Sel Insurer March 2018 by SIPC

March 2018

www.sipconline.net

The Worldâ&#x20AC;&#x2122;s Leading Alternative Risk Transfer Journal Since 1984

STOP-LOSS

P IT FA LL S

Mindful of lasering and renewal obstacles for selffunded employers with large ongoing claims, innovative solutions are paving the way to peace of mind

strength in

AN INTEGRATED APPROACH TO SELF-INSURED SOLUTIONS

balance Experts in coverage solutions for single entities, groups and public entities, our integrated approach gives self-insureds greater stability and control over their self-funded plan. Unparalleled underwriting expertise, innovative risk management and in-house claims management, work in sync and in perfect balance for best possible outcomes.

Since 1990

800.800.4007 midlandsmgt.com publicentity@midman.com

www.sipconline.net

The World’s Leading Alternative Risk Transfer Journal Since 1984

Self-Insurer’s Publishing Corp.

March

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

Editorial Staff PUBLISHING DIRECTOR Erica Massey SENIOR EDITOR Gretchen Grote CONTRIBUTING EDITOR Mike Ferguson DIRECTOR OF OPERATIONS Justin Miller DIRECTOR OF ADVERTISING Shane Byars

STOP-LOSS

PITFALLS Mindful of lasering and renewal obstacles for selffunded employers with large ongoing claims, innovative solutions are paving the way to peace of mind By Bruce Shutan

2018

Volume 113

18 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

True Transparency? Fiduciary PBMs emerge as response to consolidation of Rx dispensing, concern over conflicts of interest and need for deeper clinical expertise

EDITORIAL ADVISORS Bruce Shutan Karrie Hyatt

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

2018 Self-Insurers’ Publishing Corp. Officers

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

TAKING CONTROL

Claims Management

With Your Captive

By Karrie Hyatt

Trump Tax Bill Signals the Swan Song for Obamacare’s Individual Mandate

SIIA Endeavors

Member News

March 2018 | The Self-Insurer

STOPLOSS

P IT FA LL S

Mindful of lasering and renewal obstacles for selffunded employers with large ongoing claims, innovative solutions are paving the way to peace of mind

roponents of self-insurance know the many advantages this funding mechanism has over fully insured options, but there could be hidden costs or coverage loopholes lurking in the fine print. Consider, for example, that with many stop-loss insurers rating only for unknown future risks, some self-insured employers with large ongoing claims may find it impossible to afford annual renewals over the long haul. Even self-insured employers that purchase a no-new-laser contract and renewal rate cap at usually 40% to 50% are vulnerable because many carriers will not renew that option the following year if costly claims quickly go south.

By Bruce Shutan

The issue is being closely observed by veteran benefits broker Keith McNeil, co-founder of Arrow Benefits Group, a UBA partner firm. â&#x20AC;&#x153;The mindset of the carrier is often short-term,â&#x20AC;? he says, concerned about what happens to the cost of stop-loss insurance after the first few years.

STOP-LOSS PITFALLS | FEATURE

McNeil suggests all carriers have more flexible contracts that provide their self-insured customers an extra level of protection, even if negotiated at a higher rate – as long as it’s not onerous. Some do, he happily reports. Other solutions involve purchasing consortiums and group insurance captives that aggregate various arrangements into a single entity or small number of risk pools. The idea is for several employers to pool their stop-loss renewals at the same rate, but add a small laser to the highest users that won’t break the bank. Under lasering, higher stop-loss coverage attachment points are set for health plan members with costly claims experience or an expectation that they will become high-cost claimants. Employers may request lasering to reduce the fixed cost aspect of financing their medical benefit plan, explains Mike Kemp, head of accident and health for Swiss Re Corporate Solutions.

As self-funding becomes increasingly popular, “more employers are also seeing the downside” of this arrangement, notes Brad Kopcha, EVP of actuarial services and corporate development at Benecon. He cites the tradeoff between price and risk, noting that many times those that choose a lower fixed cost expose themselves to unforeseen risk. His job is to make employers fully aware of any long-term catastrophic risks they may encounter. While he considers lasers a valuable risk-management tool, Kopcha raises the importance of being able to negotiate those terms. While any concern over this common industry practice hasn’t reached a fevered pitch, it could be bubbling to the surface for self-funded employers with ongoing multimillion dollar claims driven by costly specialty drugs to treat, say, hemophilia or other medical conditions. Understanding the intent of lasering out costly risks to burnish profit-and-loss statements, McNeil cautions that the process lacks transparency or at least a willingness of some stop-loss carriers or captive managers to level with their customers. On top of that, he’s concerned that there appears to be a dereliction of duty in essentially transferring risk back to employers without quantifying that risk to the client beforehand.

He describes it as “somewhat analogous to the decision to self-fund vs. purchasing a fully insured medical plan. The employer is able to make an informed decision as to the appropriate trade-off between taking on a variable risk vs. laying off that risk at a fixed price based on their unique financial and risk-taking capabilities.” McNeil says there are many scenarios where it might work to their advantage. His objection is the “ability of a stop-loss carrier to impose lasers of any amount on a member, no matter how financially crippling that might be to the plan sponsor.” At issue is an ability to reasonably manage high-cost claimants who join a self-insured health plan later or the individual wasn’t known to be a high risk when the contract took effect.

March 2018 | The Self-Insurer

Your

high expectations

Our

enhanced capabilities

Extra

peace of mind

We’ve got your back. Four words that anyone seeking to self-fund healthcare benefits needs to believe, particularly when contemplating the financial risks associated with catastrophic medical events. That’s why we’re firm believers at Swiss Re Corporate Solutions in building strong relationships, understanding exactly what our partners expect of us, and creating innovative ways of fulfilling those expectations. And that’s also why we’ve integrated IHC Risk Solutions into our business. The result is a powerful combination of expertise and capabilities that offers brokers, advisors, payers and their employer clients enhanced value – not to mention extra peace of mind. Now, more than ever, we’ve got your back. We’re smarter together. swissre.com/esl Insurance products underwritten by Westport Insurance Corporation.

STOP-LOSS PITFALLS | FEATURE

There’s also an implication that the employer has done something wrong when, in fact, McNeil says they’re simply unlucky with regard to workforce demographics. The ultimate fear is that an inability to absorb ongoing catastrophic claims could put a selffunded company out of business. Some large brokers are now asking that their stop-loss renewal quotes have no new lasers and a rate cap for the first renewal, he reports. “There’s a growing realization that it’s a problem, but because it’s rare, it’s not on most people’s radar,” according to McNeil. At a recent conference he attended, for instance, McNeil was struck by several rationalizations industry leaders used to justify traditional stop-loss renewals allowing potentially unfettered lasers. One was that most employers won’t reach their laser maximum, while another was given that specialty drugs are a driving factor. The thinking was that certain costly scripts can always be purchased outside the U.S. or removed from the formulary in pursuit of a patient assistance program designed to obtain the drug for free or at a very low cost.

While these and other options can provide help in some cases, they are not something that can be relied on in the most extreme cases, he believes. In a nutshell, he’s just not sure why some carriers that profess to be in the insurance business are unwilling to rate for insurance protection that their clients will need in the worst-case scenario. If they are unwilling to do so, he suggests that they at least let the client know how they will handle a renewal in a worst-case scenario for exceeding years, not just the next renewal.

Theoretical discussions To be fair, concern about lasering and costly stop-loss renewals involve claims that are very rare relative to other risks, and therefore, not top of mind for industry leaders. Kemp has heard discussions about these issues in a theoretical context, but never involving a practical application. One brow-raising example that McNeil learned about through the proverbial grapevine involved an employee whose cancer symptoms were first diagnosed in mid-year. If the stem cell transplant estimated to cost between $250,000 and $1 million he eventually needed had been paid in year one of the policy when it was done, the spec would have been just $60,000. But because it wasn’t settled until year two, the carrier excluded that individual on renewal (not even a specified laser), though he still was covered by the plan at the full risk of the plan sponsor. That meant the self-insured employer was able to find a $250,000 laser somewhere else. Fellow brokers with whom he shared this story and have generally agreed in principle to reasonably priced lasers were surprised by this account. The fundamental issue as Kemp sees it involves the potential impact to severe, ongoing situations and how a no-new-laser is handled at renewal. Acknowledging the advent of specialty drugs can heighten angst, especially as they become more widely used, Kemp also points out the potential for lifetime catastrophic costs has always been part of the equation.

Actuarial Advisor Our Complete First Dollar and Excess Loss Pricing Manual for Medical and Rx Plans www.windsorstrategy.solutions

THE MOST COMPREHENSIVE AND FLEXIBLE ACTUARIAL RATING MANUAL AVAILABLE TODAY

March 2018 | The Self-Insurer

STOP-LOSS PITFALLS | FEATURE

With regard to mitigating high rate increases at renewal, he has seen options in the market for as low as 30% or 35. “But I would also argue that even a 40% or 50% renewal of the stop-loss premium, in most cases, should not be viewed as financially catastrophic to an employer because the stop-loss premium itself typically represents about 20% or so of their total medical benefits spend,” Kemp explains. Therefore, he says “it needs to be put into perspective” when considering the total benefits spend.

The actuarial vs. underwriting debate Whether frustration over lasering contracts and stop-loss renewals involving ongoing catastrophic claims may or may not be mounting across the self-insurance community, some service providers are poised to assist. Contribution Health, Inc., which offers self-funded employers stop-loss purchasing strategies among other specialty services, uses actuarial management, a spread-of-risk approach and purchasing power amassed over several years instead of lasers. It views high prices for nolaser guarantees as double payment for the same coverage. “Isn’t stop loss supposed to cover large claims without paying an extra 10% to guarantee they cover the large claim?” according to the company’s marketing materials. “We think large claims should be spread across the pool at no extra cost.”

The Self-Insurer | www.sipconline.net

No-laser contracts are confined to larger employers and accompanied by a rate increase of 8% to 10% and 50% rate cap on renewal, explains Rick Burd, president of Contribution Health.

“Stop-loss insurance companies are generally in the business of avoiding risk, not taking risk,” he says, referencing an operating philosophy that each group has to be profitable each year. “That’s why

they are full of underwriters as opposed to actuaries. Underwriters avoid risk; actuaries pride themselves in managing risk. Our programs are designed to pay a fair risk premium, but we have such trouble finding risk partners willing to take risk.”

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

Itâ&#x20AC;&#x2122;s a home run for your organization.

STOP-LOSS PITFALLS | FEATURE

that financial safe zone, we help them reduce the cost of health care,” he adds.

