAEA, clarified that eating disorders are mental health conditions, and required the Department of Labor to solicit feedback and provide compliance tools for stakeholders.

for MHPAEA compliance and there is good chance that a violation will be cited.

The enforcement overview also proclaims the work the DOL is doing to pursue voluntary compliance. The DOL employs over 100 benefit advisors who provide education and compliance assistance and those benefit advisors answered 127 public inquiries in 2017 related to MHPAEA. The goal of the benefit advisor is to obtain compliance without referring such matters for investigation.


Now, the DOL has issued three additional; items designed to assist stakeholders with compliance:

• An MPHAEA Enforcement Overview; • A proposed FAQ (comments are due by June 22); and • An MHPAEA self-compliance tool These three very helpful items couldn’t come at a better time as DOL audit activity continues at a high level (as evidenced by the enforcement overview) and the litigation trend seems to be increasing. The rules are very complicated and stakeholders continue to struggle to make sense of it all despite all of the guidance. This article addresses the key points of the most recent guidance identified above but we encourage stakeholders to become familiar with all of the guidance to help mitigate the ever increasing risk associated with the MHPAEA.

Enforcement Overview1

The enforcement overview provides stunning statistics regarding DOL activity with respect to the MHPAEA that underscore the need to become intimately familiar with the MHPAEA rules. The DOL notes that it closed 347 investigations in 2017 and out of those, 187 involved plans subject to MHPAEA—each of which was reviewed for MHPAEA compliance. Of those 187 MHPAEA compliance reviews, the DOL found 92 violations. The message—if your plan is subject to the MHPAEA and if you are audited, the DOL will review

The proposed FAQs focus on two very important aspects of the MHPAEA: nonquantitative treatment limitations and disclosure.

Non-quantitative treatment limitations

The non-quantitative treatment limitation (“NQTL”) requirements of the MHPAEA have proven to be one of the most challenging aspects of MHPAEA compliance because they are not based on objective mathematical formulas like the financial and quantitative treatment limitation requirements. The MHPAEA final regulations indicate that a group health plan (and a health insurance issuer) may not impose a NQTL with respect to mental health/substance use disorder benefits in any classification unless, under the terms of the plan--as written and in operation--any processes, strategies, evidentiary standards, or other factors used in applying the NQTL to mental health/substance use disorder

June 2018 | The Self-Insurer


benefits in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the limitation to medical/surgical benefits in the same classification. It has been quite the challenge to identify, first and foremost, what constitutes a NQTL. This FAQ and the prior FAQs issued by the DOL have gone a long way to help address that challenge. In addition, it has also been a challenge to determine whether the plan uses comparable standards and strategies and whether they are applied more stringently to mental health/substance use benefits. This proposed FAQ helps to clarify those issues to some extent.

Highlights include:

The FAQ clarifies that an exclusion of all benefits for a particular condition or disorder is not a NQTL for purposes of the MPHEA rules. For example, a general exclusion under a plan for items and services to treat bipolar disorder, including prescription drugs, is not an NQTL even though the plan provides prescription drug benefits for medical /surgical benefits.

When a plan covered services or treatments for eating disorders but excluded coverage for eating disorder services provided in an inpatient, out-of-network setting outside of a hospital (e.g, a residential treatment center), the plan


violated the NQTL rules when the plan covered such treatments for medical/surgical conditions when there is physician authorization and determination that the treatment is medically appropriate based on clinical standards of care. •

A plan’s terms indicate that claims for medical/surgical and mental health/substance use disorder benefits are denied as “experimental and investigative” when no professionally recognized treatment guidelines define clinically appropriate care for a condition and fewer than two randomized controlled trials are available to support the treatment’s use for that condition. For example, autism satisfies the plan’s definition of mental health conditions. In the past year the plan denies all autism related ABA therapy claims as experimental and investigative even though more than one professional recognized guideline existed and more than two randomized trials exist to support the use of ABA therapy to treat autism but approves any medical/surgical claim for benefits that meets the same criteria. The plan violates the NQTL rules.

The plan violates the NQTL rules when it sets dosage limits for buprenorphine, an opioid addiction treatment drug, that are less than the professionally-recognized treatment guidelines but sets dosage limits for all medical /surgical drugs at or above the professionally recognized guidelines.

Where a plan requires a participant to have two unsuccessful attempts at outpatient substance use disorder treatment to be eligible for inpatient benefits but only requires one unsuccessful attempt at outpatient medical/surgical benefits, the plan violates the NQTL rules unless the plan can demonstrate that evidentiary standards or other factors were utilized comparably to develop and apply the differing step therapy requirements.

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A plan violated the NQTL rules where it paid the same reimbursement rates for approved physician and nonphysician providers of medical/surgical benefits but paid a lower rate for nonphysician providers of mental health/ substance use disorder services than it paid physician providers of the same services.

This FAQ also provides a cite to a revised disclosure model form, which was required by the Cures Act, and indicates that OMB is requesting comments on the Form, which are due June 22, 2018. You can find the revised form at https://www.reginfo.gov/public/do/PRAICList?ref_ nbr=201706-1210-001.

A plan violated the NQTL rules where it ensured that participants could schedule an appointment with a network provider within 15 days for non-urgent medical/surgical care but did not ensure the same with respect to network providers of mental health/ substance use disorder care.

