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Workers’ Comp for Remote Employees:

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Updates and Guidance for the SelfInsured Community

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TABLE OF CONTENTS

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FEATURES 4

WORKERS’ COMP FOR REMOTE EMPLOYEES: UPDATES AND GUIDANCE FOR THE SELF-INSURED COMMUNITY

By Laura Carabello

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THE REBIRTH OF HEALTH CARE CONSUMERISM

NEW RULES DESIGNED TO SPOTLIGHT TRANSPARENCY AND ELIMINATE SURPRISE BILLS OPEN THE FLOODGATES TO INFORMATION, BUT HOW CAN SELF-INSURED HEALTH PLANS HELP MEMBERS UNDERSTAND THE FLOW?

By Bruce Shutan

ARTICLES 24

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HISTORY REPEATING ITSELF: THE IRS AND CAPTIVE INSURANCE THE IRS HAS A LONG HISTORY OF DISAPPROVING CAPTIVE INSURANCE ARRANGEMENTS, BEGINNING IN THE LATE 1970S. THE FOCUS THAT ENTERPRISE RISK CAPTIVES (ERCS) ARE EXPERIENCING NOW FROM THE SERVICE MIRRORS WHAT HAPPENED DECADES AGO.

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SKYROCKETING HEALTHCARE COSTS: AI MAY HELP

44

THE NEWEST FIDUCIARY DUTY: PROTECTING PARTICIPANTS FROM THEMSELVES

54

NEWS FROM SIIA MEMBERS

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

Postmaster: Send address changes to The Self-Insurer Editorial and Advertising Office, P.O. Box 1237, Simpsonville, SC 29681,(888) 394-5688 PUBLISHING DIRECTOR Erica Massey, SENIOR EDITOR Gretchen Grote, CONTRIBUTING EDITOR Mike Ferguson, DIRECTOR OF ADVERTISING Shane Byars, EDITORIAL ADVISORS Bruce Shutan and Karrie Hyatt, 2022 Self-Insurers’ Publishing Corp. Officers James A. Kinder, CEO/Chairman, Erica M. Massey, President, Lynne Bolduc, Esq. Secretary

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Workers’ Comp for Remote Employees:

Updates and Guidance for the SelfInsured Community

A

Written By Laura Carabello

A

mong the many changes and upheavals that the COVID-19 pandemic has brought to the workplace, now more than ever Americans are working from home. To limit the spread of the virus, many offices simply closed their doors and transitioned their employees to remote work, reshaping and forever changing the world at work.

Characterizing the past two years as a rollercoaster for employers, Sally Pace, CEO, Connect Healthcare Collaboration, shares, “This has been especially impactful for the way we operate our office environments. As an employer with a mix of remote and headquartered staff, juggling employee satisfaction and safety has become a bigger focus due to the pandemic.”

She says that as a result, her organization has changed its own requirements, adding, “We have adopted a hybrid work policy that we expect to remain intact for years to come. It includes establishing standard working hours adjusted according to each employee’s time zone, implementing new communication tools and computer programs to allow for more fluid work remotely while also remaining secure.”

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Workers’ Comp for Remote Employees While technology is the organization’s biggest asset in a remote situation, she notes,

Sally Pace

“But it can also be our biggest risk during remote work.

Evaluating and adjusting technology protocols is paramount to any employer with a hybrid or remote workforce.”

While a telecommuting workforce was not an option that the Alabama SelfInsured Worker’s Compensation Fund was exploring prior to the onset of the pandemic, this mindset has changed overnight. Freda Bacon, administrator, says,

“Because of the investment we made in technology, the dedication of our staff, and a determination that service would not be interrupted, we were able to pivot quickly to a remote work model.”

Bacon, who has been proud to serve as a past president and chairman of SIIA and currently serves on the SIEF Board of Directors and the SIIA Worker’s Compensation Committee, continues, “Two years later, the remote operation worked so Freda Bacon well that we have continued a hybrid work option. Our workforce is even more productive and has a much better life work balance. In the future, I believe this new normal work environment will help retain workers, be attractive to new employees and keep morale at a high level.”

Even though more people are getting vaccinated, many self-insured employers will continue to offer remote work options to their employees in the post-COVID world and the work-from-home trend is unlikely to end:

into the COVID-19 pandemic, roughly six-in-ten U.S. workers who say their jobs can mainly be done from home (59%) are working from home all or most of the time. The vast majority of these workers (83%) say they were working from home even before the omicron variant started to spread in the United States.

 A PWC survey on US remote working found that 55% of executives believe that most of their employees will continue working remotely at least one day a week post-pandemic.

But the shift to remote work as a new normal poses many challenges, not the least of which are the home environment and workers’ compensation insurance. Protecting business interests associated with workers’ compensation (WC) while helping staff work more safely at home both now and in the future are key concerns.

Steve Kokulak, MagnaCare, says at the height of COVID in New York, when many people were working from home or out of work completely, their worker’s compensation claims were down 50% compared to pre-pandemic levels.

“Today they’re down by about 25% compared to 2019 and will likely not return to pre-pandemic levels,” says Kokulak.

 Upwork estimates that 22% of the workforce (36.2 million Americans) will work remotely by 2025.

 A new survey from the Pew Research Center reports that nearly two years MAY 2022

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Workers’ Comp for Remote Employees

“This environment has forced us to be nimble and shift our business model to more of an outcome based managed care approach, with nurse case managers supporting workers’ care, as opposed to a traditional PPO network savings model. Given that our primary concern is the health of our customers, we’re glad to make those adjustments, and we hope to see more employers, insurers and TPAs adopt this more comprehensive proactive approach in the future.”

Joseph Berardo, Jr., CEO, Carisk Partners reports, “When the pandemic struck, our IT team was very proactive in transitioning all employees to work from home. We had an infrastructure and a platform that allowed for it, so within two weeks everyone was fully functional.

There was no downtime or interruption in the delivery of care for our patients or productivity for our employees.”

Remember, if the company has even one employee, it’s most likely required by state law that the business has workers’ comp insurance. This is regardless of employees being remote or not. Note that while each state has its own set of laws and regulations around WC, volunteers are not typically covered.

To this point, Mark Walls, vice president client engagement, Safety National, recommends that employers ascertain whether or not employees have relocated to a different state in the workfrom-home environment. “If so, there could be problems with your self-insured workers’ compensation coverage.

Your approval to self-insure is state specific, so if your employees have moved and they file a claim in the new jurisdiction you could find yourself in a situation where you are in violation of that new state’s workers compensation insurance requirements.”

Source: Pew Research https://www.pewresearch.org/ social-trends/wp-content/ uploads/sites/3/2022/02/ PSDT_2.16.22_ CovidandWork_0_0. png?w=544\

Joseph Berardo

Since then, he says they have seen a significant increase in the use of technologies that improve access to care for the injured workers and clients they are serving,” adds Berardo.

“Telemedicine is a great example of an enabling technology that spiked in use as a result of the pandemic. Our platform allows for it, and we continue to partner with providers who have those HIPAA-compliant capabilities.

We further leverage our own integrated technologies that not only conform with patient privacy guidelines, but also enhance the patient experience.”

Digital technologies have become integral to improving patient outcomes, including mobile apps that track, monitor, and communicate with patients. Berardo has also piloted the use of HIPAA-

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Workers’ Comp for Remote Employees

compliant, voice-enabled home health devices designed to assist patients with limited mobility access to health, wellness and emergency resources by using their voice.

“From a culture perspective, I have always found personal interaction and relationships to be so important,” adds Berardo. “While there is no replacement for the face-to-face interactions, we have prioritized our employee engagement through an increase in overall communication as we maintain a balance with being back in office and remote in our working environments.“ He notes that employee burnout was an additional focus, and due to the nature of their business, his team has increased their internal programs that focus on employee mental health and wellness as well as providing these services to their partners and clients.

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ELIGIBILITY FOR WC BENEFITS Working from home or a remote location doesn’t mean that accidental injuries don’t still occur. Typically, if a remote worker is injured while conducting workrelated activities, he or she is eligible for WC benefits.

To determine whether or not the injury is work related rests upon a multitude of factors, including whether the employer intended/approved the activity, whether the injured worker was required to participate in the activity when injured, and whether any benefit arose to the employer for the activity causing the injury. Many determinations are dependent upon the specific jurisdiction’s rules for assessing each claim.

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Workers’ Comp for Remote Employees

Mark Walls

Mark Walls explains, “Remote and telecommuting workers are typically covered under WC policies if the injury or illness occurs while an employee is completing a work task during work hours. In most cases, the remote worker has the burden of proof and must be able to demonstrate that he or she was acting in the interest of their employer at the time they got sick or injured. There are many things that self-insured employers need to be considering when it comes to a remote workforce.”

LARSON'S WORKERS' COMPENSATION LAW IS THE PREMIER SOURCE FOR ANALYSIS OF WORKERS' COMPENSATION LAW AND IS USED

BY ALL STATE COMMISSIONS AND CITED, WITH GREAT FREQUENCY, BY COURTS IN ALL STATES. LARSON’S THREE-PART TEST WHICH STATES THAT FOR THE DETERMINATION AS TO WHETHER A HOME QUALIFIES AS A WORK SITE, ONE MUST LOOK AT: “THE QUANTITY AND REGULARITY OF WORK PERFORMED AT HOME; THE PRESENCE OF WORK EQUIPMENT AT HOME; AND THE SPECIAL CIRCUMSTANCES OF THE EMPLOYMENT RENDERING IT NECESSARY, AND NOT MERELY PERSONALLY CONVENIENT, TO WORK AT HOME, WHILE ALSO CONSIDERING WHETHER THE EMPLOYER ACQUIESCED TO THE EMPLOYEE’S USE OF HIS OR HER HOME AS A WORK SITE, OR REASONABLY SHOULD HAVE KNOWN THE EMPLOYEE WAS REGULARLY USING THE HOME AS A WORK SITE.”

Joe Clifford

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Where states have already adopted Larson’s three prong test, or a modified version, for establishing if home qualifies as a work site, the first question to ask is how courts are going to apply the test where people are working from home not because the nature of their employment requires it, but because government-mandated shut downs require it.

According to some legal reviews of the preCOVID case law, the courts are fairly uniformly

going to treat working from home because the government required it, the same as working from home because the nature of the employment required it.

According to Joe Clifford, MBA, area president Risk Placement Services, “Selfinsured group funds (SIGs) in Michigan have been confronted with a variety of challenges related to the pandemic.

The SIGs we manage have held up well overall and are now bouncing back to pre-pandemic levels of payroll and premium, as the economy opens up.”

He cites the first primary regulatory change during COVID was the ability to utilize tele-health for treating injured employees. “The state broadened the treatment fee schedule codes to include this service, offering it as a compensable option. These added codes are still allowed and will provide this option moving forward.”

He sees the primary application is for the treatment of existing injuries, relative to return-to-work and ongoing care, adding, “We’re providing our client SIG members information and implementation support for its use, through both our loss control and claim teams.”

MOST COMMON WORK-FROMHOME INJURIES

The courts have found that, even though the employer does not have control over an employee’s home environment, that lack is not a reason to deny claims.

As a result, employers are responsible for providing the same safe work environment for both their on-site and remote workers.

According to the National Safety Council, about 14 out of 100 people were injured and about 1 out of 2,100 died from

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Workers’ Comp for Remote Employees a preventable injury in the home and community venue in 2020. While slips, trips, and falls are some of the most frequently reported accidents in the US, NSC also points to the incidence of cuts, poisoning, burns. concussions and even drowning. Employers should encourage workers to always be aware of their surroundings and avoid complacency.

Most home environments do not have the same safety standards that employers have put in place in the workplace. Think about the risk of slipping John Cooper on oil spatters from cooking or water spilled from a dog bowl, tripping over a child’s toys or falling down the stairs.