The lasering issue raises a larger philosophical issue about stop loss, according to Burd. “The interesting subtext to all this is the cultural clash of avoiding risk versus spreading risk,” he observes, noting how it influences pricing, renewals, contracts and claim adjudication. There are others in the self-insurance community who have adopted his thinking and even used it as their raison d’être. “Our business is designed to solve this issue,” says Andrew Cavenagh, managing director and founder of Pareto Captive Services, LLC. As part of the company’s model, employers cannot get a laser for a new condition that appears after they join one of Pareto’s programs. Also, the largest stop-loss premium increase Pareto has ever given is 30%. By adopting this approach with lasering, Cavenagh says self-insurance is made palatable for employers with between 50 and 400 employees. “Once we’ve created

Any effort to remove lasers from the industry would likely have to happen on a state-bystate basis given that regulatory structure, Cavenagh points out. “I think the big stop-loss carriers would love it, as they could assume the volatility more easily than smaller stop-loss carriers, giving them a competitive advantage,” he observes. “It would probably lead to increased consolidation in stop-loss carriers and fewer choices for employers.” Benecon has offered a program for nearly five years that mitigates lasers and other pitfalls associated with placing stop loss on an annual basis for self-insured employers. The effort includes 15 consortiums with $1 billion of premium equivalent flowing annually through 843 self-funded accounts and more than 90% retention. The largest program, called VERIS, serves about 300 private employers with stop-loss consulting services to ensure they’re entering into a stop-loss arrangement with adequate protection against high-dollar claims. Kopcha says it smoothes out any increases without the need for lasers. VERIS is posting double-digit growth, which he attributes to a combination of “expertise and volume in this space,” as well as cooperation with stop-loss carriers. Despite the solutions at hand to make stop-loss coverage more affordable for groups with unusually high risks, scores of self-insured employers may not even be aware of them. McNeil references a scene in the film “Big Jake” starring John Wayne during which a sheepherder is about to be hanged by cattle ranchers. To save his life from the ranchers, Big Jake asks if he’s willing to sell his sheep to him. When Big Jake offers a certain price, the sheepherder calls it highway robbery, but then is asked if he thinks he’s going to get a better offer that day. “Our clients with large catastrophic ongoing claims are the sheepherder with a noose around the neck, and if they have not planned ahead and selected the right stop-loss vendor, then they may end up in the same position,” he quips. Bruce Shutan is a Los Angeles freelance writer who has closely covered the employee benefits industry for 30 years.

The Self-Insurer | www.sipconline.net

TAKING CONTROL

Claims Management

With Your Captive

Written By Karrie Hyatt

hen insuring through a traditional insurer, the insurance company bears the responsibility of how claims are managed. Not so when self-insuring through a captive. Owner/ insureds must become involved with claims management and for most captives that is the key to whether or not it is successful. As claims can be the most variable and expensive cost for any insurance company, any substantial cost savings will come from the claims area. Captives require owners to substantially change how they think about claims. â&#x20AC;&#x153;A captive insurance company exists for a single purpose: to manage the claims of its owner. There is no more important function in a captive than its claims-paying ability and the integrity of its claims-paying process,â&#x20AC;? said Michael Maglaras, principal with Michael Maglaras & Company.

TAKING CONTROL | FEATURE

Claims can be resolved quickly and can help inform the parents as to where risk management needs to concentrate their efforts. “With a captive,” said Maglaras, “The immediacy of a claim reserve and its eventual adjustment have a tendency to ‘focus the mind’ of management. This results in a deeper dive into claim cause-of-loss and the impact that claims have on a business’s operations, bottom line, and reputation management. Business leaders pay attention when claim activity impacts, in a direct way, financial outcomes.”

The Benefits of Claims Management Insuring through a commercial insurance company seems like it’s uncomplicated, but there are a number of downsides when it comes to claims. Insurers can take months to evaluate and settle claims, the processing agent is not likely to be familiar with the details of the insureds’ business, the insured has little or no say in how claims are settled, and insureds have to rely on attorneys working for the insurer when a claim is disputed. Captive insurers upend these issues. The owner/insureds have the power to create their own procedures around claims adjustment and processing. They can choose when to pay a claim or when to deny it—individually assessing claims to the benefit of their company. They can also retain their own attorneys who will represent their interests.

“In deciding to setup a captive, the owner has made an affirmative statement that it wants to take control of risks and manage those risks,” said Lynn Sheils, general counsel with EWI Re, Inc. “A captive owner has the ability to control how claims are handled and ensure that its organizational philosophies are guiding claims decision. The claims handlers at commercial insurers are never going to understand the complexities of its insured’s business the way its captive team will.”

By insuring risk through a captive, companies become more aware of where their premiums are going and how they are being used. According to Jeff Kenneson, president, Quest Captive Management (USA), “A captive’s profitability relies heavily on the claims activity since most other expenses are known or static going into the arrangement, the big variable is the claims experience. In the traditional market, the owner pays a premium with the assumption that the carrier will pay losses. There’s no real pressure to keep losses down from a financial perspective year by year, the premium money is gone.” For many companies claims, and whether they are paid or challenged, can affect their reputations. By taking control of claims through their captive, a company has more control over its reputation. “Many companies, especially those in the consumer goods and services sectors, brand and reputation is crucial, so these companies may desire to settle claims quickly to prevent ill-will,” said Sheils.

March 2018 | The Self-Insurer

TAKING CONTROL | FEATURE

“There are reasons why companies may want to challenge claims and drive a claim to litigation,” she continued. “Such as companies who find themselves frequently targeted who don’t want to set a precedent of being an easy target or companies facing a claim asserting a unique or novel theory may be worried about a piling on effect and choose to litigate. Traditional insurers may see this as being the more expensive strategy and instead choose to settle. Companies with a lot of litigation often have legal teams they prefer to work with but won’t be allowed to use the preferred lawyer because the lawyer is not on the insurer’s panel counsel list. With a captive, a company has the ability to set these claim handling priorities and take back control of claims.”

The Issues of Managing Claims A primary concern for captives is that if it doesn’t have adequate capital to cover all claims that come up, the parent company is on the line to pay out of pocket. Kenneson said, “The hope is that the risk is properly underwritten so that there are sufficient funds in the captive to pay the losses and expenses with excess funds leftover, profit. If the captive is underfunded and can’t meet its obligations, there’s nobody to step in to support the captive except the owner.” While captive regulators keep a sharp eye on their captives’ funding levels, it always behooves a captive to keep on top of it themselves. Another issue, according to Maglaras, is that captive owners sometimes make the mistake of being overconfident in their knowledge of insurance.

The Self-Insurer | www.sipconline.net

“Where we sometimes see captives perform less well than anticipated is when the management of a parent’s captive believes they already possess the skills needed to adjust their own losses,” he said. “I advise captive owners, particularly in the early years of a captive’s life, to get good advice from a knowledgeable third-party administrator in key areas, such as litigation management, reserving, and adjustment. Once a captive is formed, a good TPA, who treats a captive’s assets as if they were their own, can be instrumental in a captive’s success.” Conflicts of interest can arise when owners are involved in claims management. An owner may take exception to a claim being settled, even if it is in the best interest of the captive and its parent. Kenneson said, “There can be inherent conflicts of interest that need to be address when the owners are involving themselves with claims through the captive. The owner must ensure that

Crafted for confidence.

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

STOP LOSS MTG-3059 (5/17)

MANAGED CARE REINSURANCE

TAKING CONTROL | FEATURE

pave the way for advance preparation of claims. The procedure will reinforce the claims handling philosophy of the captive’s owner. The procedure will allow for smoother handling of claims by giving forethought to all aspects of claims handling, such as who will be the captive’s vendors for services that arise in claims.... The procedure will also force consideration as to what type of claims information the captive is going capture to help risk management with understanding risks and managing them. A Claims Handling Procedure is a best practice for captives.” the captive doesn’t run afoul of any unfair claims settlement practices act. There may be occasions when the owner doesn’t want to pay a particular claim or fees the claim is frivolous. Captives can deny claims like any other insurance company. However, care needs to be given in these circumstances to ensure the claim is denied properly.”

Claims Management Advice for Owners Claims management can seem to be a mundane necessity of a captive insurance company, but, Kenneson advises, “Don’t take this function lightly. Paying attention to this function and being proactive to trends can be the difference between a failed captive and one in which management utilizes as an effective tool to move and adapt to

the expanding needs of a maturing parent company.” Claims are at the heart-of-the-matter in any insurance company but can be given little notice by captive owners in favor of more dynamic topics like investment portfolios and regulatory changes.Yet, the whole reason for a captive’s existence is to protect the insureds’ assets through careful claims management. According to Maglaras, “Regardless of what your business is, regardless of what services you provide or what product you produce, every claim in a captive, where that claim has merit, is an opportunity to improve your business, your bottom line, and your reputation.” “Just like a traditional insurance company, the captive needs to have consistency in how it handles claims and needs to be able to demonstrate that consistency,” said Sheils. “The establishing of a Claims Handling Procedure is going to help

The Self-Insurer | www.sipconline.net

Claims may not be the most interesting part of self-insuring, but it is the most important part. The captive insurance sector continues to grow, even in a continuing soft liability market, and there is a reason for that. “Once you get into the habit of adjusting your own claims and learning from the causality of loss, you never go back,” said Maglaras. According to Sheils, “Having a deeper knowledge of the business and having aligned priorities allows the captive to actively manage each and every claim with the goals of improving efficiency, promoting the philosophy of the company and gaining maximum benefit for the company.”

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.

Saving Our Clients More Since 2004

The Only Partner You’ll Need in 2018! • Claims Flow Management • Care Management • Primary PPO Administration United Claim Solutions is the industry-leading payment integrity solutions company providing customizable solutions for TPAs, self-funded groups, labor and trust organizations, stop-loss carriers and health plans.

• Custom-Built Narrow Networks

UCS places emphasis on quality and efficient service, optimal savings and timely solutions for its clients. With our end-to-end solution, our clients can generate additional savings, support their client retention and facilitate their business growth.

• Enhanced Savings Program (ESP)

(866) 762-4455

www.UnitedClaimSolutions.com

• Bill Edit, Audit and Review • Out-of-Network Solutions • High Dollar Claim Solutions • Data Analysis & Next Level Reporting • Plan Modeling • Clearinghouse / Scanning PLUS

ACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES:

Practical

Q& A T

he Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the Womenâ&#x20AC;&#x2122;s Health and Cancer Rights Act) dramatically impact the administration of self-insured health plans. This monthly column provides practical answers to administration questions and current guidance on ACA, HIPAA and other federal benefit mandates. Attorneys John R. Hickman, Ashley Gillihan, Carolyn Smith, and Dan Taylor provide the answers in this column. Mr. Hickman is partner in charge of the Health Benefits Practice with Alston & Bird, LLP, an Atlanta, New York, Los Angeles, Charlotte, Dallas and Washington, D.C. law firm. Ashley Gillihan, Steven Mindy, Carolyn Smith and Dan Taylor are members of the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questionerâ&#x20AC;&#x2122;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.