The DOL has also issued an updated self-compliance tool for MHPAEA compliance. The tool asks a series of questions designed to help stakeholders determine whether the plan complies with the MHPAEA. Below is a summary of helpful reminders and tips included in the tool:

Self-Compliance Tool3

• Medically Assisted Treatment for opioid disorder and treatments for eating disorders are subject to the MHPAEA;

• Plans may divide the outpatient classifications into two sub-classifications—office


visits and other. Sub-classifications for specialist office visits and general physician office visits are not permitted;

• A plan may divide benefits furnished on an in-network basis into sub-classifications

The MHPAEA final regulations require plan administrators to disclose the criteria for medical necessity determinations with respect to mental health/substance use disorder benefits to any current or potential participant, beneficiary, or contracting provider upon request. In accordance with ERISA Section 104(b), these documents must be provided within 30 days to avoid a penalty. This FAQ reminds stakeholders that “instruments” governing the plan required to be disclosed under Section 104(b) of ERISA would include any information on medical necessity criteria for medical/surgical benefits, as well as the processes, strategies, evidentiary standards, and other factors used to apply an NQTL with respect to medical/ surgical benefits and MH/SUD benefits under the plan.

that reflect network tiers (such as preferred provider and participating provider).

• The 2/3 substantially all test is based on payments expected to be paid for the plan year and that running that test across a “book of business” is permitted only when the plan has insufficient data to do a reasonable projection of future claims.

• Plans should clearly define which benefits are treated as medical/surgical and which are mental health/substance use.

• Factors that may be included in any NQTL design include but are not limited to: o Excessive utilization o Recent medical escalation o Provider discretion in determining diagnosis; o Lack of clinical efficiency of treatment or service o High variability in cost per episode per care; o Claim types with a high percentage of fraud. All stakeholders should take the time to carefully review this self-compliance tool and apply it to the plans they sponsor or administer.


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References 1 https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/factsheets/mhpaea-enforcement-2017.pdf 2 https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/ aca-part-39-proposed.pdf 3 https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/ publications/compliance-assistance-guide-appendix-a-mhpaea.pdf


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June 2018 | The Self-Insurer


RRGs Report Nearly $287 Million Profit in 2017, Remain Financially Stable By Douglas A Powell, Senior Financial Analyst, Demotech, Inc.

This article originally appeared in Demotech’s “Analysis of Risk Retention Groups – Year End 2017


review of the reported financial results of risk retention groups (RRGs) reveals insurers that continue to collectively provide specialized coverage to their insureds while remaining financially stable. Based on reported financial information, RRGs have a great deal of financial stability and remain committed to maintaining adequate capital to handle losses. It is important to note that ownership of RRGs is restricted to the policyholders of the RRG. This unique ownership structure required of RRGs may be a driving force in their strengthened capital position.

Balance Sheet Analysis From year-end 2016 to year-end 2017, cash and invested assets increased 4.5 percent and total admitted assets increased 4.9 percent. More importantly, over the last year, RRGs collectively increased policyholders’ surplus 7.4 percent. The level of policyholders’ surplus becomes increasingly important in times of difficult economic conditions by allowing an insurer to remain solvent when facing uncertain economic conditions. This increase 28

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represents the addition of nearly $343 million to policyholders’ surplus. During this same time period, liabilities have only increased 3.2 percent. These reported results indicate that RRGs remain adequately capitalized in aggregate and able to remain solvent if faced with adverse economic conditions or increased losses. Liquidity, as measured by liabilities to cash and invested assets, for year-end 2017 was 64.7 percent. A value less than 100 percent is considered favorable as it indicates that there was more than a dollar of net liquid assets for each dollar of total liabilities. This also indicates a decrease for RRGs collectively as liquidity was reported at 66.5 percent at year-end 2016. In evaluating individual RRGs, Demotech, Inc. prefers companies to report leverage of less than 300 percent. Leverage for all RRGs combined, as measured by total liabilities to policyholders’ surplus, for year-end 2017 was 138.2 percent and indicates a decrease compared to year-end 2016, as this ratio was 143.7 percent.

Premium Written Analysis Since RRGs are restricted to liability coverage, they tend to insure medical providers, product manufacturers, law enforcement officials and contractors, as well as other professional industries. RRGs collectively reported over $3.2 billion of direct premium written (DPW) through year-end 2017, an increase of 5.9 percent over 2016. RRGs reported nearly $1.8 billion of net premium written (NPW) through year-end 2017, an increase of less than 1 percent over 2016. The DPW to policyholders’ surplus ratio for RRGs collectively through year-end 2017 was 64 percent, down from 64.9 percent in 2016. The NPW to policyholders’ surplus ratio for RRGs through year-end 2017 was 35.8 percent and indicates a decrease over 2016, as this ratio was 38.2 percent. An insurer’s DPW to surplus ratio is indicative of its policyholders’ surplus leverage on a direct basis, without consideration for the effect of reinsurance. An insurer’s NPW to surplus ratio is indicative of its policyholders’ surplus leverage on a net basis. An insurer relying heavily on reinsurance will have a large disparity in these two ratios. A DPW to surplus ratio in excess of 600 percent would subject an individual RRG to greater scrutiny during the financial review process. Likewise, a NPW to surplus ratio greater than 300 percent would subject an individual RRG to greater scrutiny. In certain cases, premium to surplus ratios in excess of those listed would be deemed appropriate if the RRG had demonstrated that a contributing factor to the higher ratio is relative improvement in rate adequacy.

The loss and LAE reserves to policyholders’ surplus ratio for year-end 2017 was 98.9 percent and indicates a decrease compared to yearend 2016, as this ratio was 104.3 percent. The higher the ratio of loss reserves to surplus, the more an insurer’s stability is dependent on having and maintaining reserve adequacy. Regarding RRGs collectively, the ratios pertaining to the balance sheet appear to be appropriate and conservative.

