The Self Insurer July 2021 by SIPC

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Streamlining Safety

Data analytics, AI and other tech tools help speed return to work, improve outcomes and contain costs

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TABLE OF CONTENTS

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

FEATURES 4

STREAMLINING SAFETY

DATA ANALYTICS, AI AND OTHER TECH TOOLS HELP SPEED RETURN TO WORK, IMPROVE OUTCOMES AND CONTAIN COSTS By Bruce Shutan

SPOTLIGHT INTERVIEW: RICARDO PEDROZA, U.S. EXECUTIVE DIRECTOR, PROCOLOMBIA

ARTICLES 18 28

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 CAPTIVE INDUSTRY SEES BIG WIN IN SUPREME COURT DECISION

NEW ADMINISTRATION CASTS DOUBT ON TRUMP’S IMPORTATION PLAN

SIIA ENDEAVORS

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

JULY 2021 3

F E AT U R E

Streamlining Safety

Data analytics, AI and other tech tools help speed return to work, improve outcomes and contain costs

Written By Bruce Shutan

N N

ew technologies are streamlining self-insured workers’ compensation claims as never before. Consider the enormous impact of data analytics, as well as artificial intelligence, the AI subset known as machine learning and its own subset of deep learning, on speeding return to work, improving outcomes, spotting billing errors and containing costs. Other valuable tools include audio and image analysis, which can help prevent mounting frustration among claimants or elevate surveillance techniques to detect fraudulent activities. In the Information Age, a typical adjuster desk might be juggling 100 to 200 claims or more, which can be tedious and labor-intensive, explains Charles Richards, director of analytics at CorVel Corporation, who presented on the topic of work comp data and tech applications at SIIA’s virtual national conference last fall. Simply adding a single data point means reworking an entire spreadsheet. “What new technologies allow us to do is not only capture more than what a person might be able to evaluate at any given time, but actually have the power to process it all,” he says.

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Steamlining Safety OUNCE OF PREVENTION Included in that assessment is an ability to spot small patterns in large amounts of data and consider more factors, as well as pursue quicker and better actions that improve health outcomes. Whereas Richards says the trend used to be insight with no action, followed by predictive analytics. Then a realization took hold that prevention is the answer rather than focusing time and energy on the back end of a claim. But assessing volumes of information will trigger varying reactions. For example, he notes that while a TPA identifies unnecessary treatments, drugs or medical bills when managing the return-to-work process, a self-insured employer might be more concerned about safety by gleaning insight from claims data into why accidents happened. Richards says some of that info might involve HR data on work shifts, truck loading schedules or company events that aren’t fed to a TPA but the employer can leverage for understanding how to prevent claims. Whatever role it plays, what’s clear is that the pandemic advanced the use of AI at a time when virtual visits became the default option for most medical care across both the work comp and group health landscapes.

Greg Famous

“AI involved in the insurance industry will really move things along,” observes Greg Famous, president of AVI Risk Services. “If you can get a claim to close quicker using it, all the better. Claims costs go down.”

While the food processing and trucking groups he manages experienced a hesitancy and slow down with work comp claimants going to doctor appointments, etc., in order to prevent Covid-19 exposure, there were revelations about other technology advances that would save both time and money. For example, he marvels at how blood pressure and heart rate monitoring can be done during telehealth visits.

“I’d rather go to a doctor’s office. That’s just what I’m used to,” Famous muses.

“But a younger generation, they’re not going to want to do that. Who would want to go to a doctor’s office during Covid? The doctors didn’t even want you.” Doctors who quickly funnel data to claims adjusters not only reduce paper flow, but also free up time for more personal touches with their patients, according to Famous. “That live adjuster now has access to information they otherwise wouldn’t have with that claimant because of artificial intelligence if it’s done properly,” he explains. His larger point is “how you’re extracting that data to operate the best that you can, at the most optimal speed, without the necessity for robots.” He believes it’s likely that more insurance carriers and brokerages will significantly step up their use of AI to enhance their business, as well as adjusters whose work comp caseloads will become much more manageable with better retention.

POWER OF PRECISION There are numerous real-world examples of how the use of data and technology are shaping, and even revolutionizing, the way work comp claims are managed. Richards recalls how a county school district client had hypothesized that slip, trip and falls were the greatest source of both claim frequency and severity.

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Steamlining Safety disproportionate relative to the rest of the district. And there was more to the story.

Charles Richards

But after using a highly specific patternmining algorithm with embedded logic to crunch the numbers, he says CorVel found that “it actually ended up being other person and bodily motion.” An ability to pinpoint location identified three schools with reduced campus staff where the number of incidents were

“These were altercations,” he reports, not accidents, “which, of course, in a school setting is terrible. And so, from a safety perspective, there’s not a lot a TPA could do about it. They’re handling the claims when it, in fact, does become a claim. But from the school district’s perspective, they can redirect staff to these locations… It’s an immediate intervention opportunity.” Another interesting example Richards cites also involved a disproportionate number of reported work comp incidents – this time at a handful of shoe store locations. An algorithm and business-intelligence tools that mined large amounts of data revealed a disturbing pattern. While severity wasn’t a concern, the issue was frequency of accidents involving a new type of stool that was being piloted. “They quickly got rid of those stools,” he says.

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Steamlining Safety BALANCING TECHNOLOGY WITH HUMANITY If the root causes of workplace mishaps aren’t properly addressed or employer responses to injuries are generally lackluster, then litigation may be unavoidable. And while deploying data and tech tools can speed return to work, there also are caveats to consider along the way to achieving better outcomes. Given the myriad work comp injuries, as well as underlying conditions that can shape the healing process or treatment outcome, the use of technology must be tempered with human interaction, emotional intelligence and empathy, cautions an attorney specializing in workers’ comp trends.

“Sometimes, it might be right on, but it’s not going to necessarily take into account someone failing to make an appointment or wanting to change their doctor,” according to Adelson.

“I’ve read about programs that completely automate the process where the injured worker is not talking to anybody at all,” says Jeff Adelson, co-managing partner and general counsel for Adelson McLean. Jeffrey Adelson

He’s doubtful AI can do much, if anything, to

“create a feeling of security and empathy” in the mind of claimants, noting “the more distant they feel from the process, the more frightened and insecure they become, which is likely going to send them running to an attorney.” Fear also is naturally associated with bone-breaking injuries, amputation or severe pain that prevent someone from working, which he says will trigger financial anxiety as well. Adelson says enabling injured workers to call a number where they receive a friendly and helpful response will go a long way toward calming nerves and preventing litigation. While using AI to streamline work comp claims is fine, Adelson suggests that it be geared toward helping injured workers heal and return to work, as well as achieve the best possible results. For example, it could help flag various pre-existing conditions or comorbidities such as diabetes, substance abuse or obesity and uncover any impediments to treating the injured party.

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Technology and data have their place in managing work comp claims, particularly when it comes to offering guideposts and directions, but he notes that some level of expertise and experience dealing within the system also is necessary. The upshot will be a good collaborative process involving the injured worker, his or her lawyer, doctor, medical manager, adjuster and any others – a head count that number nearly a dozen in some cases. In short, Adelson suggests AI can keep claims handlers and attorneys on track, help them ask necessary questions and provide guidelines to swiftly move through the system of claims management in a more thorough and timely manner without sacrificing the human element.

EMOTION IN MOTION The mind-body connection is undeniable, and it will invariably play out in a work comp setting where pain and frustration go hand in glove with workplace injuries. Audio and image analysis help uncover the psychosocial aspects of claims, according to Richards. He notes that using audio algorithms on the front end

Steamlining Safety to examine call-center recordings helps identify how injured workers feel and, as a result, can manage claims more effectively. It may be a simple as small fluctuations, pitches or speech patterns in someone’s voice that are subtle and not easily detected, but the pattern is picked up.