The Self-Insurer | www.sipconline.net

AHP Opportunities for Small Employers and Business Owners

In October 2017, President Trump issued an Executive Order directing the Secretary of Labor to consider proposing regulations or revise its guidance to expand access to health coverage by allowing more employers to form association health plans (AHPs). AHPs offer an opportunity for otherwise unrelated small employers (i.e., employers that do not have common ownership) to group together to be considered a single large group health plan, and thus, depending on membership size, avoid the additional ACA rules otherwise applicable to small group plans.

There is no statutory definition of an AHP under ERISA, the PHSA, or the Code; however, all three laws recognize that an association may itself be treated as an employer, in which case the AHP is considered a single (e.g., possibly large) group health plan for federal law purposes. In January, the U.S. Department of Labor (DOL) gave us our first glimpse of its plan for AHPs by issuing proposed regulations.

The proposed rule also aims to prevent discrimination based on health conditions by preventing AHPs from discriminating among and between employers or employees with regard to health status for eligibility or rating (although bona fide business distinctions other than health risk are permitted).

In a departure from prior guidance, “working owners” such as sole proprietors and partners can participate if certain requirements are met. A working owner must work at least 30 hours per week in the business enterprise or have earned income from the trade or business in excess of the cost of coverage. The rules do not permit passive owners. Additionally, a working owner cannot have access to other employer subsidized group health plan coverage, such as coverage through a spouse’s employer.

Relaxed Commonality of Interest Test

The proposed rule retains a modified version of the Commonality of Interest Test. Currently, the Commonality of Interest Test generally considers:

• How the association solicits members;

• Who is entitled to participate and who actually participates;

• The process by which the association was formed;

• The association’s purposes;

Proposed Rule • The relationship of its members outside the organization; and Association can exist solely to provide benefits • The powers, rights, and privileges that result from joining the organization. Under the proposed regulation, an AHP may exist solely to provide health coverage to its employer members. The AHP can offer coverage only to the members’ employees, former employees, and their family members. The AHP cannot be a health insurer.

March 2018 | The Self-Insurer

Under case law, employers in the same line of business and same geographic location have been found to have requisite commonality of interest; however, employers that share only a common general interest, size, or geographic location have been held not to demonstrate sufficient commonality.1 Thus, for example, the DOL found that a local chamber of commerce was not the “employer” as defined in section 3(5) of ERISA, where the primary economic nexus between the member employers was a commitment to private business development in a common geographic area.2

Under the proposed rule, the employers participating in the AHP will share commonality of interest if they are in the

same trade, industry, line of business or profession. This provision should apply to franchisee arrangements, as well. As a result, an industry or franchisee related business could create a nationwide AHP.

Additionally, the employers will have a commonality of interest under the proposed rule if their principal place of business is in the same geographic region within a state or metropolitan area. Thus, all employers in North Dakota would share commonality of interest, as would employers in the metropolitan Washington, D.C. area regardless of whether they are in D.C., Maryland, or Virginia. Those employers would not be required to share any additional business connection other than their location.

As a result, a general business league could create or sponsor an AHP within certain boundaries. Although not specified in the regulations, it also appears that an AHP can provide coverage to an employer’s other locations outside the AHP’s geographic boundaries. This might be attractive to employers with a principal place of business in a lower cost geographic region that have operations in higher cost areas (e.g., San Francisco) who can lower their cost of coverage by joining the AHP and avoiding state small group community rating requirements that would otherwise apply.

CHANGING THE H E A LT H C A R E PA R A D I G M

A N D R E D E F I N I N G H O W C O M PA N I E S PAY F O R A N D A C C E S S H E A LT H C A R E ELAP Services is a leading healthcare solution for selffunded employers across the U.S., offering unparalleled cost savings and advocacy services. ELAP’s services, which encompass plan design, claims auditing, member advocacy and legal defense, emphasize collaboration and strengthen partnerships. ELAP builds meaningful connections with employers, members, and hospitals and health systems, to ensure a fair price for quality healthcare. ELAPSERVICES.COM 610-321-1030

The Self-Insurer | www.sipconline.net

INNOVATION & RESULTS 1550 LIBERTY RIDGE DRIVE, WAYNE PA, 19087

Control Test might still be a challenge

The proposed rule retains the current Control Test. Specifically:

“The functions and activities of the group or association, including the establishment and maintenance of the group health plan, are controlled by its employer members, either directly or indirectly through the regular nomination and election of directors, officers, or other similar representatives that control the group or association and establishment and maintenance of the plan.”3

Moreover, the AHP must have “a formal organizational structure with a governing body and [have] by-laws or other similar indications of formality.”4

Historically, the DOL has not found that the participating employers exercise control unless the participating employers have the authority to direct, replace, and supervise the plan’s insurer/administrator, and have the ability to amend the plan.5

Further, the DOL has typically required that each participating employer must be involved in designing and administering the plan offered to their employees.6 Typically, it has been difficult to determine if the participating employers satisfy the Control Test. Even the courts have had difficulty making this determination.7

With regard to the control test, the proposed rule does not seem to provide a significant relaxation of the current rule standards. The rule requires regular nomination and election of directors, officers, or representatives that control the AHP, as well as by-laws or similar formalities. AHPs might have difficulty obtaining or demonstrating employer participation.

For example, will the AHP require that employers meet regularly and vote on issues involving the AHP? Alternatively, will the participating employers regularly nominate and elect directors, officers, or other similar representatives? In either case, the AHP will need to ensure the active involvement of participating employers.

Other Compliance Concerns

Guaranteed Renewability Requirements under Public Health Service Act (“PHSA”)

Under the PHSA, coverage provided to an employer through a bona fide association must be renewed unless the employer’s membership in the association terminates. The PHSA’s definition of “bona fide association” is narrower than the definition of association under the proposed rule. Thus, even if an AHP is considered a single large group health plan under DOL guidance, the exception to the guaranteed renewal requirement might only be available to insurers if the association meets the PHSA’s definition of bona fide association. That definition requires, among other things, that the association have been in active existence for at least five (5) years and was formed and maintained in good faith for purposes other than obtaining insurance.8

AHPs are still MEWAs, which means state laws and ACA taxes might apply

AHPs are multiple employer welfare arrangements (MEWAs) under both current law and the proposed rule. Under the proposed rule, as under current law, the AHP will be a MEWA even if it is considered a single plan at the association level rather than separate plans sponsored by each participating employer. Thus, MEWA status should be considered when planning an AHP. Most MEWAs must file an initial and annual Form M-1 with the DOL. A MEWA might also be required to file a Form M-1 due to certain changes or before providing coverage in a new state.

March 2018 | The Self-Insurer

generally are not inconsistent with ERISA. Some state laws prohibit self-funded MEWAs entirely or require significant registration and reserve requirements.

Additionally, ERISA has specific preemption provisions that allow states to regulate MEWAs:

• For fully insured plans, states may impose and enforce requirements relating to reserves and contributions.

ERISA provides the DOL with the statutory authority to issue regulations exempting selffunded MEWAs from state laws. However, the DOL has never issued any exemptions. It is possible that the DOL will issue exemptions in the AHP final rule, but the DOL statutory authority to issue exemptions does not extend to state laws relating to reserve and contribution requirements. Depending on the DOL’s actions, new issues might arise as to which provisions are preempted by federal law.

• States have even more control over self-funded MEWAs. State laws relating to self-funded MEWAs are preempted only to the extent that the state law is inconsistent with ERISA. In that respect, state laws that provide more participant protections

In addition to state regulation, MEWAs are subject to the ACA insurance sector fee tax – regardless of whether they are self-funded or fully insured.

Artex provides a full range of alternative risk management solutions, customized for our clients’ individual challenges and opportunities. Powered by independent thought and an innovative approach, we empower our clients and partners to make educated risk management decisions with confidence.

Operating in over 30 domiciles and in more than 15 offices internationally, we have the proven capacity to supply any alternative risk need. For more information, please contact us at:

Stop-Loss Captives

Single-Parent Captives

Enterprise Risk Captives

Rent-a-Captive and Program Solutions

E: artexinfo@artexrisk.com T: 630.694.5050 W: artexrisk.com

Group and Association Captives

Bermuda Market Access

PROUD TO BE A DIAMOND MEMBER OF SIIA 29343B

The Self-Insurer | www.sipconline.net

Delawareâ&#x20AC;&#x2122;s Captive Bureau is business at the next level

In Delaware, the captive regulators are dedicated exclusively to our captive insurance clientâ&#x20AC;&#x2122;s needs, and work under the direction of our Captive Bureau leadership, directed by Steve Kinion.

MEET SEAN Mr. Brown joined the Bureau of Captive and Financial Insurance Products in March 2014 and currently serves as a Captive Analyst III. Sean holds an MBA and a BS in Business Management from Wilmington University. He is currently studying for the SOFE Certified Financial Examiner Designation. Prior to joining the Department of Insurance, Sean worked in the private sector where he developed his financial analytical skills through construction project management work. Sean holds two professional insurance designations: Accredited Financial Examiner (AFE) Associate Professional in Insurance Regulation (APIR)

Sean Brown Captive Analyst III

Our team has 15 analysts 12 hold Associate in Captive Insurance (ACI) designation. 12 hold the Accredited Financial Examiner (AFE) designation 9 hold the Certified Financial Examiner (CFE) designation 2 are Certified Public Accountants (CPA) STEVE KINION, DIRECTOR Bureau of Captive & Financial Products Department of Insurance

BUREAU OF CAPTIVE & FINANCIAL INSURANCE PRODUCTS 1007 Orange Street, Suite 1010 Wilmington, DE 19801 302-577-5280

Many state laws will need to be changed for AHPs

Current state insurance laws might also present challenges to the formation of AHPs. For example:

Thus, those considering forming AHPs will need to consider state law carefully. Although state legislatures might change their laws to match federal requirements, they likely will occur slowly.

Conclusion • Most states require that the association have been organized for purposes other than providing insurance and in existence for a certain number of years (typically five (5) years).9

• Some states have minimum participation requirements. For example, North Carolina requires an association to have a minimum of 500 persons.10

• Some states might limit the types of entities that can form AHPs. For example, Texas insurance law states that the types of entities that can obtain an association policy include “a labor union or an organization of labor unions, a membership corporation organized or holding a certificate of authority under the Texas Non-Profit Corporation Act…and a cooperative or corporation subject to the supervision and control of the Farm Credit Administration[.]”11

AHPs have a lot to offer. However, potential sponsors of AHPs will need to consider many issues, both at the state and federal level. Perhaps most significantly, it might take time for some states to update their insurance laws to accommodate the federal changes that permit AHPs.