June 2018 | The Self-Insurer


In regards to RRGs collectively, the ratios pertaining to premium written appear to be conservative.

Loss and Loss Adjustment Expense Reserve Analysis A key indicator of management’s commitment to financial stability, solvency and capital adequacy is their desire and ability to record adequate loss and loss adjustment expense reserves (loss reserves) on a consistent basis. Adequate loss reserves meet a higher standard than reasonable loss reserves. Demotech views adverse loss reserve development as an impediment to the acceptance of the reported value of current, and future, surplus and that any amount of adverse loss reserve development on a consistent basis is unacceptable. Consistent adverse

loss development may be indicative of management’s inability or unwillingness to properly estimate ultimate incurred losses. RRGs collectively reported adequate loss reserves at year-end 2017 as exhibited by the one-year and two-year loss development results. The loss reserve development to policyholders’ surplus ratio measures reserve deficiency or redundancy in relation to policyholder surplus and the degree to which surplus was either overstated, exhibited by a percentage greater than zero, or understated, exhibited by a percentage less than zero. The one-year loss reserve development to prior year’s policyholders’ surplus for 2017 was -5.2 percent and was more favorable than 2016, when this ratio was reported at -2.4 percent. The two-year loss reserve development to second prior year-end policyholders’ surplus for 2017 was -7.5

percent and was more favorable than 2016, when this ratio was reported at -6.9 percent. In regards to RRGs collectively, the both of these loss reserve development to prior year’s policyholders’ surplus ratios would be viewed as favorable.

Income Statement Analysis In regards to underwriting results, RRGs collectively were profitable in 2017. RRGs reported an aggregate underwriting gain for 2017 of $46.6 million. RRGs also collectively reported a net investment gain of $299.5 million and net income of $286.9 million. Looking further back, RRGs have collectively reported an annual net income at each yearend since 1996. The loss ratio for RRGs collectively, as measured by losses and loss adjustment expenses incurred to net premiums earned, through year-end 2017 was 73.3 percent,







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a decrease over 2016, as the loss ratio was 78.9 percent. This ratio is a measure of an insurer’s underlying profitability on its book of business. The expense ratio, as measured by other underwriting expenses incurred to net premiums written, through year-end 2017 was 23.7 percent and indicates an increase compared to 2016, as the expense ratio was reported at 23.4 percent. This ratio measurers an insurer’s operational efficiency in underwriting its book of business. The combined ratio, loss ratio plus expense ratio, through year-end 2017 was 97 percent and indicates a decrease compared to 2016, as the combined ratio was reported at 102.4 percent. This ratio measures an insurer’s overall underwriting profitability. A combined ratio of less than 100 percent typically indicates an underwriting profit. Regarding RRGs collectively, the ratios pertaining to income statement analysis appear to be appropriate. Moreover, these ratios have remained within a profitable range.

Conclusions Based on 2017 Results Despite political and economic uncertainty, RRGs remain financially stable and continue to provide specialized coverage to their insureds. The financial ratios calculated based on the reported results of RRGs appear to be reasonable, keeping in mind that it is typical and expected that insurers’ financial ratios tend to fluctuate over time. The results of RRGs indicate that these specialty insurers continue to exhibit financial stability. It is important to note again that while RRGs have reported net income, they have also continued to maintain adequate loss reserves while increasing premium written year over year. RRGs continue to exhibit a great deal of financial stability.

Douglas A. Powell

Douglas A Powell is a Senior Financial Analyst at Demotech, Inc. Mr. Powell supports the formulation and assignment of Financial Stability Ratings® by providing analysis of statutory financial statements and business information. He also performs financial and operational and peer group analyses, as well as benchmark studies for client companies. Email your questions or comments to dpowell@demotech.com. For more information about Demotech visit www.demotech.com.


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Conflicting Policies and Courts: When Plan Language Creates More Litigation than Coverage By: Catherine Dowie


ostly, working on any given subrogation file for a private, self-funded benefit plan is all about the hurry up and wait. Hurry to communicate with the injured party, their attorney, the adjusters, investigators, and make sure everyone knows to about the plan’s involvement and rights. Then wait for the completion of treatment, the compilation of damages and some initial negotiations before racing to remind everyone of those rights, and potentially racing to the courthouse to make sure those rights are preserved. As the Supreme Court reminded us in Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, timing is everything. 136 S. Ct. 651 (2016). For the most part, the bulk of the plan’s cost-containment opportunity has always come at the resolution of some liability claim, which is usually years after the bulk of the treatment and payments. Although many states require Medical Payments Coverage, Personal Injury Protection or some other form of no-fault coverage, they are typically in very small amounts. There are exceptions, of course, Michigan’s unlimited PIP scheme, potential advancement of funds in Montana under Ridley v. Guaranty National Insurance Co., and high-minimum states like New York and New Jersey, but usually very little coverage is available to alleviate the burden on a plan to pay up front or leave a member to address bills with providers directly. 951 P 2d 987 (Mont. 1997). 34

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In some circumstances, however, acting quickly when the case begins does turn up a policy that will meaningfully impact the plan’s liability from the start, where there is a policy for a specific loss or a high no-fault policy. The problem arises when these policies are designed to be excess, which they usually are.

with school and recreational policies. Schools will often secure excess policies for athletes or even students hurt in gym class, and they are common in adult recreational leagues (usually soccer, but I’ve handled a case where an adjuster was shocked to find that his company had issued a policy for a lawnmower racing league…).

