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September 2018

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The World’s Leading Alternative Risk Transfer Journal Since 1984

The 411 on

ASOs Proponents of BUCA-backed arrangements say they offer bundled firepower, broad choice and consumer comfort, while critics warn against faux discounts, conflicts of interest and inflexibility in the age of customization


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

Editorial Staff 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 Karrie Hyatt

4 The 411 on

ASOs Proponents of BUCA-backed arrangements say they offer bundled firepower, broad choice and consumer comfort, while critics warn against faux discounts, conflicts of interest and inflexibility in the age of customization

2018

Volume 119

20 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

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Three Ways Self-Insured Plans Can Leverage State Laws to Protect their Members from Balance Billing

By Bruce Shutan

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

2018 Self-Insurers’ Publishing Corp. Officers

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

Catching Up With U.S. Captive Domiciles By Karrie Hyatt

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Erisa Remedies in the Post-Montanile Era

38

Current Litigation Highlights Ongoing Need for Review of Plans for Mental Health Parity Compliance

44

SIIA Endeavors

47

Member News

September 2018 | The Self-Insurer

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The 411 on

ASOs Proponents of BUCA-backed arrangements say they offer bundled firepower, broad choice and consumer comfort, while critics warn against faux discounts, conflicts of interest and inflexibility in the age of customization

W

hat has been characterized in some circles as a David vs. Goliath battle for the hearts and minds of self-insured employers isn’t necessarily so black and white in today’s ever-changing marketplace. In one corner of the competitive canvas, scores of independent third-party administrators (TPAs) line up to sell their wares. They tout best-of-breed connections with multiple strategic partners as part of an approach built largely around flexibility and customization, industry observers say. Many of those stand-alone operations pale in comparison to so-called BUCA plans (i.e., Blue Cross Blue Shield, UnitedHealthcare, Cigna and Aetna) that have made their mark with administrative-services-only (ASO) arrangements powered by economies of scale. Experts note that these behemoths bundle services and offer massive networks to help manage costs.

But this clear choice may be more nuanced than meets the eye. Consider, for instance, that each of the BUCAs have acquired TPAs that largely operate independently from their corporate parent. So while traditional carriers with fully insured options may be controlling the purse strings for self-funded plans, their influence may be somewhat limited. One such example involves Meritain Health, an independent subsidiary of Aetna since 2011. By Bruce Shutan

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Over more than three decades, there has been an increasing demand on health insurance carriers to match TPAs “because they do so much bundling and connectivity without outside entities,” explains Dave Parker, head of national accounts at Meritain Health.


The 411 on ASOs | FEATURE

Some carriers, he observes, are starting to act more like a TPA now that bigger-ticket items for self-insured customers include pharmacy benefits management (PBM) and stop-loss insurance. The result is “a greater willingness to unbundle than they did in the past,” he says. “If care management is a big value proposition for the carriers, they are holding onto that.” Aetna last year agreed to a $69 billion deal with CVS. The drugstore retailer acquired the Caremark PBM in 2007. ASO carriers believe that their products bring best-of-breed results to the table, according to Parker, who adds that buyer preferences and/or the employer’s benefits broker shape those outcomes. “There are a lot of clients that really do want to build their own best of breed,” he says, “yet then we see a lot of other clients that love the bundled approach” for its simplicity or brand appeal.

contracts, his area of expertise, he says they’re able to provide artificially low per-employee per-month fees. Michael “Mick” Rodgers, managing partner with the Axial Benefits Group, laments that many of his fellow employee benefit brokers who lack self-funding experience are naïve about ASO contracts and fooled by promises of discounts.

“Self-insurance on their terms doesn’t align incentives, and it doesn’t lower costs,” he warns. “I have empirical data that says that our independent third-party administrators run 10% or 12% better than my ASO contracts with the same plan design, claims and everything because we’re able to use bestin-class cost controls when an independent TPA allows us to do it.” Becker also has seen similar savings. For example, one of his clients moved from a BUCA ASO to an unbundled health plan using an indie TPA without much change in their demographics and lowered its annual per-employee cost to $6,700 last year from more than $7,300 in 2016.

Critical eyes That’s not to say every ASO in the market is firing on all cylinders or without controversy. Several knowledgeable sources are highly critical of the involvement of traditional health insurance carriers with self-insurance, and representatives from three of the four BUCA letters declined participation in this story. There’s no denying the comfort level many employers have when a BUCA logo is embossed on their medical cards, says Gary C. Becker, CEO of ScriptSourcing, which helps self-funded employers mitigate prescription drug claims. However, he believes that “the perception of having the right PPO network trumps an ability to manage risk and the cost associated with working with an ASO.” Since ASOs earn substantial revenue from their PBM

September 2018 | The Self-Insurer

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The 411 on ASOs | FEATURE

While ASOs can help BUCAs “leverage their brand awareness and reputation” for all the expected mid-market conversion to self-insurance, a greater propensity to customize solutions offer independent TPAs a competitive leg up, opines Vincent Esposito, chief strategy and business development officer at BuffCo Holdings, a holding company that makes strategic investments in health care companies. He says these capabilities square with a culture of “extreme flexibility” that customers are demanding in virtually every sector of the economy. ASOs might not always have the bells and whistles of traditional TPAs in terms of plan design or utilization data, cost containment, reporting mechanisms, telemedicine or fee-for-service options, according to Esposito. Moreover, he’s skeptical about the possibilities for growth of this sub-segment when fully insured arrangements are their cash cows.

But other consultants take a more measured view. Jim Winkler, chief innovation officer for Aon’s Health Solutions Group, challenges the veracity of any blanket statement that either an ASO or independent TPA is always better. “We look at this stuff on a client-by-client basis,” he says. “You figure out their tolerance for the tradeoff between cost management and employee noise, and help them find a solution that fits.” His colleague, James Fraser, a VP in Aon’s Health Solutions Group, sees a growing number of midsize employers in the Colorado market he serves switching from fully-insured to selffunded arrangements. His sense is there are lower barriers to entry if they embrace one of the carrier ASO models. In some cases, he considers it “the next step from fully-insured to a truly unbundled TPA arrangement where you can pick best-in-class vendors and customize every area of your self-funded plan with a real independent TPA.” If one of these employers chooses to be self-funded with UnitedHealthcare, then Fraser says the firm still will be immersed in the UHC ecosystem and primarily using similar tools or prenegotiated deals with vendors to the ones offered on a fully-insured basis.

September 2018 | The Self-Insurer

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The 411 on ASOs | FEATURE

Limited freedom The degree to which ASOs can work with specialty vendors may not always be crystal clear. The Meritain Health acquisition created what Parker describes as “a different channel of opportunity” for Aetna beyond fully insured options without sacrificing on flexibility. While clients can easily access Aetna’s premier networks and tools, there’s also an ability to work with a variety of stoploss carriers, PBMs or other outside entities, as well as help employers build their own networks or pursue direct contracts.

“One of our biggest guidelines was to make sure we kept our TPA DNA,” he explains, “and we feel that we have been able to continue to do that.” Parker reports “very good growth in all markets, small, midsize and national accounts,” and feels that kind of growth will continue. The breadth and depth of Aetna

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resources fueled Meritain Health’s growth. A sales force of 15 to 20 people prior to the acquisition suddenly was able to work with 300 of their peers at the parent company. He says it gave the TPA “a significant amount of exposure and opportunity” with the help of introductions to scores of brokers and consultants. And while Meritain Health immediately benefited from Aetna’s scale from a pricing standpoint, Parker also credits clinical programs and tools for tricky areas such as specialty pharmacy. Meritain Health clients have seen their costs go down in recent years, he says, “because a significant amount of business migrated from a lesser PPO network or a rentaltype network.” There have been additional cost savings from care management and/or pharmacy tools. BUCA-type carriers nationwide are purchasing TPAs and allowing access to networks under ASO-style contracts or promoting them more than ever as selfinsurance expands, Rodgers observes. The

Dave Parker

trouble with indie TPAs that are acquired, however, is they start imposing limits on what can be carved in or out, he says. One example involves a BUCA plan whose ownership change recently tied the hands of a client’s independent nurse case manager. Perception can be another obstacle. Parker says “not every network is going to work with us because of our ownership,” noting the potential need to sign confidentiality

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The 411 on ASOs | FEATURE

agreements for competitive reasons. “We did have access to several of the networks that, as a result of our acquisition, impacted the agreements out of concerns for that,” he reports.

Assessing potential conflicts But there may be even bigger barriers ahead. Rodgers says prospective self-insured customers need to realize the chief mission is “to create revenue everywhere they can,” which will benefit the PBM, case management company and stop-loss outlet whose services are bundled under the carrier’s umbrella and may be overpriced relative to being offered by an independent TPA. It’s also worth noting that many traditional health insurance carriers “are honoring reinsurance premium and head counts towards the undisclosed retention bonuses that the advisers are getting which can be substantial income to the guys that are making the recommendations and is a total conflict of interest,” he adds. A potential conflict of interest could arise if the relationship between a TPA, its BUCA parent and other vendors such as PBMs under the same umbrella of ownership isn’t fully disclosed to an employer that is making purchasing decision, Winkler notes. That same thinking extends to referral agreements and commissions or incentives to steer business a certain way. It also would violate “probably virtually every state’s brokerage and consultant licensing code of ethics,” he says. However, greater flexibility and customization represent “the fastest way to remove conflict of interest when it comes to servicing the client,” Esposito believes. He cautions that these virtues also involve an increased level of complexity for delivering on service in a way that fits customer expectations. And since most TPAs fall short of that mark, he cannot entirely dismiss ASOs.

