It’s that time of year again – renewal season!  What is often overlooked is the type of stop loss carrier to partner with for the next plan year. Stop loss choices are often made just on the premium cost, however plans should look at more than just the price. Stop loss is something most self funded benefit plans rely upon to ensure their financial viability and long term success. Yet, too often plans seek to change benefit structures or implement cost containment programs without coordinating those changes with stop loss. Understanding procedures preemptively, reviewing a plan document side-by-side with the stop loss policy, and agreeing upon language interpretations are some of the important things plans and carriers must do to achieve harmony.

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By: Kelly Dempsey, Esq.

The last few weeks have been difficult for several states and U.S. territories.  Hurricanes Harvey and Irma have caused significant flooding and damage.  In addition to the loss of power, many people are homeless and corporations/employers are without a place to conduct business.  Depending on the level of damage, it may take a long time for different areas of the country to rebound and rebuild.  Chances are that employee benefits, specifically the health plan, are the last thing on employers’ and employees’ minds, but there are some very important considerations.  So what do Hurricanes Harvey and Irma mean for employers, employer sponsored health plans, TPAs, and employees?  

Self-funded health plans are required to comply with various federal laws that carry different responsibilities including, but not limited to, ERISA, COBRA, FMLA, HIPAA, and the ACA.  These federal laws come with a wide array of notice requirements and time frames for processing claims and appeals and other requests for documents or information.  As such, the Department of Labor and the Department of Health and Human Services (collectively referred to as “the Departments”) have issued press releases and bulletins that provide general guidance and limit exposure to penalties.  These press releases were specifically issued after Hurricane Harvey; however, it’s likely that additional releases will be issued to address Hurricane Irma.  Below are links to important press releases; however, the following is one of the key summary statements:

The guiding principle for plans must be to act reasonably, prudently and in the interest of the workers and their families who rely on their health plans for their physical and economic well-being. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits in such cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time-frames.

Health plans and their supporting vendors will likely need to review situations on a case by case basis to determine what is reasonable for each plan and employer.

If you’ve listened to any recent Phia Group webinars, presentations or podcasts, or read our blog or published articles, you already know we’ve been focusing on leaves of absence and gaps between handbooks and plan documents.  You’re probably thinking, “Yes, I know, so what’s your point?”  With all the damage to homes and job sites, it is possible employees may seek leaves of absence and/or employees will ask questions about existing leaves of absence and how the leave is impacted if an employer ceases operations.  While FMLA is generally not available for employees to use as time off to attend to personal matters such as cleaning up debris, flood damage, home repair, etc., FMLA may come into play if an employee or their family member suffers a serious health condition as a result of the hurricane.  For those employees that were already out on FMLA, if an employer ceases operations, the time operations are stopped would not count towards FMLA leave.  As always, FMLA and other leave situations should also be reviewed on a case by case basis.   

In summary, the Departments have issued guidance specifically related to Hurricane Harvey; however, we anticipate additional guidance associated with Irma as well.  The bottom line is that employers, health plans, and applicable vendors will need to act reasonably when administering the health plans (i.e., processing claims and appeals, issuing notices such as COBRA notices, etc.) and take into consideration the locations and entities that were impacted and allow grace periods or other relief as applicable.

Important Press Releases and Relevant Guidance:
- U.S. Department of Labor Issues Compliance Guidance For Employee Benefit Plans Impacted by Hurricane Harvey
- Secretary Acosta Joins Vice President Pence in Texas
- FAQs for Participants and Beneficiaries Following Hurricane Harvey
- Hurricane Harvey & HIPAA Bulletin: Limited Waiver of HIPAA Sanctions and Penalties During a Declared Emergency

By: Ron Peck, Esq.

I am a firm believer in self funding.  I believe that, when done well and properly, no other type of health plan can compare to a self funded plan.  I also believe that most well formed self funded plans need stop loss insurance.  That’s why it makes me so sad to see infighting between self funded plans and their stop loss carriers.  They are on the same side; they should be allies!  Yet, too often I see a plan pay claims in accordance with one set of rules, and then stop loss re-prices the plan’s submission for reimbursement using a different set of rules.  Sometimes this is based on differing verbiage in the plan document versus the stop loss policy.  Sometimes this is based on differing interpretations of the same verbiage.  Sometimes there is no real basis for the conflict at all.  Too often it feels like the carrier is trying to deliver a heavy handed form of tough love: “If you won’t take action to contain costs, I’m going to do it for you.  It hurts me worse than it hurts you; you’ll thank me later.”  Other times it feels like a short term maneuver to cut costs, even if it means losing business long term.  Indeed, when I describe some of the positions some stop loss carriers take when dealing harshly with their plan clients, the reaction is that those carriers are being foolish – and they will certainly lose their clients… and yet… they do continue to write new business and are maintaining a client base.  This tells us that, by offering a very low rate, they attract clients.  This also tells me that those clients (and their broker/advisors) aren’t investigating the carrier’s track record.  This, in turn, makes me just as sad as the fighting.  Why?  It breaks my heart that those stop loss carriers who go above and beyond to work with their plan clients, find ways to reimburse, and collaborate with us all are not receiving the due credit they deserve.  In fact, sometimes the “premium” they charge for their white glove service ends up knocking them out of the running when they are up against a bargain basement carrier.  Trust me – the savings on premium will never equal the loss you suffer the first time a carrier denies your claim for reimbursement because they “say” you overpaid.

