Self Insurer December 2019

D EC EMB E R 2 0 1 9

A S I P C P U B L I C AT I O N

SIPCONLINE.NET

From Wellness

to Wellbeing

EMBRACING A MORE HOLISTIC APPROACH HAS SEX APPEAL BUT ALSO CAVEATS

strength in

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TABLE OF CONTENTS

DECEMBER 2019 VOL 134

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

FEATURES 4

from wellness to wellbeing EMBRACING A MORE HOLISTIC APPROACH HAS SEX APPEAL BUT ALSO CAVEATS

By Bruce Shutan

10

ADDING VALUE TO CAPTIVE BOARDS WITH

INDEPENDENT DIRECTORS

By Karrie Hyatt

ARTICLES 16

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

24

INSURANCE SALES: IS IT ABOUT RELATIONSHIPS OR NOT?

30

MEDICAL MARIJUANA: THE ANTIDOTE TO OPIOID ADDICTION?

36

ACA ENROLLMENT BY THE NUMBERS! ADMINISTRATION’S ATTEMPTS TO STALL THE ACA AT WORK?

40 SIIA ENDEAVORS

43

NEWS FROM SIIA MEMBERS

The Self-Insurer (ISSN 10913815) is published monthly by Self-Insurers’ Publishing Corp. (SIPC).

Postmaster: Send address changes to The Self-Insurer Editorial and Advertising Office, P.O. Box 1237, Simpsonville, SC 29681,(888) 394-5688

Self-Insurer’s Publishing Corp.

PUBLISHING DIRECTOR Erica Massey, SENIOR EDITOR Gretchen Grote, CONTRIBUTING EDITOR Mike Ferguson, DIRECTOR OF OPERATIONS Justin Miller, DIRECTOR OF ADVERTISING Shane Byars, EDITORIAL ADVISORS Bruce Shutan and Karrie Hyatt, 2018 Self-Insurers’ Publishing Corp. Officers James A. Kinder, CEO/Chairman, Erica M. Massey, President, Lynne Bolduc, Esq. Secretary

DECEMBER 2019

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FEATURE

From Wellness

to Wellbeing

EMBRACING A MORE HOLISTIC APPROACH HAS SEX APPEAL BUT ALSO CAVEATS

A A

movement is clearly afoot to transform traditional workplace wellness programs into a more comprehensive offering that recognizes the connection between physical, mental, emotional, social and financial health. The rise of a holistic approach to employee wellbeing may seem intuitive and potentially game-changing for self-insured employers, but they also can expect challenges along the way to

creating and sustaining a more resilient workforce.

U.S. employers were expected to spend an average of $3.6 million on wellbeing programs this year, according to the 10th annual Health and Well-Being Survey from Fidelity Investments and the National Business Group on Health. The research noted that more than one-third of those budgets will fund financial incentives that encourage employees and their spouses or domestic partners to participate in these offerings.

Written by Bruce Shutan

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THE SELF-INSURER

HOLISTIC APPROACH CHANGING OF THE GUARD Much of the industry’s traditional wellness programming is “third-party driven without a clinical provider at the center” acting as the central command of population health, observes Karoline Hilu, M.D., chief strategy officer of Crossover Health.

The problem is that fee-for-service medicine doesn’t compensate providers for driving Karoline Hilu clinical outcomes in the in-between moments of nudging or checking in with patients, she says. So utilization runs low or results cannot be validated.

A key difference between wellness and wellbeing programs is that the latter doesn’t include so-called poke-and-prod initiatives centered around annual biometric screenings, according to Al Lewis, a seasoned health and wellness expert who founded Quizzify.

DON’T NECESSARILY TRUST, BUT ALWAYS VERIFY A staunch critic of traditional wellness plan design and return-on-investment claims by vendors, he describes traditional fare as “absurdly expensive, intrusive, ineffective and despised screenings.” In contrast, he says wellbeing initiatives include program elements “that employees like and have enough value that they sign up for them voluntarily.”

While wellbeing is a step in the right direction, Lewis warns that it’s still “a complete waste of money” if the expectation is a quantifiable ROI. “You’re talking about people who can’t even measure how much they’re moving the needle on a program which is designed to move the needle,” he says of traditional wellness program vendors. “So the idea that they can measure moving the needle on programs that don’t have clear metrics at the end of them is absurd.”

Lewis is so confident in his assessment that he’s offering a $3 million reward for anyone who can actually prove traditional program ROI. The only catch is that it would have to be verified by the Validation Institute, an independent, third-party resource he founded and now advises. The group’s focus is on transparency as a way to reduce costs and improve outcomes.

Meanwhile, wellbeing initiatives are piquing the interest of Corporate America. At the Wellness Council of America’s most recent annual summit, it was noted that financial, mental and behavioral health are the three most requested wellness programs from employers.

Bryan Noar, VP of strategic partnerships for SelfHelpWorks who attended the meeting, is heartened to see the category widening.

“Those aren’t the traditional old physical health, weightloss programs and smokingcessation programs,” he says.

“They’re all to do with what goes on in the brain. So the entire industry is taking a more holistic approach to wellbeing.”

Indeed, his company has seen a growing demand for its stress and resilience program as more companies realize how important it is for employees to pace themselves when meeting work deadlines. Yoga and meditation programs are two such tools. Also under consideration is a course in financial wellness with a behavioral focus that would retrain parts of the brain to help program participants better manage their spending.

Bryan Noar

DECEMBER 2019

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HOLISTIC APPROACH DISEASE MANAGEMENT’S LOW-HANGING FRUIT In spite of mounting interest in the wellbeing topic, one industry observer sees little evidence of employers actually embracing change. Jeff Cox, VP of TeamCare, a division of Delta Health Systems, has noted a move away from holistic health and wellness over the past 20 years, citing employee assistance programs (EAPs) as the biggest example. “Employers don’t want to spend money on them” and are instead largely content with a traditional approach, he says.

While more employers recognize the importance of stress-management programs, they’re not necessarily incorporating them into their health and wellness initiatives.

This was a key takeaway from PwC’s 2019 Health and Well-being Touchstone Survey, which suggested that “employers can jump-start a stale wellness program by taking a more holistic perspective and looking at the overall well-being of mind, body and spirit.”

Since financial decisions can cause physical and emotional duress across every segment of the U.S. population, Hilu has noticed more employers embracing financial wellness programs. Financial wellness actually affects an individual’s willingness to make other types of behavior changes, according to Don Powell, Ph.D., president and CEO of the American Institute for Preventive Medicine and author of “101 Ways to Well-Being.” He advocates a multidimensional approach to wellbeing, ever mindful of the mind-body connection.

Crossover Health was launched with this goal in mind. As its name suggests, the company offers a holistic spectrum of care that literally and figuratively crosses over from physical medicine to behavioral health as part of an integrated and transparent approach. A flat-fee primary care model helps patients navigate across the care continuum and arms them with digital tools for greater efficiency. In the process, urgent care, ER visits and inpatient hospitalizations are significantly reduced. In fact, this approach helped slash Facebook’s total trend on a risk-adjusted basis by 30%.

Hilu says the solution “works for any self-insured employer directly or through a TPA channel for smaller employers because we enable entities to handle risk that’s patient-centric.” An actuary once described it to her as feeling like a 1990s HMO from a results standpoint with the best high-touch center of excellence for the patient.

While the jury still may be out – and remain out – on savings associated with workplace wellness programs, Cox sees definitive results with disease management programs. One such example is diabetes, which he says afflicts 13% of the population with another 30% being pre-diabetic and is also the leading cause of blindness and amputations. Diabetics cost three times an average person, he adds.

While helping manage their medication and treatment protocols will save a substantial amount of money, Cox notes that “the issue is people do not want to be in disease management programs.”