Sharing the spoils One key difference Fraser notes between ASOs and indie TPAs is that BUCAs focus on auto-adjudication of claims as a barometer of efficiency, whereas many emerging TPAs, and ASO arrangements to some extent, pursue a “much more hands-on evaluation of the large claims.” For example, there would be greater scrutiny of 5% to 10% of the population that represent 60% or 70% of the cost to weed out fraud, waste and abuse. With self-insurance flowing down market with greater ferocity, BUCAs with broad and compelling networks face significant opportunities to at least retain clients if not actually achieve net growth, according to Winkler. He says they could facilitate a conversation with employer customers about moving from a fully insured to self-funded solution. But Winkler also notes that “health plans can make money in the fully-insured space certainly more so than they are likely to make in the selfinsured space,” depending on the circumstances, state and rate-filing process on the fully insured side.

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Accessing an ASO’s BUCA network can be a double-edge sword, industry experts agree. For example, Winkler explains that a broad network of providers also produces a wide variation of cost and quality, while a narrow network may not be as compelling to consumers, but could lower the total cost of care. Employers that cotton to the ASO model might involve those for whom a large provider network would best handle employees who are scattered around the country, Esposito says. But such needs are dwindling in the face of narrow networks and reference-based pricing, he adds. “At the end of the day,” Esposito observes, “small and medium-size employers need to become smarter on health care as a whole. And transitioning from full insurance into self-funding is a natural fix for that, especially when you layer on top stop-loss or level funding.” Parker believes there’s enough mounting interest in self-insurance for both ASOs and TPAs to share in the spoils. “It’s exciting to see self-funding continuing to rise and be a bigger alternative, which I think helps our industry as a whole,” he says.

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


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Catching Up With U.S. Captive Domiciles By Karrie Hyatt

T

hree quarters of U.S. states have now enacted captive legislation, but just having legislation on the books is no longer enough to attract new captive business. Captive domiciles have to update their laws regularly to keep on top of industry and market developments and to adjust to developing captive business practices, as well as making the state welcoming to captives.

Since the beginning of 2017, eleven states have updated their captive law, making both minor and major changes to stay competitive captive domicile market. Several more states are in the process of pursuing changes. But why even pursue captives when so many other states already operate as captive domiciles?

As North Carolina can attest to, states that serve as captive domiciles can bring in a significant amount of revenue to the state. North Carolina first passed captive law five years ago and has aggressively been pursuing captive business since then.

At the end of 2017, the state had 248 captive insurers and more than 400 cell and series captives operating in the state. In June, the North Carolina Department of Insurance issued a press release boasting that captives had made a $30 million fiscal impact on the state during 2017.


CATCHING UP WITH CAPTIVE DOMICILES | FEATURE

According to the statement, “The impact was generated by premium taxes paid to the state by licensed captive insurers as well as service provider and hospitality revenues generated by North Carolina businesses for services they provide to the captive insurance industry.” The department estimates that in the four years between 2013, when the state became a captive domicile, and 2017, that captives made a $71 million positive fiscal impact on the state.

While North Carolina is an outlier in how quickly and successfully a captive domicile can be established, other newer domiciles are growing at a reasonable and steady rate, reaping the benefits that captive business can bring to a state.

When it comes the financial side of new captive laws, the changes range from capital requirements to penalties for late premium taxes. The updated law in Connecticut will allow the state insurance commissioner to waive capital and surplus requirements for selected captives and lowers the minimum surplus requirement for sponsored captives.

Kansas, on the other hand, has raised the minimum requirements for capital and surplus that a pure captive must have—from $100,00 to $250,000. Kansas has also implemented a fee of $10,000 for any examinations, investigations, and applications processing conducted by the state.

South Carolina has also made changes regarding examinations for captives. Captives in that domicile must have an examination three years following its start of business, but after that any further examinations will be at the discretion of the regulator.

Tightening Up Regulation In the last two years, the majority of legislative changes in captive law either clarify the existing law, tweak the law to make the it more appealing, or change the financial requirements, fees, or taxes.

A good example is South Carolina, their 2018 update was meant to “clean up” their existing law and one of the modifications made was to redefine a captive’s principal place of business, as well as modifying capital and surplus requirements. Another example is Georgia which removed the stipulation that required captives to use the terminology “captive insurance company” in their name. Texas’s update cleared the way for captives to reinsure with nonadmitted reinsurers.

September 2018 | The Self-Insurer

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CATCHING UP WITH CAPTIVE DOMICILES | FEATURE

This year, North Carolina is in the process of trying to pass legislation that will exempt foreign captives doing business in the state from all state taxes. The law was included in a general budget bill this past spring which was vetoed by Governor Roy Cooper for reasons not relating to captives.

Vermont’s law made a clarification regarding reinsurance premium tax on loss portfolio transfers. Tennessee’s 2017 legislation implemented new penalties for captives that fail to pay their premium taxes on time. The fees consist of $500 for each month it’s late with an interest rate of 10% on the unpaid tax.

New Trends In Captive Law One of the most common changes that states are making to their captive law these days is to allow captives to go dormant. When a captive decides to cease business and become inactive, under unamended captive law, the captive would have to maintain the capital and surplus requirements that active captives are subject to. States that legislate for dormant captives typically reduce the minimum amount of capital and surplus required and reduce annual fees. Capital and surplus, in most cases, is reduced to $25,000.

Allowing captives to become inactive, makes it easier for captive owners to react to market changes as needed. Establishing a captive can be a time consuming and onerous undertaking. If a captive is not the best mechanism for insuring risk at the time, a company may choose to put theirs on hold without tying up capital that could be better used elsewhere. Then when the time is right for reactivating their captive, they are a few steps ahead in getting the captive running. The dormancy amendments that states are enacting allow more flexibility for captive owners to make best choices for their risk mitigation.

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CATCHING UP WITH CAPTIVE DOMICILES | FEATURE

In 2017 and 2018, five states updated their captive law to allow for captives to become dormant—Arkansas, Connecticut, Delaware, Montana, and Tennessee. South Carolina and Vermont, both with dormancy legislation on their books, also revised their dormant captive provisions.

Another recent change that domiciles are making is to extend the due dates for premium taxes and/or annual statements. In this year’s update to their captive law, Vermont has extended the annual report due date to March 15th for pure, association, sponsored, and industrial insured captives whose fiscal year responds with the calendar year. Other types of captives’ annual reports are still due March 1st, unless their fiscal year doesn’t correspond to the calendar year. The domicile has also set a hard deadline of March 15th for premium taxes.

In 2018, Both Delaware and South Carolina have also lengthened their due dates. Delaware now gives captives until April 15th to file both their premium taxes and their annual statements. South Carolina will now allow captives (except for risk retention groups) to file their annual reports by July 1—a four month extension from the previous due date of March 1.

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Other Ways Domiciles Are Easing the Way for Captives There is a large variation in the different angles that captive domiciles are taking to make their state more welcoming to captives. Tennessee’s latest changes to its law, in 2017, streamlined the process that will allow for a protected cell to become a standalone captive. Arkansas now allows for captives to more easily be merged into another captive.

In 2017, legislation passed in Georgia allows captives to be formed as a limited liability company, rather than as a stock company. Arkansas also amended its captive legislation in 2017 to allow captives to organize and operate in any form of business that is legal in the state, with the permission of the state’s insurance commissioner.


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CATCHING UP WITH CAPTIVE DOMICILES | FEATURE

Kansas recently updated its captive law to allow pure captives to insure controlled unaffiliated businesses for up to 5% of the captive’s total written premium with approval from the insurance commissioner. While South Carolina has changed its legislation to allow pure captives, special purpose captives, and sponsored captives to make loans to their parent companies or affiliates, with prior approval from the regulator.

Connecticut and Vermont both allow for the formation of agency captives. Agency captives are formed and controlled by licensed insurance agents or brokers. In Kansas’s 2018 overhaul of their captive law, they made room for both branch captives and special purpose financial captives. A branch captive is the U.S.-based arm of an offshore domiciled captive and is usually treated as a standalone captive and taxed accordingly.

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.

In 2017 and 2018, four domiciles updated their law to allow new types of captives to be formed. Arkansas now allows for the formation of incorporated protected cells— cell captives that are established as a legal separate entity from its sponsoring captive.

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ACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES:

Practical

Q& A T

he Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the Women’s Health and Cancer Rights Act) dramatically impact the administration of self-insured health plans. This monthly column provides practical answers to administration questions and current guidance on ACA, HIPAA and other federal benefit mandates. Attorneys John R. Hickman, Ashley Gillihan, Carolyn Smith, and Dan Taylor provide the answers in this column. Mr. Hickman is partner in charge of the Health Benefits Practice with Alston & Bird, LLP, an Atlanta, New York, Los Angeles, Charlotte, Dallas and Washington, D.C. law firm. Ashley Gillihan, Steven Mindy, Carolyn Smith and Dan Taylor are members of the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner’s situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation. Readers are encouraged to send questions by E-MAIL to Mr. Hickman at john.hickman@alston.com. 20

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Passage of House Bills Warrants a Fresh Look At Health Savings Accounts - Part One

H

ealth savings accounts (HSAs) provide a tax-favored means for individuals to save and pay for medical expenses not covered by insurance. In order to contribute to an HSA, the individual must be enrolled in a specially defined type of plan called a high deductible health plan (HDHP) and have no other health plan coverage (other than certain limited types of permitted coverage such as vision, dental, accident, specified disease, and certain fixed indemnity coverage).

The combination of an HDHP and an HSA is commonly referred to as a consumer driven health plan. While the premium for the HDHP may be only slightly lower than the premiums for health plans with a lower deductible, the tax savings from the HSA is what generally makes these arrangements attractive. HSAs were first available starting in 2004.

