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Prognostication SIIA keynoters predict politics and the future of business
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Table of contents
NOVEMBER 2018 VOL 121
W W W. S I P C O N L I N E . N E T
FEATURES 4 The Power of Prognostication SIIA keynoters predict politics and the future of business By Bruce Shutan
20 Responding to Catastrophic Weather, Captives Answer the Call
By Karrie Hyatt
ARTICLES 26 ACA, HIPAA and Federal Health Benefit Mandates The Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates
News from siia members
38 Don’t Let Your LOAs Leave You DOA: Part II - States Speak Up! 44 outside the beltway: SIIA Members Are Vigilant Advocates In State Challenges to Self-Insurance
The Self-Insurer (ISSN 10913815) is published monthly by Self-Insurers’ Publishing Corp. (SIPC). Postmaster: Send address changes to The Self-Insurer Editorial and Advertising Office, P.O. Box 1237, Simpsonville, SC 29681,(888) 394-5688
Self-Insurer’s Publishing Corp.
PUBLISHING DIRECTOR Erica Massey, SENIOR EDITOR Gretchen Grote, CONTRIBUTING EDITOR Mike Ferguson, DIRECTOR OF OPERATIONS Justin Miller, DIRECTOR OF ADVERTISING Shane Byars, EDITORIAL ADVISORS Bruce Shutan and Karrie Hyatt, 2018 Self-Insurers’ Publishing Corp. Officers James A. Kinder, CEO/Chairman, Erica M. Massey, President, Lynne Bolduc, Esq. Secretary
The Power of
WRITTEN BY BRUCE SHUTAN
SIIA keynoters predict politics and the future of business
rystal balls were on full display at SIIA’s National Educational Conference & Expo at the JW Marriott in Austin, Texas. Two captivating keynoters shared their expert insight into the future of business and politics with a record-breaking 1,900 attendees of the world’s largest event focused exclusively on the self-insurance and captive insurance marketplace. Although most conference attendees identified themselves as Republicans in a Slido.com straw poll, they feared the GOP would lose their House majority in the mid-term election and that President Donald Trump would face a primary challenge in 2020. Those results appeared to be “largely on target” based on historical patterns involving the fate of political parties in power, according to Guy Benson, political editor for Townhall.com. Top-ranking GOP strategists and senior officials have told him they worry about voter complacency and deem Trump’s red-wave prediction on Twitter harmful. He predicted that Democrats will win the House, while Republicans will hold onto the Senate, which could benefit Trump given the inertia associated with a GOP majority across Congress. “Trump likes having something to play off of and a foil,” opined Benson, a Fox News contributor sometimes referred to as the “the Millennial Conservative.”
POWER OF PROGNOSTICATION He sought to determine what algorithms, artificial intelligence (AI) and data analytics that are reshaping daily activities will mean for business – sometimes referencing Brave New World applications. For example, he said footwear can be fitted with technology that guides consumers to store shelves with products that might interest them most based on their buying patterns.
Guy Benson As many as 40 House seats hang in the balance, according to a Cook Political Report analysis. In the Senate, 24 Democrats and nine Republicans are up for re-election, but he said that based on the previous election it’s doubtful that the GOP will lose their 51-49 majority. At the state level, Benson noted that 33 governors are in power compared with just16 Democrats and one independent in Alaska. Regardless of which party runs Congress after Election Day, Corporate America is at a crossroad where adapting to a changing marketplace spells the difference between success and failure. Futurist Mike Walsh wowed the crowd with a fast-moving and self-deprecating presentation on megatrends he believes will shape the future of business and consumer behavior. The CEO of Tomorrow examined how companies can leverage disruptive innovation, adopt a data-driven mindset and embrace digital transformation.
Walsh also noted that facial recognition is becoming the primary way to authorize transactions in China whose stores are fully automated.
There’s also a device that detects worker fatigue, he said, while data can be leveraged in real time to assess consumer behavior and adjust insurance risk. Walsh referenced John Hancock, which recently announced that it won’t sell life insurance to people who aren’t part of a wellness program called Vitality.
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POWER OF PROGNOSTICATION Disruptive innovators include Hitachi, which he said is using AI to identify the causes of poor health and have identified 150 data points for 45,000 unhealthy employees. Another is MassMutual, whose Haven Life spinoff leveraged 15 years of life insurance data to offer more affordable products online. Quipping that Millennials will be passé by 2030, Walsh suggested that companies court a new generation that has grown up with gadgets. As such, he suggested that it’s more valuable to have performance-driven people who are agile thinkers and make good decisions in ambiguous situations than a specific skill set when it comes to recruiting and retaining top talent. Young people now expect businesses to anticipate their needs and make interactions more personal as big data and customer obsessions continue to meld, according to Walsh. He suggested that attendees ask this segment of their workforce for their feedback on how the technology shaping their lives can be applied to customers.
How and why Millennials should enroll in health plans Millennials may not think there’s any need to enroll in their company’s health plan between a repeal of the individual mandate under the Affordable Care Act and ability to stay on a parent’s plan until age 26. But their participation can be valuable to both young employees as well as the self-insured group health plan’s risk pool, explained Erin Weenum, employee benefit strategist for Leavitt Group in the session “Keeping Millennials on Your Self-Insured Health Plan.” Millennials, who were born after 1980, average just $2,647 a year in health care spending vs. $8,670 for Baby Boomers, according to the Petersen-Kaiser Health System Tracker. As many as 46% of the U.S. workforce will be comprised of Millennials by 2020, Weenum noted, believing recruitment and retention of this segment is crucial, especially if the labor market remains tight. However, they find benefits difficult to understand. A 2016 TransUnion Healthcare Millennial Report noting that 74% of them do not pay their medical bills in full, while 46% would be more apt to do so if they understood their out-of-pocket costs upfront. She cited other notable statistics suggesting that 16% do not have any health insurance and 80% do not have a health savings account. Since many Millennials are not in a high tax bracket and won’t care about their triple-tax benefits, she said HSAs need to be communicated as simply a mechanism to self-fund their health care.
There’s a fear that automation will end jobs, he said, but the reality is that they’ll simply change (i.e., someone will need to maintain machines). For example, he noted that ATMs enabled bank tellers to transition into a new strategic role of cross-selling financial products. Walsh described the future as an invitation for everyone to think in new ways, noting that the best thinkers in history had the courage to embrace dangerous ideas that drive disruptive innovation.
POWER OF PROGNOSTICATION A first critical step is to identify the employee benefits most important to Millennials, she urged attendees. This segment of the workforce is well educated and energetic, she said, but they’re also financially fragile and unprepared for the future with higher levels of stress and depression and a more difficult path to homeownership. Among the benefits that may resonate most with younger employees: student loan repayment and employer-assisted home purchase programs, as well as medical tourism and holistic employee assistance programs that accommodate chiropractic, massage therapy or acupuncture services. These programs can be wrapped around self-insured medical plans to help recruit and retain Millennials, she added. Careful communication is critical to the success of Millennials signing up for coverage, according to Weenum, who said they struggle to identify with a benefits brand that doesn’t fit their conception of social media’s personalized messaging. So rather than brand plan documents with standard insurance descriptions, she suggested self-insured employers simplify the description of plan offerings and emphasize that they care about them. Millennials also want online open enrollment to work more like the Amazon shopping experience, she said. Many TPAs and ASOs have mobile apps, which can help self-insured employers court this segment of the workforce. Some platforms include text messages with prescription refill reminders or information about health care
advocates who can help them find the right specialty provider. But Weenum explained that there’s a need to integrate into these apps decisionsupport tools and resources to help navigate their way through the benefits selection process, as well as telemedicine, and include a mental health component.
Incentives, quality scores blaze path to engagement Employee buy-in is critical for all benefit plans, but by elevating their level of engagement, self-insured employers can actually burnish cost-containment strategies, several industry experts noted in a panel discussion session “Getting Employees on the Health Plan Cost Containment Team.” Member engagement is “an unbelievably important component” of health care, especially in the bundled surgery space or dealing with specialty drugs, noted Mark Davenport, SVP of sales for PriceMDs.com, whose proprietary search engine helps patients locate affordable prices for quality health care procedures worldwide. He suggested offering health plan members financial incentives to interact with high-quality clinicians, which could ultimately save hundreds of thousands of dollars. His firm was able to save a not-for-profit employer client more than $2 million on an orphan drug to treat hemophilia called NovoSeven, whose annual claims were $3.2 million. The employee who was prescribed this drug was paid a whopping $100,000 to follow cost-savings protocols.
POWER OF PROGNOSTICATION It’s also important to personalize health care for employees who are inundated with information and use targeted messaging alongside behavioral economics to explain that certain decisions will save money and improve their safety, said Jeff Rice, M.D., J.D., CEO of Healthcare Bluebook. His firm uses an algorithm to help large self-insured employers identify fair market prices for various hospital services. Rice has seen an elevenfold increase in patient engagement among those who are offered the right education and resources, including health care advocates.
Jeff Bernhard, president of Continental Benefits, said it’s imperative to provide employees with provider quality scores. More than 90% of the workforces that his TPA serves are clueless when it comes to deciphering quality. What’s needed is an independent third party with risk-adjusted data on numerous physicians and hospitals, according to Bernhard, who recommended contracting with Quantros, a leading provider of enterprise SaaS-based solutions and information services that advance health care quality and safety performance. “I’m not sure that there’s a huge trust factor with TPAs and insurance companies,” he added. Contracting with direct primary care services on a fixed monthly fee is an excellent alternative to capitated fees that can vary widely, observed Bill Hennessey, M.D., CEO of Pratter. He lauded Amazon and Priceline for their real-pricing model, which his firm applies to health care with “a cost concierge staffed by medical billers.” Pratter’s proprietary platform identifies by ZIP code known charges and claim allowables before services are actually rendered. He said independent physicians who “didn’t have to sell out to the hospital” tend to offer the best quality care. Other important cost-saving elements include wise plan design with narrow networks, benefit tiers and reference-based pricing. Mandatory second opinions should be built into all self-funded health plans for specialty procedures, which will help ensure 95% compliance, Bernard opined, citing Grand Rounds’ service as an example.
