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State/Legislative Regulatory News
Self-Insurance Institute of America, Inc.

Exclusive Reporting for the Week of May 7, 2014

May 7, 2014 — This is your weekly update of state legislative/regulatory developments affecting companies involved in the self-insurance/alternative risk transfer marketplace. Should you have any questions on information provided in these reports and/or would like to alert SIIA to new state legislative/regulatory activity (health care, workers’ compensation and/or captive insurance matters) we may have missed, please contact Adam Brackemyre, Director of State Government Relations directly at 202/463-8161, or via e-mail at abrackemyre@siia.org.


Connecticut- Assessment is Out of the Latest Budget Bill
The Connecticut House has passed a budget bill without including a previously proposed assessment on self-funded plan covered lives. While the final budget has not been approved, sources close to the Governor’s office and involved in budget negotiations told SIIA that a new self-funded assessment will not appear in the final bill (HB 5596).

SIIA and allied stakeholders had been vigorously opposing the assessment, which was designed to fund a new health care delivery system in that state, on the grounds that it was preempted by federal law and was bad public policy.

Several of the association’s individual members played critical roles in this successful lobbying effort. Brooks Goodison of Diversified Group contacted his clients and brokers, encouraging them to engage and provided them sample letters and updates. Denise Doyle of Stop Loss Insurance Brokers and Bob Madden of Lawley Benefits Group each provided clients with sample letters to send to their legislators. Charlie Barger of Pequot Health Care and Chris Brown of Berkley Accident and Health submitted letters opposing the assessment. Mike Kemp of IHC Risk Solutions alerted his clients and brokers, urging them to oppose the assessment. Rob Melillo at Guardian Life Insurance Company contacted brokers, who in turn, contacted clients urging them to oppose the assessment, too. A special thank you goes to Anita Schepker, a lobbyist retained by Diversified Group, who coordinated with SIIA’s government relations team throughout the effort.

While this was an important win in Connecticut, it has broader implications as additional states are contemplating assessments on self-insured employers and/or TPAs to fund public exchanges or other purposes.

New York – Stop Loss Legislation
The New York Senate’s stop-loss legislation is moving.

On Monday, S. 6917, which will protect the ability of organizations in New York with 51-100 employees/members to purchase stop-loss insurance when the small group market definition changes after January 1, 2016, was reported unanimously from the Senate Insurance Committee to the floor without discussion. SIIA submitted a memorandum of support.

On Wednesday, SIIA’s retained counsel met with high-ranking Assembly staff to discuss companion legislation and begin the push for a successful legislative push in that chamber. The association has also initiated an integrated advocacy strategy including the mobilization of numerous SIIA members who are engaging their smaller self-insured clients in New York to communicate the urgency of this legislation to their elected representatives.

Member companies already actively engaged in the grassroots lobbying effort include Berkley A&H, Lawley Benefits Group, Sun Life, HCC Life Insurance Company, East Coast Underwriters, Standard Insurance, Meritain Health and Gerber Life Insurance.

Please contact Adam Brackemyre right away if you would like to participate as part of this grassroots strike team. Thank you again to everyone who is already helping.

Washington DC- Council Approves Very Broad Insurance Assessment to Fund Exchange
Yesterday, the DC Council approved a new one percent tax on nearly all “health-related” insurance products, which probably includes stop-loss insurance.

Mayor Vincent Gray proposed the tax on Tuesday night as a way to ensure that the DC health insurance exchange had sufficient funding. Originally, the exchange was to assess qualified health and dental plans inside and outside the exchange. But with only 23,000 privately-insured individuals, the city council had to look elsewhere for funding the exchange’s $28 million budget.

Multiple entities are contemplating a legal challenge to the new law. As this situation continues to develop, SIIA will provide additional information.

SIIA’s 34th Annual Conference
SIIA’s National Conference and Expo is scheduled for October 5-7, 2014 in Phoenix, AZ, which will feature a dedicated Legislative/Regulatory/Legal update session. Conference details, including registration forms, can be accessed on-line at www.siia.org, or by calling 800/851-7789.

1st Quarter Newsletter 2014
Well… “ObamaCare” is here, and so are we.  The sun continues to rise in the east, and set in the west; and business goes on.  Some of you have reaped the benefits of change, while others have suffered; but the reality is that for most of the industry, not much has changed.

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Taking It To The Limit - Accurately Identifying and Taking Advantage of Network Contractual Boundaries
Taking It To The Limit - Accurately Identifying and Taking Advantage of Network Contractual Boundaries

While it is true that some network contracts restrict a benefit plan’s ability to audit claims – or as is more often the case, simply prohibits the benefit plan from doing anything with the information so identified; some contracts apply unrealistic deadlines and still others contractually compel payment of claims otherwise excluded by the plan document… There are key provisions plan administrators can use to limit or eliminate the negative impact of such provisions.

 

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To Pay or Not To Pay - Examining Exclusions, Definitions, and Other Things That Really Matter
To Pay or Not To Pay - Examining Exclusions, Definitions, and Other Things That Really Matter

Whether you are a plan administrator or claims processor trying to determine eligibility of a claim, or a stop-loss carrier trying to determine whether a submission is reimbursable, how applicable provisions apply to specific facts make all the difference. From exclusions to definitions… from discretionary authority to applicable law… not only understanding what a great document says – but understanding those documents “mean” – is the difference between overpayments and financial stability. Join The Phia Group’s innovative leaders as they discuss the best and worst language, how it impacted real plans when theory met reality, and when we were forced to ask, “to pay, or not to pay?”