Similar to an individual retirement arrangement (IRA), HSAs are owned by the individual account holder. This means that (unlike Health FSAs) any unspent funds remain in the account and accumulate from year to year, with earnings based on how the HSA is invested.

Because the HSA is owned by the individual, they are also portable, that is, they remain the property of the individual even if they change employers (or retire). Also similar to an IRA, upon death, the HSA may be transferred to a beneficiary.

2. How are HSAs taxed? The Triple Tax Trifecta

Since then, as traditional health coverage premiums have continued to increase, interest in these types of consumer driven health plans has increased. Survey data indicates that in 2017, 43.7% of persons under age 65 with private health insurance were enrolled in an HDHP, including 18.2% who were enrolled in an HDHP with an HSA.1

House passage of proposed HSA improvement legislation (the “HSA Bills”) in July could resolve many potential compliance issues and make HSA/HDHP arrangements even more accessible and easier to use.

This two-part article provides a brief overview of HSAs and addresses key legislative developments based on the HSA Bills. In this Part One of our two part series we address the tax benefits associated with an HSA, who can establish an HSA, what types of coverage qualify as HDHP coverage and what additional coverage may be allowable.

1. What is an HSA?

An HSA is a tax favored account that is established through a bank or other qualified financial institution. Often, insurance companies that offer high deductible health plans that are compatible with HSAs partner with financial institutions that serve as custodians for HSAs.

Contributions made to an HSA by eligible individuals are deductible for federal (and most state) income tax purposes (regardless of whether the individual itemizes deductions). Employer contributions (including pre-tax salary reductions) are excludable from employees’ incomes and are not subject to payroll (e.g., FICA) taxes.

Income on amounts held in an HSA accumulate on a tax-free basis until withdrawn from the account.

Distributions from an HSA for qualified medical expenses are tax free. In order to qualify, these expenses must not be reimbursed from another source and must be incurred after the HSA is established.

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As we discuss in our next article, the requirement that an expense be incurred after the HSA has been established has caused some administratively difficulty related to the timing of the HSA establishment that would be addressed by the proposed HSA Bills. Non-qualifying distributions are includible in income and also subject to an additional 20% excise tax penalty.

benefits for onsite and retail clinic care, direct primary care, chronic care expenses, and certain fitness and exercise-related expenses.

The additional 20% tax does not apply to distributions made after the individual account owner reaches age 65, becomes disabled, or dies. Thus, for such individuals, if the HSA is not needed for medical expenses, it may be used to supplement retirement income.

High Deductible Health Plan Limits

An HDHP must also satisfy dollar limits on the deductible and out-of-pocket (OOP) medical expenses, as summarized in the following table. These dollar limits are indexed annually. Applying the OOP limit looks a little complicated, because there are two different limits that apply: one under the definition of an HDHP for HSA purposes, and the other under the Affordable Care Act (ACA) that applies generally to medical plans. As a general rule, the HDHP need merely comply with whichever limit is the most restrictive.

Limit

Self-Only Coverage 2018

2019

Family Coverage 2018

2019

Minimum Annual Deductible

$1,350

$1,350

$2,700

$2,700

HSA Maximum Limit on Out-of-Pocket

$6,650

$6,750

$13,300

$13,500

$7,3502

$7,900

$14,700

$15,800

Expenses (OOP expenses include the deductible and any co-payments or co-insurance for in-net-

3. Who can establish an HSA?

work services) ACA OOP Limit (OOP expenses include the deductible and any co-payments or

In order to contribute to an HSA, the individual must be covered by an HDHP and no other health plan, other than certain limited types of coverage. Currently, individuals who are enrolled in Medicare (including Medicare Part A) are not entitled to contribute to an HSA. This is another limitation that would be addressed by the HSA Bills.

co-insurance for in-network services for essential health benefits)

(applies separately to each individual under family coverage)

A couple of additional points to keep in mind on the definition of an HDHP:

• Separate deductibles for individuals in a family under an HDHP: Some family health 4. What is an HDHP?

An HDHP is a health plan that does not pay any benefits (other than for certain preventive care) before the deductible is met. The individual is responsible for 100% of covered medical expenses (other than permitted preventive care) before reaching the HDHP plan’s deductible. The HSA Bills would open the door to certain limited 22

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plans have separate deductibles for each individual as well as an overall deductible for the entire family. Under this type of plan, if the deductible is met for any individual family member, then the plan pays benefits for that individual, even if the higher family deductible is not met. For this type of plan to qualify as an HDHP, both the family deductible and the (so-called “embedded”) individual deductible must be at least the minimum family deductible.

o For example, suppose in 2018 a family health plan has an overall

deductible of $4,000, but pays benefits for any particular individual subject to a deductible of $2,000. This plan does not qualify as a HDHP. The individual deductible would need to be at least $2,700.


• Interaction of HDHP OOP limit and ACA OOP limit: HDHPs are subject to both the HDHP OOP maximum and the ACA OOP maximum that applies generally to health plans. The limits, unfortunately, are not the same and apply in somewhat different ways. Under federal agency rules, the ACA individual OOP maximum must be applied separately to each individual under a family plan. The interaction of these two rules means that HDHPs must comply with the lower of the two limits.

A limited exception applies, however, for certain types of permitted insurance and permitted coverage. Under this exception, individuals can have certain types of coverage and still be eligible to contribute to an HSA. Permitted insurance and coverage currently includes:

• Accident and disability coverage • Insurance coverage for a specified disease (e.g., cancer) or illness (sometimes called “critical illness” coverage)

• Hospital indemnity insurance coverage that pays a fixed amount per day (or other period) of hospitalization

• Dental and vision care • Long-term care

o Example: Suppose in

2018 a family health plan has an OOP limit of $13,300. This plan satisfies the OOP max for a HDHP. However, in order to satisfy the ACA rules, the plan must also have a separate OOP limit for each individual of no more than $7,350.

The HSA Bills would open the door to individuals with bronze and catastrophic plan coverage, coverage that provides a limited amount of specified expenses before the deductible applies (e.g., $250 individual and $500 family), certain limited benefits for onsite and retail clinic care, direct primary care, and certain fitness and exercise-related expenses.

References

5. What types of coverage in addition to the HDHP are permitted?

1 https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201805.pdf 2 Note, that an embedded individual OOP limit applies for ACA compliance purposes, but no such requirement applies for HSA purposes.

HDHPs are intended to make individuals more aware of and involved in their health care decisions by ensuring that the individual has “skin in the game” for medical expenses before the deductible is met. Thus, in general, individuals may not have health coverage in addition to an HDHP and also qualify for an HSA. The HSA helps to fill the gap by providing a tax favored means of saving for medical expenses not covered by the HDHP.

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Three Ways Self-Insured Plans Can Leverage State Laws to Protect their Members from Balance Billing By Matthew Albright

N

early everyone has a personal or professional horror story about an egregious balance bill for healthcare services, but, while many state laws have provisions meant to protect patients from balance billing, there appears to be no legislation at either the federal or state level that protects members of self-funded health plans from balance bills. A balance bill occurs when a provider sends a patient a bill for the difference between what the patient’s health plan has paid and what the provider charges, and these bills can be costly when the provider is outside of an insurer’s provider network. A “surprise” balance bill, a bill from an out-of-network provider that the patient did not know was out of network, can have an especially significant and unexpected impact on a patient’s financial well-being. Most commonly, these surprise bills come from situations that are beyond a patient’s control; for instance, when healthcare is provided in an emergency situation or when an out-of-network physician provides services in an in-network hospital. The issue of egregious balance billing is growing on a number of fronts: First, according to a 2016 study by the National Academy for State Health Policy, statistics demonstrate that the frequency of surprise balance billing is increasing. Second, the charges on balance bills appear to be increasing as well, according to a report by The Schaeffer Initiative for Innovation in Health Policy. 24

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Fortunately, public and political attention on surprise balance billing is increasing as well. Last year, over eighty bills were introduced by state legislatures on the issue and, ultimately, eight states passed laws. A total of twenty-eight states now have at least a minimum of provisions intended to mitigate balance billing by out-of-network providers in the emergency context and/or surprise billing in non-emergency settings. (See map.) Increased balance billing and egregious out-of-network claims negatively affect members of both fully-insured and self-insured ERISA plans. However, self-insured health plans have a particular concern with balance billing since member satisfaction has a greater impact on their business model. In general, it appears that most state laws on balance billing and reimbursement for out-of-network providers do not apply to self-insured health plans either because of how the law defines the payer or because the requirements are arguably preempted by ERISA. On closer look, however, this is not always the case. Some state laws do include elements that can provide support for self-insured ERISA plans that want to advocate against the balance billing of their members, especially if the plan includes provider negotiations as part of its cost management strategy. In addition, some state laws may help self-insured ERISA plans negotiate a provider down to a reasonable reimbursement rate overall, even if the law does not apply directly to self-insured health plans. Listed below are three tactics, using specific state laws, which self-insured health plans can use when working with providers to both protect members from balance billing and keep the cost of out-of-network bills low.