Bernhard suggested that employers focus on the 1% segment of the workforce that drives most of the selffunded plan’s health care spending and connect them with a direct primary care physician and health care coach. Patients with multiple chronic conditions that can be very costly need a health care advocate to guide them through the system 24/7, he noted. After hospital discharges, Bernhard recommended that nurse practitioners follow up with patients in their homes for a set amount of time to coordinate their aftercare and ensure adherence to prescription drug regimens. Requiring genetic testing for those who are prescribed specialty drugs agree will ensure that treatment is appropriate,
“There’s no sense in prescribing a biological drug to somebody that won’t benefit from it,” he added. he said.
POWER OF PROGNOSTICATION Synergy of medical stoploss and P&C captives touted The power of a stop-loss captive program for reining in rising health care cost is undeniable and gaining traction among many small and midsize employers. The same is true for group captives on the property and casualty side for controlling workers’ comp, auto and general liability insurance costs. Imagine the results when these separate solutions work in tandem, suggested an enthusiastic panel of industry experts during the session “Stop-Loss Captives Programs and P&C Group Captives – A Powerful Risk Management Combination.” Although Amanda Klimaski works only on the P&C side as captive director at Artex Risk Solutions, Inc., she has noticed more of her employer clients have shown interest in a medical stoploss captive over the past five to seven years. Despite a general reluctance to take on risk in this area and realization they have no control over what employees do outside of work to prevent illness and injury, she said the thinking is that if they can get employees to be healthier, then they can reap dividends on the work comp side and realize synergies in bridging these two silos. The lure of captive insurance for both areas is trickling down to middlemarket companies, Klimaski observed, noting that captive members have more control over pushing back on potentially fraudulent claims. There’s
also realization that every claim dollar that can be reduced puts money back in the pockets of employees in the form of bonuses, she added. The potential cost savings associated with captive insurance immediately piqued the interest of the Fall River Group, Inc., a family owned manufacturer founded in 1954 with 235 employees in two locations in southeast Wisconsin that specialize in foundering nonferrous alloys. Kevin Lamp, the company’s treasurer and chief financial officer, noted that after joining a stop-loss captive in 2014, a group captive was added the following year for work comp and general liability, which immediately saved 40% on premium. The number of members expanded from 42 to 58, capping annual growth to 10%.
“Experience modification for our foundry is 0.65, and that goes to the partners that we’ve had along the years to help us with our loss-control programs,” he reported. With that in mind, his firm sought to pursue a heterogeneous model – taking into account what the experiences might be in his volatile foundry business. A two-fisted strategy dovetailed nicely into the culture of health, wellness and safety that was created around loss control and employee engagement with their health plan. It also helped preserve a $250 annual deductible that’s antiquated in an age of high-deductible health plans, but deemed important in the eyes of family ownership.
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“We don’t want to create a situation where we have to increase premiums and take more money out of employee pockets,” Lamp said, noting that a first dividend distribution was shared with the workforce that’s well aware of the arrangements’ rewards. Prescription drug trend, especially in the specialty Rx arena, is a critical part of the manufacturer’s medical stop-loss program. Another panelist shared about the synergy of captive solutions for benefits and comp. “Our premiums have trended down,” reported Keith Coleman, EVP for Beard Construction Group, Inc., whose roughly 300 employees have been in a group health captive for about six years that has nearly 40 members and P&C captive for nearly 13 years. The P&C captive supports a safety culture with loss-control partners, meeting twice a year to share best practices, as well as learn from other members in terms of successes and failures. There hasn’t been a lost-time accident for Beard Construction Group in almost a decade. Fewer people are getting injured and everyone is doing a better job of loss control, according to Coleman. However, he sees auto liability with employees in company vehicles trending up. On the health side, cost-control is still an ongoing challenge given the pool of people employed, particularly in
Louisiana where he quipped that gumbo, jambalaya and Bud Light are so popular. It also hasn’t been easy implementing a wellness program for skeptical workers who suspect they’re being dinged for an additional premium. Coleman reported loss ratios of 20% on the P&C side and 90% on the health side, remarking that the latter is still a victory when factoring in an aging workforce and stable rate increase the following year. Indeed, Klimaski noted that on the medical stop-loss side the goal is to simply mitigate increases from one year to the next.
Eyeing blockchain technology apps for self-insurance While blockchain applications for self-insured health claims administration and related stop-loss insurance are still in their infancy, the technology is expected to set a new course for core transactions across the benefits landscape as well as a variety of industries. This was explored in the session “Exploring Blockchain Technology Applications for Self-Insurance – One Block at a Time.” “I think there’s a real opportunity within reinsurance specifically, and health care overall, for blockchain to, reinvent the market from a technology perspective of taking us to another level of interaction and integration,” observed Jeremy Martin, a technology consultant who has specialized in blockchain over the past three years.
POWER OF PROGNOSTICATION In the case of prescribing patterns, for example, he said everyone participating in the blockchain, including the manufacturer, distributor, doctor and pharmacist, can review an immutable audit trail and history of a particular prescription drug “from cradle to grave.” There’s also a sense of immediacy that can vastly improve clinical, administrative or operational processes. There’s no need to wait weeks for a pharmacy benefits management (PBM) download or guessing whether health plan members picked up their prescription or made it to a doctor’s appointment, according to Martin. “All that happens at the point of transaction in real time, and I would see it right then and there,” he said. Moreover, different capabilities involving contract renewals or meeting certain criteria before transactions are made (i.e., fulfilling annual deductibles) can be embedded into a private encrypted blockchain chain for all participating parties to view. “It allows for greater automation vs. having to touch and handle every step through the process,” Martin explained. Whatever parameters are required for a quote, including several years of census data or medical history, get loaded into the blockchain and transmitted to a carrier or managing general underwriter “without a whole lot of work and interaction,” he pointed out.
Data from winning bidders can be incorporated into a so-called smart contract to stipulate renewal dates, deductible accumulation and other terms, he said, while revisions can be easily made and finalized with digital signatures. Spending on blockchain technology is expected to reach $2 billion in 2018 from $945 million last year, noted Todd Roberti, CEO of Ringmaster Technologies, Inc., who moderated the blockchain panel discussion. Global revenue from an enterprise blockchain application is expected to reach $42 billion by 2025 from $19 billion today, he added. In the face of this explosive growth, there’s still a need to educate the selfinsurance community about the basics of blockchain. When people think about this emerging technology,
POWER OF PROGNOSTICATION Bitcoin often comes to mind, but Martin explained that it’s merely based on blockchain, which is a peer-to-peer network that replicates data across all the nodes that participate in a computer network. “There’s a lot more to it than the cryptocurrency,” he said. With blockchain, there’s no central point where information is stored and potentially more vulnerable to hackers or natural disasters, according to Martin. Rather, he said, it involves decentralized data that’s written into an encrypted chain of communication that all participating parties easily can modify or flag as suspicious. The result is a greater sense of transparency with real-time verification of information that’s stored inside the chain forever. As the central point where data is either pushed or pulled, third-party administrators stand to benefit from claim transactions being made in a more real-time environment, noted Wanda Owen, VP of operations for MedCost, LLC, a TPA. As formats become less important, she said blockchain participants “become trusted in the data that gets exchanged, whether it be for accumulators with a pharmacy vendor, 834s or stop-loss reimbursement claims.” The ability to recognize a coupon at the point of service for a pharmacy transaction can help revolutionize at least the member experience in that space, she added. It also can have a huge impact on PBM contracts.
Roberti, a co-founder of Zelis Healthcare whose new technology company is focused on blockchain, wondered whether self-insured payers in the future would simply enter formularies into a blockchain, agree on pricing with drug manufacturers and directly reimburse them as part of a smart contract instead of having PBMs handle the negotiations and legwork. “I don’t think that blockchain is really a threat to the PBM space,” opined Ryan Kelly, CTO of Capital Rx, a startup PBM. “The expertise that PBMs have in negotiating rebate contracts, working to develop a formulary and contracting with employers is still a necessary and very valuable activity.” Moving his company’s revenue cycle onto the blockchain could conceivably result in “same-day immediate settlement” in a real-time environment that would be beneficial for everyone, he surmised. In stark contrast, Kelly said PBMs typically are paid within two days followed by a two-week float back to pharmacies and rebates that are managed, on a six-month lag. For all its potential, blockchain isn’t expected to completely replace existing underwriting or adjudication platform. “This will be an ancillary add-on for real-time visibility,” Martin explained, noting minimal cost barriers in the “hundreds of dollars range” vs. millions. While blockchain technology in health care involves business-to-business applications, he foresees business-to-consumer uses such as electronic medical records that allow patients to control that information and become more engaged. He cited as an example an Amazon app that requires consumers to enter their data at every doctor visit.
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POWER OF PROGNOSTICATION Panel assesses all the moving parts of specialty Rx Specialty drug costs continue to be a thorn in the side of self-insurance with astounding price increases, but a panel of experts from various industry segments cautioned that there are multiple moving parts that must be assessed and no easy way to contain rising expenses. Christine Vago, who moderated the session “Taking 360-Degree View of Specialty Drug Issues and Trends Affecting Self-Insured Plans” and leads the national distribution of specialty health products as SVP of OneBeacon Health, noted that a 2018 drug trend report by the Pharmaceutical Strategies Group pegged the average treatment for a specialty drug at about $52,000, which exceeds the nation’s average median wage of $48,000. She cited other troubling statistics from the report, noting that specialty drug costs have soared 55% under the medical benefit since 2011 with double-digit annual specialty drug trend under the pharmacy benefit now the norm. In addition, she said specialty drugs are expected to account for half of the total U.S. drug spend by 2020, even though just 1% to 2% of Americans use them. The panel addressed several key culprits. Jakki Lynch, director of cost containment for Sequoia Reinsurance Services, LLC, identified “automatic fills, considering partial fills or split-fill programs for allowing for a less-than-30-day fill option for some drugs” as top cost drivers in the specialty drug distribution channel. Other considerations include the medical vs. pharmacy benefit, as well as site of care. “Because the costs and usage of specialty drugs are growing so quickly, this determination becomes more important,” she explained, “and the determination of medical benefit or pharmacy benefit usually now requires a drug-by-drug analysis.”
The high cost of R&D, marketing and a broken health care system are driving up specialty drug prices, said Steven T. Boyd, PharmD, BCPS, EVP of business development for Southern Scripts. To defray these expenses, he noted that drug companies inflate the cost of drugs that win Food and Drug Administration (FDA) approval (just one in 10 do), while rebate dollars are used as a pawn for investing in expensive direct-to-consumer marketing and advertising campaigns on television. He said the average cost of bringing a drug to market last year was $2.6 billion, according to the Tufts Center of Study and Drug Development. In some cases, Boyd said R&D may involve simply purchasing an ingredient for $10 billion and selling it at that amount annually over the next six years until the patent wears off. “Is that research and development?” he asked rhetorically. “No.”