The moral of the story is this – First, don’t pick a carrier based solely on the premium.  You get what you pay for.  Second, review the stop loss policy, network contract, administrative service agreement, employer handbook, and plan document side-by-side-by-side.  Identify areas where they require the same entity or entities to do different things; things that can’t coexist.  Third, talk through conflicts and potential conflicts BEFORE there is a claim, and agree how they will be handled if they occur.  Fourth, carriers should incentivize plans to engage in cost saving procedures before claims are incurred – not punish them for failing to do so after the fact.  Both plans and carriers need to recognize that while it may be easier to beg forgiveness rather than ask permission, it rarely works out well for anyone.

When it comes to securing stop-loss, too many benefit plans think the ball is only in the stop loss carrier’s court.  Today, our hosts explain what plan administrators can do to cut out conflict and tie up loose ends before they suffer a costly loss.  Ensuring an ongoing and fruitful relationship between plans and stop loss tomorrow requires intensive work today.  Addressing these potential costly issues now will guarantee reimbursements are in the bag later.

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By: Jen McCormick, Esq.

As we are closing in on the calendar year, Plan Administrators are starting to reflect on the past year.  In relation to self-funded health and benefit plans, they consider the laws and regulations that changed (or didn’t change) over the past year and how they might impact the plan.  Also, they consider claim occurrences – good and bad – that may impact benefit changes for the following plan year.  The most important question, however, when considering renewal changes is how to offer a valuable benefit plan to employees which takes advantage of as many cost containing opportunities as possible.
 
ERISA plans do have minimum standards as far as basic information which must be included within the documentation (i.e. benefits and eligibility, claims procedures, COBRA information, fiduciary information, etc).  As Plan Administrators, however, there is great flexibility to design a benefit program that captures the compliance information but also is tailored to the specific needs of an Employer.  Remember that ERISA does not mandate a specific format for how a benefit plan must be presented.
 
In light of the requirements, and notable flexibility, consider that change is good. Many entities specialize in the creation and administration of plan design documents, and happily wish to share the value of why certain provisions should be outlined or presented in particular fashion.  As a result, may it’s time to consider reviewing the benefit structure and organization to ensure that it’s organized in a fashion that truly meets the needs of participants. Consider reviewing the text to ensure it offers the best possible cost containing opportunities for participants.  A refresh of a document can be advantageous for the plan, and so remember to keep an open mind at renewal!

By: Brady Bizarro, Esq.

The dog days of summer have come and gone and there are still many questions left unanswered regarding the future of the Affordable Care Act (“ACA”). Congress is in its summer slow and President Trump’s plans for the ACA’s upcoming 2017-2018 enrollment period remain a mystery. There are millions of Americans in the individual insurance market who are not certain whether or not they will be able to get minimum health coverage from the precarious ACA insurance market. For employers, it still remains unclear which ACA regulations the Trump Administration will enforce and which it will not. A lot has happened thus far in the repeal and replace saga, and it is worth a recap of how we got here; once again, to a place of uncertainty.

Throughout July, the Senate voted on five repeal and replace bills, all of which failed (one by a margin of only one vote). The first bill, and perhaps the most promising for many House Republicans, was the American Health Care Act (“AHCA”). Next was the original Better Care Reconciliation Act (“BCRA”). This bill caused so much division that it was pulled from the Senate floor and underwent a series of revisions, including one from Senator Ted Cruz (R-TX). Then the Senate considered the Obamacare Repeal and Reconciliation Act (“ORRA”), which did not really provide a replacement strategy. Finally, the Senate considered “skinny repeal,” officially titled the Health Care Freedom Act (“HCFA”). This was the bill that went up in flames in a dramatic showdown involving Senator John McCain (R-AZ) on the Senate floor. In the end, we added a number of acronyms to the health care debate, but no actual progress was made.

With the administration and congressional Republicans poised to reboot repeal and replace efforts, the focus for now shifts to the White House as the individual insurance market teeters on the brink. While he did approve August subsidy payments, President Trump has threatened to end billions of dollars in cost-sharing reduction payments to insurance companies to subsidize the cost of care for low-income Americans on the individual exchanges. In addition, his administration has cut the ACA enrollment period in half, from ninety days to forty-five. This year, Americans will only be able to register for 2018 between November 1st and December 15th.  

These next few months will be critical, especially for the individual insurance market. The Senate is holding hearings in a few weeks to discuss strategies for stabilizing the exchanges. We will be watching to see how the administration reacts and what actions it takes that affect regulatory compliance. For now, however, as Speaker Ryan (R-WI) recently said, “Obamacare is the law of the land.”

