By: Patrick Ouellette, Esq.
Amid broader health policy discussions around the Affordable Care Act (ACA), the Trump Administration recently, and somewhat quietly, released new final rules that would expand the scope of the ACA contraceptive mandate exemption to potentially include more types of employers. The two rules are “Exemptions for Religious Beliefs” (CMS-9940-F2), aimed at large, publicly traded companies, and “Exemptions for Moral Convictions” (CMS-9925-F), which is geared toward nonprofit organizations and small businesses.
The intent of these rules was to extend the availability of the exemption to employers that, if they do not necessarily have sincerely held religious beliefs, can use “moral convictions” to oppose services covered by the ACA’s contraceptive mandate protections. If these rules sounds familiar, they should because the Department of Health and Human Services (HHS) released interim versions in October 2017 that were meant to accomplish the same goals. The most recent iteration of the rules were meant to be final, as they will take effect 60 days after their publication in The Federal Register, or in January 2019. Interestingly HHS estimated that the exemptions “should affect no more than approximately 200 employers with religious or moral objections, with many entities not being affected because they were already permitted not to cover contraceptives under the previous rules, or are protected by permanent court injunctions.”
Employers that have been closely monitoring HHS contraceptive mandate enforcement since 2017 and waiting to determine whether they qualified for religious exemptions would now have more a more concrete legal basis after the rules are published to make a contraceptive coverage decision either way. However, as my colleague Kelly Dempsey cautioned in January 2018, employers and TPAs should be wary of the litany of states that have already sued the Trump administration over the 2017 rules and the potential for more lawsuits against the administration.
As it stands now, the states that have sued include Pennsylvania, California, Washington, and Massachusetts. Delaware, Maryland, New York and Virginia joined California in its suit. The California and Pennsylvania attorneys general suits resulted in federal judges granting nationwide injunctions against the 2017 proposed rules, but both are currently under appeal. There will likely be more litigation in response to CMS-9940-F2 and CMS-9925-F; the new rules have also drawn scrutiny from groups such as the American Civil Liberties Union.
November 20, 2018 – For Immediate Release
The Phia Group, LLC Announces Expansion of Exclusive U.S. Relationship with Jason C. Davis Consulting (“JCDC”) and the Onboarding of Nick Fitzsimmons.
Braintree, MA. The Phia Group LLC, one of the health benefit industry’s leading cost-containment service providers, announced today that it has agreed to expand upon its existing exclusive consulting agreement with JCDC through the addition of Nick Fitzsimmons. Mr. Davis and Mr. Fitzsimmons will assist The Phia Group with sales and product development as it relates to its suite of Provider Relations services, including but not limited to Claim Negotiation & Signoff and “Phia Unwrapped.”
“How plans process claims, apply new pricing methodologies, and interact with healthcare providers will determine who thrives in the years to come,” remarked Adam Russo, CEO of The Phia Group, “Jason and Nick are here to help us and our partners reach the next level as it relates to this increasingly important topic.”
Prior to becoming independent consultants, Jason Davis and Nick Fitzsimmons helped manage the U.S. Markets for Global Excel Management and have a combined provider relations experience of over 35 years.
“Though we consult in other markets, we wanted one exclusive, long-term strategic partnership in the United States; and The Phia Group’s innovative, forward thinking attorneys and industry specialists – with their energy, market presence, and industry know-how – just seemed like a good fit for us,” stated Jason Davis. Nick Fitzsimmons explained, “I look forward to further enhancing the already incredible collaboration between JCDC and The Phia Group. Together we will continue to positively impact the viability of the benefit plans they service, and improve the lives of their plan members, by building products and services that are uniquely valuable, and distinctly Phia.”
To learn more about The Phia Group, its Provider Relations services, or any of its offerings, please contact The Phia Group’s Sales Executive, Garrick Hunt, at 781-535-5644 or Info@PhiaGroup.com.
This Podcast is HUUUUGE – Brady and Ron will dig deep, analyze the recent election results, and determine how they will impact the health benefits and health care industries. Bottom line? If you listen to this episode, you will definitely impress everyone at the Thanksgiving dinner table. You’re Welcome.
Click here to check out the podcast! (Make sure you subscribe to our YouTube and iTunes Channels!)