Some encouraging news comes from John Means Cooper, vice president, Excess Worker’s Compensation, Amwins Insurance Brokerage, LLC. He says that from an excess workers’ compensation insurance perspective, remote working has had little to no impact at all in pricing or terms, noting, “Employees working from home tend to be professional or clerical, which rarely have claims large enough to exceed today’s

self-insured retentions. If anything they are safer at home, as it’s the most familiar place a person has in their life.”

Claims examiners report that work-fromhome injuries are usually categorized as “cumulative injuries” resulting from poor ergonomics, slips, trips and falls and referring to damage and pain caused by repetitive movement and overuse. Many of these injuries include Carpal tunnel syndrome, tendonitis, bursitis, and back pain and can be the result of inadequate ergonomics at the workstation. This can be avoided by installing an ergonomic workstation that allows workers to sit comfortably at a computer screen.

Walls emphasizes the importance of ergonomics in the home office, adding,

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Workers’ Comp for Remote Employees “Many of the workplace injuries being seen in home office environment are arising from poor ergonomics on the employee’s work station. Performing ergonomic assessments of home office work stations is a strategic imperative. Employers can easily have employees send in a picture of their work station for review and then offer feedback on proper ergonomics.”

He says that employers should also require employees to designate their home work station as a single place, noting, “It should not be the kitchen table today, outside tomorrow, on the couch the next day. By not having a defined work station you open yourself up to greater potential for claims in the home office environment.”

CHECKLIST FOR PREVENTING CUMULATIVE WORKSTATION INJURIES

where the injury occurs. In other words, it must relate to what the employee was doing at the time of the injury and when the injury happened.

In some cases, a workplace injury may occur suddenly or develop over time such as carpal tunnel syndrome. Regardless of the incidence, a compensable injury must have occurred during work hours and from an activity related to the employee’s job. Since this is not always a clear-cut case, self-insured companies should consult with their insurance provider, state compensation board or legal counsel regarding individual workers’ compensation claims.

Also be aware of the “Going and Coming Rule” which denies WC benefits to an employee who is injured while commuting to or from work since the employee is not “rendering any service to the employer” during a typical commute. However, this rule is less applicable when the home functions or is designated as a secondary job site and the employee is required to work at both the employer’s premise and at home.

Source: Woodruff Sawyer https://woodruffsawyer.com/property-casualty/temporary-ergonomics-workingfrom-home/

ADDRESSING WORK-FROM-HOME INJURIES While it is nearly impossible to prevent all workplace injuries, this is particularly true for employees who work from home. It is important that Human Resource supervisors develop best practices for at-home, work-related injuries so that they are addressed as they occur and reported to the insurance carrier, if necessary.

Generally, work-related injuries or illness for remote workers is compensable under workers’ comp if it “arises out of and in the course of employment,” regardless of

This has become an issue with the onset of the pandemic and the “Coming and Going Rule” does not apply. Since many employees are now required to work from home due to the pandemic, the employee’s home becomes a secondary job site. So, for example, if a teleworker drives from their home to pick up materials or go to a workplace meeting and gets into a car accident, the injuries would likely be compensable since it is

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Workers’ Comp for Remote Employees arguably within the course and scope of employment.

The personal comfort doctrine is an additional concern, regarding a claim that might occur when an employee is injured while getting coffee or going to the bathroom at home. In these instances, an injury is compensable if the employee was engaging in activities necessary for their personal comfort or welfare and part of “normal working conditions.”

This personal comfort doctrine applies to employees who work from home, meaning that applicable activities can range from eating lunch, drinking water or coffee, going to the bathroom, and even taking a break for a smoke.

It is often difficult for an employer to correctly assess if the employee’s activity was in the scope or course of employment or whether it was strictly personal. When there are no witnesses to corroborate the employee’s statement, the issue becomes even more complicated.

EMPLOYER RESPONSIBILITIES Fortunately, employers are not responsible for making these decisions since it up to the WC carrier to conduct an assessment in collaboration with the defense counsel after the investigation is completed.

Employer responsibility is to take the first step by reporting an at-home injury claim, including a detailed written statement from the employee to understand what the employee was doing at the time of the injury and when and where it happened. Employers should also ask the employee to take photos of the injury (cuts, bruises, swelling, etc.) and the injury site when possible (broken

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furniture, dangling electrical cord.) The more information gathered for the carrier, the easier it will be to assess compensability.

As the self-insurance community realizes the “new normal”, Todd R. Johnson, president, FutureComp, a division of USI Insurance Services, advises that we now must recognize that while remote work was initially viewed as temporary, employers are moving to hybrid or exclusively remote employment

“New exposures must be considered and there is less control over the work Todd R. Johnson environment,” says Johnson.

“The overlap of work activity and non-work activity blurs the lines of responsibility and may lead to more litigation.

Ergonomic injuries may develop because of altered work settings and self-insurers need to develop policies and support systems to proactively manage this new paradigm.”

structures.

Self-insurers now must recognize that there is a potential need for “out of state” workers’ compensation coverage, as Johnson explains, “Self-insurance is licensed by individual states, so long-term exposure in other states must be addressed through commercial coverage. This poses newfound administrative, financial and operational challenges in the smooth administration of a self-insured program.”

Lack of case law is also an ongoing concern, as Walls states, “There really is not much out there in terms of case law with regard to what constitutes an increased risk due to working in a home office. This will vary greatly by jurisdiction. In some states, positional risk applies so the all the hazards of the home could become hazards of the job.”

As pointed out earlier, the convenience doctrine also may apply, so an injury suffered while getting a cup of coffee could be deemed compensable. “Around the country,” continues Walls, “there have been claims awarded for tripping over a dog, getting injured on a treadmill while on a call, even for being assaulted by someone who enters the home. Investigate every claim thoroughly but be careful about what you choose to litigate. You don’t want your company name tied to bad case law.”

Workers’ Comp for Remote Employees ADDITIONAL GUIDANCE

ACCORDING TO THE NATIONAL COUNCIL ON COMPENSATION INSURANCE (NCCI) WHICH FOSTERS A HEALTHY WORKERS COMPENSATION SYSTEM, SPECIFIC REPORTING REQUIREMENTS HAVE BEEN ESTABLISHED FOR CLAIMS ATTRIBUTABLE TO COVID-19 WITH ACCIDENT DATES OF DECEMBER 1, 2019 AND SUBSEQUENT. EXTRAORDINARY LOSS EVENT (ELE) CODE 12 (CATASTROPHE NUMBER). A NEW CODE 83 FOR NATURE OF INJURY AND CAUSE OF INJURY WILL BE REQUIRED FOR THE APPLICABLE DATA TYPES. TO GET MORE ANSWERS REGARDING COVID-19 AND THE IMPACT IT MAY HAVE ON THE WORKERS COMPENSATION INDUSTRY, VISIT HTTPS:// WWW.NCCI.COM/ARTICLES/PAGES/INSIGHTSCORONAVIRUS-FAQS.ASPX#

Laura Carabello holds a degree in Journalism from the Newhouse School of Communications at Syracuse University, is a recognized expert in medical travel, and is a widely published writer on healthcare issues. She is a Principal at CPR Strategic Marketing Communications. www.cpronline.com

References: Pew Research. https://www.pewresearch.org/social-trends/psdt_2-16-22_ covidandwork_0_0/ Wards Black. https://www.wardblacklaw.com/blog/workers-comp-coverageimpact-remote-work/ Upwork. https://www.upwork.com/press/releases/upwork-study-finds-22-ofamerican-workforce-will-be-remote-by-2025#:~:text=Upwork%20Study%20 Finds%2022%25%20of%20American%20Workforce%20Will%20Be%20 Remote%20by%202025,-Resources%20Press%20Releases&text=SANTA%20 CLARA%2C%20Calif.&text=The%20findings%20reveal%20that%20 by,increase%20from%20pre%2Dpandemic%20levels PWC. https://www.pwc.com/us/en/library/covid-19/us-remote-work-survey.html National Safety Council. https://injuryfacts.nsc.org Woodruff and Sawyer. https://woodruffsawyer.com/property-casualty/workers-comremote-employees/ Larson's Workers' Compensation Law. https://store.lexisnexis.com/products/ larsons-workers-compensation-law-skuusSku10777

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F E AT U R E

Rebirth of Health Care Consumerism The

New rules designed to spotlight transparency and eliminate surprise bills open the floodgates to information, but how can self-insured health plans help members understand the flow?

Written By Bruce Shutan

W W

ith reams of data available from hospitals and insurers under Transparency-in-Coverage (TIC) rules and the No Surprises Act (NSA), a twofold challenge awaits employer-provided health plans. One is to avoid overloading members with too much information now that hospitals are required to display their prices on shoppable services in a consumer-friendly format or face hefty penalties.

The other is helping them understand the complexity of various treatment options so that they can make more informed decisions.

When used in the right way, this data can help health care consumers gravitate toward high-quality providers, which in turn, will improve clinical outcomes and lower the cost of care. The question is, will they fully understand or even use all this information? Another concern is whether consumers will ever move beyond convenience or name recognition even if they have data showing alternatives are just as effective.

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Health Care Consumerism In order to optimize health plan member experiences, it’s best to present data in a single resource as part of a hierarchical structure

so the most relevant information floats to the top, and you’re not hitting them with 50 data points,” “

says Dennis Charland, SVP of sales for Sapphire, a division of Zelis. Indeed, members want the process to be easy and personalized. He says Dennis Charland they’re less concerned, or even confused, by detailed clinical metrics, but do find comfort in aggregated quality scoring or badges.

Seeking to connect health plan members to the right care, at the right time and right place involves a series of steps in the evolving era of health care consumerism, Charland explains. It starts with searching for providers and facilities, then pricing out services that take into account their benefits, network restrictions and out-of-pocket costs.

What’s also important is an ability to evaluate patient ratings and reviews, as well as allow members the opportunity to post their own opinions. Ironically, he reports that providers have resisted displaying reviews out of fear that patients will air their

“Things like bedside manner, average wait time and cleanliness of a facility really do matter to people,” Charland notes.

grievances when more than 80% of reviews are overwhelmingly positive.

There’s quite a bit of intersection between these key elements and what both the TIC regulation and NSA are requiring, he says. Namely: timely updates of data in provider directories, suppressing providers that haven’t validated their data, advising members of protections against balance billing, giving them personalized cost estimates based on the terms of their coverage and even the creation and hosting of machine readable files.

ALWAYS ASK QUESTIONS Irrespective of how consumers respond to all this information that will be shared, the need for clarity cannot be underestimated. Health care consumers need to ask questions about how they’re being charged, and must always request an itemized bill, says Stephen Carrabba, co-founder and president of ClaimInformatics, a payment integrity firm that identifies when a self-funded health care plan has been

overcharged because of improperly billed or adjudicated claims. His company is the only one of its kind that also identifies health plan member overpayments, which might have been in the form of overcharged co-pays, co-insurance, or deductibles. He cites Marshall Allen’s book “Never Pay the First Bill” as a source of inspiration.

But forcing more skin in the game won’t be an easy undertaking. Since the new federal rules lack specificity, hospitals that are reporting do so in different ways, which makes the information difficult to compare, explains Cheryl DeMars, president and CEO of The Alliance, a cooperative of self-insured employers.

And between spotty compliance and low penalties for noncompliance, she believes it’s going to take a while before hospitals comply in a meaningful way.

Left to their own devices, health plan members may find it challenging to process all the detailed material that they’re entitled to without guidance or context. “If you just take it for face value and only supply the rates-based cost information to members, then you’re going to lose them,” according to Charland, noting the need to make it simpler for them to understand.