SCRIPT CARE 16
POWER OF PROGNOSTICATION Marc A. Sweeney, PharmD, SVP of clinical consulting for ARMSRx Pharmacy Benefit Consulting and founding dean of the School of Pharmacy at Cedarville University, noted that the cost of drugs have been siloed off from medical costs. When Hepatitis C drugs came to market, for example, he said the value of those costly scripts was emphasized relative to “the overall medical management of those patients.” In assessing the cost and value equation, it helps to examine market complexities that lurk behind the scenes. The fact is that pharmaceutical companies are taking on risk and exposing themselves to malpractice lawsuits, Sweeney explained. They’re also putting a substantial amount of time and money into R&D with some drugs that are envisioned never getting out of the product pipeline. “So we have to, in some ways, subsidize those unsuccessful research efforts with successful ones,” he suggested. A 2016 analysis Sweeney did with a major chain pharmacy found a $40,000 variation in how much was invoiced back to the plan between the medical and pharmacy sides. One noteworthy finding was that physicians were earning “a significant amount of money off of billing for those drugs,” he reported. “And even though historically we’ve done a lot of intravenous and injection-types of therapies in the physician office, the real question is, is that causing an inflation of the drug prices?” While there’s plenty of waste in the health care system, Boyd believes the root of the problem is a lack of data transparency and communication among
clinicians and between the TPA, stop-loss carrier, PBM and employer in a collective manner. Also, with profits based on a percentage of specialty drug costs, he cautioned that there’s no incentive to lower price tags and the pursuit of profit isn’t aligned with the mission to support patients. As long as that approach continues, he lamented that “the cost of the drugs are going to continue to rise.”
But there’s a very real solution within reach that hasn’t been realized, Boyd suggested. “If we had real-time adjudication of medical claims right in the provider’s office,” he said, “that all of a sudden now expedites the cost of that drug right then and there and allows us to communicate better… The idea of real-time medical adjudication claims would change the industry.” With clinical trial data for common specialty drugs showing efficacies of less than 25%, Vago wondered whether they’re worth their high price tags. Slowing the pipeline for approval to raise the level efficacy will dash the hope of patients who are suffering from various conditions that could be treated, according to Boyd, though stressing the importance of having appropriate and efficacious drugs. It’s no surprise that the high cost of specialty drugs can lead to financial ruin. Sweeney pointed out that 40% of U.S. families who have a loved one with a terminal disease become impoverished. Society is wrestling with the question of who should pick up the tab, he said, citing the family, insurer, plan sponsor or government. One bold approach to ending this cycle of misery is that self-insured employers can actually exclude specialty drugs. But it has to be done right, according to Brady Bizarro, a health care attorney and director for The Phia Group, LLC. To wit: “As long as the plan has a caveat about preventive drugs” and doesn’t discriminate against people with particular diseases or conditions, he explained. Self-funded ERISA plans do not have to cover all essential health benefits, but if they do, he said “they can’t impose annual or lifetime dollar limitations on it. Most states do have Rx drugs listed as an EHP, but a plan does not have to cover them.” And if that’s the case, they must be mindful about multiple categories of discrimination under the Health Insurance Portability and Accountability Act. “You have to make a distinction between excluding drugs as a treatment vs. excluding the disease,” Bizarro said. “If you’re excluding all categories of drugs that treat that particular disease, that’s a problem. That is discrimination under HIPAA.”
POWER OF PROGNOSTICATION CVS was still reviewing a program for compliance purposes that would exclude specialty drugs over a certain dollar amount, he noted. The trouble with such programs, however, is a tendency to discriminate against classes of drugs that are for particular diseases, Bizarro reiterated. Another issue is that the health plan would have to notify its members of any such change and follow notice requirements under both ERISA and the Affordable Care Act, he suggested, as well as review and terminate PBM contracts. At the end of the day, he said most self-funded plans decide not to exclude specialty drugs because of the risks involved with such a drastic step. The panel also addressed the legality and safety of international drug sourcing and medical tourism. Bizarro said “it’s technically illegal to import drugs overseas, even people who do so for
personal use. But the risk to the individual who’s doing this is very small because the FDA has a policy of non-enforcement in certain situations.” While someone who is importing or carrying into the country small amounts of drugs for personal use more than likely wouldn’t be prosecuted, he cautioned that “it could be a problem is the plan is importing drugs.” Provider liability also factors into the mix, according to Bizarro, referencing laws in other countries that govern medical malpractice over counterfeit or unsafe drugs routed through tier-one countries such as Canada. “You can never really trust a drug that you’re importing that’s not FDA approved,” he said. Asked about patient co-pay assistance programs that manufacturers use to reduce the impact of high-cost drugs, Bizarro said there hasn’t been a legal challenge to this industry practice, which he hastened to add, can be confusing. “If you assume that you have a $3,000 list price of a specialty drug and the plan imposes a $500 co-pay, if the patient goes to the register and picks up the drug, and they have with them a $490 manufacturer co-pay card, what are they actually paying out-of-pocket?” he asked. “They’re paying $10, or are they paying $500? Which amount are they paying? That’s the question that we’re asking here.”
Bruce Shutan is a Los Angeles freelance writer who has closely covered the employee benefits industry for 30 years.
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• Sanctions and Exclusions • Malpractice settlements • State Board licensing and disciplinary status • License renewal reminders • Social Security Death Index (SSDI) • Open Payments Records • Medicare Opt-Out Status • Auditor-Approved Documentation Trail • Monthly and Annual Management Reports • Plus: Enhanced Service for Third-Party Accountability
Full verification of correct coding and coverage for claims. Supports pre-service, post-service, and audit implementations.
Monitor your provider panel, as well as staff and vendors, for exclusion, licensing, and disciplinary status with Medicare, Medicaid, OIG, State, NPDB and regulatory boards.
Responding to Catastrophic Weather, Captives Answer the Call
xtreme weather events are becoming more frequent and more costly. According to Munich Re, in 2017 insured catastrophic losses were $135 billion and total losses, including uninsured, were $330 billion. The insurance sector is working to adapt its processes to mitigate the large losses associated with catastrophic weather events and the compounded risk that it exposes but is responding slowly. This creates the perfect opportunity for captives to step in to help shore up and create more secure coverage.
What’s Going On
WRITTEN BY KARRIE HYATT
Last year, extreme weather events became the normal, what with the intense summer heat, firestorms, hurricanes, flooding, and tornadoes all causing billions in damage. 2017 also happened to be the second hottest year on record while 2018 is projected to be the fourth hottest year on record. According to the WMO Statement on the State of Global Climate in 2017 issued by the World Meteorological Organization, “The world’s nine warmest years have all occurred since 2005, and the five warmest since 2010, whilst even the coolest year of the 21st century—2008…would have ranked as the second-warmest year of the 20th century.”
CAPTIVES ANSWER The Accumulated Cyclone Energy index, which is used to measure the intensity and duration of storms in the Atlantic Ocean, reported that September 2017 was the most intense month on record. As the earth’s temperature increases, the likelihood of extreme weather events will become more frequent. Last year’s Hurricanes Harvey, Irma, and Maria showed exactly how disruptive extreme weather events can be to critical infrastructure.
According to the World Economic Forum’s (WEF) The Global Risks Report 2018, “Environmental risks have grown in prominence over the 13-year history of the Global Risks Report.... Among the most pressing environmental challenges facing us are extreme weather events and temperatures; accelerating biodiversity loss; pollution of air, soil and water; failures of climatechange mitigation and adaptation; and transition risks as we move to a low-carbon future.” The WEF also reported that extreme weather events, including failure of climate change mitigation and adaptation, has remained a key concern for business leaders over the last six years.
catastrophes is that the world’s population continues to grow even as the world becomes more interconnected leading to concentrated centers of population and businesses that rely closely on one another.
“Damage caused by these risks continue to increase dramatically,” said S. Lance McNeel, vice president of Business Development, Capstone Associated. “Extreme weather events have always occurred. The five most powerful north Atlantic hurricanes to hit landfall [happened between 1924 to 2007]. While these hurricanes do not appear to have a meaningful trend over time, one thing is certain: coastal values and populations have certainly increased. Flooding and windstorm damage have increased to the point where the five most costly hurricanes on record range from Katrina in 2005 to Harvey in 2017.”
Where the Insurance Industry Stands The types of risk associated with catastrophic weather events mostly involve risk to property—wind, flood, fire, and environmental—but risks that can be equally disruptive are business and supply chain interruption. All of these risks are notoriously hard to insure with any amount of accuracy, without having a crystal ball to see the future. Predictive models on natural catastrophes can only forecast so much, and while these risks are low in frequency they are often high in severity. Getting adequate and
While climate changerelated incidents contribute to the rising costs of damage, all natural disasters are causing more costly damage. The thing in common with all natural
CAPTIVES ANSWER secure insurance coverage for these unlikely events is as important as it is complicated.
According to McNeel, “Because of the catastrophic potential due to the geographic concentrations of value, adequate limits may be unavailable. In many cases, federal or state programs fill the gaps in these coverages. Whether it is business interruption or physical damage, commercial policies have limited coverage in the case of these widespread disasters.”
Last April, in a study titled, “Insurance and Climate Change Risk Management: Rescaling to Look Beyond the Horizon,” by Jason Thistlethwaite and Michael O. Wood with the School of Environment, Enterprise and Development (SEED) at the University of Waterloo, the authors used information from the
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AICPA SOC ns
NAIC’s “Climate Risk Disclosure Survey” to determine how insurers are integrating climate change into their risk management practices.
They found that the majority of insurance companies are not incorporating climate change risk management into their plans. They do so by “Failing to adopt a [climate change risk management] policy, [to] prioritize climate change risks (e.g. through senior management oversight), or [to] employ climate change models and projections to adjust premium pricing and stress-test reserves and investment portfolios.” The authors found that reinsurers are more likely to add climate change policies into their risk management practices, but only by a small margin.
While the study’s findings sound discouraging, the authors had a positive
insight on the subject, “Climate change is identified as both a threat and an opportunity for the insurance industry—a threat because losses limit the availability and affordability of coverage, and an opportunity because risk can be priced into premiums and investments, thereby creating incentives to support mitigation and adaptation strategies throughout the global economy.”