“If we identify a poor demeanor or some psychosocial flags, we can have that adjuster contact them more frequently and be very friendly so they know that they’re not just a number in the system,” he observes. There’s even call-center software featuring a proprietary algorithm that scores truthfulness, agitation and defensiveness, Richards reports. It may be possible to determine from a transcript of the conversation whether the caller is exaggerating or lying about stubbing a toe. At the heart of any such discovery is uncovering a speech pattern that’s consistent with someone who’s lying based off of a huge data sample. Real-time alerts might help a representative on the phone intervene and that conversation could be used for coaching purposes in order to be more effective. “If they know there’s something wrong or they’re agitated, they can change their tone or use a different prompt,” he adds. Images also can be taken from social media posts to help detect fraud. For example, AI tools can scrape and analyze images to uncover whether someone with a back injury is up on a ladder hanging Christmas lights or playing basketball. So-called crawlers harvest all the data from image algorithms, Richards explains. “Doing this, you can gather a lot more of that data than you can with just one or two people, or even 50 people,” he says. In addition, harnessing data analytics and AI can reduce the supply for opioids, as well as the prospect of addiction and recovery times. “I would almost say, to a large degree, it’s more about reducing or eliminating the demand” by basing the need for these prescriptions on medical necessity, he notes. A small fracture, for instance typically doesn’t require opioids because it’s not severe enough, whereas it may be reasonable to prescribe a set of opioids following surgery.

“But they need to be monitored,” Richards hastens to add. “If we’re not seeing this stuff in real time and we don’t have something that can flag it, one or both might get through. We actually have a combination of the technology, plus a team of experts in the system working with our adjusters.” 10

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Combining data and technology also holds tremendous promise in terms of uncovering medical billing errors. When reviewing 1.5 billion medical bills for one particular payer over the course of a year, CorVel found instances where certain procedures should have been covered under work comp, and the payer should not have paid and is entitled to recover those funds. What’s ideal, Richards explains, is to harness the power of tech tools for prepayment scenarios so that dollars aren’t wasted. Having a unified system in place would eliminate any confusion over the origin of claims or eliminate scenarios whereby a TPA may not have health data and a payer may not have comp data.

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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F E AT U R E

SPOTLIGHT INTERVIEW: RICARDO PEDROZA, U.S. EXECUTIVE DIRECTOR, PROCOLOMBIA This interview was conducted by SIIA’s partner in the Connect from Anywhere (CFA) live Medical Travel seminars and was originally released as a special issue of their digital newsletter, prior to the ProColombia live seminar. A recording of the seminar is available to SIIA members at www.siiacanoe.org.

Ricardo Pedroza

ABOUT RICARDO PEDROZA:

As the U.S. executive director at ProColombia, Ricardo Pedroza is responsible for the promotion of non-traditional exports, international tourism and foreign direct investment in Colombia. Prior to this position starting in January 2021, Ricardo was the European Hub executive director for ProColombia. He was in charge of the European Region with direct presence in France, Germany, Holland, Italy, Russia, Spain, Turkey and the United Kingdom.

With extensive experience in the IT sector, Pedroza joined ProColombia in September 2017 and before his responsibilities in ProColombia, he worked in leading country and regional positions as North Latin-American head for RedHat, Country Manager vice president for Oracle and general manager for Microsoft. He started his career at NCR. In addition, he has been a member of several Boards of Directors for companies that invested in Colombia.

Pedroza is fluent in English, German and Spanish and holds a B.S. in Civil Engineer from Universidad de los Andes, has a marketing specialization degree from the same university and has attended multiple management courses in University of Michigan, Columbia Business School and Kellogg School of Management.

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Ricardo Pedroza ABOUT PROCOLOMBIA: ProColombia is the government entity in charge of promoting international tourism and foreign direct investment in Colombia, non-mining energy exports and the country brand. Through its national and international network of offices, it offers Colombian companies support and comprehensive advice through services or instruments focused on encouraging the design and execution of their internationalization strategies, as well as facilitating the generation and development of business opportunities.

Our service level and medical services are part of our DNA. We are very competitive on costs. When you compare the quality that you receive, the type of medical procedures that you can get and the low costs, Colombia is a very attractive destination for medical travelers.

MTDHN: Would you say the cost is half, less than half?

Medical Travel & Digital Health News (MTDHN): Tell us a little bit about yourself and how you got involved in this whole project with Colombia and the hospitals. Ricardo Pedroza (RP): I joined ProColombia more than three years ago to manage the European operations based in Germany. Before that I spent my career in the technology industry and IT sector. I led companies for the region and for my country, like Microsoft and Oracle – to name a couple.

RP: I wouldn't say a number because it always depends. But I would say that it's well worth it. The quality of the medical training is very high, and we have cuttingedge technology. But the costs are considerably less, making it more convenient and cost-effective for many patients to fly to Colombia.

I joined ProColombia because I think there is great potential. We are focusing strongly and promoting tourism to the country, as well as investments and exports. One important area is people visiting Colombia, not just for the tourist side, but also to receive services around the country. We do different types of medical services provided to people coming from outside. This is my passion – to ensure the potential for this opportunity. I'm Colombian and have lived in the United States for a couple of years.

MTDHN: Why do you think Colombia is such an outstanding example of healthcare quality and services?

MTDHN: Where do most of your patients come from? RP: They come from the Caribbean, the Antilles Netherlands (Caribbean), Aruba, Curacao, Ecuador, Panama and Peru. About half of them come from the United States.

RP: Colombia’s medical services are top-notch, no doubt about that. Most of the doctors have been trained not only in Colombia, but also outside Colombia.

MTDHN: What are some of your service lines?

Also, Colombia’s location makes sense for many medical travelers from the United States. We are 2.5-3 hours from Miami and there are many direct flights connecting major cities.

RP: Oncology, cardiology, fertility, bariatric surgery, ophthalmology, dental and plastic surgeries.

JULY 2021 13

Ricardo Pedroza We talk to different entities, companies and people that are interested, serving as a link between the final providers. We are a government agency, so we don’t buy or sell – just promote.

MTDHN: When a patient travels to Colombia for care, what kind of follow-up is available back home?

MTDHN: Do you have a specialized Neonatal Intensive Care Units for newborns? RP: For newborns, you have 17 options across different cities, with certified facilities.

MTDHN: Can you talk a little bit about the oncology and advanced chemotherapy or cancer care? RP: We have places, for example, Fundacion Cardiovascular, which is a well-known institution for cardiology. You can find all types of surgeries at all levels with doctors who were trained in Colombia and the United States and offer high quality medical services.

MTDHN: I understand that you have an office in Miami, Florida. Tell us a little bit about that operation. RP: Yes, and we have offices around the world. Florida is our main operation in the United States. We help to promote tourism, investment and exports from Colombia.

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RP: Once they go to Colombia and get a procedure, they have support for accommodations, paperwork and tourism options. For follow-up care, they use telehealth.

MTDHN: If a patient has a less than optimal outcome, what is your policy? RP: It depends on the institution, but I can certainly say that there's always a solution. Again, the way we look at it, it's a way of making sure the patient has received the treatments he or she requires. We work with the different institutions, which have excellent track records.

MTDHN: Are patients going to be required to have a COVID vaccine? RP: We have many protocols and standards around being tested.

MTDHN: Can you discuss safety measures for medical travelers? RP: My country has changed a lot in the last 25 years. Tourism has been very strong, at least before the pandemic, with people flying down at two or three times more than other regions. Medellin, for example, is very safe to walk the streets and go to restaurants. Unfortunately, there's a lingering negative image about Colombia, but that perception is changing.

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Ricardo Pedroza

MTDHN: What do you think are the most outstanding features of the Colombian health care? RP: I would say quality. Colombian professionals are recognized for being highly professional in what they do. Also, the people are very friendly and service oriented. They make you feel welcome. MTDHN: Do the doctors speak English? RP: Yes, in the places where we have medical travel programs, they speak English and are bilingual. There are also people available to assist if translation is required.

MTDHN: Tells us about your telemedicine programs. RP: In Colombia, you can have most appointments with doctors with telemedicine, which makes it very flexible. For those who want to contact us they can call us at (305) 374-3144 or email us at rvelasquez@procolombia.co (Renatta Velasquez).

Do you aspire to be a published author? We would like to invite you to share your insight and submit an article to The Self-Insurer! SIIA’s official magazine is distributed in a digital and print format to reach 10,000 readers all over the world. The Self-Insurer has been delivering information to top-level executives in the self-insurance industry since 1984.