So wellness initiatives are offered as an incentive to join one with up to 30% of rewards or discounts allowed under the law. But conducting biometric screenings in a vacuum and leaving people to their own devices to fix themselves simply doesn’t work, he explains.

Instead, the trick is to focus on measurable outcomes by connecting chronically ill health plan members with a disease management nurse and tracking

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HOLISTIC APPROACH their progress. “As a claims payer, I can tell you exactly who has diabetes, who’s unmanaged and who needs the help,” Cox explains. “Unfortunately, mindfulness and things of that nature are less measurable.”

Other ways to drive program utilization and move the needle on costs include the use of telemedicine. This is especially for people with behavioral health problems who he says tend to be comorbid with multiple conditions and are more likely to have untreated diabetes. “The best way to go about curing that is to get people in contact with a master’s or doctorate-level therapist, and we are doing a lot of that,” he reports.

“SECOND-HAND” DRINKING

The trouble is that there’s still a stigma associated with alcoholics seeking help through an EAP, he notes, and many will hit rock bottom before they take action.

SelfHelpWorks has sought to close a huge treatment gap within corporate wellness programs by offering an efficacious alcohol management course online that’s completely confidential and convenient.

Some areas that are ripe for wellbeing programs have largely flown under the radar. So-called second-hand drinking is a prime example. While alcoholism is said to affect about 6% of adults, Noar notes that nearly 17% of the population binge drinks at least once a month. He says alcoholism also affects the wellbeing of family, friends and coworkers of the addict, causing tremendous collateral damage.

Noar believes value on investment (VOI) represents a better way to measure results than ROI because it’s a more holistic yardstick that considers the soft components health and wellness. Recalling a conversation with Soeren Mattke, M.D., a senior scientist and managing director of RAND Health Advisory Services, he says researchers find it very difficult and costly to measure productivity. There also are enormous variations across all companies depending on the industry, geography, hiring practices and demographics.

“What happens when there’s Monday Night Football, Taco Tuesday or a Wednesday Hump Day happy hour when people are out eating tacos and pounding tequila shots?” Noar rhetorically asks. “The next day, productivity is dramatically affected at work, not to mention accident rates, absenteeism and everything else.”

Beyond the ROI vs. VOI debate, wellbeing proponents cite a larger issue that selfinsured employers must at least consider. “It’s about time, quite frankly, that we started looking at people as people – not just as a bunch of biometric data – and treating the whole person rather than just various aspects of them,” Noar opines.

“Human beings are not a silo; they are a whole, vast, interconnected set of different behaviors, and we need to deal with all of those.”

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THE SELF-INSURER

Lewis counters the wellness industry uses VOI to hide the fact that there’s simply no ROI to their program offerings, noting that value is hard to define outside the subjective measure of employee satisfaction.

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

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Insurance Commissioner

BUREAU OF CAPTIVE & FINANCIAL INSURANCE PRODUCTS Delaware Department of Insurance 1007 Orange Street, Suite 1010 Wilmington, DE 19801 302-577-5280 | captive.delaware.gov Trinidad Navarro, Insurance Commissioner

FEATURE

Adding Value to Captive Boards with

Independent Directors

I I

n a recent report from the National Association of Corporate Directors (NACD), the association cited a 2019 survey they conducted which found that “73% of directors reported that board leadership is more challenging than it was three years ago, and 84% reported that performance expectations had gone up for all board members.” The report, titled “Fit for the Future: An Urgent Imperative for Board Leadership” also indicated that “a much deeper board understanding of business operations will become critical as … new trends start to transform how businesses are financed, run, and controlled, and how they deliver value to customers.”

This is where independent directors come in. Adding an independent director can make an enormous difference in board governance. A qualified independent director can bring skills and experience that can help to educate fellow board members, while bringing a unique point-of-view.

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Independent Directors WHAT IS AN INDEPENDENT DIRECTOR?

An independent director is a board appointee who provides “creative contribution to the board by providing independent oversight and constructive challenge to the executive directors,” according to the 2019 “Captive Governance” guide issued by AIRMIC, a UK-based association for risk managers and insurance professionals.

“An independent director will provide independent thought, question the decisions of the captive and challenge the quality of service provision.

They can also be used to fill essential skills gaps or provide broader insight into the sector the company is active in.”

An independent director is someone who has not been an employee of the captive’s owning companies in the last five years or been a third-party service provider to the captive in the last three years. Additionally, the independent director won’t have ties to with the captive’s senior management, company advisors, or owners; the director doesn’t represent a shareholder; the director receives no compensation outside their director’s fee; or will have served on the board for more than nine years.

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The person serving as an independent director should meet the “Fit and Proper Person Test,” in that they should be a person with some type of insurance background, insurance knowledge, or other relevant experience. At its most basic, the director should be “fit”—someone who understands insurance—and “proper”— someone who is ethical and of good character.

An independent director brings to the captive board expertise that the owners likely will not have. According to Jeffrey Simpson, partner with Womble Bond Dickinson (US) LLP, “When the owner of the captive doesn’t have a lot of background in insurance, an independent director can help to educate them. When you have a public company, the captive owner is going to be the risk management professionals in the public company. They’re going to know what they need to know about captive insurance. When you get down into the middle market and the privately held enterprises that are forming ERCs, for example, they’re not going to have the applicable experience and they’re going to need the help.”

For most group captives and ERCs, the board of their captive is usually made up of owners who are not well-informed about insurance, insurance regulation, or key functions like reserves and reinsurance. While a captive manager or general counsel can help to educate the board in the matters of insurance, having a director on the team that is knowledgeable about the industry helps to broaden the range of discussion and helps to increase the board’s ability to make decisions. An active independent director will bridge the gap between management and board.

Independent Directors THE INDEPENDENT PART

It’s the “independent” part of an independent director that adds value to a board by the expertise and skills they bring to the table, as well as a contrarian voice. If a board is only made up of the captive owners and the captive manager’s people, the captive is only going to have two voices providing input into the company’s governance. By including directors outside of those two primary voices, the captive board will get a more complete view of the issues with a closer eye to good governance.

Simpson said, “When you find somebody who is independent—who is not tied up in the politics of the organization, the issues within the organization—they can just focus on how the captive works… They can add a lot of value. They can show you ways to use your captive that you wouldn’t otherwise have thought about. They can identify regulatory issues that you might not think about or that you might overlook. They can keep you on the straight and narrow when maybe not everyone is paying attention to that.”

According to the AIRMIC report, “A truly independent and proactive [independent director] will also assist the company in demonstrating to the local regulator that the captive takes its governance requirements and role as a regulated entity seriously.”

While independent directors are not required in most U.S. captive domiciles, many states do require a captive board to have a resident director—a board member who lives in the domicile state. In the early days of captives, resident directors were often appointed through the captive manager which operated in the state of domicile. With the proliferation of domiciles, it’s not expedient for captive managers to have offices in every state, so the requirement for a resident director on the captive’s board is a chance to seek out a qualified independent director.

“A resident director needs to be a resident of the domicile state and work on the captive’s board. That’s an invitation to bring someone onto the board that you wouldn’t otherwise have,” said Simpson. “Now you have the opportunity to bring in somebody who can add value to the transaction and to me that is a big opportunity to bring on an independent director to help you. You get folks in who can show you things you didn’t know, can see things from a different perspective, and who can help you avoid regulatory pitfalls.”

If independent directors are so valuable to a captive board, why don’t they all

“If there was going to be a practical reason that they weren’t going to do it, it would be cost,” said Simpson. have independent directors?

DECEMBER 2019

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Independent Directors

“I think that’s a narrow view—a legitimate view, a reasonable view—but it’s not an ambitious view and I don’t think it’s an open-minded view.”

Independent directors can add extra costs in terms of a director’s fee or stipend, extra travel costs, and additional Directors and Officers (D&O) insurance policies.