How Captives Can Help
The insurance industry is generally a leader in adapting to changes in the financial markets. Now, facing more frequent extreme weather events, traditional insurers seem to be struggling to keep up with the changes in the marketplace created by catastrophic weather. While insurance companies work to compensate with climate change-related risk, their coverage
CAPTIVES ANSWER often falls short of what insureds need— either by not providing the right kind of products or narrowing their coverage through exclusions.
This is where captives come in. Captives may not be the whole answer to mitigating climate change-related risk, but they can help to cover gaps in traditional insurance, foster nascent or unlikely risk, create steady coverage in a volatile marketplace, and access the important reinsurance market.
Captives are known for their adaptability in insuring emerging and unlikely risks. Insuring climate change-related risk is another area where they can out perform the traditional marketplace. Pollution events, flooding outside usual flood zones, supply-chain interruption, and similar emerging issues are all risks that can be nurtured through a captive.
strict exclusions that can leave gaps in coverage. A captive can help to bridge those gaps that the traditional market is unable to insure, providing excess policies that can shore up any discrepancies, so that the captive’s owner has all aspects protected.
If extreme weather events continue to increase, there is a real possibility of a hardening of this sector of the insurance market. Insuring extreme weather-related risk through a captive can create more stable pricing of these types of policies for the captive owner and also offer more security.
“Captives cannot smooth out the unpredictability inherent in [these] risks, but they can provide insurance coverage that is tailored to the specific risk exposures of the affiliated insureds. This coverage in turn finances these ... losses, thus smoothing out shock losses that would affect the long-term viability of the insureds.” According to McNeel,
By insuring unusual risks through a captive, when there is no historical data available, parent companies can build up actuarial data allowing them, after a few years, to fine-tune their coverage for that risk, or to shop that risk through the wider insurance marketplace.
Many times, even if a product is available through conventional insurance, it might not be comprehensive enough to adequately cover a company’s risk. Many insurance policies have
One of the most important advantages of insuring for natural catastrophes through a captive is the access they give to the reinsurance and alternative capital markets. Access to these markets can lead to greater capacity in coverage, while spreading out the risk. The global reinsurance sector is going strong.
Over the last few years of favorable market conditions, the sector has attracted major investors and has built up large reserves of cash. Access to the reinsurance market can help captives create more secure coverage for unlikely extreme weather events.
“It is important to limit the exposure of an individual captive to catastrophic claims, spreading the risk over many risk-bearing entities,” said McNeel. “After all, risk spreading is what insurance is all about. Risk sharing can be accomplished by the insureds or the captive ceding a portion of the risk to one or more reinsurers.” As extreme weather events are likely to increase in frequency and in damages, captives have the opportunity to step in where traditional insurance can’t or won’t, providing an important alternative. Captives in this volatile market can provide an extra layer of risk financing while encouraging effective climate change-related risk management.
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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ACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES:
Q & A &
he Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the Womenâ€™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 questionerâ€™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 email@example.com.
Benefit Compliance Issues That Arise in Connection With Employer Sponsored Clinic Arrangements: Part One Background Many employers, particularly large employers, are evaluating on-site health clinic options as an additional benefit offering. Common reasons for instituting on-site clinics include enhancing worker productivity (i.e., “increasing “presenteeism”), reducing medical costs, integrating various health services, and improving access to care for employees. However, on-site clinics also pose a myriad of compliance obligations, particularly in the employee benefits arena. This two-part article addresses the application of various employee benefit laws to coverage offered through employer-sponsored on-site medical clinics. The impact of the various laws discussed herein will depend on the structure and design of the clinic arrangement, so not all of the issues would apply in every situation. However, the discussion below should give an idea of the employee benefit compliance obligations associated with various arrangements.1
Part One of this article focuses on the compliance concerns that are most frequently discussed with respect to on-site medical clinics include the application of ERISA, HIPAA (and other health information privacy laws, at the federal and state level), and the Affordable Care Act. In part two of this article (in the upcoming December issue), we look at other concerns which may also arise including COBRA and other group health plan requirements; the effect on plan participants’ eligibility for Health Savings Accounts (HSAs); and various tax implications for plan participants.
8.1 Billion Dollars
in Captive Insurance Premium Growth from 2016 to 2017. • $8.1 billion means the amount of total annual premium growth Delaware experienced in 2017. • $8.1 billion means a 182% total premium increase from $4.4 billion in 2016 to $12.5 billion in 2017. • $8.1 billion means Delaware is the second largest U.S. captive domicile in terms of premium. • $8.1 billion means the confidence the captive insurance industry has in Delaware’s captive program. “This explosive premium growth is mostly attributed to reinsurance premium. It is a combination of the redomestication of large reinsurers to Delaware as well as existing reinsurers vastly expanding their writings. It is a clear sign of the confidence the insurance industry has in Delaware’s status as a world class captive insurance domicile.” Trinidad Navarro, Insurance Commissioner
STEVE KINION, DIRECTOR Bureau of Captive & Financial Products Department of Insurance
In Delaware, the captive regulators are dedicated exclusively to our captive insurance clients’ needs, and work under the direction of our Captive Bureau leadership, directed by Steve Kinion.
BUREAU OF CAPTIVE & FINANCIAL INSURANCE PRODUCTS 1007 North Orange Street, Suite 1010 Wilmington, DE 19801 302-577-5280
Trinidad Navarro, Insurance Commissioner
Is the On-Site Clinic a Group Health Plan Under ERISA? As a general matter, health benefit plans sponsored by private (but not governmental or church) employers will be subject to federal regulation under ERISA. The definition of an ERISA-covered employee welfare benefit plan is set forth in § 3(1) of Title I of ERISA, which can be broken down into the following essential elements: (1) a plan, fund, or program; (2) established or maintained by an employer or by an employee organization, or by both; (3) for the purpose of providing medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability (or other enumerated benefits); (4) to participants or their beneficiaries.
However, some commonly considered services (second surgical opinions, EKG and lab-work) likely go well beyond the limited “first-aid” or on-site convenience type treatments that were likely contemplated by the regulations. Generally, the following activities/practices put on-site medical facilities at risk for falling outside the ERISA exception for on-site medical programs, thereby subjecting the program to compliance with ERISA:
Providing coverage to dependents (and possibly retirees);
Treating conditions that constitute more than “minor injuries or illness”;
Providing first-aid treatment for accidents that occur outside of working hours;
Providing care that involves “substantial” expenditures.”
The Department of Labor has interpreted the ERISA exception rather narrowly. In ERISA Opinion Letter 83-35A 06/27/1983, an employer, as part of its EAP-type program, hired a counselor to be on-site one day per week in order “to provide confidential and professional assistance to the employees and eligible family members” for personal problems.
Arrangements that fit this definition will generally be required to comply with ERISA regardless of whether an employer treats a program as an ERISA plan. The ERISA regulations include a specific exception from the definition of welfare benefit plan for “the maintenance on the premises of an employer of facilities for the treatment of minor injuries or illness or rendering first aid in case of accidents occurring during working hours.” 29 CFR § 2510.3-1(c). There is no elaboration as to when an injury or illness is minor.
After identifying the problem, the counselor would suggest a plan of action and make a referral to an appropriate professional person, agency, or service clinic if the employee agreed with the plan of action. The counselor would then serve as a coordinator with the outside service. The employer sought an opinion from the DOL as to whether the Assistance Program was included in the “on-site medical facility” exception set forth in DOL regulations. The DOL considered whether the program fit into the exception set forth in the DOL regulation. Without providing much elaboration, the DOL stated that because benefits “extend to members of an employee’s family and to problems that are more serious than ‘minor injuries,’” the program did not fit into the exception described in the DOL regulation.
Advantages to ERISA Status While the compliance requirements can be significant, several potential advantages may also flow from ERISA coverage. This section provides a high-level overview of the potential advantages of the application of ERISA.
Establishes with Specificity the Available Plan Benefits. ERISA’s written plan document and SPD requirements ensure that benefits are accurately presented and described to employees, thereby limiting an employee’s claim for benefits in a properly administered plan to those provided under the written plan document and SPD. The existence of and adherence to the plan document serves as a reference and organization tool, enabling employers to be much more deliberate and consistent in their choice of benefits offered and administration of the plan.
Possible Preemption of Some State law Claims Related to Denial of Treatment. For ERISA plans, preemption means that claimants cannot sue a plan or plan administrator under
Apparently, extension of benefits to individuals other than employees was significant. Also, providing even an initial diagnostic screening through the counselor in order to determine which plan of action or specialist would be most appropriate to provide further treatment was considered to go beyond treating “minor injuries.” ERISA Compliance Requirements An arrangement that (i) met the definition of employee welfare benefit plan (a broad definition that would catch many such arrangements) and (ii) did not satisfy the relatively narrow ERISA on-site clinic exception would be an ERISA group health plan. Status as an ERISA plan would implicate several compliance issues which, if not followed, can result in fines, penalties, and exposure to costly litigation.
Plan Document and SPD. The employer’s ERISA plan document and Summary Plan Description (SPD) must describe scope of coverage made available;
Claims and Appeals Process. The employer’s ERISA plan must have a claim and appeal process addressing benefit claim denials, and follow them in the event a benefit/eligibility determination is challenged;
Form 5500. The employer must file a Form 5500 (or include with another plan in a “wrap” arrangement), and any fees must be reported by the employer on a Form 5500 Schedule A (if treated as insurance) or Schedule C (for administrative expenses);
Reasonable Fees. The employer agreement must be reasonable with regard to fees. In addition, penalty provisions for early termination (outside of reasonable startup costs actually incurred) cannot be included;
Prohibited Transactions. The employer will need to ensure that “prohibited transactions” with related entities do not take place.
a state law claim if a claim under ERISA would also apply. This protection has been especially beneficial to utilization review organizations and HMOs in negligence, malpractice, breach of contract, and similar state law claims, though case law continues to evolve. One of the difficulties in this type of litigation has been distinguishing between plan eligibility decisions and treatment decisions, which can sometimes be impossible to separate. Generally, challenges to a coverage or eligibility decision will be preempted by ERISA, but a challenge to the quality of care may not. Where the two are intertwined (referred to as “mixed eligibility/ treatment decisions”), preemption is generally not available, and the claimant is allowed to proceed with the state law claim.