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ACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES:

PRACTICAL

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, Ken Johnson, Amy Heppner, and Earl Porter 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, Carolyn, Ken and Amy are senior 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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IRS PROVIDES 86 ANSWERS TO 86 QUESTIONS ABOUT THE COBRA SUBSIDY (PART ONE) On May 18, 2021 the Internal Revenue Service (IRS) issued Notice 2021-31, providing 86 Q&As on the COBRA premium assistance subsidy under the American Rescue Plan Act of 2021 (ARPA). This guidance comes less than two weeks before the May 31 deadline to send the ARPA-required COBRA subsidy extended election notices. Notice 2021-31 is largely consistent with the guidance issued back in 2009 for the COBRA subsidy under the American Recovery and Reinvestment Act of 2009 (ARRA) but with a few differences. READERS TAKE NOTE. BETTER LATE THAN NEVER: The deadline for issuing ARPA COBRA subsidy notices to assistance eligible individuals (AEIs) was May 31. Steps should be taken to ensure that notices are sent as required to minimize potential agency penalties and claims exposure. Any late or missed notices (especially in light of the evolving IRS guidance) should be sent out as soon as feasible.

THE ARPA COBRA SUBSIDY The ARPA COBRA subsidy applies to certain individuals (referred to as “assistance eligible individuals” or AEIs) whose COBRA qualifying event was an involuntary termination of employment or a reduction in hours of employment. This 100% COBRA subsidy is provided for the period April 1, 2021 to September 30, 2021. To be eligible for the COBRA subsidy, an AEI cannot be eligible for other group health plan coverage or Medicare. AEIs also include qualified beneficiaries who are the spouse or dependent child of the AEI employee who also lost coverage because of the AEI employee’s involuntary termination of employment or reduction in hours. Generally, an employer advances the subsidy and then recoups that advance through tax credits against the employer’s Medicare tax obligations.

Q&A HIGHLIGHTS One of the most anticipated aspects of the guidance was how the IRS would define involuntary termination of employment and reduction in hours. The Notice largely mirrors the guidance under ARRA but with some nuances. The Notice provides that, with certain exceptions, an employee who terminates employment because of concerns about workplace safety (presumably including COVID-19) will be treated as having voluntarily terminated from employment and therefore is not an AEI eligible for the subsidy.

The same is true for an employee who terminates employment because of a family member’s health issues or a school or daycare closure because of COVID-19. If, however, an employee is allowed to voluntarily reduce his or her hours to take care of a family member or for childcare concerns (or for any other reason) and loses coverage because of the reduction in hours, the individual would be an AEI. The IRS provided one surprise on how the 60-day “second bite” (extended election period) for subsidized COBRA coverage interacts with the COVID-19 Outbreak Period extension for electing unsubsidized COBRA coverage. An AEI electing subsidized COBRA coverage must also elect unsubsidized coverage for prior periods if the AEI desires that unsubsidized coverage. The AEI will lose the right to any unsubsidized coverage if the AEI fails to elect this coverage within the 60-day deadline for electing the subsidy. This is true even though the Outbreak Period for election for that unsubsidized coverage has not otherwise expired. AEIs are ineligible for the subsidy if they are eligible for other group health plan coverage or Medicare. The IRS provides some helpful guidance on what it means to be “eligible” for other coverage but also provides some “traps” for eligibility due to extended HIPAA special enrollment opportunities under the Outbreak Period. The IRS notes that employers that already subsidize COBRA coverage will not be eligible for the full Medicare tax credit to the extent of the subsidy. This is the same guidance as provided under ARRA, but the IRS provides some helpful Q&As on possibly ending the employer subsidy to take full advantage of the ARPA COBRA subsidy.

JULY 2021

Q&A SUMMARY The IRS divided its 86 Q&As into the following sections: (1) Eligibility for COBRA Premium Assistance; (2) Reduction in Hours; (3) Involuntary Termination of Employment; (4) Coverage Eligible for COBRA Premium Assistance; (5) Beginning of COBRA Premium Assistance Period; (6) End of COBRA Premium Assistance Period; (7) Extended Election Period; (8) Extensions Under the Emergency Relief Notices; (9) Payments to Insurers Under Federal COBRA; (10) Comparable State Continuation Coverage; (11) Calculation of COBRA Premium Assistance Credit; and (12) Claiming the COBRA Premium Assistance Credit. This Part One article addresses Q&As in the first 4 categories above. Q&As in categories 5-12 are covered in Part Two of our article, which will be in the August issue of The Self-Insurer.

Q&A 3 states that an individual can be an AEI more than once. For example, if an individual (1) loses coverage for a group health plan due to an involuntary termination of employment; (2) gains coverage under the group health plan of a spouse; and (3) loses that spousal coverage because of the spouse’s involuntary termination of employment, that individual will be an AEI due to both losses of coverage.

AEI attestations

1. ELIGIBILITY FOR COBRA PREMIUM ASSISTANCE (Q&AS 1–20)

AEI definition:

Q&As 1 and 2 provide the definition of an AEI as described above, clarifying that an individual whose termination of employment was for gross misconduct will not be an AEI.

Q&As 4–7 provide critical guidance on use of AEI attestations to determine eligibility for the COBRA subsidy. Notably, employers can require the AEI attestation to establish an involuntary termination of employment or reduction

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in hours and that the AEI is not eligible for other disqualifying group health plan coverage.

Further, employers may rely on the attestation unless they have actual knowledge that the individual is not eligible for a subsidy. If an employer does not use the attestation, however, it must keep documentation to substantiate that the individual was eligible for the subsidy. If an employer uses an AEI attestation, it must keep that document to substantiate eligibility for the Medicare tax credit.

Practice Pointer: The U.S. Department of Labor (DOL) issued model ARPA notices specifically contemplating the use of an AEI attestation on the form “Request for Treatment as an Assistance Eligible Individual.” On that form, the AEI certifies both to an involuntary termination of employment (or reduction in hours) and that the AEI was not eligible for other disqualifying coverage. Many employers and COBRA administrators used this form or a variation. For those that did not, there very well may be other employer records that can be used to verify that the AEI experienced an involuntary termination of employment or a reduction in hours. However, an employer cannot generally determine whether an AEI is eligible for other disqualifying coverage without the AEI attestation. Yet the IRS indicates that an employer must still have this documentation. Therefore, collecting and retaining the attestation remains a critical part of the documentation needed to establish that the AEI is eligible for the subsidy so that the employer can claim the Medicare tax credit.

OTHER DISQUALIFYING COVERAGE

Q&As 9–13: In this series of Q&As, the IRS emphasizes that it is simply eligibility for other group health plan coverage or Medicare and not enrollment that makes an AEI ineligible for the subsidy. An AEI, however, is not eligible for other coverage if the AEI is in a waiting period for that coverage. Similarly, if an AEI has missed open enrollment for coverage (for example, in a spouse’s plan) and cannot enroll midyear, the individual is not eligible for other group health plan coverage. If, however, open enrollment for that spouse’s plan occurs during the subsidy coverage period, with a coverage effective date during the subsidy period, then that other coverage disqualifies the AEI from the COBRA subsidy whether or not the AEI enrolls in that coverage. Remember, however, that eligibility for “excepted benefits” such as stand-alone dental or vision coverage or a health FSA is not disqualifying coverage. In an interesting twist, the Outbreak Period extends the period that an individual can enroll in an employer group health plan due to HIPAA special enrollment rights. An individual with HIPAA special enrollment rights must be allowed to enroll in a group health plan even outside an open enrollment period. Under the Outbreak Period guidance, the period to assert HIPAA special enrollment rights is extended until the earlier of 31 days after the end of the Outbreak Period (which is ongoing) or one year and 31 days after the HIPAA special enrollment event.