An excess policy is a policy designed to provide coverage only when no other coverage exists. They are often inexpensive because they are designed to often only bear liability for a patient’s copayment or deductible obligations, rather than the bulk of the responsibility for medical claims. Some are also only designed to cover bills

Various Federal Circuit Courts of Appeal have heard this question and have reached a somewhat surprising conclusion, especially following the Montanile decision from the Supreme Court in 2016. There is a long-standing split between the circuits on this question. See Auto Owners Ins. Co. v. Thorn Apple Valley, Inc., 31 F.3d 371 (6th Cir. 1994) (terms of an ERSIA plan are enforceable over conflicting policy language of an insurer) c.f. Winstead v. Ind. Ins. Co., 855 F.2d 430 (7th Cir. 1988) (apportioning liability for claims pro rata).

associated with a specific event or activity, such as high school sports. This issue frequently arises not only in the context of automobile no-fault coverage, but

So, what happens when a health plan has a valid excess provision, but the accident or automobile policy that covers a specific incident does as well? Although ERISA might allow a plan to preempt state laws, policy or plan provisions may call for a slightly different analysis.

Both of these cases addressed Michigan PIP policies, which provide unlimited coverage for, among other things, medical bills related to automobile accidents. Both the PIP policy and the health plans involved in the dispute had excess provisions, and in both cases the auto insurer filed suit, asking the court to declare that the that the health plan should pay the bills as primary.


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June 2018 | The Self-Insurer


The 6th Circuit concluded that the ERISA plan terms were not entitled to any deference over the terms of the auto policy and ordered the two litigants to pay the claims on a prorated basis. Straightforward enough. Neither policy had a cap on coverage, and the outstanding bills could be split on a 50/50 basis. One significant problem with this decision as applied to slightly different facts, is how does one pro-rate a theoretically infinite policy with a more standard PIP policy which might have limits of $10,000 or less. McGurl v. Trucking Emps. of N.J. Welfare Fund, Inc. , 124 F.3d 471, 485 (3d Cir. 1997) (noting that it is “unclear how the rule [prorating] would operate in practice”). The 7th Circuit, when faced with the same issue, gave more weight to the primary purpose of ERISA. These conclusions were perfectly in line with what the Supreme Court would later point out, the whole reason that the plan, “in short, is at the center of ERISA” and “[t] his focus on the written terms of the plan is the linchpin of ‘a system that is [not] so complex that administrative costs, or litigation expenses, unduly discourage employers from offering [ERISA] plans in the first place.’ ” Helimeshoff v. Hartford, 134 S.Ct. 604, 612 (2013) (quoting Varity Corp. v. Howe, 516 U.S. 489, 497 (1996)). Without giving force to valid and clear terms, uniform nationwide enforcement would be undercut. In the last 5 years, this issue has been somewhat frequently litigated in the context of nonautomobile excess policies.1 In addition to the existing split on what weight to give the terms of an ERISA plan, courts have now drawn a distinction based on if the plan paid claims before initiating suit.

Courts have allowed plans to pursue declaratory relief, obligating the insurer to issue payment in the future, but not recover from insurance policies with excess provisions once the plan has already paid claims. This pre/post payment distinction is based on the idea that plans can only seek a monetary award with a court if they can identify a specific pool of money that they have a right to, like a settlement fund, which does not exist when benefits are being coordinated between two payors. Additionally, some insurers have argued that ERISA is irrelevant even to the determination of primary liability for payment, asking courts to leave these “runof-the-mill contract disputes” to state courts. As one court noted: The paradoxical result [of this argument] is that as an ERISA plan, has fewer remedies than it would if it were a non-ERISA plan, and its beneficiary, through no fault of his own, is considerably worse off for having two policies that coincidentally had conflicting language than he would be if he had only one. One might think that the underlying purposes of ERISA and of equitable relief generally would permit a court to fashion an appropriate remedy. Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Gerber Life Ins. Co., 771 F.3d 150, 159 (2d Cir. 2014). As long as these issues remain unresolved, health plan liability will remain uncertain, and insurers and plans alike will be encouraged to leave claims denied and turn to courts before issuing payments. This leaves plan participants to deal with bills everyone agrees will not ultimately be their responsibility, and forces plans into a position where they may risk loss of discounted rates


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What are clients saying about our EmCap® program? “You have become a key partner in our company’s attempt to fix what’s broken in our healthcare system.” - CFO, Commercial Construction Company

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People are talking about Medical Stop Loss Group Captive solutions from Berkley Accident and Health. Our innovative EmCap® program can help employers with self-funded employee health plans to enjoy greater transparency, control, and stability. Let’s discuss how we can help your clients reach their goals. This example is illustrative only and not indicative of actual past or future results. Stop Loss is underwritten by Berkley Life and Health Insurance Company, a member company of W. R. Berkley Corporation and rated A+ (Superior) by A.M. Best, and involves the formation of a group captive insurance program that involves other employers and requires other legal entities. Berkley and its affiliates do not provide tax, legal, or regulatory advice concerning EmCap. You should seek appropriate tax, legal, regulatory, or other counsel regarding the EmCap program, including, but not limited to, counsel in the areas of ERISA, multiple employer welfare arrangements (MEWAs), taxation, and captives. EmCap is not available to all employers or in all states.

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or access to other benefits that are only available if payment is made within a specific timeframe. Health plans can seek to preserve enforcement of their terms through diligent investigation and coordination with – and education of – all parties and payors as soon as claims are incurred.

