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Phia Group Media

Empowering Plans: P90 - IRS Notice 2020-29, COVID-19 and Cafeteria Plans: Self-Funded Plans Beware!

On September 15, 2020

The COVID-19 pandemic has brought about an unprecedented wave of federal legislation in a short period of time specifically aimed at regulating employer-sponsored group health plan coverage. Similarly, the Internal Revenue Service (IRS) has followed suit and released several formal Notices aimed at extending COVID-19 relief options to cafeteria plans. In the most recent notice issued by the IRS, however, IRS Notice 2020-29, there are certain provisions that impact employer-sponsored coverage. If adopted by a cafeteria plan sponsor that also sponsors a self-funded health plan, these provisions can result in significant cost liability for the plan and create issues for stop-loss reimbursement.

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An Overview of the Recent New York Federal Court Decision and its Potential Impact Moving Forward

On September 9, 2020

By: Kevin Brady, Esq.

In April of this year, following the passage of the Families First Coronavirus Response Act (FFCRA), the State of New York sued the Department of Labor (DOL), claiming that several provisions of the FFCRA exceeded the DOL’s authority under the statute.

On August 3rd, the United States District Court of the Southern District of New York issued an opinion, siding with the State of New York and invalidating several provisions of the FFCRA. Specifically, the court invalidated the following regulations:

  1. The “work-availability” requirement

Under the FFCRA regulations, individuals are not eligible for Emergency Family Medical Leave or Emergency Paid Leave if their employer does not actually have work for the individual to do. The court concluded that the DOL failed to properly explain this additional requirement, and invalidated the regulation.

  1. Employer approval of intermittent leave

Under the FFCRA regulations, employees are required to have approval from their employer in order to take leave under the FFCRA intermittently. The court opined that this was not permissible and vacated the regulation.

  1. Requirement to provide documentation of leave in advance

Employees are required to provide documentation regarding the reason for leave and the requested duration of leave, prior to taking leave under the FFCRA. The court reasoned that this regulation is inconsistent with the statute and struck the regulation down.

  1. The DOL’s definition of “health care provider”

Under the regulations, employers are permitted to exclude health care providers from the leave entitlements granted under the FFCRA. The DOL’s definition of the term “health care provider” is broad and can be interpreted to include individuals who are only tangentially related to actually providing health care. The court reasoned that the exclusion of leave entitlement for health care providers is intended to apply only to those individuals who are capable of providing healthcare services.

Potential Impact

While the court’s ruling may ultimately have a significant impact nationwide, it appears that (at least for the time being) the application of the ruling will be confined to employers in the state of New York, as the court did not specifically address whether the ruling would apply nationally. At this point, the ball is in the DOL’s court. If the DOL’s complies with the ruling, we are likely to see significant changes to the FFCRA regulations and guidance. These changes are important and may drastically increase the rights of employees looking to take leave. In the alternative, the DOL may appeal the ruling, in which case the impact may be in limbo for some time. In the meantime, employers should review their current policies and their administration of FFCRA, as well as keep their eye out for the DOL’s next steps to ensure compliance with the FFCRA leave provisions.

Empowering Plans: P89 - Healthcare Policy at the DNC/RNC

On September 2, 2020

In this episode of Empowering Plans, Ron and Brady assess what we learned from the candidates on healthcare policy at the virtual Democratic and Republican national conventions. Over the course of two weeks, both parties showcased their platforms; one focused heavily on restoring the Affordable Care Act and a nationwide COVID-19 response, and the other on lowering prescription drug prices and covering all pre-existing conditions. What can our industry learn from the talking points? Join us as we cover all the angles and discuss what comes next as the presidential election draws ever closer.

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Plan Mirroring: What Does It Really Mean?

On August 26, 2020

By: Jon Jablon, Esq.

We hear a lot of chatter in the self-funded industry about “plan mirroring.” The idea is that a stop-loss carrier will adopt the same language as what is in the SPD, in effect “mirroring” the language, and that gets rid of what we at Phia like to call “hard gaps,” where the plan and carrier are working off different language, leading to situations where the plan must pay claims but the carrier may deny them. The point of mirroring the SPD’s language is so the plan never needs to worry about those kinds of gaps.

But there are other kinds of gaps, too. Gaps tend to arise when different entities are interpreting the same language, as well (we call those “soft gaps”) – and it is crucial to keep in mind that a policy that mirrors the plan’s terms is not the same as the carrier adopting the plan’s interpretation of those terms.