Exhaustion of Remedies. In situations where an employee is attempting to recover benefits, many courts have honored an ERISA plan’s requirement that the employee exhaust all remedies under the plan before the employee can file suit. Of course, such protection requires that the plan document include ERISAcompliant claims procedures, and that the plan administrator closely follow the claims procedures. While this “exhaustion of remedies” requirement is not specifically provided by ERISA, courts almost universally honor the ERISA plan document’s exhaustion requirement.
Deferential Standard of Review. The standard of review applied by the court can make the difference between winning and losing. In the event that an employee or beneficiary exhausts all remedies and files a benefits claim in court, the court will usually provide the “abuse of discretion” standard of review (provided certain requirements are met), which means that a court generally will defer to the plan administrator’s benefit determination, unless such decision is found to be arbitrary and capricious. On the other hand, without the protection of the abuse of discretion standard afforded under ERISA, a court is free to make its own determination as to whether benefits were properly denied under the plan, and is not required to give any deference at all to the plan administrator’s discretion to interpret the plan’s terms and make factual determinations. Also, many courts will expand the scope of judicial review and accept additional evidence beyond the administrative record, increasing the chances that a court will arrive at a determination different from the plan administrator’s decision. In order to benefit from the deferential “abuse of discretion” standard, the plan (and the summary plan description) must state that the plan administrator has the discretionary authority to interpret the plan and resolve any conflicts or ambiguities that exist, as well as make all factual determinations.
Limitations on Damages. Even if a plan beneficiary is successful in his or her claim, courts will rarely award anything more than restoration of denied benefits, and possibly interest and attorney’s fees. ERISA § 502 limits the relief available to recovery of benefits due under the plan, enforcement of a right under the plan, or the clarification of rights to future benefits under the plan. Plan participants can also enjoin violations of the plan’s terms or Title I of ERISA. ERISA does not provide for punitive, consequential, or similar types of damages, even if a claimant, through a state law claim, attempts to obtain an alternative remedy.
No Jury Trial (Generally). Although not specifically provided in ERISA, most courts have held that a claimant in an ERISA suit has no right to a jury trial. By way of example, several courts have held that no right to a jury trial exists where the cause of action is for benefits due, COBRA violations, breach of fiduciary duty or interference with protected rights. While some exceptions to
these cases do exist, generally the right to a jury trial will not attach because most often remedies under ERISA § 502 are equitable in nature (but a right to a jury trial is always present if the cause of action is legal in nature).
Federal Court Jurisdiction. With the exception of claims for benefits, ERISA provides federal courts with exclusive jurisdiction over ERISA claims. While state and federal courts have concurrent jurisdiction over claims for benefits, regardless of the amount in controversy, ERISA suits commenced in state court can be removed to federal court.
Funding with Medical Plan Assets. If an on-site clinic is maintained as part of an ERISA program included as part of the larger group health plan, the employer may be able to use assets of the group health plan, rather than corporate assets, to pay for clinic services.
On-site clinic arrangements can also be subject to the privacy and other administrative simplification provisions of the Health Insurance Portability and Accountability Act (HIPAA), depending on the circumstances. The administrative simplification provisions of HIPAA apply to “covered entities,” which includes (i) health plans and (ii) health care providers, if they transmit any health information in electronic form in connection with a transaction covered by the HIPAA electronic data interchange regulations.2
Health Plans The first way an on-site clinic can be subject to HIPAA is if the arrangement is a health plan. As a general rule, an on-site medical clinic is excluded from the definition of a health plan. The definition of a health plan under HIPAA’s administrative simplification rules is an “individual or group plan that provides or pays the cost of medical care.” 45 CFR § 160.103. This is a broad definition that captures virtually all arrangements that provide medical care. However, as a general rule, an on-site medical clinic is excluded from the definition of a health plan. See 45 CFR § 160.103, which excludes the “excepted benefits” listed in PHSA § 2791(c)(1); on-site medical clinics are included in the list of “excepted benefits.” PHSA § 2791(c)(1)(G). Unlike the definition for “on-premises medical facility” for ERISA purposes, the controlling definition for HIPAA purposes does not include the same limiting language for first aid, injuries or illnesses taking place during work hours. Thus, because the exception for on-site medical facilities under HIPAA appears to be broad, a clinic could be structured to fit within the exception – thus avoiding categorization as a HIPAAcovered entity. Nevertheless, an employer could lose this exemption under HIPAA if (i) the arrangement is an ERISAcovered plan; (ii) the clinic’s operations are integrated with the operations of a health plan covered by HIPAA (e.g., the
company’s group health plan) and/or (iii) information is exchanged between the covered health plan and the clinic. If the employer loses the exemption, the clinic arrangement would be a health plan under 45 CFR § 160.103.
This broad definition could cause employers that operate on-site medical clinics to be considered to be health care providers. Even so, only health care providers that conduct any standard transactions electronically, or that engage third parties (such as billing services) to process such transactions electronically, are subject to the administrative simplification rules. Id. Standard transactions include communications regarding billing, payment, coordination of benefits, enrollment and disenrollment, and eligibility. SSA § 1173(a).
Health Care Providers Effect of HIPAA Covered Entity Status The second way a clinic can be subject to HIPAA is if any of the health care providers are covered entities.3 For purposes of the administrative simplification rules, a “health care provider” is broadly defined as a provider of medical or other services, or one that furnishes medical or health care services or supplies, or any other entity that furnishes, bills, or is paid for health care in the normal course of business. 45 CFR § 160.103.
If the on-site clinic is subject to HIPAA as a health plan, the arrangement would be required to comply with various requirements with respect to the protected health information (PHI) of plan participants. For instance, it would need to:
• Implement HIPAA Policies and Procedures (for both the privacy and security portions of HIPAA);
• Sign Business Associate Agreements with vendors with access to PHI; • Issue a Notice of Privacy Practices to participants; • Provide participants with various rights regarding their PHI (including to review, amend, and receive accountings);
• Comply with various requirements imposed by the HIPAA Security Rule; and
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• Address (and comply with) rules regarding the use and disclosure of PHI by the clinic. If the on-site clinic coverage is a component of an employer’s larger group health plan, the applicable HIPAA requirements may already be met by the clinic if its operations are integrated into the overall health plan (although changes might need to be made if the employer-sponsored plan is fully insured, and the employer did not previously have access to PHI). Alternatively, if the clinic arrangement is not part of a larger plan, the employer could implement separate HIPAA documentation, or revise the current documentation to include the arrangement. If the clinic is considered to be a health care provider, a similar set of rules would apply. While the full scope of the HIPAA rules applicable to healthcare providers is outside the scope of this white paper, it would generally include rules similar (but not identical to) the rules for health plans, noted above.
Other Health Information Privacy Laws
In addition to HIPAA, employers sponsoring on-site clinics need to ensure that health and personal data gathered by the clinic does not violate other federal and state privacy laws. For instance, employers must comply with privacy and data use requirements under the Americans with Disabilities Act (ADA), Genetic Information Nondiscrimination Act (GINA), and workers’ compensation laws (including any state equivalents thereof), to ensure that information obtained in the clinic is adequately protected and/or not improperly used in the employment context.
Various types of state laws – including those related to health privacy and data retention, HIV/AIDS, drug and alcohol testing, and mental health – could apply as well. These laws would apply to clinics that are not subject to HIPAA; in addition, to the extent a state law is stricter than HIPAA, it would apply in addition to HIPAA. Thus, even plans subject to HIPAA would need to review potentially applicable state requirements. The specific risk would depend on the state, and a state-by-state analysis would be necessary to determine the full impact of such rules.
Affordable Care Act
Another important consideration is whether the on-site clinic is subject to the Affordable Care Act (ACA). The ACA includes a number of health insurance reforms for employer sponsored health plans. These requirements should be satisfied if on-site clinic services are part of an overall comprehensive package but could be problematic if any employer offers such benefits to any group of employees on a standalone basis (for instance, part-time employees who are not eligible for the comprehensive health plan).4 While the health insurance reforms would likely be the most problematic ACA issue for employers, and the ACA has specific exclusions for on-site clinics in some rules (for instance, information
reporting under IRC § 6055), other ACA requirements may also apply. For instance:
• Employers are subject to W-2 reporting on the cost of on-site clinic coverage, if the coverage meets the Internal Revenue Code definition of group health plan (under IRC § 5000(b)(1)) and the employer charges a premium for COBRA purposes. See IRS Notice 2012-9.
• Other aspects of the ACA, such as the “Cadillac tax,” (IRC § 4980I) may apply, but further guidance is needed to make a definitive determination.
With the increasing popularity of onsite health clinics, it is becoming more important to understand the benefits compliance issues raised by this type of arrangement. This white paper addresses, at a relatively high level, the various compliance issues raised by employer-sponsored on-site clinics. Employers should consult with their own legal counsel to further analyze the issues outlined above as applied to any specific situation.
1 Please note that this white paper does not address all regulatory issues that will be applicable to the clinic, particularly aspects relevant to health care providers and medical facilities – e.g., OSHA standards; fraud and abuse rules (including the Stark Law, Anti-kickback laws, and the False Claims Act); or rules regarding corporate practice of medicine, disposal of medical waste, dispensing of pharmaceuticals, or clinical laboratories.
2 HIPAA’s administrative simplification rules encompass privacy, security, breach notification, and electronic data interchange rules.
3 Note that while the on-site clinic may be part of the covered entity by virtue of inclusion in the medical plan, this would not automatically subject the clinic to HIPAA’s requirements for health care providers; this would be a separate analysis.
4 Requirements that would be difficult or onerous to incorporate into the on-site clinic context include, for example, the prohibition on annual and lifetime limits on certain benefits (PHSA § 2711); dependent coverage for children until age 26 (PHSA § 2714); and patient protections, such as the ability for participants to designate a primary care provider (PHSA § 2719A).
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
MEWAs and VEBAs
WRITTEN BY KELLY E. DEMPSEY
Don’t Let Your LOAs Leave You DOA: Part II States Speak Up! This article is a follow-up to the author’s article “Don’t Let Your LOAs Leave You DOA“ in the May 2017 issue of the Self-Insurer.
emember that scenario from Spring of 2017 where an employer was attempting to do right by an employee and offered a continuation of coverage during an employer-approved leave of absence? If not, let’s quickly refresh our memories.
An employer’s long-time trusted employee had a stroke of bad luck and was diagnosed with stage four cancer after being relatively asymptomatic and having never been diagnosed with cancer previously. As the employee’s treatment plan became more aggressive, the employee ultimately needed to take a leave of absence – but leave under The Family and Medical Leave Act (FMLA) was exhausted due to the employee’s recent addition of a new baby.