References 1 See, e.g., Gruber v. Hubbard Bert Karle Webbers, Inc., 159 F.3d 780 (3d Cir. 1998); DOL ERISA Opinion Letters 2005-24A; 2005-25A; DOL ERISA Advisory Opinion 2003-17A. 2 See, e.g., DOL ERISA Opinion Letter 200807A and cases cited therein. 3 Prop. DOL Reg. § 2510.3-5(b)(4).

Koehler

4 Prop. DOL Reg. § 2510.3-5(b)(3). LLC

5 See, e.g., DOL ERISA Opinion Letter 96-25A. 6 See, e.g., DOL ERISA Opinion Letters 200524A, 2005-25A, 2003-17A, 90-11A, 90-07A, 89-21A, 89-13A, 88-07A, 87-92A, 86-26A and 86-08A. 7 See, e.g., Assoc. Inds. Mgmt. Serv. V. Moda Health Plan, Inc., 2015 WL 4426241 (D. Or. 2015) (court could not make determination because it did not have information on how often the association meets or for what purpose, or the powers, rights and privileges of participating employers). 8 42 U.S.C. § 300gg–91(d)(3). 9 See, e.g., South Carolina Code 38-71-670(4) (association in existence for five years), but see Mo. Rev. Stat. 376.421(5) (requiring association to be actively in existence for at least two years) 10 N.C. G.S 58-51-80. 11 Tex. Ins. Code 1251.052.

The Self-Insurer | www.sipconline.net

Dialysis costs aren’t inevitable. They’re avoidable. CONTACT US TODAY TO GET YOUR FREE RISK ANALYSIS

We pioneered cost containment for ESRD and dialysis 16 years ago. Now we are innovating again. Kidney disease and diabetes are under new management. Learn why you need to think diﬀerently about identifying and managing the cost of dialysis, kidney disease and diabetes. We have the proprietary technology and clinical solutions to proactively identify Chronic Kidney Disease and prevent the onset of ESRD and dialysis. Our services include: Data Analysis and Risk Prediction Chronic Kidney Disease and Diabetes Management Dialysis Cost Containment Learn more at renalogic.com

Proud 2018 Diamond Members

True Transparency? Fiduciary PBMs emerge as response to consolidation of Rx dispensing, concern over conflicts of interest and need for deeper clinical expertise

By Bruce Shutan

ith rising prescription drug costs considered the nation’s fastest-growing component of health care, pressure has been mounting on pharmacy benefit managers (PBMs) to help Corporate America rein in such spending. But at a time when transparency has never been more important across the self-insured community and beyond, a struggle over stewardship is brewing. Gary C. Becker, CEO of ScriptSourcing, estimates that less than 2% of the nation’s roughly 300 PBMs operate without conflicts of interest. In contrast to a traditional PBM, he says all manufacturer revenue in a “fiduciary” PBM contract belongs to the employer – adding “there will be no spread pricing.” Leaders in this nascent field of expertise include US-Rx CARE, TransparentRx and OrchestraRx, among others. These market disruptors could help bend the Rx cost curve in ways that self-insured employers never imagined, crow proponents of this model. Becker says it’s analogous to scores of employers transitioning from retail to institutional pricing for their 401(k) investment fees. His point is that employers have an opportunity to mirror these cost savings by working with a fiduciary PBM.

The Self-Insurer | www.sipconline.net

At AmWINS Group Benefits our team of specialists wakes up every morning committed to bringing your team innovative solutions to the opportunities and challenges you and your self-funded clients face. Thatâ&#x20AC;&#x2122;s the competitive advantage you get with AmWINS Group Benefits.

amwins.com

OrchestraRx reinvents cost baselines through design, clinical and technological innovations and earns revenue from a subscription model. Free from traditional PBM constraints, the fiduciary PBM provides reference-based pricing, pharmacy-centric condition management, polypharma management, integration of rebates and coupons at point of sale, and new capitated models of care by which patients are managed at the therapeutic class level where cost are optimized. “These characteristics allow us to implement solutions where others will not because we are not sacrificing already established revenue streams from rebates, price spreading and mandates to use specific, owned pharmacies,” explains founder and CEO Paul Ford.

A handful of traditional players dominate the PBM market, with a 2017 Drug Channels Institute report noting that the six largest players accounted for about 62% of U.S. prescription dispensing revenues in 2016. They include CVS Health, which late last year set its sights on acquiring Aetna, as well as Walgreens Boots Alliance, Express Scripts, Walmart, Rite Aid and OptumRx. While transparency is all the rage, “it has been greatly overused and abused” in the PBM arena, says Renzo Luzzatti, CEO of US-Rx CARE. “You’re either acting in the best interests of the client, always, or you’re not,” he bluntly adds. The chief differentiation between a traditional and fiduciary PBM is “elimination of any possible financial conflicts of interest and the ability to manage risk, which takes years of clinical management experience,” according to Luzzatti. It involves a deep understanding of clinical best practices and encouraging use of cost effective options among therapeutically equivalent medications as well as an ability to effectively communicate with doctors and patients to optimize prescribing with a focus strictly on delivering the highest quality of care at the lowest cost to both the insured member and plan sponsor. Charging only a modest administrative fee per script, the mission of a fiduciary PBM is to manage costs and mitigate risks, as well as provide clinical or consultative advice to the health plan members, according to Spencer Allen, SVP and employee benefits practice leader for Insurance Office of America, one of the fastest-growing independent agencies. “Their incentive is to do the best job they absolutely can for the employer, regardless of whether the drug costs $75,000 or $15,” he explains, which can make a significant dent in the specialty drugs area.

The Self-Insurer | www.sipconline.net

Different paths to cost savings However, employers shouldn’t expect this new way of managing prescription drugs is necessarily a silver bullet. Keith McNeil, cofounder of United Benefits Advisor partner firm Arrow Benefits Group, much prefers the fiduciary PBM model, though cautioning it doesn’t automatically mean that such programs save money. “There are other factors that come into play,” he says, noting the prospect of purchasing scripts on the international market and maximizing patient assistance programs. “PBMs are now finally starting to offer a solution to this fiduciary problem,” according to McNeil. For example, he cites programs that estimate rebates and front to members so that they pay the net true cost of drugs at the pharmacy. While largely a moot point for most of those with relatively small copays at the pharmacy, he sees significance for high-deductible health plan participants who often pay the full cost of drugs.

The Pharmaceutical Care Management Association (PCMA), which represents PBMs, is on record supporting “transparency that offers consumers and plan sponsors like labor unions, employers, and health plans the information they need to make the choices that are right for them.” But the group has been highly critical of unsuccessful attempts in dozens of states, including the District of Columbia, to designate PBMs as fiduciaries, noting how “such proposals inadvertently raise, not reduce, prescription drug costs.” Another criticism is that they conflict with ERISA. In the case of a bill in Nevada, the PCMA noted that an unintended consequence of “giving drug companies inside information that would empower them to collude with their competitors.”

Still, a huge problem associated with traditional PBM practices is that “relative drug prices will often change as soon as the ink is dry on the contract,” Tyrone Squires, managing director of TransparentRx, wrote in a recent blog articulating differences between a traditional and fiduciary PBM. “But the plan sponsor is unaware of the price changes because their PBM doesn’t offer full auditing rights or access to MAC price lists.” Further complicating matters is that they “may send only a single line item invoice for drug benefit costs, although thousands of claims have been submitted for that reporting period,” he added. “To speak of transparency alone is not enough; it must be binding.”

Ford believes it’s nearly impossible for publicly traded PBMs that dominate the market to change their economic model and business practices without devaluing their stock value significantly. “They will be forced to change by market demand and pressures, including regulatory changes,” he says. “This is why PBMs are buying hospitals and provider practices. It is to diversify revenue streams or have other places to distribute and account for margins that would be scrutinized and regulated.”

Hidden costs The trouble with traditional PBM contracts is that they abdicate any fiduciary responsibility, according to Becker, whose firm helps selffunded employers mitigate prescription drug

March 2018 | The Self-Insurer

claims. “Who would ever hire someone to mitigate prescription spend who is not going to act in their clients’ best interests?” he asks rhetorically. Many PBMs are loosely claiming to be transparent and offering 100% of the rebate, Becker says, “but what they don’t share is that they might be referring to the formulary rebate, can be a very small percentage of the actual rebate.” Other rebates are associated with price protection, administration and marketing. Becker notes that TPAs garner significant income from rebates upward of 20% or more of a client’s total Rx spend. Traditional PBM incentives simply aren’t aligned with the plan sponsor, Allen opines. Rather, he says they’re focused on maximizing profitability – even with generics, thanks to spread pricing – and dispensing high-cost drugs whenever possible. In conversations with a prospective client with 4,500 employees, Allen was nearly astounded to learn that specialty drugs accounted for more than 40% of the company’s $10 million overall drug spend. He says all employers realize these rising costs are “pervasive and getting worse.” Health insurance carriers are just as culpable as TPAs “in that they make money on the [traditional] PBM that is not shown to the client,” Allen says. This makes it exceedingly difficult to carve out a PBM from carrier partners, and when it’s done, he notes that a per-employeeper-month (PEPM) fee is charged. While employers look to their PBM as a gatekeeper, Luzzatti points out “an inherent conflict of interest” in terms of cost management, oversight, and ultimately, what gets dispensed. The 30

The Self-Insurer | www.sipconline.net

primary sources of revenue for most, if not all, PBMs, “are rebates from manufacturers and dispensing,” regardless of whether it’s traced to a retail, mail-order or specialty pharmacy setting, he explains. If a PBM pockets any rebates or manufacturer incentives to increase utilization of expensive brand drugs or profits from dispensing any medications, that entity is almost certainly not acting in a fiduciary capacity in the best interest of the client.

Modest admin fees A fiduciary PBM doesn’t make money off rebates or dispensing, he says. “We get paid to manage the risk and refer to ourselves as pharmacy risk managers.” The upshot is that the formulary is structured differently and a more clinical approach drives prior authorization.