Let’s talk about an example. We have mentioned this particular situation numerous times; it’s not because we’re too lazy to think of new examples, but because it keeps on happening! The SPD excludes any benefits paid for services performed by a family member. A plan member has a great uncle who is a surgeon, and elects to have him perform the surgery partially because of the great price he has offered, and partially because he knows and trusts him. As far as the plan member is concerned, this is a win-win. The claim is sent to the health plan, and the Plan Administrator uses its discretion to determine that “family member” does not include someone as attenuated as a great uncle (since the Plan Administrator interprets that term “family member” to refer to the immediate family), so the plan pays the claim, and expects that the carrier will agree, since the policy “mirrors” the plan.

Well, you can guess what happens next.

The claim goes to the stop-loss carrier, and the carrier denies the claim because its interpretation of “family member” is broader than the Plan Administrator’s interpretation, indeed including great uncle within the class of “family members.” The carrier denies the claim. The plan is both confused and angry, and thus begins a protracted fight between the plan/TPA/broker and the stop-loss carrier, caused by the carrier’s overly-salesy and idealistic explanation to the plan, TPA, and broker what mirroring actually entails.

In short, plan mirroring entails using the same language, but it does not necessarily entail thinking the same things. The carrier adopted the same exclusion that the plan uses, but the carrier cannot control how the plan interprets that exclusion, nor can the plan be underwritten based on what interpretations of the plan language the Plan Administrator could conceivably make in the future. The carrier, after all, is not a psychic – and because of that, it is the carrier’s responsibility to make absolutely sure the health plan understands what “mirroring” really entails, and what it doesn’t entail. The concept of plan mirroring in a stop-loss policy is not quite as straightforward and magical as it seems. It is certainly useful to minimize the gaps in the language used, but it’s not a panacea.

This applies just as clearly, if not more so, in the level-funded arena, where level-funded plans expect to have their expenses capped based on a guarantee that the carrier will cover all their claims above the aggregate deductible. When there is a difference in interpretation that leads to a denial, the plan is left holding the bill, and often has no idea why – especially when level-funded plans are marketed essentially as programs that mimic fully-insured policies. The important difference is that in a fully-insured policy, the plan sponsor pays its monthly premium and there is no possibility of being on the hook for claims – whereas in a level-funded program, the plan sponsor can lose its expected reimbursement if the stop-loss carrier doesn’t agree with the Plan Administrator’s discretionary decision.

Plan mirroring provisions are sometimes marketed to make a stop-loss policy airtight for the plan, but don’t be fooled by the hype: there is always still the potential for a gap somewhere along the way. Make sure you read and understand your contracts and policies before you sign, and if possible, have them reviewed by an expert!


On August 24, 2020

By: Nick Bonds, Esq.

As the worldwide coronavirus crisis continues to grind on, impacting virtually every aspect of our lives, we have necessarily become familiar with the many pieces of legislation passed by Congress in its attempts to soften the blow to our country’s economic and healthcare systems. This has engendered a whole new can of alphabet soup: CARES, FFCRA, EFMLEA, EPSLA, PPP. Enacted late spring/early summer, these legislations have become staple pieces of the daily conversation in the arena of health benefits for employees. They’ve nearly begun to blend in with the furniture.

But as we are all keenly aware – these pieces of legislation were not designed to be permanent. Many of these temporary rules are set to expire by the end of 2020, with a number of the key components like the payroll protection program, already lapsing, many of us are looking back to Capitol Hill and wondering if and when more economic aid will be coming.

Democrats in the House of Representatives put together a follow-up aid package in May. Clocking in at roughly $3 trillion ($8 billion more, give or take, than its predecessor), the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act would echo much of the relief provided in the CARES Act. Direct stimulus checks to individuals, enhanced unemployment benefits, and in some ways would go even further by expanding the PPP and employee tax credits, expanding eviction protections, providing hazard pay to for essential workers, and allocating billions to assist schools and universities reopen safely.

Though the HEROES Act passed quickly in the House, the Republican-controlled Senate was reluctant to take up the legislation. Balking at the $3 trillion price tag, and perhaps holding out hope that the coronavirus would indeed recede in the warmer summer months and render further economic aid unnecessary, the Senate has finally put together its own approach to a new round of economic stimulus: the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act. Unveiled on July 27, the HEALS Act clocks in at a (relatively) svelte $1 trillion – putting a fairly clear number on just how far apart the two sides are in reaching a compromise.

The HEALS Act includes many of the provisions that proved so popular in the CARES Act: direct “economic impact” payments to individuals with money for dependents as well, enhanced (though significantly reduced) unemployment benefits, and expansions to the PPP and employee tax credit. The HEALS Act dodges some of the assistance provided under the HEROES Act: it is silent regarding eviction protections, provides less support for higher education institutions, and makes its aid to K-12 schools dependent upon their reopening. To Senate Republicans’ credit, the HEALS Act does address a number of things not touched on by either the FFCRA or the HEROES Acts. Namely, the HEALS Act provides $16 billion for coronavirus testing, introduces a potential “return to work” bonus for unemployed workers who secure new employment, and it contemplates a 5-year liability shield.