The employer subsequently continued to provide coverage, pursuant to 2016 guidance issued by the United States Equal Employment Opportunity Commission regarding employerprovided leave in accordance with The Americans with Disabilities Act (ADA)1.
Although the employee ended up making a miraculous recovery, the claims poured in, and the employer soon realized there was a “gap” between the plan document and the employer’s decision to provide ADA leave, such that the plan document did not actually allow this continued coverage.
Of course, the employer was free to provide whatever leave it saw fit – but the employer’s stop-loss carrier was not keen on reimbursing these claims, since this continued coverage was not contemplated when the carrier underwrote the policy. The employer was facing stop-loss reimbursement denials and potentially skyrocketing renewal rates for the upcoming plan year.
account looked bleak, and the employer was scrambling to figure out how to continue offering benefits to its employees without going bankrupt. “How did I end up here? All I wanted was to take care of my employees and give them the best benefits possible. Where did I go wrong?”
As you may recall, we put ourselves in the shoes of employers. It’s intuitive to think that a health-related leave of absence from employment is coupled with a continuation of health plan coverage. Unfortunately, though, plan documents and employee handbooks are as prone to “gaps” as any other two documents, if not more; you’d be amazed at how antiquated some employee handbooks can be, and even when they’re updated, it occurs to alarmingly few employers that the two documents must be harmonized.
Similar to “surprise billing” legislation, the last year or so has seen a boom in state legislation that is designed to protect employees, and much of the legislation focuses on – you guessed it – leaves of absence and continuation of coverage. Some state laws address whether or not leave must be paid, others address whether benefits must be continued while on leave, and others still address both issues. Two interesting recent examples are California and New York.
Part I of the story ended as a cliffhanger: the employer’s bank
California’s leave laws have been in place for decades, but have undergone various changes, including revisions in 1999, 2004, 2011, 2012, and most recently, 2017. California Senate Bill No. 63 implemented the New Parent Leave Act (NPLA) as of January 1, 2018.
Affording protected leave to employees of employers with 20 or more employees, this marked a significant change from the state’s previous requirement laws that applied only to employers with 50 or more employees. Employers subject to California law must consider the interaction of all state and federal leave laws, including the NPLA, FMLA, California Family Rights Act (bonding leave), and Pregnancy Disability Leave (PDL). Unlike California’s law, which expanded an existing law, New York passed a brand new leave law, and it happens to be the most generous paid leave law in the United States to date. Effective January 1, 2018, New York’s Paid Family Leave Benefits Law (PFLBL) is being phased in over four years with full implementation in 2021.
The law requires privately-owned employers to provide paid leave to employees in three situations: (1) for a father or mother to bond with a new child (birth, adoption, or foster); (2) to care for a close relative with a serious health condition; or (3) to care for a close relative when another close relative has been called to active military service.
The length of leave in 2018 has been limited to eight weeks, but will increase over time to become 12 weeks upon full implementation in 2021. Interestingly, in addition to creating the requirements, the law requires employee handbook modifications, conspicuous posting of specific information (similar to FMLA), the need to coordinate with paid time off and FMLA, and of course the tax treatment of the benefits.
I don’t know about you, but my head is spinning. For employers subject to a myriad of laws such as FMLA, the various state leave laws, and ERISA, it’s no surprise that complying with all of them simultaneously is a serious headache, and sometimes details are overlooked.
Now, wait a minute. If a self-funded ERISA plan is protected by ERISA, aren’t state laws like these inapplicable? The short answer is no. The longer answer is no way. At a high level, ERISA protects a health plan from being subject to state insurance laws – but laws such as paid leave and continuation of coverage laws have been found to not actually be insurance laws, but employment laws, and therefore ERISA can’t shield anyone from compliance with such laws.
As an attorney, I can tell you that following state and federal laws is crucial to the viability of a health plan and the employer’s business. As a health care professional, I can tell you that full compliance is not an easy task. Laws that protect employees tend to have intricate details and nuances; we’ve picked on California and New York,
Defends out-ofnetwork balance bills in all 50 states
Utilizes a proprietary and fully relational database to manage claims and provide customizable reports
Has a record of savings of up to 70% of billed charges
We appreciate the positive response our medical stop loss coverage has received coast to coast. We look forward to bringing our trusted brand name, stellar balance sheet, and decades of underwriting experience to the medical stop loss marketplace for years to come.
Thanks. Atlanta | Boston | Chicago | Houston | Irvine | Indianapolis | Los Angeles New York | San Francisco | San Ramon | Seattle | Stevens Point Auckland | Brisbane | Dubai | Dublin | DĂźsseldorf | Hong Kong | Kuala Lumpur London | Macau | Melbourne | Munich | Perth | Singapore | Sydney | Toronto
to-date and compliant, how can an employer expect to be able to solve the compliance Rubik’s Cube?
The alarming reality is that many gaps between plan documents and employee handbooks are only discovered once a disaster has already ensued. All it takes is one catastrophic event to discover that the various documents aren’t airtight, and may not even align with the employer’s intent.
but five other states and the District of Columbia have introduced legislation to offer or expand leave laws.
Those states include Washington, New Jersey, Rhode Island, New Hampshire, and Maryland. Although most federal and state laws do not currently require a continuation of coverage, we may soon see an upheaval in the status quo.
In the absence of applicable state laws, employers can choose whether or not to provide the benefit of continued coverage – but of course an employer’s generosity must be spelled out in the plan document, not just the employee handbook, in order to avoid stop-loss denials. Ultimately, the interaction of applicable state laws, FMLA, and any other type of employer-sponsored leave of absence will need to be assessed on case-by-case basis to determine the rights of an individual employee in any particular circumstance. As with everything else in the self-funded world, if the relevant documents aren’t kept up-
In sum, employers need to do their homework on a regular basis. As we enter renewal season, now is the perfect time for employers to look at their plan documents and the employee handbooks.
Do the two documents reference the same types of leave? Do the documents clearly indicate under what circumstances, and for how long, coverage under the health plan is maintained during a leave? Has the employer assessed the need to comply with a new or revised state law? Are the employer and employee obligations and coverage options laid out clearly? Do the terms of these documents meet the intent of the employer? What does the stop-loss policy say about eligibility determinations? Can the handbook be used to document eligibility in the health plan? Do changes need to be made to minimize or eliminate gaps?
Don’t let your LOAs leave you DOA. Do the leg work now, and figure out what needs to be done to avoid being caught by surprise.
Kelly E. Dempsey is an attorney with The Phia Group. She is the Director of Independent Consultation and Evaluation (ICE) Services. She specializes in plan document drafting and review, as well as a myriad of compliance matters, notably including those related to the Affordable Care Act. Kelly is admitted to the Bar of the State of Ohio and the United States District Court, Northern District of Ohio.
References 1 https://www.eeoc.gov/eeoc/publications/ada-leave.cfm
Celebrating 10 years of Employee Benefit Group Captives We’ve been innovating for a very long time. Ten years ago, Berkley Accident and Health was an industry pioneer with EmCap®, our employee benefit group captive program. Today, we are a market leader with an impressive track record of building and managing successful captives. For group captives, it’s a clear choice. Choose the team with a decade of experience and success. These statements are 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.
© 2018 Berkley Accident and Health, Hamilton Square, NJ 08690. All rights reserved. BAH 2018-14
Specialty Accident www.BerkleyAH.com
OUTSIDE the Beltway SIIA Members Are Vigilant Advocates In State Challenges to Self-Insurance
elf-insurance, particularly self-insured employee health plans, continues to be targeted by an increasing number of states with restrictive laws, regulations or taxation schemes that trespass on ERISA protections. The threatening environment continues to test SIIAâ€™s ability to fulfill its mission to protect and promote selfinsurance. An ongoing state-by-state government relations process has taken SIIA staff and member activists to many state capitals as they advocate for beneficial measures or defend against those that could harm the self-insurance industry.
Following are summaries of diverse political issues prompting SIIA intervention in states of Oregon, Maine, New York, Nevada, Oklahoma and Delaware.
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OUTSIDE THE BELTWAY Oregon-
enrollment information, information which some stop-loss carriers do not have.
Department Issues StopLoss Data Call, SIIA Files Letter
On October 12th, SIIA filed a letter with the DCBS asking that the department rescind its call for average health plan enrollment information and the request that policies list the policyholder’s name. It is SIIA’s position that the latter compromises a policyholder’s privacy and is redundant because the department has also requested each policy number.
On October 5th, the Oregon Department of Consumer and Business Services (DCBS) issued a data call letter to, “All insurers offering insurance against the risk of economic loss assumed under a less than fully insured employee health plan as described in ORS 742.065.” In the letter, the DCBS requests policy information including the policy number, the premium earned for the policy and the policy period in months. The DCBS also requested that stop-loss carriers report the average number of employees enrolled in the health plan, the average number of Oregon residents enrolled on the health plan and other average
MaineIndividual Market Reinsurance Assessments Will Begin Again The Maine Guaranteed Access Reinsurance Association (MGARA) will renew operations in 2019. Some SIIA members have reported receiving a communication from the program administrator notifying them of the $4 per member per month assessment and how to report plan enrollment data. Maine’s individual market was in poor condition subsequent to ACA implementation. As a solution, the legislature passed, and the governor signed, legislation creating a reinsurance program for individuals with high-cost conditions using the Maine universal vaccine assessment funding source, a covered lives assessment. MGARA was active from 2012 until 2013, at which time the board voted to cease operations when the ACA reinsurance programs attempting to stabilize individual health
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OUTSIDE THE BELTWAY grandfathered stop-loss contracts for groups of 51-100. As previously reported, Assembly Bill 11014/ Senate Bill 8995 would extend the grandfathering period for an additional five years, allowing stop-loss contracts that were issued on or prior to January 1, 2015 to be renewed through January 1, 2024.
If you have interest in participating in the meeting in Manhattan with the Governor’s staff, please contact Adam Brackemyre at email@example.com. insurance markets operated. In 2017, the legislature gave the board permission to recommence operation and, this August, the board voted to resume. Some SIIA members report receiving an assessment calculation email from the entity administering the program, while others did not. If you want a copy of the email the MGARA administrator sent, please contact Adam Brackemyre at firstname.lastname@example.org. SIIA remains concerned about health plan assessments. Speaking to a source close to the reinsurance program, self-insured lives are a large portion of Maine’s market and that the legislature is not likely to make any changes until the current federal 1332 Medicaid Waiver that provided federal funding for the program expires in 2023.