The problem with health insurance carriers and TPAs enticing employers with a modest PEPM administrative fee, the arrangement is contingent upon doing business with a particular PBM with whom they’ve negotiated Luzzatti notes. “The employer would be much better served paying a higher administrative fee and keeping their own rebates, and not having the spread pricing,” he adds, stressing the need to remove any conflict of interest. Many PBM contracts don’t charge an administration fee, which Luzzatti says sounds like the customer is getting it for free. They also might stress the maximum discount off average wholesale price. “But what they don’t realize is the reason that there are no fees is because of all these other sources of revenues that are not transparent that work against the goal, which is lowering cost,” he adds. A fiduciary PBM can help better address some of the systemic problems associated with the health care system. For example, Allen says doctors don’t always have a good enough sense about the cost of what they’re prescribing. He recalls how the lead registered pharmacist for US-Rx CARE advised one physician to prescribe an alternative for Stelara, which at $80,000, was not medically necessary for the patient. And then, by collaborating with ScriptSourcing’s specialty drug program, the patient’s medication ended up costing the client just $12,500. “That’s how you fix rising drug prices,” he quips.

Behind the fine print The importance of contractual fine print cannot be underestimated. Traditional PBMs typically will lock up their employer clients for three years, “and as fast as this market is changing, that’s not good for the plan sponsor,” Allen warns. His suggestion is “to allow the termination of that contract at any point in time without cause.” PBMs are infamous for contractual language setting themselves up to be the exclusive provider of various services, including prior authorization, which Luzzatti says allows them control the gates for manufacturers and maximize profit.

“The client should be allowed, if they choose, to have somebody else do the prior authorizations so you take the fox out of the henhouse,” he says. The language used in US-Rx CARE contracts mirror the fiduciary definition under ERISA, with references to performing duties “free of any conflict of interest” and “in accordance with the standards of conduct applicable to a fiduciary in an enterprise of like characters and with like aims.” There’s also a commitment to full disclosure of all financial, utilization and rebate information. With this in mind, Luzzatti says PBM contracts should stipulate that all data generated as a result of the servicing their members is the property of the clients and that they’re entitled to that information at no charge. There should never be any additional charges for obtaining a claims history, a list of open prior authorizations, or other client data requests, he says. Self-insured employers need to audit their Rx claims, as well as ensure that the PBM is adhering to its contract and that it squares with the request for proposal, Becker adds. “We feel many PBMs have been hustling their employer customers for quite some time, and this market requires radical transformation,” he says, noting that a true fiduciary contract is held to a higher standard.

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

March 2018 | The Self-Insurer

Trump Tax Bill Signals the Swan Song for Obamacare’s Individual Mandate By Sean Donnelly

Background

The “tax” bill that Congress passed in late December was somewhat of a wolf in sheep’s clothing from a health care perspective. It certainly overhauled the tax code and instituted tax cuts for corporations and many American taxpayers, but it also doubled as a thinly-veiled health care bill through its repealing of Obamacare’s individual mandate.

Authors of the tax bill postulated that such a repeal could save the federal government more than $330 billion over the next decade as fewer Americans will end up receiving subsidies or Medicaid, savings that could then be used to finance the bill’s tax cuts and lower tax rates.1

The tax bill was not the complete eradication of Obamacare that the Trump administration had set its sights on during the first year of Trump’s presidency, but the dismantling of the individual mandate marks the first removal of a key pillar in the Obamacare foundation.

The Self-Insurer | www.sipconline.net

The individual mandate, one of the linchpins of the Affordable Care Act, required Americans who did not otherwise qualify for an exception to obtain minimum essential health coverage. Those Americans who did not have minimum essential health coverage for any month during the year were required to pay a penalty during tax season.

This mandate was essential to pressure younger and healthier Americans to purchase insurance coverage, thereby bringing balance to the risk pools and stabilizing the health insurance marketplace.

The concept of the individual mandate was actually spawned by conservative policymakers who posited that health coverage should be mandatory in order to produce a sustainable insurance pool with the right balance of healthy and sick individuals to properly spread the risk.

The underlying theory was that by compelling healthier Americans to enter the marketplace and obtain coverage, premiums would begin to decrease across-the-board as the influx of healthier participants would help to absorb the costs of those less healthy and more expensive participants. In 2006, Mitt Romney, Massachusetts’ Republican governor, was able to convince the largely Democratic state to adopt an individual mandate as part of its health care overhaul.

The relative success of the mandate’s Massachusetts audition eventually paved the way for then-President Obama to include an individual mandate as a vital component of the 2010 Affordable Care Act. Even as the Trump tax bill begins to take effect this year, the individual mandate will still remain in effect in 2018.

The repeal of the individual mandate won’t actually take effect until 2019. Accordingly, the mandate’s penalties will continue to be levied in 2018 unless the Trump administration otherwise attempts to have them waived.

A Short and Bumpy Ride The individual mandate faced intense partisan scrutiny both before and after the passage of the Affordable Care Act. Republicans viewed the mandate as an unconstitutional scheme to coerce Americans to participate in a commercial activity, an act that they argued amounted to an impermissible overreach of Congress’ powers to regulate commerce. Following the enactment of the Affordable Care Act, a total of twenty-seven states challenged the law’s constitutionality in federal court.2

In the seminal case of National Federation of Independent Business v. Sebelius3, the Supreme Court agreed with the Republican position and held that the individual mandate was outside of the scope of Congress’ authority to regulate commerce because the Constitution’s Commerce Clause does not afford Congress the power to force people to engage in commerce.

However, the individual mandate ultimately managed to withstand judicial scrutiny as the Supreme Court held in its 5-4 decision that the mandate penalty amounted to a permissible tax that Congress could lawfully levy under its taxing and spending power.

Even though the mandate survived its main Constitutional challenge, it nonetheless sustained a shellacking in the court of public opinion. A tracking poll conducted by Kaiser Health4 just a week after the presidential election in November 2016 found that sixty-three percent of Americans viewed the individual mandate as “very unfavorable” or “somewhat unfavorable.” Comparably, only thirty-five percent of Americans viewed the mandate as “very favorable” or “somewhat favorable.” A whopping sixty-one percent of Republicans polled perceived the individual mandate as “very unfavorable.”

The Heritage Foundation, the conservative think tank that many credit as the originator of the concept of the individual mandate, renounced any affiliation with Obamacare’s iteration of the mandate and opposed it as an unconstitutional anachronism no longer considered necessary to achieve universal coverage.5

March 2018 | The Self-Insurer

Notable among those who continued to champion the repeal of Obamacare and its individual mandate in the wake of the Sebelius decision was Mitt Romney, the very same architect behind the individual mandate’s debut in Massachusetts. The mandate was branded by its challengers as an un-American and officious overreach of government authority, a pariah in the land of free people, free markets, and free choice.

Broad Implications of the Repeal Despite President Trump’s pronouncement that the tax bill “essentially repealed Obamacare,”1 the Affordable Care Act will continue to be the law of the land. Left untouched in the wake of the tax bill are the federal income-based subsidies intended to assist American consumers with purchasing

individual policies, the expansion of Medicaid for low-income adults, the prohibition against denying coverage to consumers with pre-existing health conditions, and the edict that insurers must cover those health benefits deemed “essential” by the Department of Health and Human Services.

Also surviving is the employer mandate, which requires certain employers to provide affordable health care coverage to their employees or else face a penalty. However, the repeal of the individual mandate will undoubtedly trigger some significant shifts in the health care landscape. The majority of Americans won’t be personally impacted, since most people already obtain health insurance either through their employer or through a public program such as Medicare, and thus were never really at risk of being subjected to the individual mandate penalty.

Nevertheless, for those Americans who do not receive health insurance from an employer or public program and who instead purchase coverage from an Obamacare health exchange, such individuals are now free to forego their coverage entirely without fear of having to pay a penalty.

The Self-Insurer | www.sipconline.net

Zebu Compliance Solutions

ZebuCompliance.com ● support@zebucompliance.com ● 888.395.9029

EPStaffCheck

ClaimScrub

Your provider panel: Be the first to know.

Medical claims done right.

• Compliance made simple • Auditor-approved documentation trail • Automated service monitor prevents accidental lapses • Subscriptions for organizations of all sizes • Primary sourced data • Expansive library, updated daily, including: • Medicare / Medicaid / OIG / SAM / OFAC-SDN • State exclusions / licensing boards / registration • Medicare Opt-Out • NPDB reports • Social Security Death Master File • Enhanced Full-Service Option • Dedicated compliance associate • Free your staff to focus on operations • Full audit trail

• Transparent claim validation • End to end in-house programmer, developer, and content support teams • Full service content, updated daily • Coverage, correct coding, reimbursement calculation • Clearinghouses, Payers, TPAs • Audit support and recovery • Integrate seamlessly into other systems • Plan-specific coverage support • Built-in custom rule and over-ride editor • We’ve never met a rule we couldn’t support!

Monitor your provider panel, staff and vendors, for exclusion, licensing, and disciplinary status with Medicare, Medicaid, OIG, State, NPDB and regulatory boards.

Audit Support & Quality Assurance

Provider Panel Integrity

Simpler. Smarter. Better.

DataTank

Claims Processing

Full verification of correct coding and coverage for claims. Supports pre-service, post-service, and audit implementations.

Pre-Service Coverage Validation

Those who are completely healthy and those who are financially well-off may now decide to ditch their health coverage as being needless or expendable. Comparably, even those who are sick or less financially stable may ultimately decide not to carry health insurance without the looming threat of the penalty to force them into action.

Consequently, the Congressional Budget Office (CBO) is estimating that the individual mandate repeal will result in thirteen million fewer Americans being insured within the next decade.6 The CBO is also forecasting that the premiums for coverage obtained on the health exchanges will rise approximately ten percent per year over the next decade due to healthy participants scattering from the markets without fear of the penalty and leaving the sicker participants behind to overburden the risk pools.

Some health policy experts are expecting that the removal of the individual mandate will simultaneously give rise to increased premiums and decreased coverage rates, ultimately leading to a market collapse.7 In order to head off this potential outcome, lawmakers in states such as California are already looking to push legislation that would adopt versions of the individual mandate as state law, à la Massachusetts.

The Self-Insurer | www.sipconline.net

Overtones for EmployerSponsored Plans As a result of the repeal of the individual mandate, the CBO is projecting that fewer employees will be joining their employer’s self-funded plans with the mandate’s penalty no longer in play. Specifically, the CBO anticipates that the removal of the individual mandate will result in three million fewer Americans having coverage through their employer over the next decade.8 Accordingly, employers may begin to experience a decline in health plan enrollees.

As noted earlier, however, the Affordable Care Act’s employer mandate will remain after the enactment of the Trump tax bill. Employers subject to the mandate, those with fifty or more “full-time equivalent

employees,” face penalties if they fail to offer minimum essential coverage that provides minimum value and at least one full-time employee receives a premium tax credit for purchasing individual coverage on the health insurance marketplace.