References 1 Dakotas & W. Minn. Elec. Indus. Health & Welfare Fund v. First Agency, Inc., 865 F.3d 1098 (8th Cir. 2017); Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Am. Int’l Grp., Inc., 840 F.3d 448 (7th Cir. 2016); Cent. States v. Student Servs., 797 F.3d 512, 60 EBC 1857 (8th Cir. 2015); Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Gerber Life Ins. Co., 771 F.3d 150 (2d Cir. 2014); Cent. States, Se. & Sw. Areas Health & Welfare Fund v. First Agency, Inc., 756 F.3d 954 (6th Cir. 2014); Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Health Special Risk, Inc., 756 F.3d 356 (5th Cir. 2014); Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Bollinger, Inc., 573 F. App’x 197 (3d Cir. 2014).

Catherine Dowie advanced from The Phia Group’s recovery department to The Phia Group’s legal team in 2014 and took on the role of Manager of Legal Subrogation and Reimbursement Services in 2017.  Catherine and her team are responsible for handling complex subrogation and recovery cases and recover millions of dollars each year for self-funded employers. Catherine also spearheads legal research efforts for The Phia Group, ensuring that Phia can assist health plans in taking full advantage of their recovery rights. Catherine not only assists The Phia Group’s clients with cases that require litigation, but has worked on amicus briefs for cases before the Supreme Court of the United States. Catherine is expected to graduate with her J.D. from Suffolk University School of Law in May of 2018.  Catherine passed the Uniform Bar Exam in Vermont during her final semester of law school and will be seeking admission to the Vermont and Massachusetts Bars upon receipt of her degree.  She earned her B.A. in American Government and Computer Science from Smith College and is also a Certified Subrogation Recovery Professional (“CSRP”).


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The 38th National Educational Conference and Expo is September 23-25th at the JW Marriott in Austin, Texas


he SIIA National Educational Conference and Expo is the world’s largest event focused exclusively on the self-insurance/captive insurance marketplace and typically attracts more than 1,700 attendees from around the United States and from a growing number of countries around the world. The 38th National Educational Conference and Expo is September 23-25th at the JW Marriott in Austin, Texas.

The robust educational program for this conference incorporates two great general session presentations and nearly 40 breakout sessions. The breakout sessions are further organized by subject matter tracks related to self-insured group health plans, captive insurance and selfinsured workers’ compensation programs.


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New for this year, SIIA has developed a new “Fusion” track that focuses on industry topic with likely crossover interest among multiple constituencies within the overall self-insurance marketplace.You will not see this at any other industry conference.

Consistent with the SIIA Future Leaders Initiative, the conference will feature two sessions specifically for this group of younger attendees (under 40).

This year’s keynote session “Designing your business for the 21st century” will be presented by Mike Walsh, Founder and CEO of Tomorrow, a global consultancy that helps design 21st century businesses. “Most companies are simply not designed to survive. They become successful on the basis of one big idea or breakthrough product,” says Walsh. “The companies that will thrive in the near future are the ones not only embracing change but breaking the rules.” Companies built to survive the future are no accident. They are a result of deliberate business design decisions smart leaders are making today. In his ongoing

disruptive innovation, adopting a data-driven mindset and leading change through digital transformation.

The other general session, “Election Day Preview & The SIIA Political Poll” will begin by getting a glimpse of how SIIA members view various political candidates and a variety of public policy issues. Audience members will be invited to participate via a polling technology tool that allows attendees to vote with their cell phones or other mobile devices. Results will be displayed in real time – it promises to be fascinating!

After this interactive warm-up, Guy Benson, sometimes referred to as the “The Millennial Conservative,” Political Editor of Townhall.com, and a Fox News contributor, will take the stage to share his insights and commentary about the upcoming elections and the hottest political issues of the day. In 2017 the Huffington Post included Guy in its roster of the top 25 millennial broadcasters in American news and politics. In addition, he is regular guest host for the Hugh Hewitt Show and often appears on a variety of political talk shows.

More information on the 38th National Educational Conference and Expo, including registration, can be found at www.siia.org.

research on the world’s most innovative companies, Walsh has organized these decisions into seven strategic priorities - that he will explore with audiences as a roadmap for their own reinvention. In this keynote, Walsh will outline the megatrends shaping the future of business and consumer behavior, and the lessons learned from successful Fortune 500 companies on leveraging

June 2018 | The Self-Insurer


April 17-19, 2018 Monterrey, Mexico

INTERNATIONAL CONFERENCE Attendees had the opportunity to have an authentic Mexican breakfast in the historic Villa de Santiago, known as one of the area’s “Magic Towns,” full of tradition and natural beauty.


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Attendees enjoyed a wonderful evening of food, drink and socializing at a great restaurant where “the locals” go.

Look no further. Everyone claims to keep sight of the customer. But do they really? We do. At Companion Life, you can count on teamwork with individual attention. That’s a real advantage. We anticipate trends, identify opportunities, but, most importantly – we listen to you. We brainstorm with our partners. Together, we create products and solutions or carve out new distribution channels to get an early foothold in the market. Looking to the future is a large part ofour vision. We focus on relationships and listening. Together, we’ll go places. Call us. We’ll take the time to listen.

stop loss limited benefit health plans short-term medical medicare supplement

800-753-0404 Companion Life’s Specialty Markets

Rated A+ by A.M. Best Company. Rating as of Dec. 19, 2017. For the latest rating, visit ambest.com.