1. Find state law provisions that may apply to self-insured. While there are some federal laws that address out-of-network provider reimbursement (more on that later), there is nothing in ERISA or any other federal law that prohibits balance billing. Many states, on the other hand, do have laws that

prohibit balance billing, put floors on out-of-network reimbursement rates, and require providers to give notice to patients that their healthcare may be provided by out-of-network providers. In these categories of requirements, nuggets of leverage for self-insured health plans do exist. A good example of this is the balance billing law in Oregon, HB 2339, passed in 2017, which prohibits out-of-network providers from balance billing members for emergency and non-emergency health services. The Oregon law addresses the question of ERISA preemption up front by stating that the law does not apply to any plan “that is exempt from state regulation� because of ERISA. However, ERISA preemption likely does not apply here, because the Oregon requirements apply to providers only. Providers, in network or not, have no direct standing under ERISA. The Oregon law does not include any requirements that apply to plans in the law, so there appears to be no conflict with ERISA. We might expect more laws like this:

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A bill proposed in Kentucky for the 2018 legislative session, KY SB 79, uses similar language in its balance billing prohibition. ERISA preemption is not automatically triggered for every state law that regulates healthcare. Some state laws regarding balance billing, depending on how they are structured and how their terms are defined, may be applicable despite ERISA preemption. The Oregon law and similar laws might be contested in court in the context of an ERISA preemption case, but to the extent that these laws are helpful in protecting the member and negotiating reasonable out-of-network reimbursements, self-insured plans should utilize them.

2. Use state laws as starting points to protect members from balance billing and for setting reimbursement “floors.” Protection from balance billing of emergency and nonemergency services Of the 28 states with some balance billing provisions, 25 include a provision that prohibits a patient from being balance billed, and 18 of those have balance billing prohibitions in the nonemergency context. The laws vary in applicability. Four of the states have balance billing prohibitions that apply only to HMOs. Others, like New Jersey, New York, and North Carolina, clearly put the responsibility on the payer to make the provider whole, while still others, like Illinois and Maryland, apply only to specific types of providers. Again, for the most part, these balance billing prohibitions do not clearly apply to the self-insured member or plan. 26

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However, reminding a provider that its state has a balance billing prohibition is still a good place to start at the negotiation table for a self-insured health plan. The intention of these laws is to mitigate egregious balance billing claims for the states’ citizens. Although the provider may be knowledgeable enough to know the difference in the law between self-insured and fully insured members, starting the discussion with the state’s balance billing prohibition creates a baseline from which the negotiations can start. Further, in some cases, such as New York, the dispute resolution process applies to members of self-insured ERISA plans. That is, a member of a self-insured health plan can involve a provider in a dispute about both emergency and non-emergency egregious surprise bills. Research has shown that providers perceive that state-level reviews will not go in their favor, and they perceive that they’ll get a better deal by negotiating with the payer. In other words, sometimes just the possibility of a dispute with a member may bring the provider to an agreement. Reimbursement “floors” for out-ofnetwork non-emergency claims: Note that, in most states, the Affordable Care Act’s (ACA) 3-part minimum reimbursement rule applies to selfinsured health plans for out-of-network emergency services. The ACA requires reimbursement “at least equal to” the greatest of three calculated rates:

1. The median amount for in-network providers for the emergency service;

2. The amount the plan uses to determine payments for outof-network providers; OR

3. The Medicare amount. Although the Centers for Medicare & Medicaid Services (CMS) has clarified that its rules do not prohibit the provider from balance billing the member after the payer has met this reimbursement requirement, the 3-part minimum reimbursement rule creates a low enough standard for most payers to get providers to the bargaining table. Laws in 25 states have paired prohibitions on balance billing with requirements on what insurers must reimburse providers for out-of-network bills. Although the ERISA preemption is likely to apply in these states, there are two reasons why self-insured ERISA plans should counter any egregious bills by mentioning the “floor” of their state reimbursement provisions: First, the provider is likely familiar with its state’s balance/surprise billing reimbursement provisions and therefore the provider would likely expect to start with the state’s “floor” with any reimbursement negotiation. Second, these reimbursement provisions reflect what the state believes is fair for out-of-network providers to get paid in general. It is therefore not unreasonable for plans to start payments or negotiations with providers at these “floors.” Self-insured health plans may find reimbursement provisions in states like Florida, Maine, Iowa, and others to be useful, at least for emergency services. Maine’s LD 1557, passed in 2017, allows payment rates at the average network rate, unless the provider and plan agree otherwise. Florida requires the lesser


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of billed charges, usual and customary rate (UCR), OR a negotiated rate. Iowa requires reimbursement to be the same as if the person had been treated by an in-network provider. Reimbursement provisions in other states like Connecticut and Maryland are generally not payer-friendly or are too complicated to be useful, but they may still be helpful in cases of egregious billing if a plan wants to dig into the details. Connecticut, for example, uses the 80th percentile of FairHealth rates as its payment “floor.” Maryland’s outof-network reimbursement provisions are payer and consumer friendly overall, but the algorithms for figuring out the “floors” for three difference categories of providers are complicated and not easily explained in a negotiation setting.

3. Follow up on Required Provider Notices

State laws are increasingly concerned with notice from providers and consent from patients before out-of-network services are provided. Eight states now require providers to give notices to patients about possible out-of-network charges for nonemergency services,

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and half of these laws were passed in 2017. Depending on how they are written, these notices may require providers to give notices to members of self-insured ERISA plans. New York is a good example where hospitals and physicians are required to notify – both in writing and verbally at the time an appointment is scheduled – patients seeking non-emergency care of the health care plans with whom they participate. New York’s definition of “health care plans” includes self-insured health plans, and a provider notice by itself doesn’t trigger ERISA preemption. As with reimbursement provisions, even if the law is clear that these notice requirements are not being applied to self-insured members, there is an expectation that providers are giving these notices in all other cases. If they are not, it provides a beginning argument for not accepting an egregious bill.

Conclusion Although ERISA preemption usually keeps self-insured health plans from worrying about state laws, many states have laws or will soon pass laws that put state government and selfinsured health plans on the same side of the balance billing issue. Read your state laws closely and use those that do not trigger ERISA preemption to protect your members from balance billing. Use your state’s balance billing prohibitions and reimbursement “floors” as starting points for out-of-network reimbursement. When you make state laws on balance billing a part of your out-of-network reimbursement strategy, you’re helping both members and your bottom line.

Matthew Albright currently serves as Chief Legislative Affairs Officer at Zelis Healthcare where he tracks emerging legislation on EFT healthcare payments, provider network adequacy and access, and claims auditing and editing. Previously, he was Director of the Administrative Simplification Group for the Centers for Medicare & Medicaid Services (CMS) where he drafted regulations and developed policy in accordance with Affordable Care Act mandates.

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Erisa Remedies in the Post-Montanile Era By Grace Bowling

S

ince 1990 the United States Supreme Court has handed down five cases on ERISA remedies. While all five cases concerned the issue of subrogation in particular, each case also had an impact on the entire area of ERISA remedies. The Montanile case is the most recent of the five decisions. It was handed down in 2016. This article focuses on how the Montanile decision has impacted the area of ERISA remedies.

In 2016 the U.S. Supreme Court handed down its opinion in Board of Trustees of the National Elevator Industry Health Benefit Plan verses Robert Montanile, 136 S. Ct. 651 (2016). Robert Montanile was injured in an automobile accident. The Elevator Industry plan paid more than $120,000 in medical expenses. Montanile filed suit against the at fault party and settled his case for $500,000.

The Plan sought reimbursement from Montanile’s settlement. Montanile’s attorney refused to reimburse the plan and eventually transferred the funds to Montanile. At some time after the settlement, Mr. Montanile dissipated the settlement funds.

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The plan brought suit to recover its expenditures and the case wound its way up to the United States Supreme Court. The United States Supreme Court held that, “when an ERISA-plan participant wholly dissipates a third-party settlement on nontraceable items, the plan fiduciary may not bring suit under 502(a)(3) to attach the participant’s separate assets.”

Now, two and a half years post Montanile, it seems appropriate to revisit the Montanile case and see how it has impacted the subrogation and reimbursement industry and to take a look at the impact of Montanile on Erisa plans in general.

As part of this review, interviews were conducted with four prominent subrogation/ reimbursement recovery attorneys. The interviewees were: Daran Kiefer, a former President of the National Association of Subrogation Professionals, who is with Kreiner and Peters, John Kolb from Kolb Clare and Arnold, who was the lead attorney in the Montanile case, Chris Aguiar with the Phia Group, and Bryan Davenport, who is with the Law Office of Bryan B. Davenport, P.C.

Each individual responded to the same four questions, which are noted below, and their answers are synopsized in the following paragraphs.

How did you believe the Montanile case would impact the subrogation industry? Given the fact that the Montanile case seems to invite plaintiff ’s attorneys to tender funds to their clients with the advice to spend the money quickly, the initial fear after Montanile was that subrogation recoveries could become much more difficult to obtain. However, all the interviewees agreed that the Montanile decision verified what subrogation attorneys knew all along and as such, the case is not having a large impact on recoveries.

What has your experience been after the Montanile case relative to the issue of attorney’s dissipating settlement funds? The overall consensus was that the experience post Montanile has been a pleasant surprise. Although each case is different, the vast majority of plaintiff ’s attorneys have not engaged in the practice of dissipating funds but have instead agreed to hold funds in a trust while the health plan’s interest is resolved. Daran Kiefer stated, “My experience has been pretty nonexistent, which is kind of surprising. I don’t see many lawyers on the plaintiff side using it at all.”

What changes did you make to your subrogation practice after Montanile? Taking into consideration that each subrogation practice is different, Montanile did bring about some adjustments. Chris Aguiar stated that the main focus was changing plan language. It is important to do this so plaintiffs and plans are both clear on 32

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what needs to happen moving forward with a case.

Kiefer stated, that the changes were highly dependent on the two states he works primarily with; Ohio and Kentucky. “This didn’t change much because of the nature of the states I am practicing in.” Davenport notes that his firm has increased the intensity of following up on cases and his firm increased the incidence of seeking an agreement from attorneys to hold funds in trust pending the outcome of the subrogation case.