Timothy Jost, a law professor at the Washington and Lee University School of Law, deduced that if fewer Americans end up seeking coverage through the health care exchange, then it follows that some employers may be able to avoid paying the employer mandate penalties that are only levied if at least one full-time employee receives a premium tax credit through the exchange.

In this way, the individual mandate repeal is somewhat of a double-edged sword;

fewer employees may end up enrolling in employer-sponsored plans, but fewer may also look to purchase coverage on the exchange, thereby reducing the risk to their employers who would otherwise be exposed to the strict penalties imposed by the employer mandate. Still, Jost surmises that as over 150 million Americans already have health coverage through their employers, the “effects of the individual mandate repeal on the employer-sponsored market will be marginal.” 9

The repercussions of the repeal will certainly be felt hardest in the individual market, but employer-sponsored plans will likely experience some fallout as healthier, lowerrisk employees begin to question if it might make more financial sense to withdraw from their plans entirely. As these healthier, less

expensive employees begin to disenroll, the all-important balance each plan seeks to achieve will be disrupted as the scales start to tilt back towards the sicker, higher-risk and more expensive employees.

A resulting risk pool made up of a disproportionate number of the costliest employees is the kiss of death for an employer-sponsored plan. As employees are no longer “mandated” to enroll in the plans offered by their employers, self-funded plans will need to devise more alluring and increasingly innovative methods to retain their healthiest participants. With the individual mandate repealed, the driving force of the mandate’s penalty can no longer be relied upon to funnel low-risk lives towards enrollment. Employer-sponsored plans will need to fill this void by offering

March 2018 | The Self-Insurer

more comprehensive benefits, designing more creative incentive programs, and prioritizing enrollee engagement in order to secure these vital, low-cost lives.

Sean Donnelly joined The Phia Group, LLC in 2013 and currently serves as Corporate Counsel. In his role as Corporate Counsel, Sean is primarily responsible for handling the drafting, negotiation and enforcement of The Phia Group’s contracts and agreements. He also serves as a key advisor to The Phia Group’s management on legal and regulatory compliance issues, business governance issues and internal policies and procedures. Sean earned his B.A. in Political Science with Distinction from the University of Michigan and his J.D. from Boston College Law School.

(Endnotes) 1 Bennett, Brian (2017, December 20). ‘We have essentially repealed Obamacare,’ Trump says after tax bill passes. Los Angeles Times. Retrieved from http://www.latimes.com/politics/washington/la-napol-essential-washington-updates-trump-sees-an-

References 1 See Congressional Budget Office, Repealing the Individual Health Insurance Mandate: An Updated Estimate (November 2017), https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/53300-individualmandate.pdf. 2 Park, Katie & Rolfe, Rebecca (2013, September 23). How states approached health-care reform. The Washington Post. Retrieved from http://www.washingtonpost.com/wp-srv/special/politics/state-healthcare-progress/. 3 See 567 U.S. 519 (2012). 4 Kirzinger, Ashley, Sugarman, Elise & Brodie, Mollyann (2016, December 01). Kaiser Health Tracking Poll: November 2016. The Henry J. Kaiser Family Foundation. Retrieved from https://www.kff.org/healthcosts/poll-finding/kaiser-health-tracking-poll-november-2016/. 5 Butler, Stuart M., Ph.D. (2012, February 06). Don’t Blame Heritage for ObamaCare Mandate. The Heritage Foundation. Retrieved from https://www.heritage.org/health-care-reform/commentary/dontblame-heritage-obamacare-mandate. 6 See Congressional Budget Office, Repealing the Individual Health Insurance Mandate: An Updated Estimate (November 2017), https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/53300-individualmandate.pdf. 7 Sanger-Katz, Margot (2017, December 21). Requiem for the Individual Mandate. The New York Times. Retrieved from https://www.nytimes.com/2017/12/21/upshot/individual-health-insurance-mandate-end-impact.html. 8 See Congressional Budget Office, Repealing the Individual Health Insurance Mandate: An Updated Estimate (November 2017), https://www.cbo.gov/system/files/115th-congress-2017-2018/reports/53300-individualmandate.pdf. 9 Jost, Timothy (2017, December 20). The Tax Bill And The Individual Mandate: What Happened, And What Does It Mean? Health Affairs. Retrieved from https://www.healthaffairs.org/do/10.1377/ hblog20171220.323429/full/.

end-to-obamacare-in-the-1513794883-htmlstory. html.

The Self-Insurer | www.sipconline.net

Unlock

Whether youâ&#x20AC;&#x2122;re looking at a claims administration system for the first time or are tired of navigating the complicated maze of your current system, Hi-Tech Health can provide a customized software solution which will eliminate your frustration and put you on the right path to success.

YOUR

Claims Administration Puzzle

Your Business. Your Time. Your Way.

25 YEARS ou. ns as Individual as Y

Te c h H e a l

Soluti o

1990-2015

Whether your goal is to grow faster while competing with larger Third Party Administrators, streamline your paperwork, or simplify your billing services, weâ&#x20AC;&#x2122;ll work with you, one-on-one, in a fraction of the time it takes other software companies to get you started!

1500 Route 517 Suite 200 Hackettstown, NJ 07840 908.813.3440 hi-techhealth.com sales@hi-techhealth.com

SIIA

Endeavors

Monterrey, Mexico

elf-Insurance Institute of America, Inc. (SIIA) Latin America-focused International Conference, is scheduled for April 17-19, 2018 in Monterrey, Mexico. The event is designed to help attendees identify and understand self-insurance business opportunities in Latin America.

Prior to the start of the conference attendees can get an early start on networking and enjoy an authentic Mexican breakfast at Las Palomas Restaurant in the historic Villa de Santiago, known as one of the area’s “Magic Towns,” full of tradition and natural beauty. There will be time after breakfast to walk around and explore the town before being transported back to the hotel.

The Self-Insurer | www.sipconline.net

YOUR BEST PARTNER EARNS YOUR TRUST EVERY DAY Employers of all sizes experience high-cost medical claims. As an independent stop-loss provider with strong financial ratings, weâ&#x20AC;&#x2122;re here for you. Listening to you. Helping you design a stop-loss plan that meets your needs with specialized options. Delivering hassle-free claims reimbursements. Want a partner that earns your trust every day? Go with Sun Life. Ask your Sun Life Stop-Loss specialist how we can put our expertise to work for you.

STOP-LOSS | DISABILITY | DENTAL/VISION | VOLUNTARY | LIFE 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. Group insurance 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, group insurance 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. ÂŠ 2017 Sun Life Assurance Company of Canada, Wellesley Hills, MA 02481. All rights reserved. Sun Life Financial and the globe symbol are registered trademarks of Sun Life Assurance Company of Canada. BRAD-6503f SLPC 28097 02/17 (exp. 02/19)

The educational program begins the morning of Wednesday, April 18th. Session highlights include:

• Getting to Know Monterrey David Manllo Valdes, CEO of the Monterrey Convention & Visitors Bureau will provide a brief presentation highlighting all of the great things you should know about the host city.

• Medical Travel Trends – The U.S. – Latin America Connection Laura Carabello, Editor of Medical Travel Today Newsletter will discuss the latest trends, opportunities and challenges related to U.S.-based companies allowing employees the option to seek medical treatment in various Latin America countries, including Mexico.

• Duty of Care Updates for Expats in Latin America Dick Atkins, Esq., Legal Counsel, International Recoveries, LLC, is an expert on helping expats who encounter legal problems abroad. He will discuss the rapid expansion of Duty of Care requirements from medical and security coverage to the newest area of providing emergency legal assistance for expats and their family members. Case studies illustrating the benefits of providing this assistance also for victims of crime in addition to those who are arrested, and for those who suffer serious accidental injuries, as well as the benefits of including vacation and other leisure travel and activities for the expat and family. Of specific interest to groups that self-insure, using international legal experts can lead to recoveries made on employee medical expenses from serious accidents while traveling abroad.

• Using Monterrey-Based Medical Facilities to Treat Employees of U.S.-Based Companies Attendees will learn how Monterrey has positioned itself to provide high quality, cost effective medical treatment options for U.S.-based self-insured health plans from Dr. Edmundo Mesta Casaventes, Director General for Hospital Angeles.

• Value Added Services for International Plans With a growing number of Expat plan participants, U.S.-based self-insured employers are increasingly looking at ways add more value to their international health benefit plans, such as telemedicine, wellness programs, navigators, etc. The panel will provide an overview of the latest strategies being used and/or considered by employers with workers based outside the United States. Self-Funding, Stop-Loss and Reinsurance in the Latin America Marketplace

•

Arbor Benefit Group Proven Solutions. Exceptional Service.

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

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

The Self-Insurer | www.sipconline.net

This panel discussion session will explore emerging Latin America markets self-funding and related opportunities, trends and challenges for stop-loss insurance and reinsurance.

•

Latin American Carrier Panel Discussion

A panel of leading Latin American insurance carriers will discuss their market strategies and product development highlights.

There will be an offsite dinner where attendees will enjoy a wonderful evening of food, drink and socializing at a great restaurant where “the locals” go. This will be a truly unique experience you will not want to miss.

WANT TO IMPROVE THE HEALTH AND PRODUCTIVITY OF YOUR EMPLOYEES? YOU’LL NEED MORE THAN A WELLNESS PROGRAM AND SOME HEALTH DATA. You need a comprehensive view of workforce health & the systems and expertise to turn data into action.

YOU NEED IN-SIGHT FROM IPMG. In-Sight provides a single, integrated platform for all employee health, injury, workers’ compensation, absence and engagement activity — and the specialized teams that use your data to proactively minimize risks and promote productivity.

BECAUSE THRIVING COMPANIES RELY ON HEALTHY EMPLOYEES.

ipmg.com/in-sight.

Attendees will also have the opportunity to tour selected medical facilities in Monterrey to see and hear first-hand how they are currently positioned to partner with forward-looking self-insurance industry players in the United States. It’s very easy to get to Monterrey, with direct flights from more than a dozen major U.S. airports and the conference will be held at the beautiful Quinta Real Hotel – check it out on-line at www.quintareal.com

How do you choose, if all your choices look the same?

There are limited sponsorship opportunities who want to promote their corporate brands with event. For immediate assistance, contact Justin Miller at jmiller@siia.org

Detailed event information, including registration can be accessed on-line at www.siia.org, or by calling 800/851-7789.

Life’s Risky. Choosing Sutton isn’t. TM

Reputation, experience and superior customer service. That’s how you choose. Founded in 1978, Sutton Special Risk has grown into a premier MGU providing Stop Loss, Accident & Health, Life and Contingency products and services for a diverse range of clients worldwide. Our consultative approach, underwriting expertise and attention to service enable us to respond quickly and effectively to your clients’ needs.