JULY 2021

Thus, an AEI with ongoing HIPAA special enrollment rights will be eligible for group health plan coverage and ineligible for the subsidy. (Q&A 9, Example 3)

Practice Pointer: The rules regarding eligibility for other disqualifying coverage are complex as illustrated by the HIPAA special enrollment rights and the Outbreak Period. Other complications abound. For example, if an individual cannot enroll in a spouse’s plan on a pre-tax basis mid-year but could enroll on a post-tax basis, that individual is apparently not eligible for a subsidy. Also, because of the COVID-19 pandemic, the IRS provided guidance in Notice 2021-15 that permitted an employer to allow midyear elections into group health plans that ordinarily would not be allowed under the cafeteria plan rules. AEIs may be unaware of whether a spouse’s plan has adopted such a provision and that they are, in fact, eligible for the spouse’s group health plan. Further, most AEIs who are 65 or older can enroll in Part A of Medicare at any time even outside the special enrollment periods that are applicable to Medicare Part B. So, whether enrolled in Part A or not, it would seem that an individual 65 or older would be ineligible for the subsidy. As mentioned above, an employer can rely on an AEI’s attestation that the AEI is not eligible for other coverage. Given all the complexities surrounding what it means to be “eligible” for other coverage, this is all the more reason to use the attestation. 22

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SECOND QUALIFYING EVENTS AND DISABILITY EXTENSIONS

In a break from prior ARRA guidance, in Q&A 17, the IRS provides that if the original qualifying event was an involuntary termination of employment or a reduction in hours and the individual’s 18 months for that coverage ended before April 1, 2021, then the individual may still be eligible for a subsidy if still enrolled due to a disability extension or a second qualifying event extends the period of COBRA coverage into the subsidy period. The second qualifying event would only extend the coverage period of a spouse or dependent. The same rule is true for extensions under a state mini-COBRA that extends beyond 18 months.

Practice Pointer: Generally, employers and COBRA administrators “looked back” to October 2019 (18 months before April 2021) to notify potential AEIs. This guidance will likely require a “look back” much further for those COBRA qualified beneficiaries who have experienced a disability extension or a second qualifying

event and elected COBRA. The effect of this expansion of who may be an AEI is likely limited because the individual with a disability extension or a second qualifying event must have “remained on COBRA continuation coverage” to be eligible for this extension and the subsidy. 2. REDUCTION IN HOURS (Q&AS 21–23)

In these Q&As, the IRS confirms that a reduction in hours can be voluntary if it triggers a loss of coverage. Also, a furlough where there is a complete reduction in hours but the employment relationship continues constitutes a reduction in hours, as does a “lawful strike” as long as the employee and employer intend to continue the employment relationship during the strike. The reduction in hours must, however, have resulted in a loss of coverage for the event to trigger COBRA coverage (and thus ARPA eligibility).

3. INVOLUNTARY TERMINATION OF EMPLOYMENT (Q&AS 24–34)

The IRS maintained the general definition of involuntary termination of employment from ARRA, which is the “severance from employment due to the independent exercise of the unilateral authority of the employer to terminate the employment, other than due to the employee’s implicit or explicit request, where the employee was willing and able to continue performing services.” As under ARRA, the IRS has specifically articulated that a “good reason” resignation would constitute an involuntary termination of employment if it is due to an “employer action that results in a material negative change in the employment relationship for the employee analogous to a constructive discharge.” (Q&A 24) In a somewhat ambiguous Q&A (Q&A 25), the IRS states that an involuntary termination of employment occurs when the employer takes action to terminate the individual’s employment while an employee is away form work due to illness or disability if “there is a reasonable expectation that the employee will return to work after the illness or disability has subsided.”

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Practice Pointer: Of course it is often unknown whether an employee will ever return from long-term disability. Our interpretation is that the inquiry should be whether the employee would return if he or she recovered from the disability. If so, any termination of employment will be considered involuntary. If, however, an employee informs the employer that the employee will never return or if the employee recovers and takes other employment, then the formal termination of that employee will be considered voluntary rather than involuntary. The Notice provides that, with certain exceptions, an employee who terminates employment because of concerns about workplace safety (presumably including COVID-19) will be treated as having voluntarily terminated from employment and therefore is not an AEI eligible for the subsidy (Q&A 30).

The termination, however, will be considered involuntary if the “employee can demonstrate that the employer’s actions (or inactions) resulted in a material negative change in the employment relationship analogous to a constructive discharge.” A termination of employment will also be voluntary for an employee who leaves employment because of a family member’s health or a school or daycare closure because of COVIlD-19 (Q&A 31). On the other hand, if an employee is allowed to voluntarily reduce his or her hours to take care of a family member or because of childcare issues and loses coverage because of the reduction in hours, the individual would be an AEI.

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Among the other guidance on involuntary termination of employment: · Death is not an involuntary termination of employment. (Q&A 33) · Retirement is not an involuntary termination of employment unless: o Absent retirement, the employer would have terminated the employee. o The employee was willing and able to continue employment. o The employee had knowledge that he/she would be terminated absent the retirement. (Q&A 26) · An involuntary termination includes an employee who terminates employment due to a material reduction in the employee’s hours (good reason termination) even if the reduction in hours did not cause an initial loss in coverage. (Q&A 32) · An involuntary termination includes a resignation due to a material change in location of employment. (Q&A 28) · Participation in a “window program” will be an involuntary termination of employment. (Q&A 29) · An employer’s decision not to renew an employee’s contract is an involuntary termination, unless the parties understood at the time they entered into the contract that the contract was for specified services and would not be renewed. (Q&A 34)

4. COVERAGE ELIGIBLE FOR COBRA PREMIUM ASSISTANCE (Q&AS 35–42)

This series of Q&As confirms that the subsidy is available for all group health plans except health FSAs and includes dental and vision coverage and HRAs (including ICHRAs). QSEHRAs are not included because QSEHRAs are not group health plans. (Q&As 35, 39, and 40) AEIs enrolled in retiree-only coverage will be eligible for the subsidy only if the retiree coverage is available under the same group health plan that covers active employees. (Q&A 36) The Q&As in categories 5-12 are covered in Part Two of our article, which will be in the August issue of The Self-Insurer.

THE SELF-INSURER

CAPTIVE INDUSTRY SEES BIG WIN IN SUPREME COURT DECISION

Written By Karrie Hyatt

I I

n May, the U.S. Supreme Court handed down the long-awaited decision in the case of CIC Services v. IRS Commissioner. Deciding on behalf of the plaintiff, CIC Services, the decision threw out the IRS’s defense using the Anti-Injunction Act and remanded the case back to the lower courts.

The captive industry’s response was both pleased and hopeful. For John R. Capasso, president and CEO of Captive Planning Associates, LLC, “I was pleased with the Court’s opinion. I thought there was a better than likely outcome that the Court would rule in favor of CIC. My surprise was that the decision was unanimous, which I think sends a very strong message back to the Service.”

According to Kevin M. Doherty, attorney with Dickinson Wright, PLLC, “I think it was an excellent victory, no question. We’re thrilled that the case was successful. It was a hard-fought battle, but I think the court made the right ruling, and with a unanimous decision. But, the reality is we’re going back to trial and fundamental issues regarding the Notice have yet to be answered.

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It’s a win but it’s only a skirmish in the war,” said Gary Osborne, vice president of Alternative Risk with Risk Partners. “The decision sends this [case] back down to debate the legality of the notice but the IRS already has all the information and it does nothing to help us give clear guidance on what will pass as risk transfer and risk distribution and what is insurance vs. business risk.” “

THE CASE The lawsuit sprang from the IRS’s Notice 2016-66, issued in November 2016, which named 831(b) captives as “transactions of interest” and sought to require additional financial disclosures. With the Notice, the IRS requested specified entities to file additional financial disclosures by January 30, 2017—90 days after the Notice was issued.

The captive industry was very vocal in its disapproval. Criticism was initially pointed towards the fact that there was no comment period before the deadline was set and that only 90 days was an unreasonable amount of time to put together the disclosures required. At the end of December, the IRS extended the deadline to May 2017.

CIC Services, a Tennessee-based captive manager, filed a lawsuit in December of that year against the IRS and Treasury Department arguing that Notice 201666 was unlawfully issued and did not meet the authority or “reasoned analysis” requirements of the Administrative Procedure Act.

The Notice was requiring both time and monetary investment to collect the data not only from the captives themselves, but also from captive managers and advisors. Because the IRS did not allow for any comment period, there was no chance for objections to be raised or clarifications to be requested.

Over the next four years, CIC’s case was denied by the lower courts and the U.S. Court of Appeals for the Sixth Circuit due to the IRS’s defense, in which they invoked the Anti-Injunction Act. Last year, the Supreme Court agreed to hear the case and arguments were made before the Court last December.