How often do plaintiff’s attorney’s site the Montanile

practices, “Montanile comes up about 60 percent of the time, if not more. However, it is cited for the wrong proposition.” Overall, it appears most attorneys are not concerned with Montanile and don’t make reference to it during the resolution of a subrogation case.

While the Montanile case has not significantly impacted subrogation/reimbursement recoveries, that is not the end of the story relative to its impact on ERISA plans. To assess that impact a review was completed of the cases where Federal District and Federal Circuit Courts sited Montanile as a significant portion of their decisions.

There were twenty-four significant citations to Montanile since it was handed down. The following seven decisions are representative of the twenty-four decisions and do offer some meaningful guidance for plans moving forward.

Benefits Administrative Committee of the Brush Aftermarket North American Inc. Group Pension Plan v. Daniel J. Wencl, U.S.D.C. MN., 2016 WL 8809475.

case? The answer was pretty much unanimous across the board. Kiefer, Kolb, and Davenport state that Montanile almost never comes up. Due to the fact that, it is irrelevant if the funds have not been dissipated. Aguiar indicated that in his

This is a pension case where the plan overpaid the plan participant, Daniel Wencl. Upon discovery of the overpayment, the plan sought an Ex Parte restraining order so that Mr. Wencl could not dissipate the funds.

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The court granted that order because it believed that the risk of dissipation of the funds would greatly increase if the plan participant had notice of the plan’s suit to collect the overpaid funds. The ability to obtain a restraining order without prior notice to a plan participant in possession of plan assets is a necessary and useful tool for plans to use when plan funds are in the control of a plan participant.

Frank Cognetta v. James Bonavita, U.S.D.C., E.D. N.Y. 2018 WL 2744708. In the Cognetta verses Bonavita case, Bonavita was involved in a motor vehicle accident. Before the conclusion of suit, or the settlement of the case, the plan filed a declaratory action to establish a constructive trust for the benefit of the plan.

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Bonavita argued that the plan could not seek this relief under Erisa because there was no fund in existence. The court granted the relief sought by the plan and established the constructive trust. Filing a declaratory action to establish a constructive trust even before the settlement funds exist is an effective preemptive remedy to the dissipation of funds by a plan participant.

HNI Corporation v. Jordan Hess, U.S.D.C., M.D. P.A. 2017 WL 412994. Jordan Hess was involved in an automobile accident. He incurred substantial medical expenses. The Plan paid said medical expenses and sought reimbursement after the case was settled. Hess refused to reimburse any expenses the plan had paid.

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HNI Corporation proceeded to sue Hess. Not only did they win, but they also were awarded attorneys’ fees. It is not common for plans to receive attorneys fee awards where the plan sues a plan participant. However, the possibility that this can happen in a subrogation/reimbursement case is a useful tool when working with plaintiff ’s attorneys in the resolution of a subrogation case.

Carpenter Technology Corporation v. Rodger Weida, U.S.D.C., E.D. P.A. 2018 WL 398297. Rodger Weida was injured in an automobile accident. He incurred substantial medical expenses which the Carpenter Technology plan paid. After his case settled, he refused to reimburse the plan. Carpenter Technology filed suit for an order imposing a constructive trust and an order enjoining the defendant from transferring or disposing of the settlement funds.


By the time that the plan sued, Weida had already placed the money in a joint checking account with his wife. Since the funds were transferred to a joint checking account the court held that the funds are no longer just Rodger Weida’s money but his wife’s money as well.

As such the funds are no longer specifically identifiable, and the plan cannot recover. It is extremely important to identify funds early and prevent funds that rightly belong to the plan from being placed into a joint checking account. This is true even if the balance on the account clearly appears to contain the funds that the plan claims a lien over. Once funds are in a jointly titled account they are considered dissipated and no recovery is possible.

District Photo Inc. v. Dimitri Pyrros, M.D., 2016 WL 5407869, U.S.D.C., E.D. N.Y. In this case, the District Photo Plan overpaid a medical provider, Dr. Pyrros, by $315,000. District Photo filed suit in order to be reimbursed. Unfortunately, Pyrros had already dissipated the funds.

Because the Supreme Court held that a plaintiff can “enforce an equitable lien only against specifically identified funds that remain in the defendant’s possession or against traceable items that the defendant purchased with the funds,”

Dr. Dimitri Pyrros was granted summary judgment. This case strongly indicates that suits against medical providers to recover overpaid claims are going to become very difficult in the post Montanile era where that was not necessarily the case pre Montanile.

Central States, Southeast and Southwest Areas Health and Welfare Fund v. American International Group, Inc., 1840 F.3d448, U.S. Ct. App., Seventh Circuit, (2016). In the Central States versus American International Group, Inc., a plan participant was injured while playing organized sports. The Central States plan paid the injury related claims.

The educational institution where the plan participant played sports and was injured had a medical claims policy issued by AIG. Central States filed suit claiming to be secondary to the AIG policy and sought reimbursement from AIG. AIG refused to reimburse Central States.

The Seventh Circuit Court of Appeals held that Central States sought was not equitable because Central States could not identify specific funds in the hands of AIG that rightfully belonged to Central States. It is important to note that Central States did have another option.

Central States could have refused to pay the medical claims and then sought declaratory relief as to whether its plan was secondary to AIG. Had Central States followed this procedure the Court indicated that it had the possibility for success even though this course of action would have exposed its participant to substantial discomfort.

Michael N. Manuel v. Turner Industries Group LLC, U.S.D.C. M.D. L.A., 2017 WL 4150945. Michael Manuel received short-term disability payments from Prudential. Prudential realized that they had overpaid 36

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Manuel and filed suit to recover their overpaid benefits. However, the funds had been dissipated and there were no traceable or identifiable funds in Manuel’s possession.

Given the results in Montanile, one would expect Prudential’s claim to fail. The Court distinguished Manuel’s case from Montanile because Manuel did not receive funds from a third party. The Court then turned to the U.S. Supreme Court’s decision in Sereboff stating, “The Supreme Court in Sereboff rejected the plaintiff ’s argument that the fiduciary must be able to identify the assets which can be used to satisfy the equitable lien by agreement.”

The court also turns a blind eye to dissipation. At least in this district, actions to

recovery overpaid disability benefits can succeed even though the assets are dissipated and untraceable.

Overall it appears that to date the Montanile case has not significantly altered the subrogation recovery world. It does require individuals in the subrogation and recovery industry to be more diligent in handling of cases. Fortunately, the post Montanile courts have provided some useful tools like Ex-Parte injunctive relief and attorney fee awards to stave off or deal with the dissipation potential.

The real impact of Montanile is in the claims overpayment recovery world. In this area Montanile has substantially limited a plan’s ability to recoup an overpaid or mis-paid claim and the courts do not appear prepared to provide relief even though the overpayment or mispayment is clearly unjust and provides a windfall of plan assets to an undeserving provider. Whether future courts will attempt to remedy this injustice remains to be seen.

Grace Bowling is a senior studying Strategic Communications with a minor in Journalism at Butler University in Indianapolis, IN. She is a communications and marketing intern this summer at the Law Office of Bryan B. Davenport, P.C.

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Current Litigation Highlights Ongoing Need for Review of Plans for Mental Health Parity Compliance By Corrie Cripps

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lan sponsors of self-insured group health plans have to balance the need for costcontainment strategies while ensuring compliance with federal health benefit mandates. Mental health parity compliance is particularly challenging to navigate as case law is still being developed in this area.

Background

The Mental Health Parity and Addiction Equity Act (MHPAEA), as amended by the Affordable Care Act (ACA), generally requires that group health plans ensure that the financial requirements and treatment limitations on mental health or substance use disorder (MH/SUD) benefits they provide are no more restrictive than those on medical or surgical benefits.

MHPAEA generally applies to group health plans that provide coverage for mental health or substance use disorder benefits in addition to medical/surgical benefits. Some self-insured plans are exempt from MHPAEA, such as those with 50 or fewer employees.1 38

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The Department of Labor (DOL) has primary enforcement authority with regard to MHPAEA over private sector employment-based group health plans.

DOL Actions In April 2018, the Departments of Labor, Health and Human Services and the Internal Revenue Service issued a package of guidance on MHPAEA. Among the items was the “FY 2017 MHPAEA Enforcement Fact Sheet”, which states that in fiscal year (FY) 2017, the DOL conducted 187 MHPAEA-related investigations and cited 92 violations of MHPAEA noncompliance.2

limitations that apply to the medical/surgical benefits in the same classification.

Current Mental Health Parity Cases MHPAEA does not require that self-insured group health plans cover MH/SUD benefits; it only requires that if a plan does cover MH/SUD benefits that the benefits are in parity with the medical/surgical benefits.

One of the challenges for plans is determining the scope of benefit types that are compared for parity purposes. Since case law is still being developed in this area, these matters continue to be unsettled.

The Employee Benefits Security Administration (EBSA) branch of the DOL authored publications and compliance assistance materials to assist plans with MHPAEA compliance. One of these publications, “Warning Signs” is an extremely useful tool to refer to when doing a quick review of a plan document/summary plan description.3

This document was published in May 2016, but the DOL is expected to publish a “Warning Signs 2.0” document in fiscal year 2018 to focus on non-quantitative treatment limitations (NQTLs), since this appears to be a problem compliance area for plans.

NQTLs are generally limits on the scope or duration of benefits for treatment that are not expressed numerically, such as medical management techniques, provider network admission criteria, or fail-first policies. In terms of MHPAEA compliance, plans should ensure that any NQTLs with respect to MH/SUD benefits are comparable to the

September 2018 | The Self-Insurer

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The following are some recent cases that highlight this area of concern.