An orthopedic surgeon’s rate for knee arthroscopy, for example, doesn’t provide any additional context around where and with whom that service is provided, and how many procedures are actually performed. “Volume is important, too,” he says.

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Health Care Consumerism

Patient advocates can help draw attention to cross-promotional opportunities that will help members optimize the services that are made available to them. For example, someone who uses Sapphire’s tool to search for a pediatrician may find that the availability of telehealth services also is highlighted. In addition, recommendations could be made for second-opinion or surgical guidance resources if someone is in need of knee or back surgery.

“It’s all about using the partners that you have to help cross-promote those services at the time the member needs it,” Charland says. “The more you can incorporate those solutions in the aggregate, the more valuable they become.”

Still, consumers are expected to have a difficult time digesting the way hospitals report their information.

play,”

“This is where intermediaries come into

says DeMars whose group has provided its members with information to compare price and quality information for more than two decades. She expects entrepreneurs, and even health plans, to present the raw material in a format that’s easy to understand, more actionable and relevant to the decisions health care consumers are making.

As part of that movement, DeMars predicts the emergence of more advocates who will serve as a coach or concierge to connect health plan members with all the information that will become available and use it in a meaningful way. Moreover, she says self-insured employers can use the information to design tiered networks featuring high-value providers at the top and lower-value ones at the bottom or excluded altogether.

“Employees could still go anywhere, but if they use this set of providers who we know do a good job and cost less, they may pay nothing out of pocket, or even get a cash incentive from their employer for using those providers because the savings are so tremendous,” she envisions.

Another area where health plan members can benefit greatly from the growing emphasis on consumerism is in combatting overuse of resources, which DeMars describes as a quality problem.

“You’re exposing patients to unnecessary procedures, tests, etc. that they don’t need to have,” she cautions, “and so I also think that looking at resource use variation is a reasonable quality indicator.”

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Health Care Consumerism

SHIELDING CONSUMERS FROM FRAUD Considering that as much as 25% of $4.1 trillion in U.S. health care spending is rife with fraud, waste and abuse, there has never been a better time to take consumer protections to the next level. On a prospective payment integrity basis, Carrabba encourages health plans to block access to providers or facilities that have been flagged as potential abusers, and to review their claims before they or the member pay.

“On a post-payment or even prepayment type of review, I can’t tell you how many times we’ve seen invoices on claims where three-quarters of the stuff was for services that were never rendered,” he reports.

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THE SELF-INSURER

His company has developed more than 600 proprietary algorithms that are identifying 5% to 15% of total plan expenditures as improperly paid in a post-payment environment and significantly higher amount in a prepayment environment.

Misaligned incentives on the provider side have given rise to a buoyant health care consumerism movement built around the need for transparency. When combing through what are in essence re-adjudicated claims, ClaimInformatics often uncovers excess fees tied to negotiations or self-dealings.

Health Care Consumerism

Stephen Carrabb The problem, Carrabba says, is that physician practices, health systems, surgery centers and others are encouraged to overbill, by highpriced consultants who promise that implementing evasive billing practices can increase their revenue by upwards of 20% to 30%.

“Some of our clients are of the mindset of, ‘let’s not just educate our members, but also share the benefits and savings with them,” he notes. “We have one client where we proposed leveraging a charity care provision to substantially decrease the claim cost. And the client said, ‘whatever the plan saves, we want to compensate our member to the tune of a third of those substantial savings.’ That’s significant dollars to a plan participant, and a perfect example of how payment integrity done right can be transformative for plans and members.”

“How are they doing that legally?” he asks. “It’s not just billing and coding. It’s unbundling. It’s claim splitting. It’s fraud.

It’s upcoding. It’s a laundry list of stuff that we see all day, every day.”

Other obstacles that are baked into the system include medical claims being processed and subsequently paid in silos.

Carrabba cites a big-toe amputation as an example of how billing errors seep into claims. In one review, the radiologist billed for a right-foot X-ray, while the hospital up-coded and billed for removal of the patient’s entire leg.

Acknowledging that individual health care consumers may be overloaded with too many choices and information, Carrabba says they need to be incentivized to save on the cost of care.

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Health Care Consumerism If done right, prompting the member with savings alerts, redirection opportunities to higher value care, and even overlaying member incentives, can combine to deliver better quality, lower costs and a more satisfied consumer.

An augmented algorithm will point members to more cost-efficient locations for centers of excellence, as well as lab work, imaging and other services, where Charland says it’s more about impacting the quality of care vs. cost. However, members still want to be rewarded for making decisions that save their employer money, so he adds that overlaying incentives can be an effective way to engage them.

ENCOURAGING SELF-SERVICE In the years ahead, there could be a fine line separating the value of advocacy from a need to empower people to become better health care consumers. Greater availability, accuracy and standardization of data should enable high-level questions from members to be answered digitally, which could open the door to more selfservice, Charland observes.

However, that’s not to take the need for advocacy off the table. In fact, he says, plans are requires to provide the same level of information that’s available digitally via telephonic access. That means patient advocacy services can walk members through that experience, though in no way does he think it replaces the need to empower members to make sense of the data on their own.

What’s likely to happen is the explosion of information technology will continue to help make critically important data more readily accessible. DeMars suggests that health plans can create an app with easy-to-discern information, better-and-worse symbols, etc. – all of which will help consumers who want to do quite a bit more of their own research.

The law of supply and demand could dictate the future of delivering health care information and paying for services rendered. If enough health care consumers actually make good use of the information made available to them and it reaches critical mass, then providers likely will offer more transparent and affordable services, she observes.

In fact, it’s already happening. Adds Charland: Facilities that are embracing the transparency movement the right way will offer a mini-procedure bundle that will list exactly what the procedure will cost members in and out the door with no hidden costs. “You do have to make it simpler for them,” he says, sanguine about the prospect for improvement.

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

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THE SELF-INSURER

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HISTORY REPEATING ITSELF: THE IRS AND CAPTIVE INSURANCE The IRS has a long history of disapproving captive insurance arrangements, beginning in the late 1970s. The focus that enterprise risk captives (ERCs) are experiencing now from the Service mirrors what happened decades ago.

W

Written By Karrie Hyatt

W

hile captives have existed since the 1940s, they began to flourish in the 1970s. Single-parent captives and group captives were an important solution to the hard insurance markets during the 1970s and 1980s.

As the sector grew, the IRS began to take notice of captives, particularly large singleparent captives. The IRS’s position on single-parent captives was that those captives were not providing insurance, as the arrangement related the captive too closely to its parent and the parent company’s subsidiaries. The IRS claimed that the premiums paid could not be deducted from the parent or subsidiaries’ taxes.

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THE SELF-INSURER

The Service codified this position in 1977 in Revenue Ruling 77-316 which called the relationship between parent, subsidiaries, and captive an “economic family.” Their position was substantiated in 1978 in the case of Carnation Co. v. Commissioner. In the decision, the U.S. Tax Court found in favor of the IRS’s argument that the captive was too closely related and that the captive was not adequately capitalized to be an insurance company.

According to Charles J. Lavelle, partner with Dentons Bingham Greenebaum LLP, “The tax lawyers at the time knew that the ‘economic family’ theory had no historical precedent. Even though the IRS won early captive cases, no court ever adopted economic family, and the IRS ultimately abandoned it.”

During the 1980s, the IRS had several more wins in the tax court—Stearns-Roger v. Commissioner and Clougherty Packing v. Commissioner were two more wellknown cases—which continued to strengthen its “economic family” theory.

Regardless of these tax court losses, large single-parent captives were forming at an accelerated rate. The hard insurance market in the 1980s encouraged companies to turn to captive insurance programs as a viable alternative to the commercial market, despite the IRS’s issues.

“The insureds needed the insurance coverage and/or felt they could prosper from the other aspects of captive insurance (e.g., capture the profits of the commercial market, control over claims handling, etc.),” said Lavelle. “For instance, Humana could not obtain medical malpractice for its hospitals from the commercial market, and considered several options before selecting a singleparent captive.”

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It wasn’t until 1989 that the IRS suffered a loss in tax court. In Humana v.

Commissioner, the Sixth Circuit Court of Appeals found in favor of Humana’s captive structure based on the new idea that a captive and the subsidiaries it insures are in a “brother-sister” relationship, which undermined the IRS’s “economic family” position.

The “brother-sister” relationship posits that as each subsidiary of a parent company is its own entity as recognized by the tax court (i.e. they each file their own taxes making them an individual in terms of taxation), when a captive insures that subsidiary there is enough distance in the relationship that risk distribution is achieved. The decision allowed for subsidiaries to deduct their premiums paid to the captive, but not the parent company.

Humana’s big win influenced more captive tax court wins in the early 1990s, all of them using the “brother-sister” position of risk distribution.

However, it wasn’t until 2001 before the IRS officially dropped its position on “economic family” in Revenue Ruling 2001-31.

Alan J. Fine, tax partner, Armanino LLP said, “I think that the industry as a whole felt that the IRS was blatantly wrong and courts were agreeing with them. If you think about it in hindsight, the IRS didn’t win a captive case pretty much after 1992 or 1993 until Avrahami.”

As to why it took so long for the IRS to disavow its “economic family” theory, the Service works very slowly. “Things take a long time at the IRS, which had to follow a four-step process. First, a consensus had to develop within the IRS to stop the audit initiative against the large captives, then the IRS had to internally decide that it would abandon ‘economic family,’ this was followed by a decision that the IRS would agree that captives can have insurance for tax purposes, and finally the IRS had to draft the Revenue Ruling to announce its official position.

Each step required decisions by IRS executives, who had responsibility over a very wide variety of issues, not just the captive issue,” said Lavelle.

The IRS was still very much interested in the risk distribution aspects of captive insurance companies. In 2002, the Service released three revenue rulings that focused on unrelated business and risk distribution. Revenue Ruling 2002-89 deemed that 50% unrelated risk would qualify as adequate risk distribution.

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Revenue Ruling 2002-90 stated that 12 or more subsidiary companies in a “brothersister” relationship, with no one company contributing more than 15% of the total premium, counted as sufficient risk distribution.

Revenue Ruling 2002-91 suggested that in group captives seven or more unrelated entities was enough for risk distribution. There was no reason given why seven equaled appropriate risk distribution for group captives, but twelve was the number required for single-parent captives.

With its “economic family” theory revoked, the IRS focused more closely on risk distribution for large single-parent captives in the early 2000s, and then on ERCs later in the decade.

In 2014, the IRS lost two important cases regarding single-parent captives and risk distribution—Rent-A-Center, Inc. & Affiliated Subsidiaries v. Commissioner and Securitas Holdings, Inc. & Subsidiaries v. Commissioner. In these two cases, the tax court found that while the IRS focused on number of subsidiaries insured for risk shifting and risk distribution, insurance companies looked at the unit number of risks being insured. When looked at from the insurers point of view, risk distribution is more than adequate.

According to Fine, “The courts had historically focused on entities being insured rather than on units being insured, so the IRS never thought they would lose those cases. Then the tax courts said, you don’t look at insurance from the number of insureds, you look it at from the insurance company’s perspectives and how

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THE SELF-INSURER

many risks are they insuring. If they are insuring a sufficient number of independent risks then you have risk distribution.”

Large single-parent captives have not been a focus of the IRS since the early 2010s, especially after their losses in tax court in 2014.

However, most industry professionals do not think that the IRS is done with those types of captives. “I think the Service is temporarily focused elsewhere, but they don’t like captives. They’ve told us that face-to-face when we went in to talk to them about issues with the 831(b) captives. They began the conversation by telling us that they don’t like captives and they suspect they never will. I don’t think they are done with [large] single-parent captives, I think they are focusing on something else for the time being,” said Jeffrey K. Simpson, partner with Womble Bond Dickinson (US) LLP.