By: Jon Jablon, Esq.

Reference-based pricing is a huge hot topic in the industry today, and different entities have very different ideas of how to accomplish a given health plan’s RBP goals. Doing it right isn’t difficult, especially when you have the right partners on your side – but doing it wrong is even easier. Here are a few of the most common RBP “bloopers and blunders.”

Lack of preparation: poor (or no) supporting SPD language

A health plan’s rights are only as good as its language. This is true regarding subrogation, assignments, and many other facets of plan benefits and administration – but it is especially true, and immediately noticeable, in the context of the plan’s payment parameters. Since RBP necessarily entails changing the way the health plan pays claims, the plan language must reflect how the Plan Administrator will adjudicate allowable amounts for claims submitted to the plan. If the language is vague, ambiguous, or unsupportive, the plan is giving medical providers the ammunition they need to invalidate the plan’s RBP-based payment determinations.

Looking at claims in a vacuum: applying RBP payments to contracted claims

Simply put, if a health plan has agreed to a contract, it must follow that contract, or prepare for the consequences. If a plan wants to use a reference-based pricing methodology, it should ensure that it doesn’t have contracts that require claims to be paid at a higher amount. One of the biggest issues we see is when a health plan pays a claim based on Medicare rates because it is payment the plan has deemed reasonable – only to later encounter pushback from a provider that asks, “what about our contract?” The world of insurance is a world full of contracts – especially self-funded insurance, where plans have to arrange their service agreements themselves rather than relying on an insurer to handle everything for them. Ignoring contracts is one of the most problematic things there is for a self-funded health plan.

Not knowing your audience: refusing to settle claims with providers (or choosing too-low standards)

Calling someone’s bluff when negotiating can be a useful tactic at times, but be aware that medical providers have the right to send patients to collections or even sue them. Calling a hospital’s bluff would be a more enticing prospect if not for the fact that the patient’s credit is held hostage – and unlike in Bruce Willis or Denzel Washington movies, hostages do sometimes get hurt… Just because the health plan may have the right to walk away from the bargaining table doesn’t mean it’s a good idea.

Not knowing all the options: thinking RBP is all or nothing

When looking into a reference-based pricing option, many TPAs, brokers, and health plans have the impression that they either use RBP, or they don’t. The reality is that there are other options out there! For some plans, physician-only networks and narrow networks will help the plan achieve its goals without the burden of “full” RBP; for many plans, though, the out-of-network option is the best way to go. If the plan accesses a provider network that adds significant value for the plan, and one that members are well-accustomed to, then perhaps losing that network access would not be the best route to take.

The bottom line is that the self-funded industry contains various vendors and consultants that can offer reference-based pricing guidance and options to suit every health plan’s needs. Feel free to contact The Phia Group to learn more.

The Phia Group’s legal team frequently addresses the biggest issues impacting the health benefits industry today. Join them as they dissect the conflicts threatening every entity involved in the business of health benefits, and share real life examples of clients who implemented forward thinking solutions… and those that didn’t. From fiduciary liability to claim re-pricing by stop-loss carriers… from international importation of prescription drugs to handling large out of network costs and resolving balance billing of patients… We will together discuss the biggest trends, solutions, and results.

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This week, Adam Russo and Ron Peck accept that an answer to the high cost of healthcare won’t be coming from D.C., and that health plan administrators (with the help of their partners and advisors) need to address the costs internally.  Amongst options to do just that, so-called “Reference Based Pricing” is a hot topic in our industry.  Join Ron and Adam as they pick apart this method for containing costs, identify the pros and cons of an “RBP” plan, and discuss options to customize such a program.
 
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By: Chris Aguiar, Esq.

Subrogation is tough.  Even the best language possible is susceptible to issues like limited funds, or worse, a Plaintiff’s attorney who refuses to acknowledge the realities of the law.  Of course, self-funded benefit plans who find themselves subject to state law, such as government entities, can find themselves in even worse positions when located in certain areas of the Country.  New York, New Jersey, and Pennsylvania, to name a few, are notoriously averse to the rights of benefits plans.  Connecticut was among the worst on that list …until now.  As of October of 2017, the State of Connecticut has enacted an exception to its anti-subrogation law which will give self-funded benefit plans some reprieve.  

Connecticut HB 6221 takes its cue from some of the other anti-subrogation states who have provided an exception to their law for cities, towns, and municipalities; allowing them to take advantage of some more of the cost saving benefits of self-funded plans.  Specifically, it allows self-funded local government entities with a third party interest to seek recovery from judgments or settlements obtained by plan participants.  While this is great news, this change doesn’t come without limitations.  The bill appears to only allow recovery from the part of the judgment or settlement that represents payments for medical, hospital, or prescription expense damages.  This will no doubt entice plan participants and their lawyers to structure settlements in such a way as not to include those damages.  Either way, it gives plans, administrators, and their recovery partners another tool to utilize.