Vorpahl v. Harvard Pilgrim Health Care Ins. Co. (D. Mass. July 20, 2018)4 This focus of this case is on coverage of a “wilderness treatment program”. The plan at issue is a fully-insured plan that denied coverage for an employee’s dependent children who received treatment at a statelicensed outdoor youth treatment program that was authorized to provide mental health services.

the plan covers medical/surgical benefits provided at other inpatient treatment settings it should cover this wilderness treatment program setting as well since it is an equivalent type of treatment setting. In support of their position, they cited the Joseph F. v. Sinclair Servs. Co. case from 2016, in which the court ruled that the plan violated MHPAEA by covering skilled nursing facilities but not covering residential treatment facilities.

So which comparison is correct—the more specific setting comparison, or the broader category comparison? There is currently no direct guidance on this issue.

While this case is still at its early stages procedurally, we will be watching to see how it develops.

Bushell v. Unitedhealth Group Inc., 2018 WL 1578167 (S.D.N.Y. 2018)5 The children’s parents claim the plan’s exclusion for “health resorts, recreational programs, camps, wilderness programs, outdoor skills programs, relaxation or lifestyle programs, and services provided in conjunction with (or as part of) those programs” violates the MHPAEA and the ACA. The US District Court for the District of Massachusetts dismissed the ACA claim but denied the insurer’s motion to dismiss the MHPAEA claim, so this portion of the lawsuit will proceed.

What is interesting about this case is how the plan participants determined the medical/surgical equivalent of the wilderness treatment program, which is different than how the plan viewed the benefits and exclusions.

The plan argued that its exclusion is a categorical exclusion that applies to both medical/surgical benefits and MH/SUD benefits provided at this type of facility. The example the plan gave for the medical/ surgical equivalent is a “diabetes camp”, which the plan would also exclude.

The question in this case is how to determine the MH/SUD equivalent of the plan’s “nutritional counseling” benefit.

In this case, the plan participant who has anorexia nervosa sued the insurer after it denied her claim for nutritional counseling to treat her condition. The insurer asserted that nutritional counseling was not covered under the plan.

The plan participant argued that the plan covered such counseling for non-mental health conditions, such as diabetes, and therefore was in violation of MHPAEA. The insurer asked the court to dismiss the claim, arguing that the counseling services that were requested were not in the same classification as the counseling services that were covered under the plan. The court refused to dismiss the claim, therefore allowing the case to proceed.

The parity rules under MHPAEA are applied on a classification basis. Therefore, if a plan provides mental health or substance use disorder benefits in any “classification”, then mental health and substance use disorder benefits must be provided in every classification in which medical/surgical benefits are provided. Those classification requirements apply to the following: • Inpatient, in-network • Inpatient, out-of-network • Outpatient, in-network • Outpatient, out-of-network • Emergency care; and • Prescription drugs

The plan participants argued that because September 2018 | The Self-Insurer

41


In this particular case, the medical/surgical benefit of diabetes nutritional counseling was covered within the “outpatient, outof-network” classification (as noted by the court in this case), but the mental health benefit for anorexia nutritional counseling, which may also fall into that classification, was not. Therefore, if mental health is covered under the plan, and the medical/ surgical benefit of nutritional counseling for diabetes is covered in any of the classifications listed above, then the mental health benefit of nutritional counseling must be provided in parity in that same classification(s).

Conclusion

The DOL’s published enforcement reports suggest that the DOL is continuing to investigate compliance with MHPAEA. In addition, based on current litigation, it appears there is a fairly low burden to state a claim under MHPAEA that survives a motion to dismiss. Plan sponsors should review cost-containment techniques with counsel to ensure they are designed to mitigate risk in this area while ensuring compliance.

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

The plan participant makes a good argument for parity here. Plans that cover both (1) mental health benefits and (2) the medical/ surgical benefit of diabetes nutritional counseling should take the conservative approach and cover mental health nutritional counseling as an additional benefit. Another option would be for the plan to provide a “Nutritional Counseling” benefit that is more general, and not specific to just diabetes.

The results are pending in this case but we will be tracking the outcome. Plans should be aware that eating disorder treatments are considered mental health benefits. Congress addressed this in section 13007 of the 21st Century Cures Act and this subject was also addressed in the FAQs that the Departments issued on June 16, 2017.6,7 Plans should be cautious when reviewing plan exclusions to ensure they cannot be interpreted as applying a limit on an eating disorder treatment.

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References: 1 The Mental Health Parity and Addiction Equity Act (MHPAEA), https://www.cms.gov/cciio/programs-and-initiatives/other-insurance-protections/mhpaea_factsheet.html, (last visited August 8, 2018). 2 FY 2017 MHPAEA Enforcement Fact Sheet, https://www.dol.gov/sites/default/files/ebsa/about-ebsa/ our-activities/resource-center/fact-sheets/mhpaea-enforcement-2017.pdf, (last visited August 8, 2018). 3 Warning Signs – Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance, May 2016, https://www.dol.gov/sites/default/files/ebsa/laws-and-regulations/laws/mental-health-parity/warning-signs-plan-or-policy-nqtls-that-require-additional-analysis-to-determine-mhpaea-compliance.pdf, (last visited August 8, 2018). 4 Vorpahl v. Harvard Pilgrim Health Care Ins. Co. (D. Mass. July 20, 2018), https://www.bloomberglaw. com/public/desktop/document/Vorpahl_v_Harvard_Pilgrim_Health_Ins_Co_No_17cv10844DJC_2018_BL_2?1533762894, (last visited August 8, 2018). 5 Bushell v. Unitedhealth Group Inc., 2018 WL 1578167 (S.D.N.Y. 2018), https://law.justia.com/cases/ federal/district-courts/new-york/nysdce/1:2017cv02021/471192/38/, (last visited August 8, 2018). 6 21st Century Cures Act, Pub. L. No. 114-255 (2016). 7 FAQs About Affordable Care Act Implementation Part 38 and Mental Health And Substance Use Disorder Parity Implementation, https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/ resource-center/faqs/aca-part-38.pdf, (last visited August 8, 2018).

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September2018 | The Self-Insurer

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SIIA

Endeavors

T

he Self-Insurance Institute of America, Inc. (SIIA) has launched the SIIA Future Leaders (SFL) initiative, designed to encourage talented younger professionals to become involved with the association and the self-insurance industry.

To help guide the implementation of the SLF, the association has formed a SIIA Future Leaders Committee, which is comprised of younger managers/executives from leading member companies. The group has already identified additional exciting engagement ideas that are currently under consideration for possible implementation.

The first phase of this initiative is to promote younger professional participation at its upcoming National Conference & Expo, which is scheduled for September 23-25, 2018 in Austin. The event will feature multiple educational sessions and networking opportunities geared specifically for this target audience (defined as under 40), along with a discounted registration fee. 44

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Sessions include:

Launching SIIA’s Future Leaders Initiative We invite younger conference attendees (under 40) to attend this session where we will talk about the launch of SIIA’s Future Leaders initiative, what is on tap for the future, and how you can get the most from your SIIA involvement. Mike Ferguson, President & CEO of SIIA will moderate panelists Craig Clemente, Chief Operating Officer of Specialty Care Management, and Chair of the SIIA Future Leaders Committee, Adam Russo, CEO of The Phia Group, LLC and Kevin Seelman, Senior Vice President of Lockton Dunning Benefit Company.

If you have Future Leaders in your company that you would like to direct to this initiative, or if you are a future leader yourself, we invite you to join the SIIA Future Leaders LinkedIn Group here https://www.linkedin.com/groups/12098226.

After the conference program concludes, join us for the SIIA National Conference Party on September 25th (7:00 PM - 10:00 PM) as we head to one of the most unique entertainment areas in Austin.... historic Rainey Street! Located just a short distance from the Marriott, Rainey Street features 1930’s-era bungalows that have been renovated into casual bars with front porches, backyards and picnic tables. We’ll experience local foods, local music and a local vibe. Leave your attitude at home and “Get Local”! The SIIA National Conference party never disappoints, and you will not want to miss out on this event so make your travel plans accordingly!

More information on SIIA’s Future Leaders initiative and the 38th National Educational Conference and Expo, including registration, can be found at www.siia.org.

Planning for a Successful Career in the Self-Insurance Industry The self-insurance/captive insurance industry offers tremendous career opportunities for talented younger professionals. This session will feature a panel of some of the most successful senior industry executives who will share their career advancement stories (in both corporate and entrepreneurial environments), related SIIA involvement, and most importantly, engage directly with session attendees to answer questions and offer useful advice. Ernie Clevenger, President of CareHere, LLC will moderate panelists Denise Doyle, President of StopLoss Insurance Brokers Inc., Mary Catherine Person, President of HealthScope Benefits, Les Boughner, Chairman of Advantage Insurance Management, Kimble Coaker, CEO of Alabama Trucking Association Workers’ Comp Fund and Steve Gransbury, President, Accident & Health of QBE North America.

September 2018 | The Self-Insurer

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NEWS

from SIIA

Members

2018 SEPTEMBER 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 Wrenne Bartlett at wbartlett@siia. org. All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at www.siia.org. For immediate assistance, please contact Jennifer Ivy at jivy@siia.org. If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy and jivy@siia.org. September 2018 | The Self-Insurer

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Diamond Members New Errors & Omissions Coverage for Architects, Engineers & Design Businesses QBE North America, an integrated specialist insurer and an operating division of QBE Insurance Group Limited, today announced a partnership with AmWINS Program Underwriters (APU) to offer Errors and Omissions coverage for architects, engineers and design (A&E) businesses. The initiative to expand its specialized portfolio demonstrates QBE North America’s distinctive ability to quickly respond to the evolving customer and market trends. APU’s A&E program will be distributed through both wholesale brokers and retail agents. This new program has several key coverage features including pre-claims assistance, crisis management, technology and no copyright/ trademark exclusion. APU is a managing general agency (MGA) with more than thirty years of experience delivering comprehensive insurance products and exceptional service. It is part of the Underwriting division of AmWINS Group, Inc., a global distributor of specialty insurance products and services.