New YorkSIIA Will Urge Governor to Sign Stop-Loss Legislation SIIA expects to meet with the Governor’s policy staff in New York City in the coming weeks to urge the Governor to sign legislation extending
NevadaDraft Small Group Stop-Loss Regulation Released In early July, the Nevada Department of Insurance released a re-drafted small group stop-loss regulation. There is one significant welcomed change: the dropping of a per-person aggregate requirement. However, the regulation also prohibits the issuance of a stop-loss policy to employers of fewer than 15 eligible employees, something SIIA will urge the DOI to remove. This regulation is not final. In conversations with DOI staff, SIIA has learned the next two steps in the adoption process are an in-person meeting in Carson City (date is TBD) and proceeded by an open comment period. SIIA understands that there is a backlog of pending regulations and it is unclear when the DOI will schedule the next step in the regulatory process, the in-person meeting.
OUTSIDE THE BELTWAY
DelawareStop-Loss Legislation Signed by Governor
On September 4th, Governor Carney signed House Bill (HB) 406. HB 406 allows stop-loss contracts to be issued to groups of six to 15 eligible employees. Under previous law, an employer must have 15 eligible employees to be issued a stop-loss contract. If after reviewing the draft regulation, you have comments or want to discuss further, please contact Adam Brackemyre at email@example.com.
The law was effective immediately.
Questions or information about involvement in these or other state issues are welcomed by Adam Brackemyre, firstname.lastname@example.org.
OklahomaStop-Loss Bulletin Re-Issued to Reflect Statutory Changes The Oklahoma Department of Insurance recently issued LH 2018-002. This bulletin appears to be the 2013 stoploss bulletin without any unknown changes. The known changes include a required small group stop-loss disclosure form and a minimum aggregate retention point of 110%. These additions reflect HB 2996 of the 2016 legislative session.
he Self-Insurance Institute of America, Inc. (SIIA) recently announced that a SIIA Future Leaders (SFL) Forum has been scheduled for December 12-13 in Tampa, FL. This stand-alone inaugural event has been put together due to the overwhelming positive response from SFL attendees at the association’s National Conference & Expo last month in Austin, TX.
The SFL initiative has been designed to encourage talented SIIA members under age 40 to become involved with the association and the self-insurance industry.
“Given the significant positive energy that was generated in Austin, we determined it was important not to lose momentum,” said SIIA President & CEO Mike Ferguson. “Now we are providing younger SIIA members a dedicated educational and networking opportunity to finish off strong for 2018.” 50
The educational program will feature one of the countryâ€™s top keynote speakers (and a SIIA member favorite) Robert Stevenson, Author, Business Consultant and Keynote Speaker, who will talk about how Millennials can most effectively engage with their Baby-Boomer and/or Gen-X bosses for career advancement purposes.
Donâ€™t miss this unique opportunity to learn practical strategies to put you on a faster promotion track within your organization! This event is ideal for those that are looking to further educate, network, and grow in the insurance industry.
There will also be a preview of SIIA activities for 2019 and related involvement opportunities for SFL members.
To encourage maximum participation, the registration fees are low and SIIA selected a hotel with affordable rooms rates and easy airport access. Event details can be accessed on-line at www.siia.org, or by calling (800) 851-7789.
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NEWS FROM SIIA MEMBERS
2018 NOVEMBER MEMBER NEWS SIIA Diamond, Gold & Silver Member News SIIA Diamond, Gold, and Silver member companies are leaders in the self-insurance/captive insurance marketplace. Provided below are news highlights from these upgraded members. News items should be submitted to email@example.com. 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 firstname.lastname@example.org. If you would like to learn more about the benefits of SIIAâ€™s premium memberships, please contact Jennifer Ivy at email@example.com. 54
NEWS Diamond Members Swiss Re Seeks Business Development Manager - A&H Stop-Loss Position Business Development Manager - A&H Stop-Loss
business profitability. Our goal is to continue to grow a profitable stop-loss block, deliver high quality service, promoting and enhancing the reputation of Swiss Re Corporate Solutions, and to ensure our producers have a clear understanding of our products and procedures. About the Team •
Produce new traditional stop-loss, captive, organ transplant sales to management defined goals
Develop and cultivate new producer relationships within the assigned region
Maintain and grow existing contacts with key distribution channels (brokers/ third-party administrators/consultants)
Collaborate and communicate effectively with other sales team divisions
Work closely with Account Management team to maintain existing block and associated producer and administrator relationships
Work closely with underwriting to write profitable new business
Exercise strong communication skills enabling proper interaction with prospects/clients as well as internal departments
Apply strong presentation skills for individual, boardroom, and conference level events
Represent Swiss Re at industry events, affiliations, associations, sponsored outings
Willingness to travel as required (50%) and manage to a defined budget
Must have excellent time management skills with ability effectively balance multiple tasks under tight deadlines
Comply with SRCS corporate practices and procedures
Location: Los Angeles, CA, US Swiss Re’s Corporate Solutions Accident & Health division is looking for an experienced Business Development Manager to support expanding our footprint on the West Coast based out of our Los Angeles location. In this role you will be responsible for maintaining and growing existing client relationships as well as developing and expanding new key distribution channels within the region. If you are a motivated and detail-oriented individual who enjoys working in a fastpaced environment apply on-line today! About The Role Swiss Re Corporate Solutions’ Sales Team is highly skilled and experienced in building, actively managing and expanding existing relationships. The Business Development Manager must have an extensive knowledge and background in the self-funded industry. The BDM is expected to maintain and grow existing producer relationships as well as develop and expand new key distribution channels within their designated region. This expansion would be in coordination with our National Broker Relations and Producer Development teams. Additionally, they must work closely with the Account Management team to support retention targets and with Underwriting to maintain
About You •
Located in the Western region, ideally out of the Los Angeles, CA office
Medical stop-loss sales experience or related industry with a good knowledge of self-funding and stop-loss
Captive and organ transplant products knowledge helpful
College degree and/or 5+ year’s work experience equivalent
Existing contacts with key distribution channels (brokers/ third-party administrators/consultants) within defined territory beneficial
Excellent organizational skills with ability to manage a large block of business and achieve defined goals
Significant travel required
Strong client focus with excellent oral and written communication skills
Good negotiation and collaboration skills
Knowledge of key industry factors and good understanding of the employee
benefits and healthcare marketplace •
Microsoft suite knowledgeable with SalesForce experience helpful
The Company is an equal opportunity employer. It is the practice of the Company to recruit, hire and promote without regard to race, religion, color, national origin, sex, disability, age, pregnancy, sexual orientations, marital status, military status, or any other characteristic protected by law. Decisions on employment are solely based on an individual’s qualifications for the position being filled.
NEWS Swiss Re Corporate Solutions’ Underwriting Seeks Senior Underwriter -
said Eveleigh. “I am honored to have witnessed the extraordinary growth of the North Carolina captive insurance program, and I am very confident that the NCCIA will continue to provide value to its members as new board members come on.”
Stop-Loss Swiss Re Corporate Solutions’ Underwriting team is highly skilled and experienced in the production of new and renewal rate development for groups that self-fund their Medical plans. The incumbent will follow Swiss Re underwriting guidelines, policies and procedures to calculate Stop-Loss rates and factors. Ideal candidates will be located in the Windsor, CT, Schaumburg, IL or Marlton, NJ areas so they can join our dynamic and collaborative team working on Medical Stop-Loss Underwriting cases.
Silver Members Distinguished Service
As Eveleigh steps down from the board, Morgan Weatherly, a senior account manager at Atlas, will take up a position on the NCCIA board of directors beginning Jan. 1, 2019. Weatherly started working with Atlas in 2016 and is based out of the Charlotte, N.C. office. An N.C. Certified Public Accountant, Weatherly’s responsibilities include overseeing a team that manages a diverse portfolio of captive insurance companies, financial reporting and regulatory filing requirements, and working with third-party providers.
“I’m very excited to be joining the NCCIA board of directors,” said Weatherly. “I’m looking forward to working with the NC Department of Insurance to make sure that the legislative environment in North Carolina continues to be friendly towards captive insurers.” For more information on Atlas Insurance Management, visit atlascaptives.com or call (704) 945-6620.
Award Presented to Martin Eveleigh of Atlas Insurance Management Martin Eveleigh, Chairman of Atlas Insurance Management (Atlas), received the Distinguished Service Award at the fourth annual North Carolina Captive Insurance Association (NCCIA) conference. Martin Eveleigh served on the board of directors for the NCCIA for two terms, is a past Chairman and has assisted with many fundamental plans for advancement of the association through the years.
“I have very much enjoyed serving on the Association board over the years,”
About Atlas Insurance Management Founded in 2002, Atlas Insurance Management is a leading independent insurance management firm, providing captive insurance consulting, formation and management services in the major U.S. and offshore domiciles. The firm has worked with all types of captive insurance companies and managed a full spectrum of captive programs for a diverse clientele. Atlas operates offices in Charlotte, North Carolina and the Cayman Islands. For more information, visit atlascaptives.com or call (704) 945-6620.
SRS Establishes North Carolina Presence, Dana Williams Joins The Firm Strategic Risk Solutions (SRS) announced that Dana Williams has joined the firm as Regional Manager for North Carolina and Ohio. Ms. Williams will be based in a new SRS office in the Charlotte, NC area. The new office marks the firm’s first permanent presence in North Carolina. Dana Williams has over 15 years’ experience in senior finance positions in the insurance industry. She was previously Chief Financial Officer of Hub International Eastern Canada and Worldwide Broker Network, before serving as COO of Steadfast,
NEWS Australasia’s largest insurance broking network. At Steadfast, a publicly listed broker, Ms. Williams was part of the executive team and oversaw operations and acquisitions. Dana also spent several years in the captive insurance industry in the Cayman Islands and at a reinsurance company in Bermuda. “I am excited to take on this new challenge in my career. I have known Brady and SRS for a while and admire what SRS has achieved and the reputation the firm has built. This opportunity allows me to return to the captive insurance industry and be more actively involved in day to day financial management as well as working with a variety of client organizations” said Dana Williams. “North Carolina is a rising, progressive domicile and I am looking
forward to working with the regulators and local captive community”, added Williams. “We have worked with Dana on a couple of different projects including our expansion into Barbados and are very pleased to be able to welcome her full-time to SRS”, said Brady Young, President of Strategic Risk Solutions. “Her experience as a financial executive in the insurance industry is exceptional and we are confident she will be a valuable addition to the firm especially in expanding our presence in North Carolina and growing that presence in Ohio. We are keen to do more work in these domiciles and we believe Dana’s addition in a local North Carolina office will help better serve our clients there”, added Young. SRS has been managing captives in North Carolina since 2014 and expects its portfolio of captive programs to expand in the next few years. In addition to North Carolina and Ohio, SRS manages captives in nineteen US states as well as Barbados, Bermuda and Cayman. Ms. Williams can be reached at firstname.lastname@example.org or (704) 621-3116.