CIC received broad support from the captive industry. In a statement from Ryan Work to SIIA members, “The unique coalition of participants in the captive industry amicus brief in this case highlighted the firm, singular support of CIC’s position held by a variety of state and national captive-related associations.”

According to Doherty, who was instrumental in writing the brief, “We wrote the brief on behalf of virtually every active trade association in the captive industry, including SIIA. It was remarkable.”

THE DECISION The Supreme Court decision came down to whether or not the IRS’s defense using the Anti-Injunction Act was appropriate. The Court unanimously decided that it was not.

The original Anti-Injunction Act dates back to 1867 and has been updated numerous times in the last century and a half. The Act describes that a lawsuit objecting to a tax (either revenue-related or regulatory) cannot be brought unless the tax has already been paid. In the case of Notice 2016-66, the regulatory tax and penalty fees threatened would be the result of not complying with the reporting requirements.

CIC Service’s suit challenged the reporting mandate, not the regulatory tax. CIC’s argument was that the IRS bypassed the Administrative Procedures Act by foregoing a comment period prior to requiring the additional financial information.

JULY 2021

The decision states, “CIC’s suit targets neither a regulatory tax nor a revenue-raising one; CIC’s action challenges a reporting mandate separate from any tax. Because the IRS chose to address its concern about micro-captive agreements by imposing a reporting requirement rather than a tax, suits to enjoin that requirement fall outside the Anti-Injunction Act’s domain.”

regulatory tax, but instead a regulation that is not a tax. Here, the tax functions, alongside criminal penalties, only as a sanction for noncompliance with reporting obligation.”

Justice Kagan wrote the Court’s opinion. In her dissection of the case she found three reasons that Notice 2016-66 was not “a tax action in disguise.”

With the Supreme Court’s decision, the case has been remanded to the lower courts.

· “First, the Notice imposes affirmative reporting obligations, inflicting costs separate and apart from the statutory tax penalty.”

· “Second and relatedly, the Notice’s reporting rule and the statutory tax

THE OUTCOME

penalty are several steps removed from each other.”

· “Third, violation of the Notice is punishable not only by a tax, but by separate criminal penalties.”

She concluded her opinion with “CIC’s action challenges, in both its substantive allegations and its request for an injunction, a regulatory mandate—a reporting requirement—separate from any tax. Or said otherwise, the suit targets not a

The Court’s decision narrowly focused on the IRS’s use of the Anti-Injunction Act. While it didn’t offer any special support to the issues captives are facing from the IRS, it did make it clear that the IRS overstepped legal proceedings in issuing Notice 2016-66.

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In SIIA’s statement, Work said, “At no point in time should a captive manager or advisor have to knowingly violate a law or Notice, under criminal and monetary penalty, in order to object to an IRS reporting requirement. Simply stated, the IRS’ ongoing stance of guilty until proven innocent remains faulty. It also demonstrates the IRS’ lack of willingness to impartially engage with industry participants which, should it undertake, may assist in efforts to better understand appropriate captive structures.”

For Doherty, the narrow focus of the decision, “Did not address risk distribution and the validity of 831(b) from a captive standpoint. It wasn’t within the scope of litigation anyway. We did win a victory but it’s not as if the court ruled that 831(b) captives meet the definition of insurance.”

The case was widely watched by a number of related industries as the Court’s decision could have widespread ramifications in the IRS’s use of the Anti-Injunction Act as a defense of its notices. “Based on what I’ve read, the case will become a seminal case as far as the Supreme Court is concerned because it will allow more challenges to IRS procedures,” said Doherty.

According to Capasso, he doesn’t believe the flood gates will open for similar lawsuits against the IRS, but he does

“I think the Decision is somewhat narrow in scope with the type of notices the Service issues, but I do think it opens the door for other professionals to challenge onerous requirements from the service.” see the potential for a few.

THE NEXT STEP The IRS feared that in allowing CIC’s case to proceed that it would be opening the Service to a flood of similar litigation. The Court’s decision expressed that in, “Allowing CIC’s suit to proceed will not open the floodgates to pre-enforcement tax litigation.”

With the precedent-setting decision in place, the next question is how the IRS will respond. The Service could rescind the Notice or could find new arguments to defend it in the lower courts.

If the IRS decides to continue defending the Notice, Doherty thinks, “What they’re going to have to do is prepare to argue that the Notice itself complies with the Administrative Procedures Act and honestly I don’t think it does because I don’t think they gave adequate notice and comment period. These are arguments we made in our brief.”

“If they lose [in court] or they don’t move forward on it they’ll have to come back with a revised notice that does comply with

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the Act,” continued Doherty. “They could give notice that they plan to issue a new regulatory filing requirement with the 831(b) filings. They could invite comments from the industry and take them into account. That would allow us to regroup and take care of it properly.”

“The IRS could voluntarily rescind the notice before the lower courts have a chance to issue an opinion. However, I don’t think that will happen. Because of the unanimous decision from SCOTUS, the district courts will undoubtedly follow their lead. I would not put it past the Service to issue a similar notice, but only after following protocols of a comment period,” said Capasso.

“It’s a strong possibility they withdraw [the Notice] and issue a new one rather than defend it—it depends on what ramifications withdrawing it would have on their ability to use what has already been filed and it could be a huge expense for advisors and owners.” According to Osborne,

“The Notice is out, has been out for a long time, and it may have produced the desired effect the Service was looking for,” said Capasso. “They may do nothing and just continue to send out letters, which they’ve been doing for better part of a year now. Instead of a new Notice, I could see the current pattern of harassment continue for the foreseeable future.”

THE FUTURE/THE POSSIBILITIES Whatever steps the IRS may take, the captive industry is hopeful that this could signal a change in IRS and 831(b) captive relations. The hope is there, but from previous experience captive professionals are wary.

“I hope it’s positive but I’m not sure we aren’t just poking the bear. My main hope is that it may reduce the intimidation tactics from the IRS where they are just tarring all 831(b) [captives] with the same brush,” said Osborne.

For Capasso, “My hope is that after years of stonewalling, the Service will be more willing to sit down with members of the captive industry to work on establishing guidelines and best practices protocols for what may be deemed ‘a good captive’

THE SELF-INSURER

arrangement as well as iron out final guidance relating back to the PATH Act of 2015.” “For years, SIIA and others in the captive community have made numerous attempts to engage the Treasury in constructive dialogue on these issues,” continued Capasso. “Who know, maybe this could be the opportunity we’ve been waiting for.”

“I don’t understand how they cannot understand that their actions negatively affects [the IRS] as much as anybody else. If they want to spend all this time and effort trying to figure out through the courts who the bad guys are, they are wasting their time as much as ours,” said Doherty.

He continued, “They cannot be efficient and they cannot be successful if there aren’t clear guidelines so they know who is obeying the law and who is not. The industry is more than willing to comply, we just need to know what to do. I guess I would say that I am hopeful that something will change and that we’ll get more guidance.”

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NEW ADMINISTRATION CASTS DOUBT ON TRUMP’S IMPORTATION PLAN

I I

n July of 2019, then president Trump’s HHS announced a “New Action Plan to Lay Foundation for Safe Importation of Certain Prescription Drugs”1.

Much of this release was reiterating and repackaging previous policies and rulemaking authority, but a significant development was the announcement of that the HHS and FDA would review and approve pilot programs organized by the states to facilitate the importation of prescription drugs from Canada.

Written By Andrew Silverio, Esq.

An awful lot has happened in the country and the world during the almost two years since this guidance, and we did not see any development at a federal level before the election and hand-off of the presidency. Now, the Biden administration has touched on the issue for the first time. In a court filing calling for the dismissal of a lawsuit against HHS by a pharmaceutical industry organization2 the administration claimed that the plaintiff’s claims are moot and their alleged damages far too speculative (the lawsuit against HHS claims that the importation rule impermissibly damages drug manufacturers and oversteps federal authority). In the filing, HHS outlines that there is “no timeline” for the approval of any state programs, and that states still have numerous hurdles to get past before any such program could be approved begin operation (at this time, six states have passed laws providing for the formation of these programs, and two have actually submitted programs to the FDA for review).