“We’re excited to announce our partnership with APU and offer a comprehensive liability program supporting architects, engineers and design professionals,” said Erin Fry, SVP, Specialty Programs, QBE North America. “This new E&O program will target A&E firms with between $1 and $10M in annual revenue and is a huge value, strengthened by APU’s proven success in program administration.”

“We’re pleased to announce our alliance with QBE to offer this product to the marketplace,” said Brett Fowler, Vice President and Program Manager of

“We’re looking forward to providing this coverage to serve the needs of architects, engineers and design businesses.” APU’s A&E program.

QBE partners with MGA/MGU program administrators to underwrite management liability and professional lines for trade associations and affinity groups. QBE Specialty underwrites risks across a wide variety of industry sectors and customer segments. These include Aviation, Public Company, Private Company, Commercial Errors & Omissions, Financial Institutions, Healthcare, Media & Entertainment, Trade Credit, Surety and Inland Marine risk for appointed retail and wholesale producers. Read more here. “QBE’s competitive advantage depends on solving our customers’ issues and offering creative solutions,” said Jeff Grange, President, Specialty Insurance, QBE North America. “We are committed to meeting our customers’ needs by collaborating with our program administrator partners.”

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Crafted to guard financial health.

At the heart of a smart business decision is the integrity of the transaction. With HM Insurance Group, you can count on the consistent delivery of coverage that is designed to help protect financial well-being. You can rely on our responsiveness so you can focus on your business goals. And you can be confident in the quality of protection that has expert risk evaluation, financial stability and market knowledge at its core. Make connections and learn more about our people and products at hmig.com

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About AmWINS Program Underwriters AmWINS Program Underwriters (APU) is a managing general agency (MGA) specializing in affinity and program management. For more than 30 years, APU has developed and maintained programs for a variety of niche markets that provide broad-based property and casualty coverage. Today, the company administers over 35 programs, generating premiums in excess of $340 million. For more information, visit www.amwins.com/apu. About AmWINS Group, Inc.  AmWINS Group, Inc. is the largest independent wholesale distributor of specialty insurance products in the United States, dedicated to serving retail insurance agents by providing property and casualty products, specialty group benefit products and administrative services. Based in Charlotte, N.C., the company operates through more than 100 offices globally and handles premium placements in excess of $14 billion dollars annually. To learn more, visit www.amwins.com. About QBE QBE North America, an integrated specialist insurer, is part of QBE Insurance Group Limited, one of the largest insurers and reinsurers worldwide. QBE NA reported Gross Written Premiums in 2017 of $4.6 billion. QBE Insurance Group’s 2017 results can be found at www. qbe.com. Headquartered in Sydney, Australia, QBE operates out of 31 countries around the globe, with a presence in every key insurance market. The North America division, headquartered in New York, conducts business through its property and casualty insurance subsidiaries. The actual terms and coverage for all lines of business are subject to the language of the policies as issued. QBE insurance companies are rated “A” (Excellent) by A.M. Best and “A+” by Standard & Poor’s. Additional information can be found at www.qbe. com/us, or follow QBE North America on Twitter.

CONTACT: Jaime Bruck, Lead Communications Partner, 646-341-8042, jaime.bruck@us.qbe.com

Swiss Re Seeks Business Development Manager Swiss Re’s Corporate Solutions Accident & Health division is looking for an experienced Business Development Manager to support their expanding footprint on the West Coast based out of their 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 fast paced environment apply online today!

Silver Members HIIG To Acquire Boston Indemnity Company  Houston International Insurance Group (HIIG) announced today that it had signed a Stock Purchase Agreement (SPA) with Bondex Insurance Group to acquire Boston Indemnity Company (BIC). The transaction is expected to close soon, pending regulatory approval.   BIC is a treasury listed, admitted insurance company domiciled in South Dakota and based in North Andover, Massachusetts. BIC was acquired by Bondex Insurance Group in 2015 and currently writes surety business in 27 states.

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The Self-Insurer | www.sipconline.net


Matthew J. Semeraro is President of BIC and will continue to manage the operation after the transaction closes. The business will operate as HIIG Surety following closing and will complement HIIG’s existing business. HIIG Surety anticipates writing more than $25 million of business in 2019 consisting of small and medium size contractors and subcontractors, Mining Reclamation Bonds, and other commercial bonds.   Stephen L. Way, Chairman and Chief Executive Officer of HIIG, said, “We are pleased to have Matt and his team as part of our group and this transaction continues the strong expansion of our Surety Division.”  

Mr. Semeraro said, “We

are excited to be part of the HIIG organization, where their experience and financial strength will support our growth as we continue to provide quality product and service to our clients.”

HIIG is an insurance holding company formed in 2007 by Stephen L. Way, a leader in insurance for more than 50 years. Based in Houston, Texas, HIIG continues to build long term shareholder value through creative but disciplined underwriting, acquisitions, and strategic investments.

HIIG has underwriting segments focused on Accident & Health, Commercial, Excess & Surplus Lines, and Specialty. HIIG has total assets exceeding $1.5 billion and shareholders’ equity of than $325 million. HIIG’s subsidiary insurance companies consist of Houston Specialty Insurance Company, Imperium Insurance Company, Great Midwest Insurance Company, and Oklahoma Specialty Insurance Company. These insurance companies are rated A/A(Excellent) by A.M. Best Company.

September 2018 | The Self-Insurer

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

Since then we have merged our brands and are issuing

Specific Advance Funding ability with enhanced features for qualified producers

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

152 Conant Street

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

2nd Floor Beverly, MA 01915

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

Email: Robert.Robinson01@libertyIU.com

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


Axis Re Seeks Senior A&H Re Claims Specialist Position: Senior A&H Re Claims Specialist Preferred location: Princeton, NJ AXIS Capital – a trusted global provider of specialty lines insurance and reinsurance is looking for Senior A&H Re Claims Specialist. AXIS Capital stands apart for their outstanding client service, intelligent risk taking and superior risk adjusted returns for their shareholders. They also proudly maintain an entrepreneurial, disciplined and ethical corporate culture. As a member of AXIS, you join a team that is among the best in the industry. As an active member of the North American A&H Reinsurance Claims Department, the Reinsurance Claims Specialist deals directly with cedants and reinsurance brokers to manage large losses, review incoming claims data and provide prompt and efficient claims support. An ideal candidate for this position brings a working knowledge of health care delivery, medical diagnosis, treatment, and billing and serves as a reliable source of knowledge and developing trends in A&H reinsurance claims.

Responsibilities •

Read and interpret insurance documents and reinsurance contracts to analyze, resolve and process ceded accident & health reinsurance claims

Review and interpret clinical records including clinical terminology, diagnostic and laboratory data, treatment plans, case management notes, and pharmaceutical dosing and pricing information

Analyze reported losses via bordereaux and via individual XS claim notifications

Work directly with ceding company and/or broker claims contacts

Collaborate with our underwriting and actuarial colleagues to resolve issues that arise from claims data

Participate in establishing appropriate reserves consistent with applicable insurance/ reinsurance contract terms

Contribute to special projects, RFP’s, presentations and onboarding of new clients

Facilitate client education & support including webinars

Analyze various accident and health quota share, XOL, and Managed Care reinsurance contracts

September 2018 | The Self-Insurer

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

“Our clients have grown accustomed to Berkley’s high level of customer service.” - Broker

“The most significant advancement regarding true cost containment we’ve seen in years.” - President, Group Captive Member Company

“EmCap has allowed us to take far more control of our health insurance costs than can be done in the fully insured market.” - President, Group Captive Member Company

“With EmCap, our company has been able to control pricing volatility that we would have faced with traditional Stop Loss.” - HR Executive, Group Captive Member Company

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

Stop Loss | Group Captives | Managed Care | Specialty Accident ©2017 Berkley Accident and Health, Hamilton Square, NJ 08690. All rights reserved. BAH AD2017-09 7/17

www.BerkleyAH.com


Review and accurately pay valid XOL and QS reinsurance claims Exercise independent judgment and leadership skills to effectively manage ceded reinsurance claims

About Axis We are shaping the direction of Insurance and Reinsurance during a critical and exciting time for the industry. Whether you are a student approaching graduation or a seasoned professional looking for a new environment, AXIS has the right challenges and career opportunities for you. At AXIS, we value each individual and recognize that attracting and retaining the right people is essential to the success of our company. Visit www.axiscapital. com .

Requirements •

Bachelor’s Degree or equivalent, Master’s degree preferred RN required

Gold Members TRU Services Seeks Claims Specialist TRU Services, A Liberty Mutual Company is looking for a Claims Specialist. Responsibilities

High level of technical knowledge of accident and health claims processes

Minimum of five years of medical claims experience in a large brokerage firm, stop loss MGU, or insurance company

Experience with stop loss insurance administration or accident & health reinsurance

Excellent communication, negotiation and interpersonal skills

Strong analytical and problem solving ability

Proficiency in MS Office

The Claims Specialist will handle a book of business of specialty lines claims throughout the entire claim’s life cycle.

Would be responsible for conducting investigations, recommending adequate reserves, monitoring, documenting, and settling/closing claims in an expeditious and economical manner within prescribed authority limits for the line of business.

Some travel required.