NEWS About Strategic Risk Solutions (SRS) www.strategicrisks. com SRS is the 5th largest captive management firm in the world and the leading independently owned manager. The company has representation in all major US captive domiciles, Barbados, Bermuda, Cayman and Europe. It provides financial reporting, regulatory compliance and program management services to existing and prospective captive insurance companies. For more information, please contact email@example.com or visit www.strategicrisks.com.
Joining Cattarina is Mark Rapoport as Chief Financial Officer. Rapoport also has a rich history of leadership in healthcare technology, holding CFO positions at Visioneering Technologies, Inc. (VTI) and Capsule Technologie SAS, as well as President & CEO of Thomas, Thomas & Walsh, Inc., and COO and CFO of Landacorp, Inc.
About Healthx Healthx is the leading healthcare member engagement orchestration platform connecting members, providers, and payers integrating all tech tools into one platform driving cost savings and positive health outcomes for everyone. Visit www.Healthx.com.
Healthx Names Gene Cattarina as New CEO and Mark Rapoport as CFO Healthx, Inc., the leading healthcare technology engagement platform announces the appointment of healthcare technology industry veteran Gene Cattarina as new CEO and Mark Rapoport as CFO. Prior to joining Healthx, Cattarina established an impressive track record of success, leading numerous healthcare technology companies through major growth in business sectors including healthcare information systems, software, products, devices, and professional services. Most recently he was CEO of SafeOp Surgical, Inc. (now an Alphatec company) the developer and provider of the EPAD™ System, a unique, simple-to-use, and cost-effective neurological monitoring solution. Previous to SafeOp, he was President and CEO of Capsule Technologies (now a part of Qualcomm Life) the industry leading provider of medical device integration solutions. Gene has also held CEO and President positions at Lynx Medical Systems; Landacorp, Inc.; Medicode; and TDS Healthcare Systems, now part of Allscripts. “The things happening at Healthx are very exciting and I am honored to have the privilege of leading the company through this next phase of innovation and growth,” said Cattarina. “I’m thrilled to join the vibrant tech scene here in Indianapolis with the likes of Salesforce, Lessonly, Sigstr, and others. Healthx has an incredible history of technological innovation in healthcare. Most recently, Healthx has focused on its platform technology that orchestrates the complex healthcare journey, initiating interactions between health plans and TPAs, providers, and members.”
Gold Members Berkshire Hathaway Specialty Insurance Company Adds Key Product Line & Service Leaders in Dubai Berkshire Hathaway Specialty Insurance Company (BHSI) announced that it has further expanded its leadership team in Dubai with the appointment of executives to fill key product line and service posts.
“Building a strong foundation of servicing capabilities and local knowledge and expertise is critical to BHSI’s long term plans in the Middle East.” said Marc Breuil, President, BHSI, Asia Middle East. “Since BHSI Middle East commenced operations in February, we have established a strong and dynamic team to bring BHSI’s unmatched financial strength and capital to the Middle East.” “Our new teammates in Dubai embody the excellent capabilities and strong character that is so valued by BHSI and by our customers,” said Alessandro Cerase, Senior Executive Officer, BHSI Middle East. “They will lead our efforts to bring
NEWS BHSI’s long-term focus, multi-line underwriting and service excellence to customers throughout the Middle East. We are pleased to welcome them aboard.” Thee BHSI appointees include: •
Aisling Malone, Head of Executive & Professional Lines. Aisling was previously Head of Professional Liability Cyber MENA and Senior Underwriter at AIG MEA Limited. Aisling is joined by Joe Saab, Senior Underwriter. Emir Erdur, Head of Casualty. He was previously Casualty Leader and Regional Underwriter of Casualty for the MEA region at QBE Insurance (Europe) Limited. Emir is joined by Mohammed Hannoun, Senior Underwriting Manager.
Carlos Beltran, Head of Commercial Property. Carlos was previously Regional Vice President, P&C Underwriting at Chubb Latin America.
Meenakshi Srinath, Head of Marine. Prior to BHSI, Meenakshi was Head of Marine (Gulf and KSA) at AXA Insurance Gulf.
Kapil Palathinkal is Head of Energy and Construction. Kapil was most recently the Energy & Engineered Risk Manager for the Arabian Hub at AIG. Kapil is joined by Anuradha Sekar, Senior Underwriter.
Pruthviraj More, Senior Risk Engineer. Pruthviraj joins BHSI from Allianz Global Corporate Specialty where he was a Property Loss Control Engineer.
John Lewis, Head of Claims. John was previously Head of Claims at Zurich Insurance DIFC Dubai.
Earlier this year BHSI announced the appointment of Alessandro Cerase as Senior Executive Officer (SEO) and Neeraj Yadvendu as deputy SEO and Head of Third
Party Lines for the Middle East, both based on Dubai. Alessandro also leads First Party Lines for BHSI’s broader Asia Middle East region, which includes BHSI’s other regional hubs of Hong Kong and Singapore as well as BHSI operations in Malaysia and Macau. To learn more, contact alessandro. firstname.lastname@example.org. Berkshire Hathaway Specialty Insurance Company (www.bhspecialty.com) provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, medical stop loss, and homeowners insurance. The actual and final terms of coverage for all product lines may vary. In the Asia Middle East region, it underwrites on the paper of Berkshire Hathaway Specialty Insurance Company, which holds financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s. Based in Boston, Berkshire Hathaway Specialty Insurance has offices in Atlanta, Asheville, Boston, Chicago, Houston, Indianapolis, Irvine, Los Angeles, New York, San Francisco, San Ramon, Seattle, Stevens Point, Auckland, Brisbane, Dubai, Dublin, Düsseldorf, Hong Kong, Kuala Lumpur, London, Macau, Melbourne, Munich, Perth, Singapore, Sydney and Toronto. Regulated by the Dubai Financial Services Authority. For more information, contact email@example.com.
CAPTIVE INSURANCE SOLUTIONS
BOARD of directors & committee chair
Chairman of the Board*
Robert A. Clemente CEO Specialty Cace Management LLC Lahaska, PA
Mike Ferguson SIIA, Simpsonville, SC
Chairman Elect* Adam Russo Chief Executive Officer The Phia Group, LLC Braintree, MA
Treasurer and Corporate Secretary* David Wilson President Windsor Strategy Partners, LLC Princeton, NJ *Also serves as Director
SIEF Board of Directors Nigel Wallbank Chairman Heidi Leenay President Freda Bacon Director Les Boughner Director
Gerald Gates President Stop Loss Insurance Services AmWins Worcester, MA
CAPTIVE INSURANCE COMMITTEE Michael P. Madden Division Senior Vice President Artex Risk Solutions, Inc. San Francisco, CA
Mary Catherine Person President HealthSCOPE Benefits, Inc. Little Rock, AR
GOVERNMENT RELATIONS COMMITTEE Lawrence Thompson CEO BSI Fresno, CA
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
HEALTH CARE COMMITTEE Kari L. Niblack, JD, SPHR CEO ACS Benefit Services Winston-Salem, NC INTERNATIONAL COMMITTEE Robert J. Repke President Passport For Health Novato, CA WORKERSâ€™ COMP COMMITTEE Mike Zucco Business Development AL Trucking Association Fund Montgomery, AL SIIA FUTURE LEADERS COMMITTEE Craig Clemente Chief Operating Officer Specialty Care Management Lahaska, PA
Alex Giordano Director
SIIA new members NOVEMBER 2018 Regular Corporate Members Brenda Motheral CEO Archimedes Nolensville, TN G. Bryan Thomas CEO/President CCMSI Danville , IL Rachel Schreiber Senior Marketing Director Change Healthcare Nashville, TN Rashad Miller National Account Manager Chetu, Inc. Plantation, FL David McLean, PhD CEO Emerging Therapy Solutions, Inc. Stillwater, MN Rachel Means CEO Employee Benefits Consulting EBC Tyler, TX Alan Hall GlobalTech Houston, TX
Cristin Dickerson Green Imaging Houston, TX
Silver Corporate Members
Diane Gross Director of Underwriting Henderson Brothers Pittsburgh, PA
John Butts Director, Market Development and PR PerformRx Philadelphia, PA
David Vizzini Partner & CSO M&G, Inc. Lake Oswego, OR
Aaron Pohlmann Attorney Womble Bond Dickinson Atlanta, GA
Chris Boling Vice President Molyneaux Davenport, IA
Cathy Nenninger CEO New World Medical Network Westhampton Beach, NY Dennis Labrasca President & CEO Paradigm Health Holdings Portsmouth, NH Shelley Steele Director Peachtree Risk and Insurance Company SPC, Ltd. Atlanta, GA Mark Testa EVP Regenexx, LLC Des Moines, IA
Corporate Members Tine Hansen-Turton Woods Services Langhorne, PA
Paying Usual & Customary IS PAYING TOO MUCH
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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.
Pay it Right THE FIRST TIME
Through our integrated PREPAYMENT REVOLUTION Zelis is the market leader in integrating network solutions, payment integrity and electronic payments to deliver insights that drive even greater savings before a claim is paid. Working in a prepayment environment, we price the claim correctly before you pay, avoiding unnecessary costs, time and reducing member and provider abrasion. In fact, 85% of the time we find claim savings that other vendors donâ€™t. We do this by focusing on every step of the pre-payment claim cycle and delivering value-driven solutions from payment to reconciliation.
Contact Zelis today at 888.311.3505 or visit zelis.com to find out how our pre-payment solutions are helping control the rising cost of healthcare.
Better Service. Better Performance.
Copyright 2018 Zelis Healthcare. All rights reserved Copyright 2017 Zelis Healthcare. All rights reserved.