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4th Quarter Newsletter 2013

2014 is now upon us and I can’t imagine it being any crazier, both personally and professionally, than 2013; of course, I’ll probably say the same thing next year! Thanks to your concerns and needs, we have many exciting new opportunities coming your way this year. 2014 will be the year of self funding where we see the industry grow to heights never seen before. With growth comes many potential pit falls, as always, we are here to get you through them. It will be interesting to see how Obamacare fares in 2014 and what it does to the employer based healthcare system. I am optimistic that things will work out for us in the end and that we will be stronger for it. Just remember that through all the chaos, The Phia Group will be your one stop for all of your cost containment and consulting needs. 2013 was great – the prospects are even brighter for this year!!!! Happy reading!

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A Look Behind, A Look Ahead, Lessons Learned in 2013, and Predictions for the Coming Year
A Look Behind, A Look Ahead, Lessons Learned in 2013, and Predictions for the Coming Year

As has seemingly been the case for almost every year in the last half-decade, 2013 – like its predecessors – was a busy year for those of us involved with health benefit plans. The continued (bumpy) rollout of PPACA and efforts made by legislators, regulators, and attorneys – both at the State and Federal levels – handicapped us as we attempted to adjust our plans to meet the requirements of law, while maintaining cost effectiveness. Now 2014 promises to be as eventful, if not more so. Join The Phia Group as we review the biggest issues dealt with in 2013, the lessons learned, and what we expect to be dealing with in the year to come.

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Supreme Court upholds ERISA plan document statute of limitations
By Andrea DavisIn

What can be viewed as a victory for plan sponsors, the Supreme Court ruled on Monday that statute of limitation periods written into plan documents are valid, as long as those periods are “reasonable.” The court, however, declined to define “reasonable.”

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The Phia Group's Adam Russo Fires at WSJ Article 'When Insurance Fails...'

MyHealthGuide Source: Adam V. Russo, CEO, The Phia Group, 2/6/2012

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Pushing Back Against Prompt Pay Laws
Pushing Back Against Prompt Pay Laws

You may be aware of recent growing efforts by providers and vendors to leverage prompt pay laws as they seek to obtain additional funds from you and benefit plans across the nation. In particular, we are aware of providers in Texas working hand-in-hand with aggressive local law firms to take advantage of the state’s prompt pay laws. One Texas law firm recently boasted that it is pursuing potential damages exceeding $865,000,000 and is now promising to pay a 20% referral fee to parties that refer providers to the firm. While these laws may indeed impact you and your process, we at The Phia Group have analyzed the matter in great detail. We urge you to contact us, so that we may discuss your options further. In the meantime, here is a summary of our recent findings: [click here to read more]

Texas Prompt Pay Legislation

S.B. 418 amended Article 3.70-3C of the Texas Insurance Code to require insurers to make payment determinations within 45 days of receiving clean claims from providers in a non-electronic format, or within 30 days of receiving clean claims submitted electronically. Depending on the insurer’s determination, there are three potential courses of action:

(1) if the entire claim is payable, pay the total amount of the claim;
(2) if a portion of the claim is payable, pay the portion of the claim that is not in dispute and notify the provider in writing why the remaining portion will not be paid; or
(3) if the claim is not payable, notify the provider in writing why the claim will not be paid.

As you can see, a key to protecting yourself from these laws and those that seek to take advantage of it, is simply notifying providers within the allocated time frame of factors prohibiting prompt payment of a claim. If a claim is incomplete, or additional information is needed from a third party, simply notifying the provider will stop the clock.

Insurers that fail to abide by the prompt pay deadlines could face a penalty of up to 100% of the difference between the provider’s billed rate and its contracted rate. Insurers may also be required to pay the provider’s reasonable attorney’s fees.

How To Fight Back

First, S.B. 418 provides that an insurer may request additional information from a provider in order to make a proper payment determination. However, the request must be in writing and strict deadlines apply to this allowance.

Second, the Texas Department of Insurance (TDI) has taken the position that the Texas prompt pay statutes do not regulate private self-funded ERISA plans.

Third, the TDI has indicated that in order to be considered a “clean” claim, the submitted claim must be legible, accurate, and complete. Thus, a Plan may argue that a claim was not a “clean” claim, and not incur the obligation to pay promptly, in the event that any information is missing from the claim. We would once again suggest, however, that if a claim is not clean, you notify the provider of that fact within the deadline.

For a more detailed explanation of these and other effective defenses that are available for group health plans, even including ERISA-exempt plans and ERISA plans susceptible to regulation by state law (due to the savings clause of ERISA), make sure to contact The Phia Group and join in our effort. If you would like to ensure that your own plan or your clients’ plans are afforded all essential rights, please contact pgcreferral@phiagroup.com and we will be happy to assist you in any way possible.

Disclaimer — The above article constitutes the opinion of The Phia Group, LLC, only and should not be construed or interpreted as constituting a legal opinion or binding legal advice.