June 2018 | The Self-Insurer


The group went on a guided tour to see the inner workings of one of of Monterrey’s top medical facilities, Hospital Angeles Valle Oriente


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A medical stop loss grand slam. A trusted business name. A stellar balance sheet. An executive team with 30 years of experience. Creative, tailored solutions. Berkshire Hathaway Specialty Insurance is proud to bring our exceptional strength, experience and market commitment to the medical stop loss arena.

It’s a home run for your organization.

www.bhspecialty.com/msl Asheville | Atlanta | Boston | Chicago | Houston | Irvine | Indianapolis | Los Angeles | New York | San Francisco | San Ramon | Seattle Stevens Point | Auckland | Brisbane | Dublin | DĂźsseldorf | Hong Kong | Kuala Lumpur | London | Macau | Melbourne | Singapore | Sydney | Toronto



May 15-17, 2018 Belmond Charleston Place, Charleston, SC

Networking reception at the Self-Insured Workers’ Compensation Executive Forum


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Your Payment Problems


Meet the solution that delivers: Connection with over 900,000+ providers Compliance across HIPAA, PCI, OFAC, and IRS 1099 reporting

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Efficiency that streamlines internal and external operations Ease of Use by working with your existing file formats

Contact us today. 440.835.3511 sales@echohealthinc.com echohealthinc.com

Attendees in the Exhibit Hall area

Networking Reception


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Attendees participated in a strong educational program, focusing on such topics as excess insurance and risk management strategies


Capital Group Principals at Work.

In 2017, Ansley Capital Group, through its FINRA registered broker-dealer Ansley Securities, advised some of the most well-respected entrepreneurs in the self-funded insurance market on their partnerships with strategicly focused private equity funds.

Services. Savings. Solutions

February 2017


Healthcare Cost Management

March 2017

September 2017

For more information visit www.ansleycapital.com

June 2018 | The Self-Insurer


Networking break


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Whether you’re looking at a claims administration system for the first time or are tired of navigating the complicated maze of your current system, Hi-Tech Health can provide a customized software solution which will eliminate your frustration and put you on the right path to success.


Claims Administration Puzzle

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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. 52

The Self-Insurer | www.sipconline.net

Diamond Members Symetra Names Jeremy Freestone SVP, Medical Stop Loss Symetra Life Insurance Company, a medical stop-loss pioneer and leading carrier for more than 40 years, announced the promotion of Jeremy Freestone to senior vice president for its medical stop-loss insurance business. Freestone was most recently vice president and senior actuary, Benefits Division. In his new role, he assumes responsibility for all aspects of Symetra’s stop-loss business, including sales, underwriting and claims. He also will continue to lead the stop-loss actuarial function. Based in Symetra’s Bellevue, Washington headquarters, Freestone will report to Michael Fry, executive vice president, Benefits Division. “Symetra’s medical stop-loss unit is a cornerstone of our Benefits Division business line and a critical component of the solutions-driven product suite we offer employers looking to effectively manage their healthcare costs,” said Michael Fry. “As we continue to invest in our stop-loss operations, we are fortunate to have a leader with Jeremy’s proven abilities ready to step up and drive the business forward with clarity, creativity and a customer-centric focus.”

insurance also protects against unexpectedly large amounts of total medical claims. In such a case, the coverage kicks in once a certain amount has been paid by a client toward all of its employee medical bills. About Symetra Symetra Life Insurance Company is a subsidiary of Symetra Financial Corporation, a diversified financial services company based in Bellevue, Washington. In business since 1957, Symetra provides employee benefits, annuities and life insurance through a national network of benefit consultants, financial institutions, and independent agents and advisors. For more information, visit www.symetra.com.

Freestone joined Symetra in 2005 as an actuarial assistant. He is a Fellow of the Society of Actuaries, a member of the American Academy of Actuaries, and earned a Bachelor of Science in mathematics from Western Washington University in Bellingham, Washington. Medical stop-loss insurance protects companies that self-fund their health insurance plans against large or catastrophic claims. Employers with stop-loss insurance are reimbursed for individual employees’ medical costs above a certain pre-determined dollar amount. Stop-loss

Innovat ive Sof t ware Solutions f or Pricing Analysis & Design of Healt hcar e Plans

June 2018 | The Self-Insurer


Voya Financial Names Daniel Palermino to lead sales efforts for Employee Benefits business Voya Financial, Inc. announced it has appointed Daniel Palermino as vice president, Sales, for the company’s Employee Benefits business, effective April 23. In the new role, Palermino leads Voya’s Executive Regional Managers (ERMs) in new sales, retention and re-enrollment in support of the company’s voluntary benefits, group life and disability insurance, and stop loss distribution strategies. He reports directly to John B. “Brad” Galiney, senior vice president of Employee Benefits Distribution, and will be based out of Voya’s Braintree, Massachusetts, office.

“Dan has a solid background in group benefits sales and strategic leadership that will complement the strong and deep talent of our team,” said Galiney. “His proven track record of leading teams in achieving profitable growth, and in building strong partnerships with distribution organizations, will help us deliver products and services to round out employers’ benefits portfolios and offer employees important financial protection solutions.” Palermino has 24 years of experience in the employee benefits industry. Prior to joining Voya Employee Benefits, Palermino was vice president and head of Employee Benefits Distribution at AXA Employee Benefits, where he led a multi-channel distribution and field service organization. He also previously served in leadership roles at other organizations, including as head of sales for AIG’s core and voluntary benefits.