Independent directors will expect some kind of renumeration as any type of expertise does not come free. They will also expect to be offered D&O coverage or to be compensated for procuring their own to cover the cost of their risks in taking on that responsibility. It’s not that independent directors are terribly expensive, but if a captive is operating on a tight budget, the difference of an extra thousand dollars per year for an independent director could be a deal breaker.

However, if it is in a captive’s budget to bring on an independent director, then it should be a priority. In fact, Simpson recommends bringing on more than one independent director if possible. This is a widespread view and is endorsed by AIRMIC as well, “The captive may want to counter ‘group think’ and increase diversity by ensuring the [independent directors] outnumber the parent’s representatives and captive manager on the board. If the shareholder of the captive has a number of directors representing them on the board, it may be important to have more [independent directors] involvement to support and demonstrate independent mind and management for regulatory and tax residence purposes.”

FINDING THE RIGHT INDEPENDENT DIRECTOR

Another reason that captives may not bring on an independent director is that qualified independent directors can be hard to find. According to Simpson, “I think there are a fair number of people out there who are willing to offer their services as independent directors. There aren’t enough, in my view, who know what they’re doing.

That’s not just independent directors, that’s also in the captive space. There aren’t enough people in the captive space who have the right kind of experience to do the job right now because there is such a huge need in the industry for experienced people. There aren’t enough people to fill all those roles.”

As with the whole of the captive sector, identifying and recruiting people on all levels is a well-known problem. The captive industry is growing faster than qualified

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professionals can be trained. That’s not to say that there aren’t insurance and captive professionals that aren’t available to be independent directors. Independent directors can often be found among retired insurance professionals who still want to keep their hand “in the game,” who want to make a difference who are not necessarily in it for financial gain.

Simpson hopes that as captive professionals begin retiring, they will want to stay involved in the industry by providing their services as board directors. “I have this idea that we ought to, within the senior ranks of the industry, begin a tradition of not retiring but instead providing some service to the industry,” said Simpson.

“Instead of ending your career, maybe take your foot off the gas a little and continue to serve the industry by being a resident director or independent director, putting yourself in a position where you can work less, maybe not earning what you were, but contribute to training and developing new people who are coming along. This would help the industry to have the capacity to absorb all the new business by making sure that people with sufficient expertise stick around for a while.”

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

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Q A

ACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES:

Practical

T

Q & A &

he Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the 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, Carolyn Smith and Dan Taylor are members of the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner’s situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.

Readers are encouraged to send questions by E-MAIL to Mr. Hickman at john.hickman@alston.com.

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2019 HEALTH BENEFITS YEAR IN REVIEW As we anxiously anticipate further year-end IRS Guidance (hopefully) increasing the FSA carryover amount, let’s pause for a few moments to reflect on the 2019 Health Benefits Developments. While there is still a chance that year-end Congressional activity may result in “surprise billing” or” Cadillac Tax” legislation, the bulk of the Health Benefits activity so far has been regulatory.

HRA Final Rule and Follow-up Guidance on Pay or Play and NonDiscrimination Requirements: The agencies finalized regulations governing individual coverage health reimbursement arrangements (ICHRAs) and excepted benefit health reimbursement arrangements (EBHRAs). Subsequently, the IRS issued a proposed regulation clarifying how ICHRAs would be treated under the IRC 105(h) nondiscrimination requirements and the IRC 4980H employer responsibility requirement.

Under the final rule, if certain requirements are satisfied, an employer may establish an HRA to pay employees’ premiums for individual market coverage (other than excepted benefit or short-term coverage) and other unreimbursed medical expenses. These individual coverage HRAs (ICHRAs) are considered minimum essential coverage (MEC) for purposes of the ACA employer penalties. Among other requirements, an employer must not offer a traditional group health plan and an ICHRA to the same class of employees.

The second type of new HRA, the excepted benefit HRA (EBHRA), may be established without integration as otherwise required for ICHRAs. The EBHRA must satisfy four requirements (similar to requirements that apply to excepted benefit FSAs): (1) the maximum annual contribution is $1,800 (indexed, and without regard to any carryovers); (2) the employee must also be offered traditional health insurance from the same employer (but the employee does not have to enroll in that coverage); (3) the employee cannot also be offered a premium reimbursement HRA; and (4) the terms and conditions must be the same for all “similarly situated” classes of employees. See our article in the September and October issues of The SelfInsurer for more information.

Extensive Proposed Regulation on Health Plan Transparency: Recently introduced proposed regulations would impose significant new transparency requirements on group health plans (other than account based plans). The deadline for comments is January 27, 2020. The proposal would take effect one year after finalization (i.e., likely some time in 2021).

As proposed, health plans would be required to provide the following information to consumers: •

Estimated cost-sharing liability (consumer’s share of the cost of an item or service under the plan or coverage).

•

Accumulated cost share amounts (the consumer’s accrued deductible or out-ofpocket payment amount).

•

Negotiated rate (the in-network provider payment amount).

•

Out-of-network allowed amount (the maximum amount a plan will consider when calculating the benefit payment for out of network services).

•

Items and services content list (for bundled services, health plans would have to disclose a list of each covered item and service and cost-sharing liability as a bundle).

•

Notice of prerequisites to coverage (when consumers request cost-sharing information, health plans must inform them if the item or service is subject to concurrent review, prior authorization, step-therapy, or other medical management requirement).

•

A “disclosure notice” (must include an explanation disclosing that out-of-network providers may bill consumers, actual charges may vary from the estimate, and estimated cost-sharing is not a guarantee of coverage).

DECEMBER 2019

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Health plans would be required to make this information available in two ways: (1) through an Internet-based “self-service tool”; and (2) in paper form by mail upon a consumer’s request.

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The ability of patients to select high-deductible health plans that can be used alongside a health savings account, and that cover low-cost preventive care, before the deductible, for medical care that helps maintain health status for individuals with chronic conditions. See discussion of Notice 2019-45 below.

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The eligibility of expenses related to certain types of arrangements, potentially including direct primary care arrangements and healthcare sharing ministries, as eligible medical expenses under IRC 213(d).

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Guidance to increase the amount of funds that can carry over without penalty at the end of the year for flexible spending arrangements. See related article in this Flex Reporter.

The self-service tool must provide real-time responses, be searchable by billing code or descriptive term, and interact with consumer input to deliver meaningful costsharing information depending on any tiering, network status, or other factors.

The departments are considering expanding this definition to include mobile applications. Health plans may provide consumers the option to receive the information through other methods, such as by phone, face-to-face, facsimile, or email.

The proposal would also require health plans to publicize in-network provider negotiated rates and data outlining the historical allowed amounts for covered items or services provided by out-of-network providers.

The agencies believe this requirement will “expose price differences” so consumers can judge the reasonableness of provider prices and shop for the best price.

As proposed, these files would have to be updated monthly, and the departments are considering requiring more frequent updates, such as within 10 calendar days of the effective date of new rates.

June 24th President Executive Order: President Trump issued an Executive Order on June 24th that required Treasury to address 3 issues:

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THE SELF-INSURER

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HSAs and Preventive Care: On July 17, 2019, the IRS issued new guidance that makes health savings accounts (HSAs) more user-friendly by allowing a high deductible health plan (HDHP) to cover certain treatments for chronic conditions before the plan’s deductible is satisfied.

The IRS had been considering issues relating to preventive care for HSA purposes for some time.

IRS Notice 2019-45 was released less than 30 days after the President signed an Executive Order directing the Treasury and IRS to issue guidance on the issue.

Notice 2019-45 provides some helpful clarification as to the scope of preventive services that may be provided under an HDHP for persons with chronic conditions.

Employers who offer HDHPs/HSAs or are considering doing so should review their plans with the new guidance in mind and consult their advisors as to any design changes.