In this “Partners in Empowerment” episode, Ron and Brady enjoy chatting with Michael Meloch, President of TPAC Underwriters and valued member of The Phia Group’s own advisory board. Michael isn’t shy when it comes to diagnosing the issues, boiling healthcare cost containment down to simple basics we can all appreciate, and telling it like it is. His employer based perspective and focus on the bottom line (a/k/a “risk”) is as refreshing as it is informative. Don’t miss this one!
In today’s episode, our hosts chat with Norma Phillips… our first official “Face of Phia;” (sorry Matt). Norma explains what makes her different (and special) as well as what makes The Phia Group so unique. From Friday night films, to saving the American workers’ job… Norma and the team touch all the bases.
By: Philip Qualo, J.D.
The Occupational Safety and Health Administration (OSHA) released a memorandum last month clarifying the agency’s position on post-incident drug testing under 29 C.F.R. § 1904.35(b)(1)(iv). Although OSHA requirements are generally set by statute, standards and regulations, memorandums from the agency are helpful as they explain these requirements and how they apply to particular circumstances.
On May 12, 2016, OSHA published a final rule that, among other things, amended 29 C.F.R. § 1904.35 to add a provision prohibiting employers from retaliating against employees for reporting work-related injuries or illnesses. In the preamble to the final rule and post-promulgation interpretive documents, OSHA discussed how the final rule could apply to action taken under workplace safety incentive programs and post-incident drug testing policies. Specifically, OSHA’s guidance cautioned employers against administering blanket post-accident drug tests in situations when drug use likely did not cause an injury. Without further clarification by OSHA, the final rule left many employers confused regarding their own post-incident drug testing policies and whether enforcing such a requirement would be considered retaliatory under the new rules.
In the memorandum issued by the agency on October 11, 2018, OSHA clarified its position on post-accident drug testing and confirmed that such policies are not prohibited under applicable regulations. The agency concluded that most employers that conduct post-incident drug testing likely do so to promote workplace safety and health. The agency further elaborated their position by noting that action taken under a post-incident drug-testing policy would only violate the law if an employer conducted the drug test to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health.
The key takeaway from this guidance is that most workplace drug-testing programs are permissible, including:
Furthermore, OSHA noted that drug testing that is conducted to evaluate the root cause of a workplace incident that harmed or could have harmed employees is allowed if the employer tests all workers who could have contributed to the incident, rather than just the employees who reported injuries.
The future is here! As we’re about to enter 2019, the undercurrents of the self-funded industry are as exciting as they are dynamic, and changes are happening at an unbelievable pace. Join The Phia Group’s legal team as they present Part 1 of this two-part series on What to Expect in 2019, which will highlight current industry happenings and our predictions to help you look forward to the coming year. Miss this one, and you’ll be left behind.
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By: Ron E. Peck
If you are looking for a blog post listing specific healthcare related questions appearing on ballots, and a technical assessment of each, look elsewhere. If you were hoping for a dissection of candidates advertising heavily their support or opposition to the Affordable Care Act, and how that position will likely effect their likelihood of being elected (and what they says about the population’s attitude regarding healthcare and “Obamacare”), you can find a million articles on that topic somewhere else. My goal is to step back and assess the big picture.
I’ve read that “healthcare” is the biggest topic on most voters’ minds. That makes me laugh, because “healthcare” is such a broad topic, it captures everything. Further, it is something about which most people are painfully misled or ignorant.
In many other areas, some politicians basically say: “I want more of this. If I do what I want, these great things will happen…” and the opponent says, “Yes… but that thing will cost this much, and we will need to pay for it with higher taxes. It’s a nice idea, but not worth the money. We have more important things to do with that money.” Voters then decide whether that “thing” is worth the cost.
When I was in the 6th grade, we held a mock election. I was one of two presidential candidates, and was up against Zach. In the primaries, we all had discussed things that were important to us, and realistic goals we had for our classmates in the coming year, and apparently the majority of kids agreed with me and Zach. So we get to the election, and during our debate, Zach unleashes a barrage of questions about topics I’m sure he didn’t understand (that his parents fed him)… I mean… what 6th grader is asking another about their position on abortion; am I right? Regardless, when faced with this ridiculous assault, me and my team resorted to the age old strategy of smearing the other candidate. My team and I brought up every nasty thing Zach had ever done to someone else. I won, though I’m not proud of it. That year I learned that smear campaigns work.