THE SELF-INSURER

Interestingly, HHS cites hostility to the proposed program(s) from Canada itself, noting that “Canada’s interim order injects uncertainty into whether and to what extent the Rule could be implemented.” This is actually closely in line with what we predicted when the rule was first released: It is worth noting that when the proposed rule came out, it was met with harsh criticism from our northern neighbors, many of whom discussed potential action by the Canadian government to counter any such importation efforts in order to protect their own drug supply. As such, action taken by the United States in regard to Canadian drug importation won’t be the only factor in whether the practice ultimately becomes both legal and practical.

References 1 https://public3.pagefreezer.com/browse/HHS.gov/31-122020T08:51/https://www.hhs.gov/ about/news/2019/07/31/hhs-new-action-plan-foundation-safe-importation-certain-prescription-drugs.html) 2 https://www.politico.com/ f/?id=00000179-b4ee-db57-abfdb7fe4db60000

Of course, proponents of these programs shouldn’t lose all hope just yet – this is an interesting situation where the posture of HHS is such that they must argue in order to defend the program against challenge that it may very well never actually get off the ground. That said, any optimism for imminent program approvals is essentially quashed with this filing.

Andrew Silverio, Esq. joined The Phia Group, LLC in the summer of 2014, dealing primarily with subrogation and third-party recovery, and other opportunities to recoup funds for benefit plans. He soon branched into the consulting branch of our company, assisting clients with compliance inquiries, plan document and contract drafting and revision, reviewing vendor programs, and addressing any and all other consulting questions. He now serves as Compliance and Oversight Counsel, primary focusing is on the most complex and emerging legal and regulatory issues, both internally and for our clients as a member of Phia Group Consulting. Andrew is also the Phia Group’s HIPAA privacy officer. Andrew attended Berklee College of Music in Boston, earning his B.A. in professional music. He then attended Suffolk University Law School, graduating with an intellectual property concentration with distinction. There, he took the step into the healthcare realm of the legal world, serving first as an editor and content contributor, and then on the executive board of the Journal of Health and Biomedical Law. Andrew is licensed to practice in the Commonwealth of Massachusetts.

JULY 2021

ENDEAVORS

SIIA ENDEAVORS

S S

IIA’s 41st Annual National Educational Conference & EXPO will be October 3 - 5, 2021 and will be in-person & virtual at the JW Marriott in Austin, TX.

The world’s largest self-insurance event is back with an entirely fresh approach to conferencing. So what’s The Way Forward….in person or virtual?

SIIA will deliver the best of both formats, with a “blended” National Conference that will allow everyone to participate in whatever way works best for them and their organizations. Join us and be a part of what promises to be a groundbreaking industry event.

Live general session highlights include:

Monday, Oct 04, 2021 9:00 AM - 10:30 AM EDT The Way Forward – New Rules for the New World (LIVE)

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ENDEAVORS

SPEAKER(S): Mike Walsh CEO Tomorrow

Why is there no such thing now as digital disruption, just digital delivery? Why is there no more remote work, just work?

Note: This session will not be available on-demand after it streams live, so be sure to block your schedule if you plan to watch.

Tuesday, Oct 05, 2021 9:00 AM - 10:30 AM EDT

One of the world’s leading futurists will help us visualize how the business environment will continue to evolve in a post-COVID world, with a particular emphasis on the health care and insurance sectors.

Conversations Between the Leaders of Today and the Leaders of Tomorrow (LIVE)

This powerful keynote presentation will help everyone chart the way forward for their organizations given emerging challenges and opportunities created by digital delivery realities, changing work patterns and related developments.

For the past two years, SIIA has produced “Mentor Connection” forums designed to connect younger industry professionals with leading executives for small group career development mentoring sessions. These forums have sparked many interesting conversations highlighting important perspectives from both sides.

To give to give you a flavor of what is being said, this session will feature members who participated as part of the most recent Mentor Connection Forum.

You will hear about the specific career advancement advice that has been shared, what younger professionals value most in their work environments, mutual expectations and other topics

JULY 2021

ENDEAVORS that will be of interest to everyone who cares about the future of the selfinsurance/captive insurance industry.

Katie McGrath Head Accident & Health (A&H) North America Swiss Re Corporate Solutions

Rachael Benton Renalogic

SPEAKER(S): Mike Ferguson President/CEO SIIA

Erin Duffy ELAP Services

Thomas Partlow President & CEO Compass Health Administrators

Griffin DeMenna Guy Carpenter & Co. LLC

Jerry Messick CEO Elevate Risk Solutions

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NEWS

NEWS FROM SIIA MEMBERS

2021 JULY 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 membernews@siia.org. All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at www.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. 42

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NEWS

DIAMOND MEMBERS

BERKLEY ACCIDENT AND HEALTH APPOINTS MATT KOTTMEIER AS REGIONAL SALES MANAGER

Hamilton Square, New Jersey – Berkley Accident and Health, a Berkley Company, has appointed Matt Kottmeier as Regional Sales Manager for its EmCap Group Captive segment. Matt will be responsible for adding to our growth initiatives and developing group captive program business in Texas in this new role.

“We’re very excited to leverage Matt’s experience and deep network of broker relationships that he’s developed over his career in the Texas market,” said Brad Nieland, President and CEO of Berkley Accident and Health. “His employee benefits sales experience will be a great asset to our team.” Matt joins Berkley Accident and Health with over 20 years of sales experience, primarily in the insurance industry. He has worked on both the carrier and TPA side of the business and most recently served as VP of Sales of a nationally recognized TPA. Matt is a graduate of Texas Tech University and resides in Dallas, Texas.

About Berkley Accident and Health Berkley Accident and Health is a member company of W. R. Berkley Corporation, a Fortune 500® company. Berkley Accident and Health provides an innovative portfolio of accident and health insurance products. It offers four categories of products: Employer Stop Loss, Group Captives, Managed Care (including HMO Reinsurance and Provider Excess), and Specialty Accident. The company underwrites Stop Loss coverage through Berkley Life and Health Insurance Company, rated A+ (Superior) by A.M. Best. Visit BerkleyAH.com.

VĀLENZ® PROMOTES NATHAN NELSON TO SENIOR VICE PRESIDENT, GROWTH

PHOENIX, AZ — Leaders at Vālenz® have announced that Nathan Nelson, MBA, has been promoted to Senior Vice President, Growth. Nelson joined the firm as Vice President, Business Development in April 2019. In his new role, he will oversee the sales organization and lead the company forward for strong business growth across all areas of revenue.

“Since joining the team two years ago, Nathan has been a catalyst for ensuring our vision and organizational JULY 2021

NEWS

strategies are delivered to the market, and for enabling the self-insured industry, as brand awareness consistently,” said Rob Gelb, Chief Executive well as the providers and Officer. “He is the consummate team player and works to partners who support them,” said. “As we continue to grow collaborate with every member of sales, client services and Nelson our ever-expanding ecosystem – which is fueled by data and optimized by data leadership.” transparency unlike anything other firms Nathan’s career spans two decades of proven success in sales and account management for the healthcare industry, primarily in the managed care segment. Prior to joining Valenz, highlights from his extensive career include sales and leadership in claim management, workers’ compensation, underwriting and account management. Nathan graduated magna cum laude with his master’s in business administration from Webster University in St. Louis, Mo.

“I am honored and excited to take this next step as a Senior VP at Valenz for many reasons, not the least of which is the extraordinary innovation Valenz delivers for

can provide – the growth opportunities for our team are limitless, as are the savings improvement opportunities for our clients.” Nelson’s promotion is effective immediately. For more information about Valenz and its leadership team, visit valenzhealth.com.

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NEWS management, which is integrated into our solution. Lucent Health brings HCS customers the scale that drives better savings. We also bring robust monthly reporting to employers and deliver a member experience powered by daily claims data to ensure that individuals feel supported and known." "We are thrilled to join the Lucent Health family," said William C. Beeler, HCS

"This transition allows HCS to continue to grow and provide our current employees the opportunity to grow as well. Our clients will benefit from the additional services available to them from Lucent Health." President.

About Valenz Valenz enables self-insured employers to make better decisions that control costs across the life of a claim while empowering their members to lead strong, vigorous and healthy lives. Valenz offers transparency through data to pinpoint members at highest risk, address gaps in network designs, ensure appropriate and accurate charges, and expertly navigate employees to optimal care solutions for substantial cost savings and improved health outcomes. Visit valenzhealth.com. Valenz is backed by Great Point Partners.