In some cases health plans had previously adopted a broader list of preventive care expenses that is otherwise reflected in Notice 201945 (and the prior guidance from IRS regarding preventive care).

As for possible future guidance, hopefully the IRS will continue to look at these issues and provide updates more frequently than the 5 to 10-year timeframe mentioned in the Notice.

The need to appropriately define the scope of permitted preventive care services remains an on-going issue, as HSAs expand, more individuals need to manage chronic illnesses, and there are continued improvements in medical care.

See the November edition of The SelfInsurer for our prior article on this issue.

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Agencies Obtain Criminal Conviction in Double Dip Tax Scheme: A recent federal-state criminal enforcement action demonstrates the continued commitment of the Department of Labor (DOL) and other federal agencies in combating fraudulent tax avoidance schemes involving health benefit arrangements. The recent case publicized by the DOL involves a version of what is commonly referred to as the classic “double dip”.1 For employers and employees who may be duped into these schemes, the chilling aspect is that, as noted by the DOL, “the employer-clients and employee-participants are now individually responsible” for underpaid employment and income taxes.

Penalties on underpayments may be waived by the IRS for employers and employees who were not aware the arrangement was fraudulent, but the amount of unpaid taxes, plus interest, can still be collected.

As regulators continue to pursue these unlawful arrangements, employers need to be sure they are dealing with a legitimate plan in order to avoid unexpected tax liabilities for themselves and their employees. See our article in the August issue of The SelfInsurer for more information.

Invalidated DOL Fiduciary Rule Still on DOL Business Plan: The DOL’s far-reaching investment fiduciary rule would have imposed significant new disclosure and approval burdens on entities that receive investment-related compensation from covered plans, including HSAs. The Fifth Circuit declared the DOL rule invalid, and the DOL quickly issued a nonenforcement bulletin. See DOL EBSA Field Assistance Bulletin 2018-2 (May, 2018).

While an updated fiduciary rule has been on the DOL Business Plan, nothing has been released yet. Entities that might be considered brokers under SEC rules may be impacted by a similar regulatory regime finalized by the SEC.

DOL Electronic Disclosure Rule: DOL introduced a revamped electronic disclosure rule under ERISA. While the new rule significantly pushes the electronic communication ball forward for retirement plans, it is not applicable to health and welfare plans (including FSAs and HRAs). Nonetheless, we expect similar changes coming down the pike for health and welfare plans (perhaps in 2020).

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FOR QUICK REFERENCE: 2020 COST-OF-LIVING ADJUSTMENTS FOR POPULAR BENEFITS

BENEFIT

2020

2019

HSA contribution max (including employee and employer contributions)

$3,550 ($7,100 family)

$3,500 ($7,000 family)

HSA additional catch-up contributions

$1,000 (this is not indexed)

Same

HDHP annual deductible minimum

$1,400 ($2,800 family)

$1,350 ($2,700 family)

Limit on HDHP OOP expenses

$6,900 ($13,800 family)

$6,750 ($13,500 family)

Health FSA salary reduction max

$2,750

$2,700

QSEHRA max reimbursement

$5,250 ($10,600 family)

$5,150 ($10,450 family)

Transit and parking benefits

$270

$265

401(k) employee elective deferral max

$19,500 (Catch-up contributions $6,500)

$19,000 (Catch-up limit unchanged)

Highly compensated employee

$130,000 (applies for 2021 plan year under look-back rule)

$125,000 (applies for 2020 plan year under look-back rule)

Key employee

$185,000

$180,000

2019 ADJUSTED CIVIL PENALTIES UNDER ERISA (HIGHLIGHTS)

Violation

2019 per day penalty

2018 per day penalty

Failing to File Form 5500

$2194

$2140

Failure to provide CHIPRA notice

$117

$114

Failure to comply with GINA

$117

$114

Failure to provide SBC

$1156

$1128

Is there more to come?

As this goes to press, the year isn’t quite done. Federal agencies are still at work and the Fifth Circuit has yet to render its decision on appeal from a District Court decision last December challenging the Constitutionality of the ACA. 2020 looks to once again be an exciting year. Key late breaking December developments will be in the March Flex Reporter in the New Year!

References 1

See, DOL press release https://www.dol.gov/newsroom/releases/ebsa/ebsa20190619. The facts and background of the case are

drawn from this press release.

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Written by Wendy Keneipp

INSURANCE SALES: IS IT ABOUT RELATIONSHIPS OR NOT?

E E

veryone in the employee benefits supply chain is definitely in the sales business, but is it a relationship business, as well?

Feeling confused by the declarations used as headline click-bait about relationship selling? I’m sure. It can make your head spin, especially if you don’t read the articles to learn what case is actually being made.

“Selling is not about relationships” claims Harvard Business Review1. “How to Stop 'Selling' and Start Building Relationships” says The Balance2. These are both worthy articles with sound advice. From the titles, they sound conflicting. Yet, their premises are similar and the differences largely come down to semantics.

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and how they impact your own business results.

KEEPING UP WITH CHANGES Sales has changed significantly over the years and decades for many reasons:

WHAT IS A “RELATIONSHIP”?

We have to define and maybe re-define in our own minds what is meant by “relationship” to start getting a better idea of where to go with this notion of relationships and selling.

According to Oxford English Dictionary, a relationship is “The way in which two or more concepts, objects, or people are connected, or the state of being connected.”

And, “The way in which two or more people or organizations regard and behave toward each other.”

Notice that these don’t specify the interactions must be of a certain type, but rather it’s an objective look at how the parties interact. We all have relationships. Some are strong and some are weak; some are balanced and some are unequal; some are friendly and some are combative; and some are some are transactional and some are consultative.

I don’t think the idea that we have relationships with our clients and prospects should at all be in question. Instead, we need to focus on what type of relationships we have with our clients and prospects: how does that relationship develop and what is the basis of it? Does it develop through rounds of golf or cocktails at the country club, or does it develop from bringing new insights and delivering improved results to the business?

The development may vary by client, and that’s completely understandable as we’re talking about human interactions here. But to have successful client relationships that drive your business, you need to be very clear about what those relationships are

•

Moving from a product-based to a service-based economy

•

Moving from local business-tobusiness sales to a national and global economy

•

Moving from a paper-based environment to an electronic one

•

And perhaps the largest influencer of all, moving from having tightly controlled information to prolifically available information

With each significant change in business operations, a change in the way we sell to these businesses has also been required. Yet, what we see too often is that sales people tend to thinking of selling and business relationships in the same way it was when men ran everything and women were secretaries; when you knew most of your potential clients from the country club or the little league fields; and when deals were struck on the golf course or at the ball game without consensus from the rest of the team.

It’s a different world now. Sure, every one of these scenarios above still exist today.

But if you rely on those as your bread and butter to grow your business, you’re

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deluding yourself, and you’re selling your business and team short of its potential.

The Sales Executive Council has spent considerable time researching selling and buying styles3, and hands-down, the lowest performing sales reps are those who rely on typical personal and professional relationship development.

IT TAKES A TEAM In further research, Harvard Business Review reports that the average buying decision has been steadily increasing and is made by a group of at least 6.8 formal decision makers4. However, the underlying theme for selling in the benefits industry is to focus selling efforts on a single person, undervaluing the relevance of others who do, or need to, participate in the process.

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The single-point decision maker is alive and well in many small companies. Yet players in the insurance field regularly express the desire to move up-market, and then tend to treat the relationship development with these up-market organizations as though they are still single decision-maker operations. Common sentiments are: “We work with CFOs, the decision-makers. HR Managers just slow down the process.” Or “We work with HR Managers; we have a hard time ever getting to the decision-makers.”

Very different approaches, but the overarching idea is still the same with both: you are not respecting the reality of today’s businesses that there are multiple people involved in complex buying decisions. There are both influencers and decision-makers involved and each has his/her own goals. The complexity of the process can get tricky for these teams. And the only basis for developing relationships when you have multiple people involved like this, is around the commonality they all share, which is the success of their organization.