The next year was my first year of junior high school. We promptly began elections for student council, and given the previous year’s success, I was sure I had it in the bag. That’s when another candidate did something I’d never seen, and will not soon forget. He made promises. He promised better food in the cafeteria; longer recreation periods between classes; and more. By the time he was done, I was ready to vote for him too! The issue? After he won, nothing happened. Why? Because no one could realistically pay the cost of delivering on those promises.
Fast forward only a few years (yeah right), and here I sit. I witness before me politicians promising to maintain (or – gasp – expand) health benefits and coverage, without addressing the cost of doing so. The opposition, meanwhile, can’t whip out the old reliable “anti-promises” stick (also known as the “we don’t want higher taxes” campaign), because – unlike almost all other issues politicians debate – we have privatized a huge portion of healthcare taxes. Make no mistake. When we force people to either pay a penalty or buy insurance, and the money that we all contribute is used to pay for “things” that benefit society… and when we increase the size and scope of those “things” and the resultant payments we all make to purchase insurance increases … that is the same as an increase in taxes. The problem is that by privatizing this tax as “insurance,” we dumbfound politicians and confuse the public.
No one will look at an image of a sick child, and argue they should not receive care. No one is “pro-illness” or “pro-death” and “anti-healthcare.” Yet, anytime anyone argues that buying more healthcare without assessing what we’re buying, or more importantly, the price of what we’re buying, they are labeled as those things… and worse.
Meanwhile, the voting public is blissfully unaware of how increasing coverage on the one hand, will cost them more on the other hand. Our healthcare payment system is so convoluted, people don’t see how an action today will cost them down the line. For most, mandating coverage for this condition or expanding coverage to that person is – in their mind – free. The only one who suffers is the “greedy insurance companies.” Bottom line? If you order a cheeseburger, and I ask if you want fries with it… and I tell you the fries are free… YOU AREN’T GOING TO SAY NO TO THE FREE FRIES!
Sadly, many insurance carriers and benefit plans do suffer from inefficiencies and other issues that result in them receiving too much, and handing out too little. It is true that for some payers, they could “tighten the belt” a little, to ensure more is covered without passing the cost onto everyone else. But, for the most part, what people don’t understand, is that along with the people working for the carrier, they too – the policy holders – are also part of the so-called “insurance company.” The money used to pay for healthcare comes from the pockets of the patients and policyholders. Whether it be through contributions to a self-funded plan or premiums paid to a carrier, we – as the people paying the bills – deserve to know that our plan or policy is being managed prudently and effectively. We have a right to demand that the carrier or plan is not wasteful or too focused on profits at our expense, and that they are coordinating with providers of healthcare to ensure we have access to care at an affordable price. As the ones “footing the bill” we should rest assured that everyone involved has the information they need to achieve an exchange of consideration that doesn’t overly favor one party or abuse another.
I have no issue with making efforts, legally or otherwise, to expand healthcare and improve the overall health and wellbeing of my fellow Americans. My concern is that until people truly understand the cost of healthcare, and who’s ultimately paying for the fries (in the form of an upcharge on the burger), people won’t make educated decisions or first assess our current spending to identify and eliminate inefficiencies BEFORE we throw more money at the problem.
But then again… what do I know? I couldn’t even win my student council election.
Like it or not, healthcare is on the ballot – nationally, statewide, and locally. The questions asked and people we elect will have an impact on how we receive and pay for healthcare – and for those of us in the benefits industry – failing to identify the trends, issues, and opportunities is tantamount to waving the white flag. Stay in the know and get ready to go; don’t miss this episode of Empowering Plans.
By: Erin M. Hussey, Esq.
On October 23rd, the Department of Labor (“DOL”), Department of the Treasury (“Treasury Department”), and the Department of Health and Human Services (“HHS”) issued proposed regulations on health reimbursement arrangements (“HRAs”). An HRA is a tax-free account coordinated with a group health plan, funded by the employer that reimburses employees for health care costs.