“I am excited to join Voya Employee Benefits and be part of an organization that puts so much emphasis on what customers truly need and works closely with Voya’s retirement and investment teams to provide comprehensive financial solutions,” said Palermino. “I look forward to working with the team and our distribution partners to arm clients and their employees with solutions that will help prepare them financially for life’s challenges.” Voya Employee Benefits offers stop loss, group life, voluntary benefits and disability income insurance products to employers and their employees. The business has extensive experience in the design, implementation and administration of employee benefits plans, and it offers a full range of supplemental voluntary products that include critical illness/specified disease, accident and hospital confinement indemnity insurance.  As an industry leader and advocate for helping Americans retire better, Voya Financial is committed to delivering on its vision to be America’s Retirement Company®, and its mission to make a secure financial future possible — one person, one family, one institution at a time.

Media Contact: Donna Sullivan                                                  Voya Financial                                                  Mobile: (860) 306-5792 donna.sullivan@voya.com                                  


The Self-Insurer | www.sipconline.net


WHEN EVALUATING STOP LOSS CARRIERS, JUST LOOK AT THE NUMBERS. Looking for assurance that Guardian Stop Loss Insurance will protect you against catastrophic claims and higher-than-expected medical plan usage? Our numbers speak for themselves: 155 years of financial stability, so you know we’ll be there when you need us

98 (out of 100) score from Comdex, making us one of the most highly rated insurers1

Average turnaround time of just 5 days on claims, whether $10K or $10M2

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)

Renalogic Announces Laura Gebers, Mark Masson and Jim

About Voya Financial® Voya Financial, Inc. (NYSE: VOYA), helps Americans plan, invest and protect their savings — to get ready to retire better. Serving the financial needs of approximately 14.7 million individual and institutional customers in the United States, Voya is a Fortune 500 company that had $8.6 billion in revenue in 2017. The company had $555 billion in total assets under management and administration as of Dec. 31, 2017. With a clear mission to make a secure financial future possible — one person, one family, one institution at a time — Voya’s vision is to be America’s Retirement Company®. Certified as a “Great Place to Work” by the Great Place to Work® Institute, Voya is equally committed to conducting business in a way that is socially, environmentally, economically and ethically responsible. Voya has been recognized as one of the 2018 World’s Most Ethical Companies® by the Ethisphere Institute, one of the 2018 World’s Most Admired Companies by Fortune magazine and one of the Top Green Companies in the U.S. by Newsweekmagazine. For more information, visit voya.com. Follow Voya Financial on Facebook, LinkedIn and Twitter@ Voya.


fo r

S er v

ice O rganiz a

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continues to be the leader in dialysis cost containment within the self-funded industry, by expanding our footprint in the solutions we deliver and by investing in our people and processes while focusing on organizational health. It is a strategic focus for me as the CEO of this organization given we expect to double our staff by the end of this year,” says Lisa Greenblott Moody, President and CEO of Renalogic. “I am very excited to have our newest team members on board already practicing and embracing the passion for our cause. We truly are revolutionizing how the industry thinks about dialysis and kidney disease. It is a preventable and even avoidable condition and so are the costs associated with it. Our growing team is evidence that we are making a positive difference in the management of kidney disease and changing the way we address the provider profiteering and chronic disease epidemic issues in this country.”

O rga ic e







Renalogic is proud to welcome Laura Gebers, Mark Masson and Jim Wachtel to our Executive and Clinical leadership teams. To support our continued growth, they join six other new hires including three registered nurses certified in case management, a project manager, a business data analyst and a chronic kidney disease project coordinator. Renalogic is headquartered in Phoenix, AZ with additional full-time staff members in eleven states across all regions.

nizati on s


Wachtel to Executive and Clinical Leadership Teams



The Self-Insurer | www.sipconline.net

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

Laura Gebers, MSN, RN, Senior Director of Clinical Services Laura will be responsible for advancing the Chronic Kidney Disease and Diabetes Management Program for a more comprehensive service that identifies people who are at risk for Chronic Kidney Disease progression and/or Diabetes. Laura leads the national clinical team which provides outreach, coaching, education and advocacy to equip program participants to best understand how to manage risk factors that will optimize their health outcomes. Laura has been a nationally recognized clinical leader for over thirty years, joining Renalogic after her departure from DaVita Medical Group. Laura specializes in population health to champion practices for excellence in patient care, regulatory compliance, clinical quality measures with outcome reporting, patient safety, and health education. Laura received her Bachelor of Science in Nursing from Thomas Jefferson Magna Cum Laude; and her Master of Science in Nursing with an emphasis on healthcare informatics; graduating with high distinction from Rutgers State University of New Jersey-Newark.  Mark S. Masson, Executive Vice President New Markets and Business Development Mark will be responsible for identification and strategy on entering new markets and market segments, finding additional partners, channels, and product development opportunities. He will ensure they share the mission, vision and core values of Renalogic. Mark joins the Renalogic Executive Team led by Lisa Greenblott Moody, President and Chief Executive.


The Self-Insurer | www.sipconline.net

Mark has been a healthcare executive for over 20 years. Mark specializes in impacting and optimizing organizations across multiple healthcare disciplines including providerbased, managed care, cost containment, niche Medicare, Medicaid support, health and wellness and PBM. Mark received his Bachelor of Business Administration in Marketing and Management and Master of Business Administration from Baylor University, Hankamer School of Business.