And the sales person/team who successfully helps the buying team navigate the complexity of the process and come to beneficial consensus becomes the winning organization.

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IT’S STILL A RELATIONSHIP

References: 1- https://hbr.org/2011/09/selling-is-not-about-relatio

This type of interaction is absolutely a “relationship.” It’s a relationship based on business advice, helping employers navigate the complexities of having employees, and delivering results.

Achieving this level of relationship comes through having defined business practices, that by their very nature, bring value to every interaction you have with a prospect/client for the duration of the relationship. This begins with your online and in-person marketing activities, continues through every sales conversation you have, and is baked into the value proposition delivered by each member of your team.

You likely won’t be building the relationship by golfing with these teams or taking them to the ball game. But after you’ve established yourself as a sound partner for helping them make challenging decisions, you may very well find that some social time is a welcome change of scene and helps further strengthen the trust of the relationship.

Developing relationships for sales and business opportunities shouldn’t be about friendships and camaraderie. It should be about the advice and value you can bring and the positive ways you can influence the roles of the individuals and the results of the business. If friendship grows out of that, it should be considered a bonus, but not be the primary objective and method for winning the sale.

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2- https://www.thebalancesmb.com/stop-selling-start-building-2296036 3- https://hbr.org/2011/09/selling-is-not-about-relatio 4- https://hbr.org/2017/03/the-new-sales-imperative

Wendy Keneipp, partner at Q4intelligence, is a business strategy and marketing/sales coach, working with independent agencies to transform them from legacy sales organizations into modern, client-focused advisory firms. In an industry starved for effective marketing, Wendy delivers a clear advantage by helping agencies create their own results-oriented messages that connect with their buyers and develop marketing and sales systems to take advantage of the new ways buyers seek out answers.

Wendy Keneipp

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MEDICAL MARIJUANA: THE ANTIDOTE TO OPIOID ADDICTION? MEDICAL MARIJUANA HAS RECENTLY BEEN GAINING GROUND AS ACCEPTABLE TREATMENT, AND POSSIBLE OPIOID REPLACEMENT, FOR PAIN THERAPY

W W

ith opioid use and abuse by injured work comp claimants becoming an increasing concern among self-insured employers, medical marijuana is being considered as a possible alternative because of its purported medical benefits and allegedly low risk of addiction.

In a recent session at SIIA’s National Educational Conference and Expo in San Francisco, Kevin Glennon, VP of Clinical Programs, National Product for One Call and Brian Allen, Vice President of Government Affairs at Mitchell International explored the pros and cons of substituting medical marijuana for opioids in the treatment of occupational injuries, conflicting legislation and court rulings, and what the future holds for self-funded employers considering covering it for their injured workers.

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Since 1999, overdose deaths in the U.S. involving opioids have quadrupled and opioid abuse totals over $72 billion in medical costs alone each year in the U.S.

We have more prescription drug addicts in the United States than any other place in the world, and on average there are up to four to six drug overdose deaths per hour (although that does not mean they necessarily got that prescription legally), explained Glennon. What we do know is that in many of the states that have legalized recreational, and especially medical marijuana, there has been upwards of a 25% percent decrease in those prescription drug overdoses, according to studies from the Journal of American Medical Association.

MEDICINAL VALUES

Cannabis was first and foremost utilized for treatment of intractable seizure disorders in children, and that was primarily using the CBD components of the cannabis plant.

CBD is the medicinal value that works on inflammation, swelling and muscle spasm, while THC is the component that gets you high. CBD affects the body and the CBD receptors in the brain but does not give you the euphoric feeling that you get with high levels of THC, clarified Glennon.

It is also worth noting that the majority of medical CBD is not smoked or vaped; it is in edibles, oil or tincture/topical forms.

Even though 33 states and the District of Columbia have legalized marijuana for medical purposes, it remains illegal federally and is still listed as a Schedule 1 drug “because there have been no FDA approved triple blind studies that have been completed to document the medical efficacy of cannabis” indicated Glennon.

“But we currently do have 3 FDA approved triple blind studies going on right now for the use of medical marijuana for the treatment of PTSD. They are both in the third phase right now I believe, and the preliminary outcomes are proving to be extremely positive.”

The study is using low-dose THC and a high percentage CBD during the day.

The opposite is being used at night, with a higher percentage of THC to turn the dream centers off in the brain, as most individuals with PTSD suffer from Night Terrors where they are reenacting the event that has caused the PTSD.

“The other very interesting thing is that the individuals in the study are weaning off all of their prescription medications.

So not only are they weaning off those medications, but they're losing the side effects of those medications. I think that’s one of the biggest things – we don’t see side effects like nausea, vomiting, constipation, stomach ulcers,

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which are many of the things that we see with the common drugs that are utilized in our industry today. If it’s work comp, the first visit is pain pill, muscle relaxer, antiinflammatory. The next visit we give them something because they have an ulcer and then we have to give them something for constipation,” he continued.

DITCHING OPIOIDS FOR MARIJUANA

“In many of the cases I’m monitoring across the United States, especially those where the carrier has been courtordered to reimburse, the intent is that the primary care physician must have them on a weaning schedule to get them off all of their other drugs, and in all but a handful of the cases it has been extremely successful,” stated Glennon.

“Even for those Injured workers that are paying for it on their own and not being reimbursed, they are taking themselves off the other drugs and everyone has been reporting ‘I feel much better. I don't have the side effects. I have a much better quality of life and I'm able to function not being all confused and disoriented and drowsy from the prescription medication’.”

The first state to reimburse for medical cannabis was New Mexico, establishing a fee schedule of Maximum Reimbursable Amount = $12.02 per unit (i.e., per 1-gram dry weight equivalent) up to a half a pound per year, but mandating any patient getting reimbursed is on a weaning schedule to taper off opioids.

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POLICIES

“We’re in a very interesting time in this country because we have a lot of conflicting policy at the state and federal level and it’s creating a lot of angst out in the marketplace, it is especially troubling for work comp insurers and self-insured employers because nobody really knows where this is going to end up,” stated Brian Allen.

He continued, “there's still a lot we don't know about it and I think we’re really excited about the studies that are going on and hopefully they'll be revelatory, and we’ll hear about what it can and can’t do, and some of the effects that are out there.”

Several states currently have voter initiatives that would legalize marijuana either recreationally or medically. In the last year, even though a state’s status of marijuana didn’t necessarily change, some of the states that have medical marijuana already have decided to include it on their prescription drug monitoring programs so they can see who's dispensing it, who's getting it, and which doctors are recommending it.

A number of states have also added chronic pain as a qualifying condition for medical marijuana in an attempt to reduce opioids.

More states are also starting to allow home cultivation. “I think the challenge I see from a medical and clinical perspective is that if someone is recommended to receive medical marijuana, but they can grow their own, it's going to be challenging to figure

out how they're using it and when they're using it, because you aren’t going to have a paper trail on all of that. And if it is readily available recreationally, who's going to go to the doctor to get a prescription? I guess unless they want to get it paid for it by their insurance carrier.

But right now, that doesn't happen in most states,” stated Allen. “Getting it on the PDMP is a good way of knowing whether or not they are getting both opioids and marijuana which would help validate some of the stuff that's out there or invalidate it as the case maybe be.”

WORKERS COMP REIMBURSEMENT

“Pretty much every work comp carrier has said they're not going to just automatically reimburse. We have no approved ODG or ACOEM guidelines.

There is no AWP so there is no formulary,” explained Glennon, “and that brings up a whole other multitude of issues. How do we know what strength or how much you pay per strength?

DECEMBER 2019

33

In New Mexico, they base it on leaf (smokable bud). But if we see more and more edibles and tinctures, how are we going to reimburse with those?”