According to John R. Capasso, president and CEO, Captive Planning Associates, LLC, “I honestly do not think the IRS will ever give up their quest of harassing single parent captive owners. Its unfortunate, because companies that are willing to assume risk in their own captive, assuming proper risk shifting and risk diversification, are saying that they understand the nature of the their own risk and can manage such risk better than a third-party that has little, if any, vested interest. For the business, it should translate into a stronger balance sheet enabling management to better manage cash flow and, ultimately, earnings.”

For Lavelle, there are three reasons he believes the IRS will again turn their scrutiny towards large single-parent captives. “First, the IRS has never liked captives (large or small). Second, the recent court opinions [involving captives] have some statements that might be used against large captives. Third, the IRS has built an infrastructure of agents and insurance specialists who understand insurance, that the IRS could deploy against large captives.”

The IRS turned its attention towards ERCs taking the 831(b) tax election in the early 2010s. They began an aggressive audit campaign against them, that was followed by the IRS naming microcaptives, what they call ERCs, to its annual “Dirty Dozen” list of what they consider tax scams. Notice 2016-66 followed soon after which named microcaptives as “transactions of interest” and required additional, burdensome information from ERCs.

However, the IRS’s tax court history with single-parent captives might begin to repeat itself. In 2017, the captive sector experienced its first loss in U.S. Tax Court to the IRS in Avrahami v. Commissioner. This was followed by two additional losses the following two years with Reserve Mechanical Corp. v. Commissioner and Syzygy Insurance Co. v. Commissioner. The Reserve Mechanical case is being appealed,

so there is some possibility that the original decision might be overturned.

Then late last year, the IRS conceded a tax court petition that been filed by Puglisi Egg Farms of Delaware, LLC. The concession indicated that the IRS knew that they were not going to be able to win in the tax court. While not as precedent setting as a U.S. Tax Court decision, the IRS’s concession implied to the captive insurance sector that there are captive insurance arrangements that are acceptable to the Service.

“The IRS will say that there are valid captive insurance arrangements, but their actions speak louder than words,” said Fine. “When you are dealing with an

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examination, the IRS will assume that everything is bad until you prove otherwise and you’re not able to prove otherwise unless you litigate. That’s how we got the result in Puglisi. The IRS conceded because they knew they were going to lose.”

An interesting aspect to note is that, so far, the IRS has not focused its attention on group captives, other than through a few revenue rulings. In 1978, the IRS released Revenue Ruling 78-338, which addressed how many members a group captive needed to achieve proper risk distribution. Revenue Ruling 2002-91, one of the three pertinent rulings in 2002, stated that seven or more entities should make up a group captive to create appropriate risk distribution.

Why hasn’t the IRS been as keen to audit group captives as other types of captives?

For Lavelle, “The IRS assumes that because a group captive has numerous unrelated participants, none of whom dominates the group captive, that the premiums, sharing arrangements, claims processing and other aspects will be conducted at arms’ length.”

“Risk distribution is a necessary component of insurance and a key criteria in determining whether an arrangement constitutes insurance for federal income tax purposes,” said Capasso. “By their very nature group captives establish risk distribution by providing for sharing of risk among numerous unrelated policyholders.”

Simpson thinks there are three reasons. “One is that group captives typically cover risk that the insureds are otherwise covering in commercial programs. They are just replacing those commercial programs, so it’s considered insurable risk. The second reason is that it is a group sharing risk, distributing it across themselves. That is what everyone considers the definition of insurance. Third, companies really don’t tend to accumulate any profit in those programs. The IRS really doesn’t like captive insurance companies that accumulate profit. The Service thinks if a captive is spending all of its money to pay for losses that’s a good thing. Group captives typically do that.”

“The IRS feels like there is less potential for abuse in the group captive setting,” said Fine. “What I would caution, for people to keep in mind is that some time they’re going to finish up with the small captives, one way or another. All of these issues they are raising they can then take the same approach and apply it to group captives.”

While the IRS has some significant wins in the tax court regarding captives taking the 831(b) exemption, the hope is that the pendulum will swing back in favor of those captives as happened in the early 1990s with large single-parent captives.

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It is Capasso’s hope that this happens, “History has shown that it will take time and diligence. The ability for small to mid-sized companies to purchase hard to insure, high cost coverages—such as business interruption insurance due to a pandemic, or cyber liability insurance in case of a cyber- attack—could be the difference in the business surviving such an economic calamity or catastrophic event. This is especially so in the event government is unwilling or unable to offer bail-out funding. The small captive, properly capitalized and holding sufficient reserves may be the only life-line the business has.”

Whether or not the IRS gives up its campaign against ERCs, they will likely continue to scrutinize captive arrangements well into the future.

“There’s always going to be tension between the IRS and captive insurance because the captive insurance industry exists to be creative, to solve new problems, and to do new things that haven’t been done before,” said Simpson.

“What the IRS wants is for everything to fit into the same mold they’ve always seen. If it’s a different mold, they think it’s a trick.”

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A QQ& A

ACA, HIPAA AND FEDERAL HEALTH BENEFIT MANDATES:

PRACTICAL

T

&

he Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the Women’s Health and Cancer Rights Act) dramatically impact the administration of self-insured health plans. This monthly column provides practical answers to administration questions and current guidance on ACA, HIPAA and other federal benefit mandates.

Attorneys John R. Hickman, Ashley Gillihan, Carolyn Smith, Ken Johnson, Amy Heppner, and Laurie Kirkwood provide the answers in this column. Mr. Hickman is partner in charge of the Health Benefits Practice with Alston & Bird, LLP, an Atlanta, New York, Los Angeles, Charlotte, Dallas and Washington, D.C. law firm. Ashley, Carolyn, Ken, Amy, and Laurie are senior members in the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner’s situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation. Readers are encouraged to send questions by E-MAIL to Mr. Hickman at john.hickman@ alston.com.

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ERISA IMPLICATIONS FROM DOL ACTIVITY IN BCBS ANTI-TRUST LITIGATION BACKGROUND As a result of recent action, certain larger self-funded group health plans impacted by the Blue Cross Blue Shield Antitrust Litigation have until May 2, 2022, to reevaluate their settlement decision.

Regardless of whether a plan is impacted by this specific decision, the DOL action in this area provides a clear warning (and complicated roadmap) to explore with regard to similar plan settlement activity.

As background, a settlement was reached on October 16, 2020, arising from a class action antitrust lawsuit In re: Blue Cross Blue Shield Antitrust Litigation MDL 2406, N.D. Ala. Master File No. 2:13-cv-20000-RDP (the “Settlement”).

The class action claimants asserted that the Blue Cross Blue Shield Association and its licensees (collectively “Settling Defendants”) engaged in anti-competitive market practices that resulted in inflated premiums for fully insured health plans and stop loss policies, as well as higher ASO fees for self-funded agreements.

The Settling Defendants denied all allegations of wrongdoing and the parties agreed to settle. The Settlement will establish a $2.67 billion fund and the Settling Defendants will also agree to make changes in the way they do business to increase the opportunities for competition in the market for health insurance. More information is available at https://www.bcbssettlement.com.

After the Settlement, the court approved a proposed plan of distribution on March 12, 2021. The proposed distribution plan contemplates a $1.9 billion net settlement fund for distribution between the class members. Class members are individuals and companies that purchased or received health insurance provided or administered by BCBS during the following periods:



Individuals and insured groups: February 7, 2008, through October 16, 2020.



Self-Funded Accounts: September 1, 2015, through October 16, 2020.

Notice to class members was provided on May 31, 2021, and the deadline to file a claim was November 5, 2021. Most governmental accounts are excluded from the settlement.

WHAT IS NEW? Although the deadline for claims filing has passed, the Court in February 2022 opened a new “opt-out” period for self-funded entity accounts in order to clarify that an opt-out election from the damages class also takes the account out of the injunctive relief class for “Second Blue Bids.”

The “Second Blue Bid” portion of the Settlement was designed to enable large, geographically dispersed, selffunded national employers (5,000 or more employees) to have the opportunity to receive a second bid from a settling individual BCBS plan in addition to the employer’s local settling individual BCBS plan.

A Second Blue Bid is unavailable to employers headquartered in areas where there are already two licensed settling individual BCBS plans.

For purposes of the new opt-out period, a “self-funded entity account” is

·

an account that purchased or was enrolled in a Blue Cross and/or Blue Shield administrative services plan at any point in time between September 1, 2015 and October 16, 2020; and

·

any account, employer, health benefit plan, ERISA plan, non-ERISA plan, or group that purchased, were covered by, participated in, or were enrolled in a “self-funded health benefit plan.”

A self-funded entity account does not include sponsors, administrators, fiduciaries, or members of a self-funded account. A “self-funded health benefit plan” is any commercial health benefit

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product other than commercial health insurance, including administrative services only contracts or accounts, administrative services contracts or accounts, and jointly administered administrative services contracts or accounts.

A self-funded entity account has until May 2, 2022, to take one of the following actions:

·

Withdraw a previously filed damage claim and elect to opt out (an opt out will exclude the account from the settlement damages class, and individualized injunctive relief, including the right to request a Second Blue Bid); or

·

Withdraw a previous opt out and remain in the damages class; or

·

Do not respond and leave the previous election in place. If the account did not file a claim earlier, it will remain part of the settlement class but not be entitled to damages.

A copy of the updated notice is available at https://www.bcbssettlement.com/admin/ services/connectedapps.cms.extensions/1.0.0.0/asset?id=74891eaa-4806-4718-ad9e078d084313a7&languageId=1033&inline=true If the account opts out, it will keep its right to sue BCBS and its settling affiliates for monetary damages and individualized injunctive relief related to the claims in this case.

The ability to sue depends on the individual facts and circumstances surrounding the account’s claim, e.g. venue, applicable statute of limitations, amount of fees at issue, etc.

Injunctive relief may include the right to pursue in litigation more than one BCBS bid based upon the account’s individual facts and circumstances.

POTENTIAL ISSUES UNDER ERISA Given the structure of settlement relief, there are potential prohibited transaction and fiduciary issues for ERISA covered plans as a portion of the settlement fund may be considered ERISA plan assets. ERISA plan sponsors should take heed that similar issues are likely to arise in connection with future settlements (especially those involving ongoing service providers).

According to the U.S. Department of Labor (DOL) in its Statement of Interest Brief filed with the court on October 19, 2021, a group health plan’s cause of action against the Settling Defendants due to paying inflated service fees is itself an ERISA plan asset.

The DOL reasons that the ERISA plan is a legal entity distinct from the employer under 29 U.S.C. § 1132(d) as the plan can sue and be sued and has a separate and independent legal claim against the Settling Defendants.

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The DOL also identifies other potential sources of plan assets as the employee portion of prior premiums or contributions paid (despite the independent right of employees to receive a portion of the Settlement proceeds on an individual basis) as well as trust assets if the plan is funded.

Thus, the DOL views the decision of whether to accept the Settlement or optout as an exercise of “authority or control respecting management or disposition of assets” and a fiduciary decision.

As a result of the DOL’s brief identifying a potential “cascade of ERISA violations depending on the facts and circumstances of each case,” the opportunity for the second opt-out may give eligible plans and their fiduciaries the ability to address the potential fiduciary issues outlined in the DOL’s brief.

These fiduciary issues differ depending on whether a Settling Defendant is a current plan service provider. If so, then the Settling Defendant is a party on interest under ERISA § 406(a). Based on the DOL’s brief, the acceptance of the Settlement by the Settling Defendant could be a Prohibited transaction in the DOL’s view unless an exemption applies.

In its brief, the DOL cites PTE 200339 as a possible exemption for plan fiduciaries. Under PTE 2003-39, a fiduciary acting on behalf of the plan must acknowledge in writing that it is a fiduciary with respect to the settlement of the litigation on behalf of the plan.