Your Trusted Stop Loss MGU Partner

Creative Underwriting Solutions • Competitive Rates • Exceptional Service

Contact Arleigh Kennedy at: 781.270.7460 or akennedy@suttonspecialrisk.com

The Self-Insurer | www.sipconline.net

NEWS

from SIIA

Members

2018 MARCH MEMBER NEWS

SIIA Diamond, Gold & Silver Member News SIIA Diamond, Gold, and Silver member companies are leaders in the self-insurance/ captive insurance marketplace. Provided below are news highlights from these upgraded members. News items should be submitted to Wrenne Bartlett at wbartlett@siia. org. All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at www.siia.org. For immediate assistance, please contact Jennifer Ivy at jivy@siia.org. If you would like to learn more about the benefits of SIIAâ&#x20AC;&#x2122;s premium memberships, please contact Jennifer Ivy and jivy@siia.org.

March 2018 | The Self-Insurer

we have the necessary controls in place to protect their sensitive data.”

Diamond Members MultiPlan Achieves HITRUST CSF® Certification to Manage

“HITRUST has been working with the industry to ensure the appropriate information protection requirements are met when sensitive information is accessed or stored in a cloud environment. By taking the steps necessary to obtain HITRUST CSF Certified status, MultiPlan is distinguished as an organization that people can count on to keep their information safe,” said Ken Vander Wal, Chief Compliance Officer, HITRUST.

Risk, Improve Security Posture and Meet Compliance Requirements MultiPlan, a leading healthcare cost management company, announced its data transmission and service portal applications have earned Certified status for information security by HITRUST*. HITRUST CSF Certified status demonstrates that the organization has met key regulations and industry-defined requirements and is appropriately managing risk relating to these systems and infrastructure. This achievement places MultiPlan in an elite group of organizations worldwide that have earned this certification. By including federal and state regulations, standards and frameworks, and incorporating a risk-based approach, the HITRUST CSF helps organizations address these challenges through a comprehensive and flexible framework of prescriptive and scalable security controls. “Securing clients’ data has been a long-standing priority at MultiPlan. Each year, we make substantial investments in infrastructure and implement the industry’s latest best practices as part of our commitment to keep PHI secure,” said Michael Kim, MultiPlan’s CIO. “This certification, which is the gold standard for organizations trusted to keep PHI confidential, validates our commitment to information security and gives clients added assurance that

24.305

SCOR’s strength stands out clearly

Magnesium

40.078

Ca Calcium

87.62

Sr Strontium

137.327

Ba Barium

226.025

Ra Radium

54.938

55.933

58.933

58.693

63.546

Mn Fe Co Ni Cu Manganese

98.907

Iron

Cobalt

2015

Nickel

2015

Copper

106.42

107.868

Tc AA- AA- Pd Ag Technetium

186.207

Stable Outlook Standard & Poor’s

190.23

Stable Outlook Fitch Ratings

2016

Palladium

2017

Silver

196.967

Re Os Aa3 A+ Au Rhenium

107

Stable Outlook Moody’s

Osmium

264

108

269

109

268

Stable Outlook AM Best

110

269

Gold

111

272

69.732

Ga Gallium

114.818

In Indium

204.383

Tl Thallium

113

unknown

Bh Hs Mt Ds Rg Uut Bohrium

Hassium

Meitnerium

Darmstadtium

Roentgenium

Ununtrium

“SCOR’s success story continues. Over the past 15 years, the Group has overcome obstacles, faced economic and financial crises, and absorbed major natural catastrophes. Throughout this long journey, SCOR has held its course. SCOR has achieved the solvency and profitability strategic targets set out in its successive plans. It has grown, reinforced its financial strength and expanded and deepened its franchise. It has diversified its portfolio and developed a superior risk management strategy. Today, SCOR is a truly global group. The upgrade of our rating to A+ by A.M. Best on September 1st, 2017, which follows the upgrade to AA- by S&P and Fitch in 2015 and to Aa3 by Moody’s in 2016, once more demonstrates the relevance of SCOR’s business strategy and confirms SCOR as a Tier 1 global reinsurer. The Group’s strength is a clear benefit for our clients.” Denis Kessler Chairman & Chief Executive Officer

The Self-Insurer | www.sipconline.net

www.scor.com

Would you navigate uncharted waters without a compass?

As a leader in Group Captives, Berkley Accident and Health can steer you in the right direction. With EmCapÂŽ, our innovative Group Captive solution, we can help guide midsize employers to greater stability, transparency, and control with their employee benefits. With Berkley Accident and Health, protecting your self-funded plan can be smooth sailing. This example is illustrative only and not indicative of actual past or future results. Stop Loss is underwritten by Berkley Life and Health Insurance Company, a member company of W. R. Berkley Corporation and rated A+ (Superior) by A.M. Best, and involves the formation of a group captive insurance program that involves other employers and requires other legal entities. Berkley and its affiliates do not provide tax, legal, or regulatory advice concerning EmCap. You should seek appropriate tax, legal, regulatory, or other counsel regarding the EmCap program, including, but not limited to, counsel in the areas of ERISA, multiple employer welfare arrangements (MEWAs), taxation, and captives. EmCap is not available to all employers or in all states.

Stop Loss

Group Captives

Managed Care

Specialty Accident www.BerkleyAH.com

Zelis® Payments Named as Finalist in 2018 Stevie® Awards for

About MultiPlan MultiPlan is committed to helping healthcare payers manage the cost of care, improve their competitiveness and inspire positive change. Leveraging sophisticated technology, data analytics, and a team rich with industry experience, the company interprets clients’ needs and customizes innovative solutions that combine its payment integrity, networkbased and analytics-based services. MultiPlan is a trusted partner to over 700 healthcare payers in the commercial health, government and property and casualty markets, and saves these companies more than $15 billion annually. MultiPlan is owned by Hellman & Friedman and other investors. For more information, visit multiplan.com.

Sales & Customer Service Zelis Payments, a business unit of Zelis Healthcare, is pleased to announce that it was named a Finalist in three categories for the 12th annual Stevie® Awards for Sales & Customer Service. Zelis Payments will ultimately be awarded a Gold, Silver, or Bronze Stevie Award in the following categories: Best Use of Technology in Sales; Customer Service Department of the Year - Healthcare, Pharmaceuticals, and Related Industries; and Telesales Team of the Year. The awards are presented by the Stevie Awards, which organizes several of the world’s leading business awards shows including the prestigious International Business Awards® and the Stevie Awards for Great Employers. The final results will be announced during a gala banquet on Friday, February 23 at Caesars Palace in Las Vegas, Nevada. Finalists from the U.S.A. and several other nations are expected to attend. More than 2,500 nominations from organizations of all sizes and in virtually every industry were evaluated in this year’s competition. Finalists were determined by the average scores of more than 150 professionals worldwide, in seven specialized judging committees. Entries were considered in 89 categories for customer service and contact center achievements.

Lockton Associates and Partners Are Experts At: F O C US E D O N C L IE NT S . Medical Benefits

Life & Disability

Retirement Services

Risk Management

Serving Employers Around the World

D E DIC A T E D T O R E S UL T S .

C OMMI TTED TO MA KIN G YOU R BUSINESS BETT ER. WE LIVE SERVICE!®

Insurance • Risk Management • Surety Expertise

444 W. 47th Street, Suite 900 Kansas City, MO 64112 • 816.960.9000

The Self-Insurer | www.sipconline.net

“The 2018 judges were so impressed with the wide range of achievements detailed in the Finalist nominations,” said Michael Gallagher, president and founder of the Stevie Awards. “We look forward to announcing the Gold, Silver and Bronze Stevie placements in Las Vegas next month.” “Our sales and client service teams continue to receive recognition for our continued commitment to enhancing the client experience with innovative approaches to service and performance. We are absolutely delighted with our finalist positions and look forward to the award ceremony next month,” said Jay Ver Hulst, President of Zelis Payments. “This recognition further demonstrates our commitment to Better Service and Better Performance for our clients. And we are honored to be a Customer Service finalist in three categories this year,” said Doug Klinger, CEO of Zelis Healthcare. Details about the Stevie Awards for Sales & Customer Service and the list of Finalists in all categories are available at www.StevieAwards.com/Sales.

About Zelis® Healthcare Zelis Healthcare is a technology company and market-leading provider of integrated healthcare cost management and payments solutions including network analytics and design, network access and cost management, claims cost management and electronic payments to payers, healthcare providers and consumers in the medical, dental and workers’ compensation markets nationwide. Zelis Healthcare is backed by Parthenon Capital Partners. To learn more about Zelis Healthcare, visit us on Facebook, follow us on Twitter or connect with us on LinkedIn. Contact Heather Ingram at heather. ingram@zelis.com, +1 (678) 341-1635, and visit www.Zelis.com.

March 2018 | The Self-Insurer

fo r

S er v

ice O rganiz a

t io

O rga ic e

aicpa.org/soc4so

nizati on s

AICPA SOC ns

™

About Zelis Payments Zelis Payments, a business unit of Zelis Healthcare, is a leading healthcare payments technology solution dedicated to delivering value via exceptional client experiences. Our solutions facilitate regulatory compliance and streamline the transfer of healthcare payments and data. Zelis Payments is a payments exchange that connects payers with healthcare service providers – consolidating payments and aggregating data into one simple daily electronic file. To learn more about Zelis Payments, visit us on Facebook, follow us on Twitter or connect with us on LinkedIn. Visit zelispayments.com. About The Stevie Awards Stevie Awards are conferred in seven programs: the Asia-Pacific Stevie Awards, the German Stevie Awards, The American Business Awards, The International Business Awards, the Stevie Awards for Great Employers, the Stevie Awards for Women in Business and the Stevie Awards for Sales & Customer Service. Stevie Awards competitions receive more than 10,000 entries each year from organizations in more than 60

nations. Honoring organizations of all types and sizes and the people behind them, the Stevies recognize outstanding performances in the workplace worldwide. Visit www.StevieAwards.com.

Companion Life Receives A.M. Best A+ Rating for 16th Consecutive Year A.M. Best Company has assigned Companion Life Insurance Co., (including its subsidiaries Niagara Life and Health and Companion Life Insurance Co. of California) an A+ (Superior) rating, marking the 16th consecutive year Companion Life has met this high threshold of achievement. A.M. Best noted that the rating reflects a stable premium, earnings growth and a strong level of risk-adjusted capitalization in support of Companion Life’s business and insurance risk. According to Companion Life President Philip Gardham, A.M. Best’s recognition is a significant achievement. He said, “The organization’s sustained accomplishment is a byproduct of Companion Life’s commitment to exploring strategic opportunities while maintaining disciplined execution in a competitive market. This rating validates our long-term strategy, acknowledges our solid financial position and brings additional confidence to our business partners, employees and customers.”