We offer a comprehensive and competitive benefits package which includes medical plans for employees and their families, health and wellness programs, retirement plans, tuition reimbursement, paid vacation, and much more. Interested candidates should click https:// www.linkedin.com/jobs/view/762463239/ 

September 2018 | The Self-Insurer

55


Experience •

Bachelors’ or equivalent. 2+ years claims/legal experience; or in a related field.

Functional knowledge of claims handling concepts, practices and techniques, to include but not limited to coverage issues, and product line knowledge.

Functional knowledge of law and insurance regulations in various jurisdictions.

Demonstrated strong verbal and written communications skills. Demonstrated strong negotiation skills.

To apply, please email Robyn Eagan at robyne@truservices.com with your resume and cover letter. About TRU Services TRU Services was founded in 1995 and was acquired by Liberty Mutual in April 2017. Since then we have merged our brands and are issuing the Liberty Insurance Underwriters Inc. (LIU) Policy. With the acquisition by Liberty Mutual, the principles represented by TRU for the past 20 years have not changed and it is these shared principles with Liberty Mutual that led to the acquisition.  Liberty Mutual has been a trusted entity in the insurance industry for over 100 years! Liberty Mutual boasts an A rating for both A.M. Best and Standard & Poor’s. The merger with Liberty Mutual has allowed TRU to create a completely new Stop Loss Policy to meet the demands of the marketplace that include: Plan Mirroring availability, elimination of Disclosure statements on renewal business, and specific Advanced Funding ability with enhanced features for qualified producers.  Visit www. truservices.com.

Do you aspire to be a published author? Do you have any stories or opinions on the self-insurance and alternati ve risk transfer industry that you would like to share with your peers? We would like to in vite you to share your insight and submit an article to The Self-Insurer ! distributed in a digital and print format to reach over 10,000 readers around the world. The Self-Insurer has been delivering information to the self-insurance /alternative risk transfer community since 1984 to self-funded employ ers, TPAs, MGUs, reinsurers, stoploss carriers, PBM s and other service providers.

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

Byars at sbyars@sipconline.net for advertising information.

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Medical stop loss insurance from Berkshire Hathaway Specialty Insurance comes with a most trusted name and the stability of an exceptionally strong balance sheet. Our executive team has 30 years of experience and a commitment to tailoring solutions and paying claims quickly. All of which is key to ensuring your program’s success for years to come. With so many choices, you can make this one with certainty.

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www.bhspecialty.com/msl


Uncovering the Truth Behind Restricted Formularies by: Dustin Brown, SVP of Script Care, Ltd.

Let’s be honest: Restricted formularies don’t have the world’s greatest reputation. That truth is reflected in a 2017 survey of professionals who oversee pharmacy benefits for their companies- specifically, HR professionals and company executives. 86% agree that “less expensive generic drugs are just as effective at treating conditions as brand name drugs” - in other words, they generally understand that treatments can have viable alternatives. However, only 9% say they are currently using a restricted formulary design and only 7% said restricted formularies were the best fit for their organization. At first glance, these data points seem contradictory. While a restricted formulary does exclude certain drugs, it also covers equivalent therapeutic alternatives at a lower cost to the plan (hence the appeal to management). Since 86% of respondents clearly understand that less expensive treatments can be just as effective, why is there so much antipathy toward a formulary design that embodies this principle? As the Senior Executive Vice President and co-owner at Script Care, an independent pharmacy benefits manager, I work every day to help our clients understand restricted formulary options. From my perspective, there are three related reasons why HR Directors and other decision makers are wary of an option called “restricted.” Members are concerned that they either won’t get the treatment they need or will be dramatically inconvenienced when changing medications. The HR team worries that they will bear the brunt of these employee anxieties.

Let me address all three concerns head-on - and then explain why the trade-offs involved in choosing a restricted formulary are, for many companies, still very much worth it. Truth #1: Members can still get the treatment they need. Many prescriptions have alternatives - either branded or generic - that are therapeutically as good or better than the medicine they replace. Even if a formulary stops covering one drug, there may be four other options that a member can move to. At Script Care, we always want to give members another option when we take something off the table. And we work hard to educate members when these changes occur, helping to ease the burden on HR teams. I’ll say more about that burden below.

Truth #2: Change can be a challenge - but, ultimately, the HR team will benefit. Moving to restricted formularies will often impact only a small portion of lives on the plan, since only a few members and their families require the expensive treatments that are being restricted. Still that small group can mean significant work for HR, which has to assuage employee concerns and help them work through the change. In the long run, however, the lower costs from restricted formularies will benefit everyone in the company; movement to a restricted formulary can double rebate dollars, enabling the plan to hold down premiums. Choosing not to move to a restricted formulary could necessitate higher premiums for all employees.

Truth #3: Member inconvenience can be relatively minor. I understand that moving from one drug to another can be disruptive and unpleasant. I’ve had to change medications myself due to a formulary restriction implemented for Script Care’s own health plan. I understand restricted formulary benefits on a professional level, but on a personal level I didn’t

want ot make the switch. No one ever does. Fortunately, changing prescriptions for me was ultimately a minor inconvenience of making a few phone calls; I suspect many similarly affected members have an equivalent experience.

Worth The Trade-Off

In our experience preparing pharmacy plans for clients, the size of the potential savings makes the move to restricted formularies an obvious choice. By making that decision, a company makes a trade-off, accepting some immediate disruption for the long-term benefit of its employees and itself. We recognize that making the best choice isn’t always pleasant. When we present clients with a restricted formulary option, we often hear that “we can’t cut coverage” and “we want to save money, but we don’t want to do anything different.” If only that were possible. Realizing significant savings requires change. Moving to a formulary that shifts members to more cost-effective medications is a promising way to lower costs. Given the very reasonable concerns that plan members and HR teams have about restricted formularies, the survey data isn’t as puzzling as it first appears. But the truth is that health care itself is a puzzle with no easy answers. In today’s challenging healthcare landscape, restricted formularies help ensure the long-term success of a company’s health plan - and indeed, of the company itself.

We know that sometimes the right decisions can be the toughest. As your partner, Script Care provides the detailed analysis and thoughtful insight that instills complete confidence that you are making the right decisions for your company.

SCRIPT CARE


You’ve always dreamt bigger

flown higher and

worked harder Today, your employees are relying on you. Ensuring they have affordable and convenient access to their daily medications is an important investment in their continued well-being - but every decision must be made with an eye on your bottom line.

Don’t you want to Partner with a PBM who also dreams bigger, flies higher and works harder? At Script Care, we don’t believe in “one-size-fits-all” solutions. Continuous leadership by our company’s founder means we are not the product of mergers and acquisitions. Our entire 30-year history has been devoted to innovation and client-success, not spent identifying redundant processes or combining platforms and systems.

We’re here to ensure you can keep pursuing your dreams.


SELF-INSURANCE INSTITUTE OF AMERICA, INC. 2018 BOARD OF DIRECTORS & COMMITTEE CHAIR ROSTER SIEF Board of Directors

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

Nigel Wallbank Chairman Heidi Leenay President

President/CEO Mike Ferguson SIIA, Simpsonville, SC

Freda Bacon Director

Chairman Elect*

Les Boughner Director

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

Alex Giordano Director

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

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

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

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Robert Tierney President StarLine East Falmouth, MA

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

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

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

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

*Also serves as Director


Your Payment Problems

SOLVED.

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

It’s time you experienced payments simplified.Ž

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

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


Regular Corporate

SIIA New Members

Members Donald Brandt President Claim Technologies Incorporated Des Moines, IA April Begin Marketing Communications Manager Clarity Software Solutions, Inc. Madison, CT Doug Truax CEO Everlong Group Medical Captive Services, LLC Downers Grove, IL Arleigh Kennedy SVP, Risk & Strategic Partnerships Evolution Risk Partners Chicago, IL

Silver Corporate Members

Jonathan Logan Logan & Associates of Louisiana, Inc. Boutte, LA

Greg Cobb VP, Investment Strategy Sage Advisory Services Austin, TX

Marie-Emilie Rojas Product Development Director Medical Card System San Juan, PR

Alex Soria Stop Loss Solutions South Miami, FL

Jeannie Comins Manager, Alternative Funding MVP HealthCare Schenectady, NY Lea Stoyka VP of Sales OccuNet Amarillo, TX

Michael Lorenzini Senior Manager Healthcare Service Corporation (HCSC) Chicago, IL

Employer Corporate Members

Renzo Luzzatti US-Rx Care Tamarac, FL

Gordon Shoger CFO Army Residence Community San Antonio, TX

Lorelee Byrd CEO Visio Health and Technical Solutions, Inc. Omaha, NE

Jessica Linart Director of Insurance Colorado PERA Denver, CO

Mark Kunkle President PK Benefits Consulting Wyomissing, PA

Our HBCS applications provide plan sponsors and their advisors with powerful tools to model the impact of plan changes, identify the risk/reward profile of alternative selffunded plan structures, and calculate a group’s projected claims experience.

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Paying Usual & Customary IS PAYING TOO MUCH

Zelis Healthcare drives over $1 BILLION IN ANNUAL SAVINGS on out-of-network charges Cost variances on out-of-network claims make budgeting for healthcare nearly impossible for the self-insured. Zelis Healthcare delivers savings with a proven, comprehensive approach that includes market-driven and acceptable reimbursement, expert support and member advocacy processes. Reduce your liability and experience sustainable cost management. Partner with Zelis to get your share of $1 billion in annual savings.

Better Service. Better Performance.

Copyright 2018 Zelis Healthcare. All rights reserved.

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


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 don’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.

zelis.com

Copyright 2018 Zelis Healthcare. All rights reserved Copyright 2017 Zelis Healthcare. All rights reserved.

Self Insurer September 2018  
Self Insurer September 2018