Such fiduciary must not have any relationship to or interest in any of the parties involved in the settlement, other than the plan, that might affect the exercise of such person’s best judgment as a fiduciary. This provision may require

use of an independent fiduciary as the employer will also have an interest in the Settlement since the proposed settlement distribution considers the employer, not the plan, as the class member.

The plan fiduciary must then document its process of evaluating the settlement to determine, among other things if the terms of the Settlement are reasonable in light of the plan’s likelihood of full recovery, the risks and cost of litigation, value of claims foregone if opt out, etc.

·

What is the time frame to use the allocations if plan assets?

Employers and plan administrators should consider and discuss these issues with counsel in connection with this or any future plan settlement situation.

One important factor under PTE 2003-39 is that settlement must be no less favorable to the plan than comparable arm's-length terms and conditions that would have been agreed to by unrelated parties in similar circumstances.

If the plan no longer uses a Settling Defendant as a current service provider, there still may be potential fiduciary issues. Further, there are several unanswered questions for plans and their fiduciaries based on existing guidance dealing with the use of demutualization proceeds and MLR rebates:

·

If there are no independent sources of ERISA plan assets, (no employee or trust contributions) does the plan’s settlement right alone implicate fiduciary concerns?

·

Does a plan fiduciary have to formally evaluate whether it is reasonable in light of the plan’s likelihood of recovery for the plan to accept the Settlement or can the employer merely opt out to avoid potential ERISA issues as employees have their own rights to file a claim?

·

Do ERISA plans have an obligation to file a claim to seek damages if the fiduciary determines that the terms of the Settlement are reasonable?

MAY 2022

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SKYROCKETING HEALTHCARE COSTS: AI MAY HELP

I

Written By Edmundo Gonzalez, Co-Founder & CEO, Marpai Health

I

t’s a simple fact that the United States healthcare system costs too much.

In the U.S., healthcare represents a considerably higher share of GDP than other countries, while those others achieve better health outcomes. And it’s getting worse.

According to the Centers for Medicare and Medicaid Services, healthcare spending will increase by 5.5% annually through 2027, reaching nearly $6 trillion by 2027 faster than the rate of inflation. Despite efforts to reduce overtreatment, improve care, and address overpayment, studies estimate that approximately 30% of U.S. healthcare spending may be considered waste, i.e., spending that does not improve patients' health.

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THE SELF-INSURER

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The bottom line is that this is a huge and growing problem for businesses of all sizes that are looking to achieve cost savings.

While it may seem surprising, a central cost driver within the U.S. healthcare system is the significant amount of health innovations. New offerings such as drugs, procedures, and machines – while certainly providing many positive options for human health — bring a substantial cost to the system.

However, there is one emerging trend that is positioned to be the industry’s best ally - smart, state-of-the-art technology that’s grounded in artificial intelligence (AI). In many ways, AI is changing how healthcare is received and delivered by offering a personalized and integrated experience to consumers, enhancing provider productivity, and improving both outcomes and affordability.

INNOVATION INSPIRED BY THE COVID-19 PANDEMIC

The pace of innovation has never been faster. Facing a global pandemic, companies of all sizes, across all industries, and in every corner of the world, have focused their attention on how best to meet the rapidly evolving needs of their end-users quickly and at scale.

The COVID-19 pandemic opened up new ways and vehicles for people to consume healthcare, such as telehealth and mail-order prescriptions. Although telehealth is not new, adoption rates are significantly higher as a result of the pandemic forcing people to consume health in this way.

According to a recent survey, 63% of respondents who had used telehealth in the past report that they plan to increase their use of such services even after the pandemic ends.

In fact, 40% of consumers believe they will continue to use telehealth going forward —that represents an 11 percent increase over the number of consumers using telehealth prior to COVID-19. Forty percent of consumers also believe they will continue to use telehealth going forward—again, an 11 percent increase over those using telehealth prior to COVID-19.

Another rapidly evolving innovation is developing around personal health data. While this was popular prepandemic, how this data is being used is dramatically different now.

For example, in the wearable technologies field, data is enabling healthcare providers to identify and predict conditions in ways that were never possible before. Building on this, Fitbit has announced that it is participating in projects out of the Scripps Research Translational Institute and the Stanford Medicine Healthcare Innovation Lab, both researching early detection.

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And in support of its wearable, the Apple Watch, Apple launched a study on respiratory disease prediction in April 2020.

Clearly, data is fueling a remarkable transformation in the healthcare arena and shows no sign of slowing down.

LEVERAGING AI TO DRIVE

HEALTHCARE COSTS DOWN

AND HEALTH OUTCOMES UP

These days, technology plays a crucial role in managing costs. Traditional cost containment strategies are not enough to stem the tide of rising prices. We need to leverage new tools, particularly

predictive technologies, to change the cost curve and outcomes.

AI corrects the problems of the past: a majority of consumers don’t know quality ratings and costs of in-network providers, are blind to emerging health issues and near-term events, need reminders of annual appointments, or they won’t keep them and are not used to staying ahead of their health and on a proactive routine. Instead, they wait until something goes wrong – which costs more and is harder to address.

AI-powered solutions are vital to building solutions that can offer proactive assistance to help in keeping people healthy and making better choices while cutting health plan costs for employers. Results include improvements to patient care, faster and more accurate diagnoses, preventive measures, more personalized treatment, and more informed decision-making. And at the business level, it can lower costs, simplify internal operations, and more.

AI-powered products and services are a gamechanger and can be transformative for a patient's journey because of their ability to do three key things:

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1. Predict: to enable early intervention that can save lives, prevent costly events, and change health trajectories/ mitigate developing conditions;

2. Anticipate: annual checkups, vaccinations, screenings, renew prescriptions, get ready for allergy season, and more;

3. Connect: get the right, highquality/low-cost provider for each person’s needs.

Patients who are educated and empowered - through AI-driven products and services - to make sound healthcare decisions tend to have better outcomes.

This can save money, particularly in managing chronic diseases.

Payers can implement artificial intelligence (AI) solutions to automate critical but repetitive tasks to improve efficiencies and eliminate costly human

errors. It is estimated that as much as 80 percent of medical bills contain errors.

Such lapses could result in substantial money losses for businesses every year.

As healthcare costs continue to rise, so does the need for healthcare payers to reduce overspending that results from avoidable billing errors and improper claims reimbursement. The impact will be improvements in how well, fast, and accurately they do their job.

GETTING YOUR FEET WET IN AI-POWERED TECHNOLOGY

Even if you’re not big enough to have a full-blown data science group, that shouldn’t hold you back from benefiting from AI. The market has evolved, and there are solutions available from third-party vendors that you can begin implementing.

With AI-powered products and services quickly moving from a nice-to-have to a must-have offering, there are a few things self-insured groups should consider when getting their feet wet in the technology.

Artificial intelligence is a broad term that encompasses many technologies. That can often make it difficult for many to grasp its business potential and deploy it in real use cases in the healthcare space.

MAY 2022

41

A fundamental lack of understanding of the technology can scare many people off.

It’s essential to keep in mind: AI’s superpowers in the healthcare arena are predicting, anticipating, and connecting. It can be leveraged to get to the best possible outcomes for members.

Employers that have already made the switch to self-insurance should jump right in to start implementing products and testing strategies that work. When exploring new technologies and talking to vendors, it’s important to look for products with a clear value proposition, a clear price, and a clear return based on your spending as an employer.

Strategies should focus on prevention and steering your health plan members to the right care, which means high quality, resulting in a higher outcome and reduced cost.

For example, you’ll want to ask about how this product is cutting plan costs for you each month (e.g., $1,000 per employee per month to $900 per month), helping predict member health events that activate early intervention or how the solutions simplify the health plan experience for you.

Most importantly, give it time. You will not see meaningful data in a quarter. You have to give this a year or two and track implementation and member usage of whatever product you're evaluating.

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THE NEW FRONTIERS OF AI: WHAT’S NEXT?

While no one can predict precisely how it will evolve in the future, the complexity and rise of data in healthcare mean that AI will increasingly be applied within the field. There’s no sign of the adoption of this technology slowing down anytime soon as the applications in healthcare are endless.

We know that we’ve only scratched the surface of what AI can do for healthcare.

The latest developments focus on building products and tools that help nudge people into better behaviors. For example, it’s easy for health providers to say that a patient needs to lose weight.

However, actually getting a patient to lose weight is much more challenging.

The $255 billion weight-loss industry thrives because diet companies know that most people regain lost weight.

But, what if there were a better solution?

In the future, there will likely be AI-driven digital assistants that can proactively manage your behavior around food and exercise, helping you make choices that affect your overall health journey.

Anticipating someone's needs, anticipating behavior, and helping make choices isn’t an easy problem to solve.

Making a real change will require data at scale and doctors who understand both behavior and medicine. Plus, it will need to be tied together with products that can make or encourage consumers to change their behavior.

In all, when looking at the next frontier for AI, it presents significant opportunities and has the potential to transform our healthcare system for members, employers, and providers.

Edmundo Gonzalez co-founded Marpai Health and has been its CEO since its inception. He is an established technology entrepreneur and investor in private and publicly traded companies with several decades of experience. He is recognized for his ability to analyze potential investments, structure deals, and for building management teams. He has been involved with the success of several companies, most recently as Operating Partner of US VC Partners Management, LLC, an investment management company running CNTP’s investment funds. Prior, Mr. Gonzalez was the co-founder and member of the Board of 340B Technologies, a fast-growing healthcare IT company, until its sale to Parthenon Capital in 2020. He was also the co-founder and Chairman of Fr8Hub, a digital cross-border logistics company. He received a B.A. from Harvard University and an M.B.A. from Columbia Business School.

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THE NEWEST FIDUCIARY DUTY: PROTECTING PARTICIPANTS FROM THEMSELVES Written By Jon Jablon, Esq.

T T

he recent case of Hughes v. Northwestern University before the U.S. Supreme Court solidified a legal interpretation that many feel is a misstep when applied broadly to fiduciary duties. Although the case focuses on 401(k) plans, it has potentially broad implications for any plans governed by the Employee Retirement Income Security Act, or ERISA.

THE OLD WAY OF THINKING

The industry at large tends to conceptualize fiduciary duties a bit nebulously, especially in the context of what benefits are offered by a given health plan.

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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.

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Although a few federal laws require certain benefits be offered and outline under what circumstances they are, plan sponsors have enjoyed a great deal of freedom to offer any combination of benefits they see fit.

While pension plans are subject to some different regulation, they are mostly in the same boat when it comes to rules regarding plan administration under ERISA: pension plan sponsors are given a wide latitude to decide which investment options should be made available to their plan participants.

The Plan Administrator is charged with administering the benefits laid out in the applicable plan document, and ERISA Plan Administrators are subject to strict burdens, which can intersect with the plan sponsor’s basic framework for the plan.

However, the Plan Administrator is not necessarily permitted to administer the plan exactly as written, creating an odd distinction between the employer’s role as the plan sponsor and the employer’s (or a third party’s) simultaneous role as the Plan Administrator.

With Hughes, the Supreme Court has handed down additional clarification on how Plan Administrators can satisfy, or perhaps more relevantly, fail to satisfy, their considerable duties.

THE NEW WAY OF THINKING

To summarize this case, a group of 401(k) plan participants sued the Plan Administrator, alleging that the aggrieved plan participants had made poor investments, and that the Plan Administrator should not have allowed that to happen.

The Seventh Circuit Court of Appeals disagreed with that logic, opining that the participants were given all available information and made their own choices, and that the Plan Administrator is not responsible to curate 401(k) plan participants’ investments. According to the appeals court, the participants could have made better investments; they just didn’t.