Jim C. Wachtel, Executive Vice President Sales and Marketing Jim will be responsible for sales and marketing innovation, strategy and operations while implementing comprehensive solutions to current and future clients. Jim leads a team of elite healthcare sales and marketing professionals across the United States. Jim joins the Renalogic Executive Team led by Lisa Greenblott Moody, President and Chief Executive. Jim has been a healthcare and financial executive for over 20 years. After distinguished service in the U.S. Army, Jim has been building high performing businesses and teams that produce measurable results throughout his career. Jim has a track record of successfully entering new healthcare markets and producing substantial results. Jim received his Bachelor of Business Administration with an emphasis on military science and commercial flight operations from Clarke University and his Master of

Business Administration from The University of Iowa Tippie College of Business.

About Renalogic Renalogic has been the industry leader in dialysis cost containment for 16 years and continues to innovate through the impact of The Renalogic Chronic Kidney Disease and Diabetes Management Program. We are not abandoning dialysis cost containment. We are revolutionizing it by simplifying the costs and clinical complexities of chronic kidney disease to make a positive impact on reducing the dialysis incidence rate in every population we touch. Every chronic condition leading to kidney disease is manageable and even preventable when identified early. Contact Shelley ‘Mac’ McKown, Senior Account Representative, at smckown@ renalogic.com and visit www.renalogic.com.

Joseph (Joe) Byers has joined the Accident & Health Group (A&H) of Swiss Re Corporate Solutions, North America as Vice President, Business Development Manager for the Midwest Region. Mr. Byers has extensive experience in the Employer Stop Loss industry including Underwriting, Sales and Sales Management, includes national sales experience. The Midwest Region covers Michigan, Ohio and Indiana where Mr. Byers will be responsible for maintaining our existing payer and broker relationships, as well as developing new business opportunities.

June 2018 | The Self-Insurer


About Swiss Re Corporate Solutions A&H The Accident & Health Group of Swiss Re Corporate Solutions has been providing in-depth product knowledge and solutions to customers since 1975. Our long history and continuity in this market gives both our policyholders and their trusted advisors confidence in knowing they are backed by experts who adapt to market trends and provide market-leading capacity. Our Employer Stop Loss portfolio includes: medical stop loss, group stop loss captives, and an organ transplant solution program. We are a direct writer for self-insured employer groups in all 50 states and coverage is underwritten by Westport Insurance Corporation, rated “A+ (Superior)� by A.M. Best Company.

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

Koehler LLC

distributed in a digital and print format to reach over 10,000 readers around the world. The Self-Insurer has been delivering information to 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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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 Joseph Antonell CEO/Principal A&M International Health Plans Miami, FL 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

HEALTH CARE COMMITTEE Kari L. Niblack, JD, SPHR CEO ACS Benefit Services Winston-Salem, NC

Robert Tierney President StarLine East Falmouth, MA

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

Committee Chairs

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

CAPTIVE INSURANCE COMMITTEE Michael P. Madden Division Senior Vice President Artex Risk Solutions, Inc. San Francisco, CA GOVERNMENT RELATIONS COMMITTEE Lawrence Thompson CEO BSI Fresno, CA

*Also serves as Director

June 2018 | The Self-Insurer


SIIA New Members Regular Corporate Members Stephanie Harless Administrative Assistant 90 Degree Benefits Birmingham, AL

Brad Garrigues Providence Health Plan Portland, OR

Philip Healy Executive Director AWANE Peterborough, NH

Chad Fitterer Vice President U.S. Bank Minneapolis, MN

Anne Richter President Accresa Carrollton, TX

Employer Corporate Members

Annemarie Benton Manager, Managed Care Caris Life Sciences Phoenix , AZ

Michelle Lee Director, Client Services AscellaHealth, LLC Berwyn, PA

RamonGonzalez Director, Clinical Bill Review Services Equian Indianapolis, IN

Jeremy Ramsland Director, Network Development Hawaii-Mainland Administrators Tempe, AZ

Gerald Young President & CEO Hopewell Risk Strategies Houston, TX

Arbor Benefit Group Proven Solutions. Exceptional Service.

For more than 18 years we have been a trusted source for your Stop Loss needs; Helping business maintain profitability with customized Stop Loss products and cost containment services.

INTEGRITY . STABILITY. DEDICATION For more information, please contact Karen Harrison by telephone at 860.631.5889 or via email at KarenH@arborbg.com Arbor Benefit Group, L.P. | www.arborbg.com


The Self-Insurer | www.sipconline.net


Partner with Zelis Healthcare to SAVE UP TO 85% Identifying plan participants who are at-risk for highdollar dialysis claims can be the difference between $8,000 and $100,000 in monthly claim costs. Through the Zelis Dialysis Savings & Support Program, you can secure the deepest savings for dialysis claims. We effectively identify and manage claims before, during and after treatment has begun by utilizing multiple methods utilizes technology, tools and expertise to obtain savings to ensure that you pay the appropriate cost for your Dialysis claims.

Better Service. Better Performance.

Copyright 2018 Zelis Healthcare. All rights reserved.

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



in annual healthcare waste & abuse too much?

YES. At Zelis Healthcare, we’ve combined our technology, expertise, and services to pull waste from the system, improve workflow and deliver industry leading levels of service and performance. Every Network. Every Claim. Every Payment. Every Day. In fact, over 85% of the time, we identify additional savings other companies are unable to find.1

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

Better Service. Better Performance. zelis.com Copyright 2018 Zelis Healthcare. All rights reserved.

Data on File. Zelis Healthcare. 2018.


Profile for SIPC

Self Insurer June 2018  

Self Insurer June 2018