The Self-Insurer | www.sipconline.net

GUARDIAN STOP LOSS INSURANCE

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

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

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

VISIT WWW.GUARDIANANYTIME.COM/STOPLOSS The Guardian Life Insurance Company of America®, 7 Hanover Square, New York, NY 10004. 1. As of 1/2017 and subject to change. Source: Vital Signs. Comdex is a composite of all ratings that a company has received from the major rating agencies (A.M. Best, Standard & Poor’s, Moody’s, and Fitch). 2. Upon receipt of complete information from the payer. Guardian’s Stop Loss Insurance is underwritten and issued by The Guardian Life Insurance Company of America, New York, NY. Policy limitations and exclusions apply. Optional riders and/or features may incur additional costs. Plan documents are the final arbiter of coverage. Financial information concerning The Guardian Life Insurance Company of America as of December 31, 2016, on a statutory basis: Admitted Assets = $51.9 Billion; Liabilities = $45.7 Billion (including $39.4 Billion of Reserves); and Surplus = $6.2 Billion. Policy Form #GP-1-SL-13. 2017-43335 (07/19)

Companion Life (including subsidiaries) is licensed in 49 states and the District of Columbia and offers numerous of group accident and health and ancillary products nationwide. Founded in 1899, A.M. Best Company is one of the world’s oldest and most authoritative insurance rating and information sources. For more information on A.M. Best’s ratings, an overview of its rating process and rating methodologies, visit: http://www.ambest.com/ home/ratings.aspx. About Companion Life Headquartered in Columbia, Companion Life has specialized in employee benefits since 1971. The company markets life, dental, disability, accident, specialty health — including medical stop-loss, limited benefit health plans and group supplemental retiree prescription drug plans — as well as other insurance programs, through a network of independent agents and brokers, general agents and managing general underwriters. Companion Life is licensed in 49 states and the District of Columbia. It holds an A.M. Best Rating of A+ (Superior). Visit www.CompanionLife.com.

Silver Members Gilsbar Wellness Once Again Nation’s Best and Brightest® Gilsbar’s wellness product has been recognized once again by the National Association for Business Resources as one of the Nation’s Best and Brightest in Wellness® in 2017. The Best and Brightest in Wellness® is a service organization of the National Association for Business Resources. This program is an innovative initiative recognizing and celebrating quality and excellence in health awareness programming. This unique designation highlights companies, schools, or organizations who promote a culture of wellness, as well as those who plan, implement, and evaluate efforts in employee wellness to make their business and the community a healthier place to live and work. Gilsbar was recognized for the services offered through our Wellness Program, which is engineered to help companies reach corporate benefit management goals, as well as long-term cost management objectives. President of Gilsbar Health & Life Doug Layman noted, “The dedication our Wellness Program team members have for the work they do is inspiring. These employees are the Best and Brightest. We are proud of them and their efforts, and we appreciate them being recognized on a national level.” Gilsbar continues our commitment to enhance business and improve lives, a mission which is only enhanced by this recognition.

Everyone loves surprises! Unless they’re hidden costs in your pharmacy benefit plan. With KPP: What you see is what you get. Quality, control, and flexibility with no service upcharges or hidden fees, ever. Get better financial and health outcomes without any surprises. Contact KPP at 800.917.4926

100% No Hidden Fees Guarantee Providing comprehensive pharmacy benefits management services since 1993.

kpp-rx.com 05162 12-06-2017 KPP

The Self-Insurer | www.sipconline.net

About Gilsbar, LLC Established in 1959, Gilsbar, LLC® is one of the largest privately-held insurance services organizations in the country. Recognized as a catalyst for creating healthy businesses, Gilsbar, LLC® offers self-funded and fully-insured benefit plan management services, along with Wellness, Advocacy, and overall Population Health Management. Gilsbar, LLC’s integrated delivery model improves the health and well-being of its members, resulting in significant health plan savings for its clients. Gilsbar, LLC® has been honored by Inc. magazine for its sustained growth, Modern Healthcare and Business Insurance magazines as a Best Place to Work, and WELCOA and the American Heart Association for its proven wellness methodology. Visit www.Gilsbar.com.

ACS Benefit Services Names Joe Meyer Vice President of Sales ACS Benefit Services announced that Joe Meyer has been named the new Vice President of Sales. Meyer brings over 20 years of industry experience to ACS and will manage all aspects of sales and marketing. He joins an executive team focused on providing unparalleled customer service and innovative benefit solutions.

“We are excited about adding Joe’s skill set to our outstanding executive team. He has a proven track record of facilitating longterm business relationships with clients and consultants. His detailed and analytical marketing approach of identifying employer needs and designing customized benefit solutions to provide quality, innovative product solutions that accomplish clients’ specific business objectives fits perfectly with the customer-centric approach that ACS has always taken with our customers,” says Kari L. Niblack, CEO, ACS Benefit Services.

March 2018 | The Self-Insurer

Meyer has held sales and client management leadership roles at Cigna, MedCost, and Blue Cross Blue Shield NC, and was most recently a business development leader with Inmar. His broad range of experience in healthcare, insurance and benefit administration combined with his proven record of revenue growth and client satisfaction will be a tremendous asset to ACS Benefit Services. About ACS Benefit Services ACS Benefit Services, founded in 1982, is one of the leading third party administrators in the country. ACS is focused on creating longterm solutions and anticipating the benefit administration needs of the employer groups we serve. We are committed to investing in the future, by seeking out emerging technologies and bringing employers state-of-the-art benefit

solutions in an ever-changing market. Contact Kari L. Niblack, JD, SPHR, Chief Executive Officer, at 336.759.2013, KNiblack@ACSbenefitservices.com and visit ACSbenefitservices.com.

Gold Members ELMC Group, LLC Appoints Industry Veteran John Gedney to the Role of Executive VP, Chief Growth Officer ELMC Group, LLC, (“ELMC”), a manager of premier, full-service managing general underwriters (“MGUs”) specializing in underwriting medical stop-loss insurance, announces the hiring of John Gedney into the role of Executive Vice President, Chief Growth Officer. Gedney is an employee benefits entrepreneur with more than 30 years of experience helping companies optimize their benefits plans and is considered an industry expert in the emerging Private Exchange market. In his new role, Gedney will drive business development and new market opportunities that will further ELMC’s accelerated rate of growth and profitability. Prior to joining ELMC, Gedney held the position of Vice President of National Partnerships at Liazon, a Willis Towers Watson company, where he was responsible for creating, developing and overseeing the national broker partner channel.

The Self-Insurer | www.sipconline.net

“John is known throughout the industry as a pioneer who has been on the leading edge of significant industry shifts including managed care and technology,” said Richard Fleder, co-founder and CEO of ELMC. “His

expertise and experience uniquely positions him to lead our business development efforts, and he will be a great addition to our senior leadership team,”

Do you aspire to be a published author? Do you have

said Fleder.

any stories or opinions on the self-insurance and alternati ve

Gedney’s previous industry experience includes executive positions with Oxford Health Plans and EBP Healthplans, at the time the nation’s leading mid-market, Third Party Administrator and MGU. Prior to joining EBP, John owned an employee benefits advisory firm, Securis, and was a founder of OnlineBenefits, the creator Benergy, the industry leading benefits communications portal.

risk transfer industry that

Gedney holds a Bachelor’s Degree in Business from Adelphi University. He is a former finalist in Ernst & Young’s Entrepreneur of the Year award and has mentored entrepreneurs in formulating and growing their businesses.

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.

March 2018 | The Self-Insurer

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

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

Nigel Wallbank Chairman Heidi Leenay President

President/CEO Mike Ferguson SIIA, Simpsonville, SC

Freda Bacon Director

Chairman Elect*

Les Boughner Director

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

Alex Giordano Director

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

Directors Joseph Antonell CEO/Principal A&M International Health Plans Miami, FL Gerald Gates President Stop Loss Insurance Services AmWins Worcester, MA Mary Catherine Person President HealthSCOPE Benefits, Inc. Little Rock, AR Kevin Seelman Senior Vice President Lockton Dunning Benefit Company Dallas, TX

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

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

Robert Tierney President StarLine East Falmouth, MA

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

Committee Chairs

WORKERSâ&#x20AC;&#x2122; COMP COMMITTEE Mike Zucco Business Development AL Trucking Association Fund Montgomery, AL

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

*Also serves as Director

The Self-Insurer | www.sipconline.net

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

Since then we have merged our brands and are issuing

Specific Advance Funding ability with enhanced features for qualified producers

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

152 Conant Street

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

2nd Floor Beverly, MA 01915

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

Email: Robert.Robinson01@libertyIU.com

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

March 2018 | The Self-Insurer

SIIA New Members Regular Corporate Members Steve Kinion Director of Captive Bureau Delaware Department of Insurance Dover, DE

Sarah Delaney Howalt McDowell Insurance Sioux Falls, SD

Patrick Cowles Chief Financial Officer Pape-Dawson Engineers Inc. San Antonio, TX

Brittany Crowe Account Manager RxSense Cumming, GA

Mindy Bradley CTO Scripta Savings Scripta Inc. Savannah, GA

Joe McLaughlin SVP Sales & Marketing TRISTAR Long Beach, CA

Silver Corporate Members Lawrence Thompson Founder Inventavis Fresno, CA

Employer Corporate Members Craig Boskey Chief Financial Officer National Marine Manufacturers Association Chicago, IL

James Dickinson VP Global Marketing Ventiv Technology Atlanta, GA

Discovering new things is not just for kids. NLA is changing how the industry manages workersâ&#x20AC;&#x2122; compensation claims to lower your bottom-line. Discover how your data, our analytics and collaborating with our claims team will improve your results. Our team of experts is ready to put the power of data at your fingertips.

Call us today to discover something new!

Workerâ&#x20AC;&#x2122;s Compensation Claims 941.306.2393 nextleveladmin.com

The Self-Insurer | www.sipconline.net

Better Service. Better Performance.

Experience Zelis Healthcare.

Network Analytics & Design

Claims Cost Management

ePayments & Compliance

Zelis Healthcare is a healthcare information technology company that provides solutions which address pre-payment to payment needs across the claims life cycle.

Zelis Healthcare Proudly Welcomes EthiCare Advisors into Our Team of Cost Management Specialists

The EthiCare acquisition further enhances Zelisâ&#x20AC;&#x2122; ability to deliver better service and better performance as we help payers maximize savings on healthcare claims.

EXPERIENCE ZELIS HEALTHCARE and see what fully integrated cost & payment management can do for you. Contact Zelis Healthcare Today. zelis.com