The U.S. Supreme Court, however, unanimously disagreed, indicating that – among other things – “even…where participants choose their investments, plan fiduciaries are required to conduct their own independent evaluation to determine which investments may be prudently included in the plan’s menu of options. If the fiduciaries fail to remove an imprudent investment from the plan within a reasonable time, they breach their duty.”

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In other words, although Plan Administrators can certainly give plan participants freedom of choice in their investment options, the Plan Administrator must ensure that those investment options are all good options.

The Supreme Court imposed a fiduciary responsibility to protect plan participants from themselves, holding that the existence of “bad” options is not excused even by the prevalence of “good” options.

While the Court’s opinion may seem confined to the pension plan space, it interprets the fiduciary duties imposed by ERISA, which of course apply to self-funded healthcare plans as well.

SCOPE OF BENEFITS

Take, for instance, a section 125 cafeteria plan that offers a cash-in-lieu-of-benefits option, a traditional and robust health plan, a high deductible health plan with qualified HSA, and a preventive-only health plan.

and traditionally there has been no question of whether it is appropriate for the plan to offer these options.

But, then again, we might have said the same thing about 401(k) investments.

One could argue that being uninsured is inherently a poor decision since most individuals will need some sort of medical care at some point. Regardless, consider a situation where a young, healthy, low-risk employee decides that having health insurance is unnecessary, and the employee elects the cash-in-lieu plan option.

To quote the Supreme Court, a fiduciary

“breached the duty of prudence by failing to properly monitor investments and remove imprudent ones”.

may have Intuitively, the practical result is that the Plan Administrator can compliantly offer three competing options, since participants choose to pay (or receive) a certain amount of money in exchange for benefits (or no benefits). That is a matter of participant choice,

Interestingly, the difference between investments and benefits seems inconsequential here, since the defining relevant factors are apparently (1) that plan participants make the choice, and (2) that choice has a financial impact on the chooser.

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Scalable Solutions for Self-Funded Employers We’re a leading third party administrator for self-funded employers of all sizes, in all industries. Driven by the unique needs of our employers and brokers, our proprietary technology systems enable us to administer cost-effective plan designs that match the needs of your organization.

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REFERENCE-BASED PRICING

Admittedly, there are other factors at play in the Hughes case other than the participants’ poor investment decisions. For example, certain investments were offered at a higher, retail-class rate than their institutional-class counterparts, thus costing participants more money than perhaps necessary.

In the industry today, no discussion of health plan practices seems to be complete without some mention of reference-based pricing (or RBP). That’s because there are so many different factors involved in reference-based pricing touching upon so many aspects of the industry, making it an excellent example.

The complaint also alleged that the plan fiduciary offered too many investment options, which “thereby caused participant confusion and poor investment decisions”.

The Supreme Court did not elaborate, however, regarding which factors were relevant to this allegation or how many investment options would not have caused undue confusion, since making such specific determinations is not the Supreme Court’s job.

With any luck, more clear guidance may be forthcoming now that the Supreme Court remanded the case back to the lower Court of Appeals with further instructions on how to correct its prior errors.

Reference-based pricing – or pricing claims based on Medicare or some other reference other than billed charges – is a practice that is increasingly common, necessitated by the growing feeling among those in the the self-funded industry that most medical bills are exorbitant, arbitrarily marked-up, and somehow immune from ordinary market forces.

It seems a bit irrational to think that a cafeteria plan fiduciary can be faulted for including a plan option that could result in financial detriment to the plan participant, despite being elected by an informed decision – but the Supreme Court has so determined with respect to 401(k) investments.

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Since balance billing can have deleterious effects on plan participants when not effectively managed by a health plan, an important question is how the duty of prudency, as explained by the Hughes case, might apply to a situation where a health plan has elected to utilize some type of reference-based pricing model.

Typically, health plans using RBP models are able to save a great deal of money in claims payments, resulting in a lower overall participant contribution. The primary trade-off is that the lower-than-billed payments provide significantly less protection for affected plan participants.

Whenever a non-contracted medical provider is paid less than its full billed charges, the provider may bill the balance to the patient (assuming that the claim in question is not one for which the patient is protected by the No Surprises Act, such as emergency claims, out-of-network air ambulance claims, or certain out-of-network claims rendered at in-network facilities).

The Hughes decision tells ERISA-governed plans that their fiduciaries must protect plan participants from their own decisions. If a plan participant has the option to visit a contracted provider but chooses instead to visit a non-contracted provider, the participant may end up subject to a balance bill.

In that case, it seems clear that the plan fiduciary has allowed the participant to make what amounts to a poor investment decision: the patient effectively elected to incur a balance bill from its chosen provider, whereas a comparable provider down the street would have been subject to a contracted rate, leaving the patient with no balance.

This balance bill is a reality of almost all RBP programs.

Many health plans and their RBP vendors wisely adopt some way to mitigate balance bills and increase participant security, but there can be situations where balance bills still negatively impact the patient. Health plans can create “safe harbors” for participants with contracts or otherwise finding providers that will not balance bill, but one of the staples of a reference-based pricing model is that participants can choose to visit any providers they want.

Recall that 401(k) plan participants are also able to choose which investments they want. Recall also that the Supreme Court iterated that the fiduciary must ensure that participants are not even able to make poor decisions.

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THE SELF-INSURER

Digging a bit deeper, perhaps the Hughes precedent would even require a plan fiduciary to remove higher-charging providers from the pool of provider options, effectively offering no benefits for those providers.

Literally speaking, if a provider is excluded from benefits altogether, the participant’s cost for the claim is

maximized (since the full bill is the participant’s responsibility) – but perhaps including all providers within the class of covered providers increases the number of analogized “investment options”, contributing to the consumer confusion referenced by the plan beneficiaries in Hughes.

THE PARALLELS

Jon Jablon, Esq. joined The Phia Group’s team in 2013, after receiving his Juris Doctor from New York Law School and being admitted to the bars of New York and Massachusetts. He is well-versed in the ins and outs of ERISA, stop-loss policies, PPO agreements, administrative services agreements, and health plans. Jon works on a large variety of projects for The Phia Group’s clients, including providing advisory opinions, consultative advice, and contract review.

The aggrieved plan participants in Hughes identified three primary allegations:

1. For some investments, there were multiple ways to elect them, some costing more than others for virtually the same result.

2. Some poor investment options were offered among the better options.

As the Director of Phia Group Consulting’s Provider Relations Team, Jon assists TPAs, brokers, stop-loss carriers, and other entities with disputes related to both in- and out-of-network claims, various claims payment methodologies (including reference-based pricing), appeals, medical bill negotiation, and much more.

3. Too many investment options caused consumer confusion.

With the examples provided above – a cafeteria plan and a reference-based pricing model – those three allegations can be extrapolated into the health benefits universe.

It would be folly to suggest that the Hughes decision is confined to the pension plan space; the fiduciary duty explained by the Supreme Court in Hughes is an interpretation of existing ERISA law, which is the common denominator of pension plans and health benefit plans alike.

With an increased focus on consumer protection (take, for instance, the recent advent of the No Surprises Act and additional Mental Health Parity and Addiction Equity Act obligations and enforcement), health plans and their fiduciaries should be acutely aware of emerging consumer protection laws that in many ways change the historical application of ERISA.

ERISA is almost 50, but it continues to evolve with the times as much as ever. Who ever said you can’t teach an old dog new tricks?

MAY 2022

53

NEWS

NEWS FROM SIIA MEMBERS 2022 MAY MEMBER NEWS SIIA Diamond, Gold, and Silver member companies are leaders in the self-insurance/ captive insurance marketplace. Provided below are news highlights from these upgraded members. News items should be submitted to membernews@siia.org.

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

If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy and jivy@siia.org.

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NEWS DIAMOND MEMBERS VĀLENZ® HIRES KEVIN O’DONNELL AS VICE

PRESIDENT, ENTERPRISE SOLUTIONS

management and value-based care, as well as operational assessments and restructuring, has delivered significant results in improved care, streamlined operations and increased revenues.”

PHOENIX, AZ — Vālenz® is pleased to announce Kevin O’Donnell, MPA, has joined the company as Vice President, Enterprise Solutions.

Most recently, O’Donnell was Managing Director of Operations for Evolent Health and held several other leadership positions there in operations, claims quality and payment integrity. He also served as managing consultant for Navigant.

O’Donnell brings extensive experience in providing advisory and strategic services, project management and implementation support to healthcare organizations.

O’Donnell earned a master’s degree in Public Administration with an emphasis in health and human services from the University of Arizona’s Eller College of Management, He lives in Newark, Del. “I’m a firm believer in living out the culture of strong, vigorous and healthy, which Valenz has fully incorporated into the way it serves its employees, its partners, and their members,” O’Donnell said.

He will be highly involved in expanding and integrating how Valenz delivers solutions for providers and payers that assure the validation, integrity and accuracy of reimbursement and claims, as well as care and member advocacy program enhancements.

Other key responsibilities include driving product growth, supporting client-facing sales function, and fulfilling roles within operations and technology.

“We are thrilled to have Kevin’s entrepreneurial spirit and proven success in operations, consulting and change management on the Valenz leadership team,” said Maurice Steenland, Senior Vice President, Product &

“His superior skills in implementation of care

Delivery.

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THE SELF-INSURER

“I’m looking forward to building upon that foundation through the proactive, sustainable solutions and customer love that have set Valenz apart as healthcare continues to evolve.”

NEWS About Valenz Vālenz® simplifies the complexities of selfinsurance for employers through a steadfast commitment to data transparency and decision enablement. To balance the relationship between healthcare quality, advocacy and cost, the Valenz approach aligns the member, provider and payer. We deliver this synergy through a strong foundation with deep roots in clinical and member advocacy, alongside decadeslong expertise in claim reimbursement and payment validity, integrity and accuracy. By establishing “true transparency” and offering datadriven solutions that improve cost, quality and outcomes for you and your members, Valenz engages early and often for smarter, better, faster healthcare. Valenz is backed by Great Point Partners. Visit www.valenzhealth. com

BERKSHIRE HATHAWAY

SPECIALTY INSURANCE NAMES TOP POSTS TO SANJAY

GODHWANI AND DAVID BRESNAHAN

Berkshire Hathaway Specialty Insurance (BHSI) announced Sanjay Godhwani has been named president, North America region, and David Bresnahan will take on the role of global chief operating officer.

Peter Eastwood, president and CEO, BHSI, said the two executives have been “pivotal in the building of BHSI” since its launch in 2013.

Godhwani will be responsible for all North America region underwriting and underwriting support groups, customer and broker engagement, and BHSI’s global catastrophe engineering and analytics group. He has more than 25 years of industry experience and is a fellow of the Casualty Actuarial Society. He continues to be based in Boston.

Bresnahan has more than three decades of insurance industry experience. In his new role he will oversee real estate and administration, finance, audit, information technology and operations throughout BHSI’s global platform. He continues to be based in Boston as well.

About BHSI Berkshire Hathaway Specialty Insurance (BHSI) provides employer stop loss, commercial property, casualty, healthcare professional liability, executive and professional lines, transactional liability, surety, marine, travel, programs, accident and health, medical stop loss, homeowners, and multinational insurance. Visit www.bhspecialty.com.

MAY 2022

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NEWS TRUSTMARK ANNOUNCES KATHLEEN SWEITZER AS

SENIOR VICE PRESIDENT AND GENERAL COUNSEL

LAKE FOREST, Ill -- Kathleen Sweitzer has joined national employee benefits provider Trustmark as Senior Vice President, General Counsel and Corporate Secretary. She will lead Trustmark’s legal, compliance and government affairs functions.

“Kathleen has experience at this intersection of healthcare and technology, providing strategic solutions

Focused on Clients.