GOLD MEMBERS LUCENT HEALTH ACQUIRES HEALTH COST SOLUTIONS Nashville, TN -- Lucent Health, a leading provider of health benefits solutions to self-insured employers, has acquired Hendersonville, Tennessee-based Health Cost Solutions (HCS), a third-party administrator serving the self-insured employer market for 32 years. The acquisition of HCS represents the sixth acquisition by Lucent Health since 2014. "HCS, like Lucent Health, is focused on bringing a consultative approach to helping employers take care of their people and drive down costs," said Brett Rodewald, Lucent Health CEO. "For HCS customers, Lucent Health will be able to deliver industry-leading customer service and the highest levels of compassionate care

As part of this transaction, HCS clients will have access to Lucent Health’s bestin-class care management and concierge care solutions, provided by Narus Health, a Lucent Health company. The Narus Health solutions, integrated into health benefits solutions from Lucent Health, include:

· Precertification/Utilization Review/Utilization Management

· Concierge Care Support · Traditional Large Case Management

· Complex Care Support JULY 2021

NEWS "The key to better health benefits is integrated care management," Rodewald said. "Human-focused, data-driven health care delivers an unparalleled, compassionate customer-centered experience for members. And better, more compassionate care is at the heart of how you help mitigate costs for employers because you are identifying issues at the birth of the claim and working with patients to ensure they are following physician directives and remaining compliant with care plans." About Lucent Health Lucent Health, founded in 2014, is the leading health benefits solution provider to the self-insured employer market, with plan administration, patient care and cost controls all under one roof. Visit www.lucenthealth.com.

AMPS EXPANDS SELF-FUNDED MARKET TEAM WITH REY

BALCAZAR, SVP OF SELF-FUNDED AND CLIENT SERVICES Atlanta, GA -- Advanced Medical Pricing Solutions (AMPS), a pioneer in healthcare cost containment, announced its expansion of the self-funded market sales team to meet the growing needs of its clients across the U.S. This growth plan includes expanding to eight regions across the country and doubling its large employer team.

We are Advocates for Healthier Living As Advocates for Healthier Living, we’re improving clinical outcomes while reducing the Total Cost of Care. It’s the foundation of the service we provide our clients, members and business partners. We Change Lives. We create positive change in every interaction we have. By listening and understanding our clients’ needs, we offer flexible, cost-effective and easy-to-use health care solutions. We are dedicated to providing compassionate support and guidance to help our members be active participants in their health care.

For more information, visit www.meritain.com.

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Leading this effort is Reynaldo Balcazar, senior vice president of self-funded markets and client services, who recently joined AMPS. Balcazar is responsible for managing and leading a team of regional sales executives, overseeing the client services team, and managing the sales support unit. He is tasked with growing customer accounts and partner relationships to drive top-line revenue.

“Rey is an outstanding addition to the AMPS team, as he brings experience and sales management skills that will strengthen our team and empower our business development executives to excel,” said Lawrence Thompson, chief strategy and revenue officer of AMPS. “He has a deep understanding of the self-

NEWS funded market and knows how to build and enhance a sales force, which will be critical to growing this business segment.”

Balcazar brings more than 30 years of sales and leadership experience in the overall employee benefits industry with companies of various sizes. Most recently he was the health and benefits practice leader at Mercer where he was responsible for revenue growth and profitability via new client sales and existing client expansion. Balcazar has also held sales positions at Principal Financial Group, International Medical Group, and Encore Health Network.

“Healthcare cost management is a top priority with employers as healthcare costs continue to rise each year,” said Kirk Fallbacher, AMPS president and CEO. “By expanding our sales efforts and adding industry veterans to our team, AMPS is able to enhance its ability to serve the self-funded market and provide innovative healthcare cost containment solutions. We have the right solutions, a team of experts in place, and the flexibility to provide excellent customer service.”

AMPS EXPANDS SALES TEAM TO DELIVER HEALTHCARE COST CONTAINMENT SOLUTIONS TO SELF-FUNDED MARKETS NATIONWIDE

ATLANTA – Advanced Medical Pricing Solutions (AMPS), a pioneer in healthcare cost containment, announced the continued expansion of its self-funded market sales division. AMPS’ four new sales professionals – Mike Causey, Kevin Conway, Anthony Masotto, and John Phillips – will accelerate the AMPS mission to make healthcare dollars go further. They will deliver multi-faceted solutions that help self-funded employers reduce medical and pharmacy costs and provide high-quality patient care for their employees. According to Lawrence Thompson, chief strategy and revenue officer of AMPS, the sales expansion is happening at the right time, especially as employers continue to take on more financial risk providing healthcare benefits to their employees. “Mike, Kevin, Anthony, and John understand there is no one-size-fits-all plan for employers,” he says. “I am confident in their ability to deliver flexible plan options that meet the unique needs of self-funded employers and their employees.” Mike Causey will serve as vice president of business development in Arizona, Colorado, Montana, New Mexico, Nevada, Utah, and Wyoming. He brings more than three decades of employee benefits and experience to AMPS, previously with

JULY 2021

NEWS Reseco Insurance Advisors, Blue Cross of Idaho, Arizona Benefit Plans, and LifeWise Health Plan of Arizona.

EMPLOYERS WANT EASY. HR MANAGERS WANT EASY. WE PROVIDE EASY. Connect to HSA Success. We make HSA’s so easy that choosing the right partner is exceedingly simple. As your partner, we provide you with the healthcare solutions, products and customer service you need to reach your goals. Connect to HSA Success Learn more at HSA.UMB.com/Engage

Member FDIC

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Kevin Conway will serve as vice president of business development across the Mid-Atlantic region and brings more than three decades of group insurance experience to AMPS. Prior to AMPS, he worked with Upstate Insurance Brokerage Services, HM Insurance Group and Upstate Administrative Services. Anthony Masotto will serve as vice president of business development for pharmacy benefits management, bringing 13 years of group pharmacy and stop loss insurance experience to AMPS, and holding previous positions with Assurant Employee Benefits, Sunlife Financial, Avesis, Remedy Analytics, and ELMCRx. John Phillips, MBA will serve as vice president of business development for the Northeast region of the U.S. He brings more than 25 years of insurance sales experience to AMPS, having previously worked with Versant Health, Wells Fargo Insurance and Corporate Synergies. AMPS President and CEO, Kirk Fallbacher notes the self-funded community still struggles to manage rising healthcare expenditure. “We strive to provide cost effective solutions knowing that greater financial transparency and flexibility is still needed in the market.” He adds, “By appointing four new sales professionals, we are able to expand our footprint even wider, reducing medical and pharmacy costs for more employers, while keeping their employees satisfied with quality healthcare benefits.”

NEWS About Advanced Medical Pricing Solutions (AMPS) Advanced Medical Pricing Solutions (AMPS) provides market leading healthcare cost containment solutions serving self-funded employers, brokers, TPAs, health systems, health plans, and reinsurers. AMPS mission is to help clients attain their goals of reducing medical and pharmacy costs while keeping members satisfied with quality healthcare benefits. AMPS leverages its 15+ years of experience and data in auditing and pricing medical claims to deliver "fair for all" pricing. AMPS offers detailed analytics and transparency to provide clients with insights based on plan performance. Contact Tara Rowland, Sr. Communications Manager/Technical Writer, at trowland@ advancedpricing.com and visit www. amps.com.