There has been a lot of discussion at the state level on whether or not work comp should be required to reimburse from a policy standpoint. New Jersey bill AB4097, if passed, would require work comp to cover individuals.

“Kentucky actually had a bill running that would exempt work comp insurance from paying for medical marijuana, which is not even legal there. There was a bill running that would legalize it so that's open sided run a bill out of the defense mechanism,” said Allen, continuing that Utah’s medical marijuana law has a provision that insurers don't have to pay for it.

“And that's the real challenge that if there's no medical treatment guidelines that indicate the medical marijuana should not be used and there's a state and federal law, it is still illegal federally so there’s some reluctancy on the part of payers” he concluded.

There have been several court cases regarding reimbursement. In New Mexico there were three cases that were of note and in all three of the cases the circuit court ruled that the employer should reimburse, which is what ultimately spawned the regulation that created the fee schedule in New Mexico.

In Minnesota the Department of Labor and Industry has put out a public statement saying that it will not treat marijuana as an illegal substance. If an injured worker was recommended to use medical marijuana, they would not look at it as an illegal substance.

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Allen described an interesting case in New York, Matter of WDF, Inc from 2017 where an injured worker was recommended to have medical marijuana, submitted the bill for reimbursement, was denied and challenged it at the workers comp board.

The workers comp board found in favor of the employer not because marijuana is a Schedule 1 drug, but because the doctor failed to pre-authorize it, stating that had the doctor pre-authorized it, they would have ordered payment. They were not concerned about the legal status of marijuana.

“We're hearing that a lot from courts. In Petrini v. Marcus Dairy (Connecticut in 2016) that's another case where the judge said ‘yes, it’s illegal federally and we recognize that, but the risk of prosecution is so low we think it negates the Schedule 1 status and your unwillingness to pay for it as an employer’ and they required the employer to pay. It was almost the exact same in the case of Watson v. 84 Lumber in 2016 in New Jersey” stated Allen.

In Michael Hall v Safelite Group, Inc. an injured worker in Vermont was prescribed medical marijuana, but Vermont had language in their medical marijuana law that said the person that was using medical marijuana could not be discriminated against by a business, industry or professional licensing board. The lawyer read business to be a standalone word, but the court interpreted it as a business licensing board of the state and ruled that the law itself was not intended to regulate private business and in that case upheld the denial of payment.

Workers comp employers, insurers and anybody involved in the system really needs to start preparing now to deal with it because it's coming,” stated Allen. “We just have to be prepared and continue to watch for what is in the clinical studies.

Because those are the things that are ultimately going to tell us how we manage in within our industry.” he “

concluded.

Bourgoin v Twin Rivers Paper went all the way to the Maine Supreme Court. The worker won at every level until it got to the Supreme Court, where they indicted that yes, there is a medical marijuana law and it is allowed in the state, but they didn’t feel it was appropriate for state law to require an employer to violate federal law, and ultimately ruled in favor of the employer.

“You can see the states are all over the charts on this and it is not something that is settled law by any means,” concluded Allen.

The question now becomes is reclassification possible? There are several bills at the federal level dealing with marijuana in general, and how to handle at the federal level.

DECEMBER 2019

35

Written by Christopher Aguiar, Esq.

ACA ENROLLMENT BY THE NUMBERS

ADMINISTRATION’S ATTEMPTS TO STALL THE ACA AT WORK?

W W

ith headlines focused elsewhere, much of the political discourse in 2019 has avoided Healthcare Reform.

In contrast, 2017 and 2018 featured many headlines with the current Administration doing everything within Its power to make good on a touchstone of Its 2016 campaign platform; President Trump and the Republican Party pushed for repeal and replacement of the Affordable Care Act.

When they were unable to garner the votes, the President utilized powers outside the control of Congress to weaken key parts of the Law designed to ensure the viability of the Insurance Marketplace, as well as keeping the American public in the dark regarding enrollment by virtually defunding marketing efforts. Many feared these tactics would encourage disengagement of the young and healthy, demographics crucial to maintaining a balanced risk pool covered by the Marketplace. Did it work?

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It all came to a head when the late Senator John McCain stood on the Senate floor and casted his vote with a momentous thumbs down.

This iconic moment marked the end of a legislative war of words, highlighted to that point by Twitter attacks from the President, himself, where the Republican Party was unable to garner the 50 votes necessary under the Budget Reconciliation Act to pass the Better Care Reconciliation Act. What followed was a tactical maneuvering

by President Trump to undermine of key features of the ACA through his control of federal agencies and national purse strings.

First the Administration built Reform provisions into a tax bill. In December of 2017, President Trump signed the Tax Cuts and Jobs Act (“TCJA”). Among many other provisions, the Bill effectively directed the Internal Revenue Service to cease enforcing the Individual Mandate.

In so doing, the Government would no longer penalize Americans who chose not to purchase health insurance. So, even though the Affordable Care Act was still the Law of the Land, one of the key provisions intended to protect the health of the risk pool by ensuring it was balanced and included not only the old and sick but also the young and healthy, now had no teeth.

Many posited this lack of enforcement could hamstring the Law by encouraging the very malady it was designed to avoid, adverse selection. Without the tax to be levied upon non-compliant Americans, another important challenge to the Law was also set in motion, Its constitutionality.

When now Chief Justice Roberts upheld the constitutionality of the Affordable Care Act in an historic 2012 Supreme Court decision, it was upon enforcement of this provision that he relied.

Specifically, Roberts held in National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012) that the Law was constitutional because the Federal Government was empowered to generate revenue.

This penalty, as it was initially labeled, to be levied against Americans who chose not to purchase health insurance, then, was actually a tax, a permissible exercise of the Government’s power of taxation.

So, too, was the Affordable Care Act considered constitutional.

With the Administration’s removal of enforcement of this tax, without repealing the Law or provision itself, the constitutionality of the Affordable Care Act is again called into question because where no revenue is generated, the Individual Mandate is now arguably invalid. Such is the question to be answered by The Supreme Court when it issues a ruling Texas v. US, 809 F. 3d 134 (2015). Though oral arguments took place in July of 2019, no ruling has been issued.

The final act taken by the Administration was an exercise of the Executive Branch’s control of money. Specifically, it is within the power of the president to control how certain federal funds are spent, a power which allowed President Trump to slash the Affordable Care Act’s marketing budget by 90%. The fear? With

DECEMBER 2019

37

significantly less advertising of open enrollment, would American’s be aware of the Open Enrollment period and how they could go about purchasing coverage on the Exchange?

Perhaps the most concerning data point, however, is the percentage of new enrollees who qualify for premium subsides/tax credits. Those who qualify for these subsidies do so because they are individuals or families with low to moderate income levels.

Though not significant, the efforts may have had some impact on the enrollment which occurred from November 1 through December 15, 2018. According to Kaiser Family Foundation as well as the Centers for Medicare & Medicaid Services (“CMS�), enrollment through Healthcare.gov was down 4% in 2018 as compared to 2017.

In 2017, 83% of new enrollees qualified for these subsidies. In 2018, that number grew to 87%. This indicates that lower income individuals and families are flocking to the health insurance exchanges at significantly higher rates than their wealthier (and perhaps, healthier) counterparts. Historically, data suggests that lower income individuals also tend to be less healthy.

Overall, enrollment was down 3% in 2018 as compared to 2017. Those numbers seem insignificant when you consider the significant budgetary limitations that were placed on advertising, but perhaps the more telling and concerning data lies in the decline of new enrollees and percentage of those who qualified for subsidies. With respect to enrollees, 39% of enrollees were new in 2016. That number in 2017 had fallen to 31%, and even further in 2018 to 24%.

38 THE SELF-INSURER

Accordingly, it appears the fear of adverse selection may indeed be manifesting itself as the young and healthy seem to be avoiding entering the Marketplace, either due to obtaining benefits through employee sponsored plans, or their willingness to gamble on their youth to save a buck.