Dedicated to Results.

to legal and business issues and building risk management and compliance programs that support innovation and drive growth. We are very pleased to welcome her to Trustmark.”

“We are at an inflection point in employee benefits, as technology advances both shape customer expectations and influence the regulatory environment,” said Trustmark President and CEO Kevin Slawin. “Kathleen has experience at this intersection of healthcare and technology, providing strategic solutions to legal and business issues and building risk management and compliance programs that support innovation and drive growth. We are very pleased to welcome her to Trustmark.”

Sweitzer succeeds Steve Auburn, who will retire at the end of April after eight years at Trustmark and a wide-ranging legal career spanning more than four decades.

“Through monumental regulatory changes, a global pandemic and, most recently, a pair of acquisitions, Steve has quietly yet capably, and with great humility, served Trustmark,” said Slawin. “He has been a trusted member of our leadership team, and, on behalf of all Trustmark associates, we wish Steve a long and happy retirement.”

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HOLDINGS

NEWS Sweitzer’s legal career of more than 25 years includes leadership roles at Maestro Health, where she served as Chief Legal Officer and Corporate Secretary; at Aon, where she was Associate General Counsel, Health Solutions; and Tressler, LLP, where she was a partner and built and served as co-chair of the firm’s ERISA/Life and Health Practice Group.

“Coming to Trustmark is the capstone of my career,” said Sweitzer. “Recognized as a Top Workplace by the Chicago Tribune, our headline on the company website says it all: ‘Helping Businesses and Employees Thrive.’ I am thrilled to join a dedicated group of professionals who transform and make a difference in the lives and businesses of our customers.”

Sweitzer earned her law degree from California Western School of Law and her BS in business administration, with honors, from the University of Illinois at Urbana-Champaign. She is admitted to the Bar in Hawaii and Illinois. Sweitzer has also published and presented on topics of healthcare law, ethics and professional development of women in law.

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About Trustmark Trustmark, through its operating divisions and subsidiaries, offers specialized expertise in voluntary benefits, self-funded health plan design and administration, and the delivery of wellness, fitness, recreation, and injury prevention and treatment programs. Trustmark offers employers of all sizes access to benefit options usually reserved for large companies, combined with the personal service you’d expect from a small firm. Our commitment to building long-term, trusted relationships helps people and businesses thrive. Trustmark: benefits beyond benefits. Visit us at www.trustmarkbenefits.com

GOLD MEMBERS 6 DEGREES HEALTH WELCOMES KATY BRANT AS PRESIDENT Hillsboro, OR - 6 Degrees Health is excited to announce that Katy Brant has joined the company as President. Katy’s clinical and executive experience will enhance 6 Degrees Health’s position as a leader in healthcare cost containment.

“Katy is an accomplished leader with a clinical and payment background that will lead the expansion of 6 Degrees Health’s umbrella of cost containment solutions. Her in-depth knowledge of high-dollar claim reviews has resulted in significant growth of our clinical support team and their capabilities over the past two Quarters with the addition of a Chief Medical Officer and multiple experienced claim review nurses.

This investment in clinical expertise not only benefits our RBP solutions, but also our traditional network based large claim review engagements.” - Scott Ray, CEO Katy brings over 20 years of healthcare experience to 6 Degrees Health. She started her career as a NICU nurse and transitioned to healthcare administration over 15 years ago.

Katy is a strategic thinker with focus on company growth goals in combination with employee satisfaction and streamlined processes. She possesses in-depth knowledge of healthcare billing, contracting, and vast experience in provider negotiations with extensive understanding of commercial, Medicare and Medicaid payers, as well as third-party administrators, case management/utilization review companies, brokers, and reinsurers. Katy is passionate about healthcare and bringing balance into the Payer and Provider relationship.

Katy can be reached at katybrant@6degreeshealth.com

Alignment makes the difference.

It’s how we chart your course to smarter, better, faster healthcare.

A successful claim outcome and a positive member experience require the alignment of all parties, with transparency at its core. At Vālenz®, we engage early and often to assure alignment of the member, provider and payer across the continuum of the Claim Cost ArcSM. In doing so, we enable a fully integrated clinical advocacy and cost containment ecosystem that drives value and balance in self-insurance.

That’s how we give you the power to lower costs and improve member outcomes, so everyone in the ecosystem is strong, vigorous and healthy.

Call today to start charting your course to smarter, better, faster healthcare: 866-762-4455

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NEWS 6 DEGREES HEALTH WELCOMES DR. RONALD POTTS AS CHIEF MEDICAL OFFICER

Hillsboro, OR - 6 Degrees Health is honored to welcome Dr. Ronald Potts as Chief Medical Officer. Dr. Potts will be a significant contributor to building structure and expertise to our comprehensive payment integrity solution.

“Dr. Potts is well-known and respected as an industry thought leader with a career spanning multiple facets of healthcare. His extensive background in medicine will greatly compliment the clinical bench strength of 6 Degrees Health. Dr. Potts will supplement our work in clean claim reviews while allowing for exploration of future solutions to the ever-rising cost of healthcare. We are thrilled to welcome someone of Dr. Potts’ caliber and look forward to

his impact on the success of 6 Degrees Health.” – Katy Brant, President Dr. Potts’ career has spanned the rise of Emergency Medicine as a recognized specialty in which he was very active beginning in 1973 with practice at Kaiser Permanente hospitals, as clinical director for Kaiser’s affiliated Emergency Medicine residency program at the Oregon Health Science University and as President of the Oregon Chapter of the American College of Emergency Physicians.

As Chair of the Medical Advisory Board, for the city of Portland and Multnomah County, he led the development of the pre-hospital care system (911) in the

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Unlock the Power of Stop-Loss Automation Ringmaster Technologies is a cloud-based, healthcare software provider.

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NEWS

tri-county area of Portland, Oregon and helped lead the development of the innovative state-wide trauma system – the second such system in the country.

Most recently he left the role of Chief Medical Officer for Interlink Health Services, where he spent 15 years developing innovative programs in solid organ and stem cell transplantation for that transplant network organization as well as for Interlink’s CancerCARE® initiative.

Dr. Potts has served executive roles including Medical Director, Quality at Kaiser Permanente for the past 13 years in which he oversaw contracted transplant facilities and programs in both solid organ and blood and marrow transplantation.

He currently serves on several committees including the National Marrow Donor Program, the American Society for Transplant and Cell Therapy and the Center for International Blood and Marrow Transplant Research.

Within the Kaiser Permanente Medical Groups he was also Executive Medical Director for two of Kaiser’s 8 regions and retired from KP Northwest as Medical Director of Quality and Systems which involved quality systems development and management, population health management, health services research, physician education, leadership development, legal medicine, and other related healthcare improvement endeavors.

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He is a member of the Live Donor and Ethics Communities of Practice of the American Society of Transplantation and is a team member of several Massachusetts Institute of Technology’s Center for Biomedical Innovation projects on financing of high-cost durable therapies and development of real-world learning platforms.

Dr. Potts can be reached at ron.potts@6degreeshealth.com

6 DEGREES HEALTH WELCOMES LIZ TINGLEY AS SENIOR VICE PRESIDENT OF OPERATIONS

Hillsboro, OR - 6 Degrees Health is pleased to announce Liz Tingley has joined the company as Senior Vice President of Operations. Liz will pull from her 30 years of experience in healthcare and leadership to advance our operational structure and organization.

HCC Life Insurance Company operating as Tokio Marine HCC - Stop Loss Group

We Know... Risk We study it, research it, speak on it, share insights on it and pioneer new ways to measure it. With underwriters who have many years of experience as well as deep specialty and technical expertise, we’re proud to be acknowledged as experts in understanding risk. We continually search for fresh approaches, respond proactively to market changes, and bring new flexibility to our products. Our clients have been benefiting from our expertise for over 45 years. To be prepared for what tomorrow brings, contact us for all your medical stop loss, captive, Taft-Hartley and organ transplant needs.

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NEWS “Liz is an experienced leader with a clinical, insurance, and payment integrity background that will drive the operational organization of 6 Degrees Health. She is a key asset in building an efficient operation while focusing on employee engagement and reducing healthcare costs for our customers.” -Katy Brant, President Liz has 30 years of experience in the healthcare industry. She started as a nurse in a busy Atlanta metro hospital, and then quickly expanded her knowledge by working for insurance and payment integrity organizations.

Liz has been in senior leaderships roles for over 10 years and continues to thrive to learn. Liz’s passion is creating a work environment that focuses on employee engagement while running an efficient operation.

where he was instrumental in facilitating the launch of medical stop-loss in the Northeast.

As a regional sales director, his responsibilities included strategic planning, new business development, renewal retention and management of partnerships with some of the largest brokerage and consulting firms in the industry.

Her focus on reducing healthcare costs for consumers while maintaining a healthy partnership with providers fuels her motivation towards innovation in healthcare.

McSherry started his career with Anthem BlueCross BlueShield in New York where he worked for more than 10 years with

Liz can be reached at liz.tingley@6degreeshealth.com

both fully insured and self-funded clients in the commercial large group market.

About 6 Degrees Health 6 Degrees Health is built to bring equity and fairness back into the healthcare reimbursement equation. Industry-leading MediVI technology supports our cost containment solutions with objective, transparent, and defensible data. 6 Degrees Health’s solutions include everything from provider market analyses, reasonable value claim reports, ad hoc claims negotiations, evergreening provider contracts, and referenced- based pricing. Our veteran cost containment team partners with health plans and their channel partners to deliver unparalleled cost containment results. Visit www.6degreeshealth.com

EPIC WELCOMES JIM MCSHERRY AS NATIONAL PRACTICE LEADER FOR NEW EMPLOYER STOP LOSS CENTER

San Francisco, CA - EPIC Insurance Brokers & Consultants, a retail property and casualty insurance brokerage and employee benefits consultant, announced that Jim McSherry has joined EPIC to lead its newly formed Employer Stop Loss Center of Excellence.

McSherry has spent more than two decades in the employee benefits space working with brokers and consultants, developing and implementing innovative strategies to assist self-funded clients in managing their employee benefit plans.

With extensive experience drawn from both major medical and national stoploss carriers, he brings a wealth of technical and market knowledge to the EPIC organization. McSherry’s expertise in self-funding, employer stop-loss and risk mitigation will prove to be an invaluable asset to the EPIC team and its clients.

Prior to joining EPIC, McSherry was with Berkshire Hathaway Specialty Insurance

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“I have worked with Jim for over 20 years and have known him to be a highly resourceful industry leader with exceptional communication and interpersonal skills. He will be a great resource for our organization and a great fit for EPIC culturally. I am excited we have the opportunity to bring him on board," commented Craig Hasday, President, National Employee Benefits Practice.

Contact Jim McSherry at james. mcsherry@epicbrokers.com and cell (201) 320-5944.

EPIC INSURANCE INVESTS

IN ATLANTA AS SOUTHEAST REGIONAL HUB

New Perimeter Center Office to Accommodate Growth ATLANTA – EPIC Insurance, one of the nation’s largest retail commercial, diversified risk and benefits insurance brokerages, has invested in Atlanta as a Southeast regional hub. Centrally located at 5909 Peachtree Dunwoody Road, Suite 800, Atlanta, GA 30328 in

A BIRD IN THE HAND

With Marpai, every employer health plan becomes a SMART health tool designed to create healthier members and lower healthcare costs. With exclusive AI-powered services, Marpai aims to make it easy for members to prevent costly near-term health events and mitigate developing conditions, access high quality fair-cost in-network providers and stay current with annual exams, vaccinations and screenings. It’s part of how we make company healthcare, healthier.

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NEWS Palisades, the new 14,400-sq. ft. office will accommodate the company’s accelerated growth and resource expansion plans.