SILVER MEMBERS WELLNET HEALTHCARE

RECRUITS TOP INDUSTRY TALENT DURING MAJOR

team to accelerate company expansion. Bethesda, MD – WellNet Healthcare - the national healthcare management firm building and optimizing smarter self-funded health plans for companies and their people - announces four strategic hires to help accelerate key growth initiatives for the organization. Megan Chiarello, Vice President of Marketing – Megan joins the team with over a decade of experience in the employer healthcare and benefits technology space. With a deep passion for B2B marketing and strengthening broker relationships, Megan’s previous leadership role at benefitsCONNECT supported a $23m company acquisition in 2016. Roger Vandenboogaard, Vice President of Client Service – Roger has led operational teams across multiple industries to exceed retention goals and increase profitability. As a leader in the benefits client experience, Roger managed marquis, Enterprise relationships for Maestro Health during its $155m acquisition by AXA group. Jack Graham, Vice President of Business Development, Midwest – Jack joins WellNet with nearly three decades of sales level and self-funding benefits experience. Well-versed in group health, life, stop-loss coverage and PPOs for companies up to 30,000 employees, Jack led mid-west sales efforts at CoreSource and KEY Benefit Administrators to drive new business, build client rapport and create strategic partnerships in the industry. Roy Pasquarette, Vice President of Business Development, Midwest – Roy delivers high- performing sales experience to WellNet as the number one national business development executive at EyeMed, the nation’s fastest growing vision benefits company in the U.S. Prior to EyeMed, Roy spent a decade partnering with brokers and advisors at United Healthcare implementing strategic solutions in the employee benefit space.

GROWTH MODE

On the heels of a successful WellNet+ launch and robust quarter, four new benefits executives join the WellNet leadership

JULY 2021

NEWS “WellNet is on the bleeding-edge. We’re experiencing rapid growth within the organization – from product optimization to account management expansion - and investing in the talent to carry out our strategic vision,” said Keith Lemer, CEO of WellNet Healthcare. “Our team is constantly working to exceed the evolving needs of our employer groups, their members and advisers. It’s imperative we find executive leadership with the expertise, passion and drive to carry out this mission. Too often, there is a focus only on the structural cost-savings that self-funding provides, but it’s so much more than that.” The expansion of the leadership team is on the heels of a robust quarter at WellNet, the addition of Chief Revenue Officer, Dave Earle in June 2020 and the release of WellNet+ - a turbo-charged, self-funded solution with 20+ performance optimizers for precision accuracy. Leveraging aligned incentives, a proprietary toolkit analysis Blade, triple-aim advocacy and turn-key packages, businesses are saving 10% to 40% on healthcare costs – at their own pace - to reinvest back into their workforce. To launch WellNet+, hundreds of advisers and industry experts joined a virtual Watch Party where attendees engaged with a high-energy trailer, previewed success stories of million-dollar cost-savings outcomes and participated in a live Q&A with product experts. About WellNet Healthcare WellNet builds and optimizes smarter self-funded health plans for companies across the nation with 100 to 5,000 employees. Taking risk and leveraging our patented technology stack, we fix the unaffordable healthcare mess with ongoing education, stronger advocacy, and aligned incentives to combat the vested interests of traditional health insurance carriers. Our unique ability is doing whatever it takes – at the right pace – with our Crawl, Walk, Run approach to lower the cost of healthcare and improve the experience for companies and their people. Contact Megan Chiarello, Vice President of Marketing, WellNet Healthcare, at mchiarello@wellnet.com and visit www.wellnet.com.

6 DEGREES HEALTH WELCOMES BONITA HATCHETT-BODLE AS GENERAL COUNSEL Hillsboro, OR -- 6 Degrees Health is pleased to announce that Bonita Hatchett-Bodle has joined the company as General Counsel. Bonita has spent her 25+ year career as an ERISA and benefits lawyer in a large law firm setting. She holds a degree from the University of Michigan and attended Rutgers University School of Law and Georgetown University Law School.

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Scott Ray, 6 Degrees Health’s Chief Executive Officer, states, “Bonita is an accomplished benefits attorney with over 25 years of experience in a variety of settings, from a large international law firm to General Counsel for a leading independent employee benefits organization. The wealth of experience she brings to 6 Degrees Health will drive immense value to our clients and products that operate in a highly regulated and technical landscape.” Bonita can be reached at BonitaHB@6degreeshealth.com About 6 Degrees Health 6 Degrees Health is built to bring equity and fairness back into the healthcare reimbursement equation. Industryleading MediVI technology supports our cost containment solutions with objective, transparent, and defensible data. 6 Degrees Health’s solutions include everything from provider market analyses, reasonable value claim reports, ad hoc claim negotiations, evergreening provider contracts, and referenced-based pricing. Our veteran cost containment team partners with health plans and their channel partners to deliver unparalleled cost containment results. Visit www.6degreeshealth.com.

WE ARE HERE FOR YOU Now, more than ever, it is important to do business with partners you can depend on. For more than 35 years, self-funded employers have trusted Sun Life to deliver flexible stop-loss options and seamless claim reimbursement. Helping you make the best decisions for your business is our business. Our team of dedicated experts is ready to support you with innovative solutions, tools, and resources to help you manage your self-funded plan every step of the way. Ask your Sun Life Stop-Loss Specialist about what is new at Sun Life or click here to learn more!

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For current financial ratings of underwriting companies by independent rating agencies, visit our corporate website at www.sunlife.com. For more information about Sun Life products, visit www.sunlife.com/us. Stop-Loss policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states except New York, under Policy Form Series 07-SL REV 7-12. In New York, Stop-Loss policies are underwritten by Sun Life and Health Insurance Company (U.S.) (Lansing, MI) under Policy Form Series 07-NYSL REV 7-12. Product offerings may not be available in all states and may vary depending on state laws and regulations. © 2021 Sun Life Assurance Company of Canada, Wellesley Hills, MA 02481. All rights reserved. Sun Life and the globe symbol are trademarks of Sun Life Assurance Company of Canada. Visit us at www.sunlife.com/us. BRAD-6503-n

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SELF INSURANCE INSTITUTE OF AMERICA, INC. 2021 BOARD OF DIRECTORS

CHAIRMAN OF THE BOARD* Robert Tierney President StarLine Osterville, MA

PRESIDENT/CEO

Mike Ferguson SIIA Simpsonville, SC

CHAIRMAN ELECT*

DIRECTORS Thomas R. Belding President Professional Reinsurance Mktg. Svcs. Edmond, OK John Capasso President & CEO Captive Planning Associates, LLC Marlton, NJ

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

Laura Hirsch Co-CEO Aither Health Carrollton, TX

TREASURER AND CORPORATE SECRETARY*

Elizabeth Midtlien Vice President, Emerging Markets AmeriHealth Administrators, Inc. Bloomington, MN

Peter Robinson Managing Principal EPIC Reinsurance San Francisco, CA

Lisa Moody President & CEO Renalogic Phoenix, AZ Shaun L. Peterson VP, Stop Loss Voya Financial Minneapolis, MN

*Also serves as Director

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SIEF BOARD OF DIRECTORS Nigel Wallbank, SIEF Chairman

Directors Freda H. Bacon Les Boughner Alex Giordano Virginia Johnson Dani Kimlinger, PhD, MHA, SPHR, SHRM-SCP

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SIIA NEW MEMBERS JULY 2021

REGULAR CORPORATE MEMBERS

EMPLOYER CORPORATE MEMBERS

Anne Trupiano Principal Alpha Isle Services, LLC Gloucester, MA

Rick Bryan CEO Bryan Equipment Sales Loveland, OH

Veda Eswarappa Vice President Great Hill Partners Boston, MA

Mike Tissot President Countryside Rentals dba Rent2Own Bainbridge, OH

Christine Murphy Vice President, Benefits Kunkel & Associates Dubuque, IA

Abdulhamid Ali Daar Engineering, Inc. Milwaukee, WI

Scott Smith President/CEO TRUE Network Advisors Guntersville, AL

Jon Slaughter Chief Executive Officer Healthy Trucking of America, Inc. Montgomery, AL

Susan Lasuen Operations Manager III-A Boise, ID

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Those who self-fund a health plan seek autonomy and control over their benefits program and costs. It can be rewarding, but it does come with risk. Stop Loss protection from HM Insurance Group works to mitigate that risk for self-funded employers should high-dollar claims arise – delivering steadiness to the performance and confidence in the outcome. Find more on hmig.com.

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In all states except New York, coverage may be underwritten by HM Life Insurance Company, Pittsburgh, PA, or Highmark Casualty Insurance Company, Pittsburgh, PA. In New York, coverage is underwritten by HM Life Insurance Company of New York, New York, NY. The coverage or service requested may not be available in all states and is subject to individual state approval. MTG-3355 (R3/21)

The Self Insurer July 2021

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ACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES

NEW ADMINISTRATION CASTS DOUBT ON TRUMP’S IMPORTATION PLAN

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