The goal of these proposed rules is to provide more options for affordable healthcare. Specifically, these proposed rules allow integrating an HRA with individual health coverage, provided that certain conditions are met. In sum, the following details the Departments’ various proposed rules:
“. . . the [Treasury Department] and the Internal Revenue Service (IRS) propose rules regarding premium tax credit (PTC) eligibility for individuals offered coverage under an HRA integrated with individual health insurance coverage. In addition, the [DOL] proposes a clarification to provide plan sponsors with assurance that the individual health insurance coverage the premiums of which are reimbursed by an HRA or a qualified small employer health reimbursement arrangement (QSEHRA) does not become part of an ERISA plan, provided certain conditions are met. Finally, [HHS] proposes rules that would provide a special enrollment period in the individual market for individuals who gain access to an HRA integrated with individual health insurance coverage or who are provided a QSEHRA.”
Under current IRS guidance via IRS Notice 2013-54 (“Notice”), HRAs fail to satisfy the Affordable Care Act’s (“ACA”) prohibition on annual dollar limits and the ACA preventive care requirements unless they are coordinated with a group health plan that satisfies those ACA provisions. The Notice further clarifies that an HRA for active employees (otherwise called a stand-alone HRA) cannot be integrated with individual market coverage, regardless of the coverage being obtained inside or outside of the exchange. However, the above-noted newly proposed HRA regulations would allow employees with HRAs to shop for coverage in the individual market. This would allow small employers and businesses to utilize this potentially cheaper option to pay for their employees’ health coverage. Additionally, the proposed rules indicate that if an applicable large employer (“ALE”) subject to the Employer Mandate utilizes their HRA to pay for their employees’ individual health insurance premiums on the marketplace, it would be considered an offer of coverage to satisfy the Employer Mandate.
It is important to keep in mind that prior to these proposed regulations, the 21st Century Cures Act, effective January 1, 2017, allows businesses with fewer than 50 employees to reimburse their workers for out-of-pocket healthcare costs and premiums on the individual market, otherwise known as Qualified Small Employer Health Reimbursement Arrangements (“QSEHRAs”). Small business owners must meet two requirements before becoming eligible to offer QSEHRAs to employees: (1) the small business owners do not offer a group health plan to their employees; and (2) the small business owners must have fewer than 50 full-time employees, as defined in IRC 4980H(c)(2) (the Employer Mandate). QSEHRAs can reimburse premiums for ACA exchange plans, individual policies and Medicare supplemental policies. This stems the obvious question—how are QSEHRAs any different from the new HRA proposed rules? One difference is that QSEHRAs only apply to businesses with fewer than 50 employees, whereas the proposed rules apply to any size employer. Additionally, the newly proposed rules allow a plan sponsor to offer any size HRA to be integrated with individual health insurance coverage and offer a traditional group health plan, but the plan sponsor of a QSEHRA cannot offer a group health plan at all.
As detailed above, under the proposed rules an employer could offer a traditional group health plan in addition to the HRA integrated with individual health insurance. However, the concern is that adverse selection would result and unhealthy employees would be placed into HRAs so that the traditional group health plans do not take on as much risk. In order to avoid this health factor discrimination, the rules allow a form of discrimination in accordance with the different “classes” of employees when determining which classes of employees will be offered the HRA integrated with individual health insurance coverage and which will be offered the traditional group health plan (if the employer provides both). These classes are (1) full-time employees; (2) part-time employees; (3) seasonal employees; (4) employees covered by a collective bargaining agreement; (5) employees who have not satisfied a waiting period for coverage; (6) employees who have not attained age 25 prior to the beginning of the plan year; (7) non-resident aliens with no U.S. based income; and (8) employees whose primary site of employment is in the same rating area. As the proposed rules indicate “a plan sponsor may offer an HRA integrated with individual health insurance coverage to a class of employees only if the plan sponsor does not also offer a traditional group health plan to the same class of employees.” For example, the employer could offer only the traditional group health plan to full-time employees and only the HRA integrated with individual health insurance to part-time employees, but they cannot be offered both.
Lastly, another important component of these proposed rules is that they would establish excepted benefit HRAs. Excepted benefits include vision, dental, etc. Under current HRA guidance, HRAs can only pay for medical expenses, but under these newly proposed rules an HRA paired with a group health plan could pay up to $1800/year for “excepted benefits” such as an individual’s dental or vision premiums. However, there are conditions for an excepted benefit HRA outlined in the proposed regulations.
The Departments are asking for comments on all aspects of the proposed rules by December 28th. It will be interesting to see how much “opportunity” commentators believe this may bring for individuals seeking more affordable healthcare.