“We launched this new office design to meet the needs of today's workforce with a central location, amenities for employees and multiple work styles in mind,” says Adam Meyerowitz, President, Southeast & Midwest Region for EPIC Insurance.

EPIC Palisades features an open, fluid concept with both collaborative shared workspaces and private offices, hotel, huddle and meeting rooms and a green room for multimedia video recording.

Every detail has been considered to cater to the varied workday of EPIC employees who may go from having breakfast with a client, to strategizing an insurance renewal or risk with colleagues across the country, to quickly hopping in the car to review a client’s safety measures on-site and setting up risk control strategies to lower their total cost of risk, to Zooming with colleagues and client HR staff across the country to plan for benefit plan renewal and open enrollment.

EPIC’s commitment to being a desirable and modern place to work doesn’t stop with its office space. In 2021, EPIC was recognized as a Diversity Jobs Top Employer by www.DiversityJobs.com.

“Our commitment to creating an inclusive work environment is just another way EPIC is positioning itself for a healthy, sustainable and growing workforce in Atlanta and around the country,” explains Meyerowitz, “We are proud to create a space that can adapt with our changing workforce and work styles, while bringing more jobs to the Atlanta area.”

About EPIC Brokers & Consultants Founded in 2007, EPIC Insurance Brokers & Consultants has more than 2,600 team members operating from more than 80 offices across the U.S., providing Property and Casualty, Employee Benefits, Specialty Programs and Private Client solutions to EPIC clients. For more information visit www. epicbrokers.com or connect via linkedin, @epic_insurance, on Facebook/ EPICInsuranceBrokersAndConsultants and Instagram.

UNUM ELECTS GALE V. KING TO BOARD OF DIRECTORS

CHATTANOOGA, TN -- Unum announced Gale V. King, former executive vice president and chief administrative officer (CAO) at Nationwide Mutual Insurance Company, has been elected to Unum's board of directors.

King started her 37-year career at Nationwide as a claims professional and worked in key leadership roles throughout the company. She served as

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Depend on Sun Life to help you manage risk and help your members live healthier lives Behind every claim is a person facing a health challenge. By supporting members in the moments that matter, we can improve health outcomes and help employers manage costs.

For nearly 40 years, self-funded employers have trusted Sun Life to quickly reimburse their stop-loss claims and be their second set of eyes, looking for savings opportunities. But we are ready to do more to help members in the moments that matter. We now offer care navigation and health advocacy services to help your employees and their families get the right care at the right time – and achieve better health outcomes. Let us support you with innovative health and risk solutions that benefit you and your medical plan members. It is time to rethink what you expect from your stop-loss partner.

Ask your Sun Life Stop-Loss Specialist about what is new at Sun Life or click here to learn more!

STOP-LOSS

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DISABILITY

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LIFE

The content on this page is not approved for use in New Mexico.

For current financial ratings of underwriting companies by independent rating agencies, visit our corporate website at www.sunlife.com. For more information about Sun Life products, visit www.sunlife.com/us. Stop-Loss policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states except New York, under Policy Form Series 07-SL REV 7-12. In New York, Stop-Loss policies are underwritten by Sun Life and Health Insurance Company (U.S.) (Lansing, MI) under Policy Form Series 07-NYSL REV 7-12. Product offerings may not be available in all states and may vary depending on state laws and regulations. © 2022 Sun Life Assurance Company of Canada, Wellesley Hills, MA 02481. All rights reserved. Sun Life and the globe symbol are trademarks of Sun Life Assurance Company of Canada. Visit us at www.sunlife.com/us. BRAD-6503-u SLPC 29427 01/22 (exp. 01/24)

NEWS executive vice president and CAO from 2012 until her retirement from Nationwide in July 2021 and had responsibility for human resources, corporate real estate and other support services for the company.

"Throughout her career, Gale has been a champion for building a strong employee culture and advancing diversity, equity and inclusion in the workplace," said Kevin Kabat, Unum's chairman of the board. "At Unum, we share those same passions and look forward to adding her experience, insights and perspectives to the board."

King will serve on Unum's Human Capital and Risk and Finance Committees effective May 1, 2022.

Currently, King is also a public company board director for AutoZone and J.B. Hunt Transport. Her many honors include being named to Ebony's 100 most powerful African Americans in the United States, Diversity Women's 2021 Elite 100, HR Executive Magazine's Executive of the Year Honor Roll and Black Enterprise's 2019 Most Powerful Women in Corporate America.

King earned a bachelor's degree in journalism and master's degree in public administration from the University of Florida. She went on to serve as the university's foundation chair and received the Distinguished Alumnus Award.

and Colonial Life brands, the company offers stop loss insurance, disability, life, accident, critical illness, dental, vision, leave and absence management support and behavioral health services.

In 2021, Unum reported revenues of $12.0 billion and paid $8.2 billion in benefits. The Fortune 250 company is one of the 2021 World's Most Ethical Companies, recognized by the Ethisphere® Institute. Visit www.unum.com.

SILVER MEMBERS

NOVA HEALTHCARE

ADMINISTRATORS AWARDED

2022 PLATINUM BELL SEAL

About Unum

FOR WORKPLACE MENTAL

Unum, an international provider of workplace benefits and services, has been helping workers and their families for more than 170 years. Through its Unum

AMERICA

HEALTH FROM MENTAL HEALTH

BUFFALO, NY: Nova Healthcare Administrators has been awarded the 2022 Platinum Bell Seal for Workplace Mental Health by Mental Health America (MHA). The Bell Seal certification recognizes employers who strive to create mentally healthy workplaces for their employees, with platinum serving as the highest level of distinction.

In order to receive this presitigious designation, Nova underwent a rigorous evaluation of its policies and practices in four areas: workplace culture, benefits, compliance, and wellness programs.

Nova received an overall score of 93 out of 100, with a perfect 100 percent for Holistic Wellness at Work.

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NEWS “As a health care solutions company, health is at the forefront of what we do, and that starts with our own people,” said James Walleshauser, president, Nova. “We are committed to providing resources, benefits and a work culture that support our associates’ overall wellbeing, including their physical, social, and mental health.

We are honored to receive the Bell Seal for Workplace Mental Health because it acknowledges our continuous efforts and belief that if we take care of our associates, they will take care of our customers and one another.”

Nova’s receipt of the Bell Seal for Workplace Mental Health reflects not only the company’s commitment to wellbeing from its leadership, but the efforts of its associate-led wellness committee, called Renovations.

As part of a focus on mental wellbeing, one of the committee members offers biweekly mindfulness sessons for associates, as well as on-demand sessions. Nova also strives to support associates through flexible working arrangements, regular company-wide meetings and internal communications, as well as various benefits that include mental and behavioral health resources.

To learn more about the Bell Seal for Workplace Mental Health, visit www. mhanational.org/bestemployers.

About Nova Healthcare Administrators, Inc. Founded in 1982 and headquartered in Buffalo, NY, Nova is one of the largest third-party administrators of self-funded employee benefit programs in the nation, providing the health care solutions our clients need in the way they need them. And we go far beyond the basics. We are creative problem solvers who build custom solutions. Nova provides a unique, comprehensive array of services, including medical, dental, vision, COBRA, reimbursement account administration, and private-labeled solutions. Nova also offers award-winning, in-house, integrated medical management programs. We are the stewards of our clients’ benefit plans, offering best-in-class partnerships, customized solutions, and personalized service. Nova is a wholly-owned affiliate of Independent Health.

About Mental Health America (MHA) Mental Health America - founded in 1909 - is the nation’s leading communitybased nonprofit dedicated to addressing the overall mental health of all. MHA has spent decades researching mental health in the workplace, and in 2019, MHA introduced the Bell Seal for Workplace Mental Health to recognize companies and organizations that understand the value of addressing mental health at work and implement policies and practices that support employee wellbeing.

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Do you aspire to be a published author?

We would like to invite you to share your insight and submit an article to The Self-Insurer! SIIA’s official magazine is distributed in a digital and print format to reach 10,000 readers all over the world.

The Self-Insurer has been delivering information to top-level executives in the self-insurance industry since 1984.

Articles or guideline inquires can be submitted to Editor Gretchen Grote at ggrote@ sipconline.net The Self-Insurer also has advertising opportunties available. Please contact Shane Byars at sbyars@ sipconline.net for advertising information.

SELF INSURANCE INSTITUTE OF AMERICA, INC. 2022 BOARD OF DIRECTORS

CHAIRWOMAN OF THE BOARD*

DIRECTORS (CONT.)

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

Laura Hirsch Co-CEO Aither Health Carrollton, TX

CHAIRWOMAN ELECT*

Deborah Hodges President & CEO Health Plans, Inc. Westborough, MA

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

TREASURER AND CORPORATE SECRETARY*

John Capasso President & CEO Captive Planning Associates, LLC Marlton, NJ

DIRECTORS

Lisa Moody Board of Directors Chair Renalogic Phoenix, AZ Shaun L. Peterson VP, Stop Loss Voya Financial Minneapolis, MN

SIEF BOARD OF DIRECTORS CHAIRMAN Nigel Wallbank Preisdent Leadenhall, LLC Ocala, FL

PRESIDENT Daniél C. Kimlinger, Ph.D. CEO MINES and Associates Littleton, CO

DIRECTORS Freda Bacon Administrator AL Self-Insured Workers' Comp Fund Birmingham, AL

Thomas R. Belding President Professional Reinsurance Mktg. Svcs.

Edmond, OK

Les Boughner Chairman Advantage Insurance Management (USA) LLC Charleston, SC

Amy Gasbarro Chief Operating Officer Vālenz Phoenix, AZ

Alex Giordano Chief Executive Officer Hudson Atlantic Benefits Bellmore, NY

* Also serves as Director

Virginia Johnson Strategic Account Director Verisk/ISO Claims Partners Charlotte, NC

MAY 2022

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SIIA NEW MEMBERS MAY 2022

REGULAR CORPORATE MEMBERS

Mark Van Elden, C.P.A. President & CEO ACEC Life/Health Trust Frisco, TX

Randall Gardner, RHU Managing Member BeneWize, LLC Fort Worth, TX

Jen Drexinger Vice President, PBM Operations Empirian Health Montgomery, AL

Emmy Matos Senior Marketing Manager EmpiRx Health Montvale, NJ

Gordon Pardy President Focus Health Solutions Phoenix , AZ

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Emily Green Applications Sales Director Oracle Honolulu, HI

Kelly Anderson Business Development Manager Roche Diabetes Care Indianapolis, IN

Todd Airhart CEO RxEDO, Inc. Plano, TX

Thomas Graham President & CEO Simplifi Health Care Advocates Mill Creek, WA

Gregory Fisher CFO Somnomed Technologies, Inc. d/b/a REMware Tampa, FL

SILVER CORPORATE MEMBERS Maya Rosloniec​ VP of Program Development HealthBridge Grand Rapids, MI

Allison Cheney Account Manager Rx 'n Go Cincinnati, OH

Andrea Seratte EVP TransactRx South Miami, FL

EMPLOYER MEMBERS Jill Savard CEO Savard Labor & Marine Inc. Baton Rouge, LA

Henry Cabaniss Director, Risk and Claims Southern Glazer's Wine and Spirits, LLC Miami, FL

Price Comparison Machine Readable Files Provider Directories

zelis.com

Copyright 2022 Zelis. All rights reserved.

Qualified Payment Amounts Arbitration Defense Advanced Explanation of Benefits

Pay for care, with care.

Stability for those balancing risk and reward.

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

CONNECT WITH ONE OF OUR EXPERTS ON OUR INSURANCE AND REINSURANCE OPTIONS: Employer Stop Loss: Traditional Protection • Small Group Solutions • Coverage Over Reference Based Pricing Managed Care Reinsurance: Provider Excess Loss • Health Plan Reinsurance

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

MTG-3355 (R3/21)