It is difficult to ascertain with certainty whether the policy decisions made by the current Administration truly have a causal link to the drop indicated above, or if the connection is simply correlative. The numbers themselves speak to a very ominous reality. The number of new enrollees is declining each year.

Additionally, the Marketplace appears to be obtaining a higher rate of enrollees annually in the low to moderate income demographic. Finally, 1/3 of new enrollees, annually, appear to be over the age of 55 and 64% are over the age of 35.

As we head into 2020 and what should be another year of significant reform rhetoric, a Supreme Court decision that could leave the Country without a healthcare system on the books, and Healthcare once again top of mind in a presidential election cycle, the Administration will continue to attempt to repeal the Affordable Care Act, or endeavor to limit its efficacy.

Chris is an attorney with The Phia Group who has focused most of his career on subrogation and reimbursement recovery, representing TPAs and self-funded benefit plans since 2005. Chris has oversees tens of thousands of cases all over the country and spearheads negotiations between plan participants, plaintiffs’ counsel, and plan administrators on matters of State and Federal Law as well as ERISA Preemption.

He has recovered millions of dollars on behalf of benefit plans in virtually every state and federal jurisdiction. He also holds the distinction of a Certified Subrogation Recovery Professional. Although Chris spent several years dabbling in other areas of benefit plan cost containment, including plan drafting as well as plan consulting matters ranging from plan language analysis, claims appeal assistance, balance billing defense, overpayment recovery, stop loss, PPO, and administrative service agreements.

Chris is a regular contributor to The Self Insurer Magazine and is invited to present annually at the National Association of Subrogation Professionals National Conference.

If adverse selection is in fact coming to fruition as the data seems to support, the Affordable Care Act may be headed for its demise either organically or through direct legislative attacks. It will certainly not be aided by an administration that will actively undermine the parts of a healthcare system that were intended to ensure its success; a flawed system that often leaves Americans footing a significant bill.

Even with these attempts, the Republican Party has failed to clearly put forth a viable replacement. Be it with the ACA in some form, a Republican alternative, or the “Medicare for All” approach being touted by the large contingent Democratic candidates, Healthcare discussion is here to stay.

DECEMBER 2019

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ENDEAVORS

SIIA ENDEAVORS

A A

s a successful 2019 comes to an end, we now look ahead to 2020.

To help you stay informed and engaged in 2020, SIIA has an excellent line up of educational and networking events planned for the coming year.

Kicking things off for 2020 is the Self-Insured Health Plan Executive Forum, scheduled for March 16-18, 2020 at the Belmond Charleston Place Hotel in Charleston, South Carolina.

This popular SIIA educational and networking event brings together senior executives representing key business partners supporting self-insured group health plans, including third party administrators (TPAs), stop-loss carriers/MGUs, brokers/ consultants, captive managers and leading service providers, with the objective of promoting improved collaboration in order to grow the self-insurance marketplace in a responsible way.

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ENDEAVORS A mentor connection event designed for younger members is being finalized now and is expected to be held in early April.

Watch for an announcement soon.

Self-Insured Workers' Compensation Executive Forum, May 12-14, 2020 at the Renaissance Hotel in Cincinnati, Ohio is the country’s premier association sponsored conference dedicated exclusively to self-insured Workers’ Compensation.

In addition to a strong educational program focusing on such topics as risk management strategies and innovative ways to prevent and manage loss, this event will offer tremendous networking opportunities that are specifically

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THE SELF-INSURER

designed to help you strengthen your business relationships within the self-insured/ alternative risk transfer industry.

We wrap up the year with SIIA’s 40th Annual National Educational Conference & Expo October 11-13, 2020 at the JW Marriott Desert Ridge Resort in Phoenix, Arizona.

The SIIA National Conference & Expo is the world’s largest event focused exclusively on the self-insurance/captive insurance marketplace and typically attracts more than 1,700 attendees from around the United States and from a growing number of countries around the world. Registrants will enjoy a cutting-edge educational program combined with unique networking opportunities, and a world-class tradeshow of industry product and service providers guaranteed to provide exceptional value in four fast-paced, activity-packed days. This is truly a can’t miss event!

For more information, including registration, networking and advertising opportunities and exhibiting info, please visit www.siia.org.

NEWS

NEWS FROM SIIA MEMBERS 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 membernews@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 at jivy@siia.org.

DECEMBER 2019

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NEWS DIAMOND MEMBERS GREG SULLIVAN NAMED SENIOR VICE PRESIDENT, STRATEGY AND PROJECT MANAGEMENT OFFICE, FOR HM INSURANCE GROUP PITTSBURGH – Greg Sullivan has been named senior vice president, Strategy and Project Management Office, for HM Insurance Group (HM). In this role, he will be responsible for providing direct oversight, accountability and coordination of HM’s business activities related to the execution of the company’s strategic initiatives.

“Greg has a talent for bringing together multiple stakeholders and fostering a collaborative work environment where goals can be achieved,” Tom Doran, president, HM Insurance Group, said. “His ability to make connections, weave them into plans and see them through to execution will enable us to further our capabilities in this evolving insurance marketplace.”

With more than 30 years of insurance experience (the last 20 in medical stop loss), Sullivan’s areas of expertise include all facets of stop loss, actuarial services, life and health insurance, reinsurance, risk management and finance. He frequently serves on industry panels, where he shares his knowledge with industry professionals.

Prior to joining HM, Sullivan helped FullscopeRMS start up its stop loss solutions vertical. Before that, he spent 14 years in a leadership role for Cigna’s stop loss business. His work experience also includes time with several other top insurance companies, including Hartford Life.

Sullivan is a graduate of Lafayette College in Easton, Pennsylvania. He has attained the Fellow of the Society of Actuaries (FSA) designation and is a member of the American Academy of Actuaries.

About HM Insurance Group HM Insurance Group (HM) works to protect businesses from the potential financial risk associated with catastrophic health care costs. The company provides reinsurance solutions that address risk situations confronting employers, providers and payers. A recognized leader in employer stop loss, HM also offers managed care reinsurance nationally. Through its insurance companies, HM Insurance Group holds insurance licenses in 50 states and the District of Columbia and maintains sales offices across the country. Visit hmig.com.

AMWINS APPOINTS ALEX KAPLAN AS EXECUTIVE VICE PRESIDENT FOR ALTERNATIVE RISK CHARLOTTE, NC – AmWINS Group, Inc. (“AmWINS”), a global distributor of specialty insurance products and services, announced that Alex Kaplan has been named

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Executive Vice President for Alternative Risk.

In his new role, Kaplan will lead a new strategy around the development of parametric solutions and other bespoke coverages, on both a stand-alone basis and in conjunction with other traditional and non-traditional solutions for client risk transfer. He will also be responsible for developing new products and capital sources for AmWINS, its retail customers and their clients.

“Alex has been at the forefront of understanding emerging risk needs and has an extensive history of creating innovative products, solutions and markets. His work has always focused on affordable ways of closing the gap between insured and uninsured loss, and we’re excited that he will be leveraging that global expertise in support of our retail brokers and their insureds,” said Scott M. Purviance, Chief Executive Officer of AmWINS. Prior to joining AmWINS, Kaplan spent 11 years at Swiss Re, where he most recently served as Head of North America for the company’s Public Sector Solutions unit.

In this role, he supported the needs of governments and international financial institutions in managing their financial risks to help society create effective responses to major challenges, including natural catastrophes and climate change, permanently transforming the industry's approach to these complex and growing risks.

These initiatives ranged from helping to establish the US National Flood Insurance Program’s first engagements with the (re)insurance industry to

NEWS assisting in the creation of the first parametric insurance policy on a natural asset, the Meso-American reef in Mexico. Kaplan co-developed a patented parametric windstorm insurance mechanism.

“The industry faces an exciting juncture to help alleviate new challenges in an evolving risk landscape,” said Kaplan. “The confluence of technology, data digitization and computational power today will enable the industry to address the risks of society in new and powerful ways. I’m thrilled to join AmWINS to apply and scale these solutions across their vast network and bring new value to our clients.”

Kaplan has deep expertise in government and public finance. He began his career by serving on the staff of the Committee on Ways and Means in the U.S. House of Representatives working on tax and economic policy. From 2006 to 2008, he served as the Deputy to the Assistant Secretary for Legislative Affairs for the United States Department of the Treasury under Secretary Henry M. Paulson.

Kaplan received a Bachelor of Arts degree in economics from Hobart College.

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 115 offices globally and handles premium placements in excess of $17 billion dollars annually. Visit www.amwins.com.

SILVER MEMBERS NOVA HEALTHCARE ADMINISTRATORS NAMES JIM

management as a way to improve health outcomes and manage costs for clients.”

Walleshauser joins Nova during a period of rapid growth. Nova supports more than 230,000 members spanning 37 states, providing a variety of medical, private-labeled administrative solutions, COBRA, vision, dental, and reimbursement account services to clients.

“I am excited and honored to join the strong leadership team here at Nova,” Walleshauser said. “Nova’s specialized approach to serving its clients and to fostering an amazing work culture is second to none, and I look forward to supporting the company’s strategic initiatives towards growth in the coming years.”

With the appointment of Walleshauser as President, Nova bolsters its commitment to providing clients creative, innovative benefit solutions which meet the unique needs of its diverse and ever-growing client base.

About Nova

Prior to that, Walleshauser served as Senior Vice President of Health Care Service Operations at Independent Health where he was responsible for coordinating and implementing strategic and operational initiatives for health care services and medical management.

Headquartered in Buffalo, NY, Nova is a wholly-owned affiliate of Independent Health. Evolving over the last 30 years, Nova aims to manage trend to reduce health care spend and improve health plan performance. Nova works with flexibility to provide clients the solutions they need in the way they need them including medical, dental, vision, COBRA, reimbursement account administration, and private-labeled partnerships.

“Nova is delighted Jim will lead the company into our next stage of growth,” said Todd Martin, Chief Sales Officer. “Jim’s record of operational improvement and datadriven business management are aligned with Nova’s proactive approach to trend

Nova provides clients with flexible plan design, national network solutions, customized trend management

WALLESHAUSER AS PRESIDENT BUFFALO, NY -- Nova Healthcare Administrators announced James “Jim” Walleshauser has been named as president, effective immediately.

Walleshauser has more than 20 years of senior management experience with a proven track record of strategic planning and organizational leadership, most recently as president of Evolve Practice Partners.

DECEMBER 2019

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NEWS strategies and personalized service. Nova was recognized as one of Modern Healthcare’s Best Places to Work in Healthcare 2019 and Best Companies to Work for in New York. Visit www.novahealthcare.com.

H.H.C. GROUP ANNOUNCES DEAN VADEN AS VICE PRESIDENT SALES, NATIONAL ACCOUNTS H.H.C. Group is proud to announce the addition of Dean Vaden as Vice President of Sales, National Accounts. Dean brings over 20 years of experience in cost containment within organizations in the healthcare and insurance industry.

Before joining H.H.C. Group he served as CEO and President of Devon Health Services PPO Network and Consilium Out of Network Claims Solutions. Prior to that Dean was with Coventry/ First Health Division as National Sales Director responsible for the nationwide sales team marketing the First Health PPO network.

“Dean brings a unique combination of industry knowledge, experience, proven sales acumen, and client service expertise”, said Dr. Bruce Roffé, H.H.C. Group’s President and CEO. “His broad perspective enables him to identify the best ways to deliver the greatest cost containment value to all types and sizes of self-insured payors.”

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About H.H.C. Group H.H.C. Group is a leading national health insurance consulting company providing a wide range of cost containment solutions for Insurers, Third Party Administrators, SelfInsured Employee Health Plans, Health Maintenance Organizations (HMOs), ERISA and Government Health Plans.

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H.H.C. Group's services include Claim Negotiation, Claim Repricing, Medicare Based Pricing, DRG Validation, Medical Bill Review (Audit), Claims Editing, Medical Peer Reviews/Independent Reviews, Independent Medical Examinations (IME), Case Management Utilization Review, Data Mining, Disease Management and Pharmacy Consulting. For additional information about H.H.C. Group and our services, visit www.hhcgroup.com or contact Bob Serber at rserber@hhcgroup.com or 301-963-0762 ext. 163.

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SIIA 2019 BOARD of directors & committee chair ROSTER

CHAIRMAN OF THE BOARD*

DIRECTORS

COMMITTEE CHAIRS

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

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

PRESIDENT/CEO

Mary Catherine Person President HealthSCOPE Benefits, Inc. Little Rock, AR

CAPTIVE INSURANCE COMMITTEE John R. Capasso, CPA, CGMA, PFS President & CEO Captive Planning Associates, LLC Medford, NJ

CHAIRMAN ELECT*

Kevin Seelman Senior Vice President Lockton Dunning Benefit CompanyDallas, TX

Mike Ferguson SIIA Simpsonville, SC

David Wilson President Windsor Strategy Partners, LLC Princeton, NJ

TREASURER AND CORPORATE SECRETARY* Gerald Gates President Stop Loss Insurance Services AmWins Worcester, MA *Also serves as Director

SIEF BOARD OF DIRECTORS Nigel Wallbank Chairman Heidi Leenay President Freda Bacon Director Les Boughner Director Alex Giordano Director

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Jeffrey K. Simpson Partner Womble Bond Dickinson (US) LLP Wilmington, DE Robert Tierney President StarLine East Falmouth, MA Peter Robinson Managing Principal Integro Re San Francisco, CA

GOVERNMENT RELATIONS COMMITTEE Steven B. Suter President & CEO Healthcare Management Admtrs., Inc. Bellevue, WA CHAIR, INTERNATIONAL COMMITTEE Liz D. Mariner Ford Senior Vice President Re-Solutions, a Risk Strategies Company Minneapolis, MN CHAIR, SIIA FUTURE LEADERS COMMITTEE Craig Clemente Chief Operating Officer Specialty Care Management Lahaska, PA CHAIR, TPA BEST PRACTICES TASK FORCE Ron Dewsnup President Allegiance Benefit Plan ManagementMissoula, MT CHAIR, WORKERS’ COMP COMMITTEE Mike Zucco Business Development ATA Comp Fund Montgomery, AL

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We’ve got your back. Four words that you want to hear when seeking to self-fund employee medical benefits, particularly when facing the potential costs and risks associated with a self-funded benefit plan. At Swiss Re Corporate Solutions, our integrative National Employer Captive program brings our brokers, payers and their clients extra peace of mind through protection against catastrophic claims. Designed for groups with 50-400 enrolled employees, this captive program allows a small or medium size employer to participate as a member of a risk bearing entity with like-minded employers, providing both peer support and long-term financial stability. Most importantly, captive members get to jointly control their own risk and spend only the money they use. We’re smarter together. corporatesolutions.swissre.com/eslcaptives Insurance products underwritten by Westport Insurance Corporations and North American Specialty Insurance Company. Š Swiss Re 2019. All rights reserved.

SIIA new members DECemBER 2019

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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

Larry Aldrich CEO & Co-Founder NewAm Health LLC Scottsdale, AZ

Jonathan Locke Executive Director of Finance City of Killeen Killeen, TX Denise Joyce Director, Life & Health Insurance Services Georgia Municipal Association Atlanta, GA Jeff Miller Payer Relations Manager Indiana Hemophilia & Thrombosis Center Indianapolis, IN

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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