This last component, encapsulated within the SAFE TO WORK Act (a component of the HEALS Act), is likely of the greatest interest to employers. The bill is designed to shield businesses, schools, nonprofits, government agencies, and other organizations from coronavirus-related lawsuits, so long as they take “reasonable” efforts to follow public health guidelines and manage to avoid grossly negligent or intentional acts of misconduct.

Congress has yet to reach a deal on the next aid package, but there are many components on the table that could do a lot to help Americans through the next leg of this crisis, employees and employers alike. We’ll keep a weather eye on the legislation as it develops.

Conflicts Abound – Providers & Facilities Fight Back

On August 17, 2020

U.S. hospitals have lost over $200 billion from March to June as a result of canceled services due to the COVID-19 pandemic. In response, providers have changed their tactics. They are raising prices, appealing more denied claims, more aggressively fighting referenced-based pricing, and stepping up collections efforts. Now, more than ever, it is imperative for plans and their partners to be vigilant and protect their members and plan assets. Join The Phia Group’s team as they discuss these new aggressive tactics as well as the conflicts they are causing with networks and stop-loss.

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Returning to Work Safely and Smartly. Who Bears the Cost?

On August 13, 2020

By: Bryan M. Dunton

Earlier this year, the coronavirus swept through the country and became such a major concern that employers shut down their physical offices and moved their operations remote. Not long after, states began mandating shutdowns and shelter-in-place orders. The overarching theme focused on how to keep everyone safe.

Now, months later, states and employers have begun to relax those restrictions by reopening, albeit in phases. With that, employees have slowly been allowed to return to work in traditional office settings. Given that employers have an interest in the wellbeing of their employees, and would likely face significant business consequences in the event of an outbreak at their place of business, some employers have implemented mandatory return-to-work testing for those employees who come back to the physical office space. On the national level, we have seen this approach implemented in major sports leagues such as the NFL, NBA, and MLB. The idea is essentially to test everyone who enters the building, regardless of whether they are displaying symptoms or have had known exposure.

The expansion and implementation of mandatory return-to-work testing has led to an interesting issue for plan administrators; who bears the cost of covering these tests?

While the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) require health plans to cover the cost of testing for COVID-19, with no cost-share to the participants, during this declared emergency, many plans are asking if they must pay the cost of the employer-mandated return-to-work testing. Seeing as testing costs vary wildly from $20-$850 (or more) per test, and an overall estimated nationwide cost of $6-25 billion annually, we can certainly see why health plans are concerned.

Section 6001 of the FFCRA, as amended by section 3201 of the CARES Act stipulates that in vitro diagnostic testing for COVID-19 must be covered, with no cost-share to participants. Further, this mandate applies to most group health plans, including self-funded plans. The Centers for Disease Control (CDC) recommends testing for the following five populations of people:

  • Individuals with signs or symptoms consistent with COVID-19
  • Asymptomatic individuals with recent known or suspected exposure to control transmission
  • Asymptomatic individuals without known or suspected exposure for early identification in special settings
  • Individuals being tested to determine resolution of infection (i.e., ensuring someone is no longer infected)
  • Individuals being tested for purposes of public health surveillance for COVID-19

Most of these categories deal with either asymptomatic individual or someone who may have been exposed to the virus. The Department of Labor (DOL) issued additional guidance in late June 2020 to clarify that the FFCRA and CARES Act mandate to cover the cost of COVID-19 testing only applies when the testing is medically appropriate. It further clarifies that testing “not primarily intended for individualized diagnoses or treatment of COVID-19” is not within the scope of section 6001.

So here we are. What should a plan do if an employer mandates return-to-work testing for its employees?

You might be surprised by this, but the answer is: it depends. Return-to-work testing is not typically ordered by an attending physician who deems the test medically appropriate for the patient. Rather, it is ordered by the employer, most likely for purpose of public health surveillance to help diagnose individuals in the workplace. This approach can ensure prompt and proper treatment to prevent creating a hot spot and spreading the virus. Some group health plans have opted to cover the return-to-work testing as a precautionary measure to help mitigate the costs of having to treat a larger pool of participants that may become infected with COVID-19.

Plans and employers should also consider any respective state mandates and obligations which may create additional circumstances where testing would be covered. As a final consideration, some mandates could also create a situation where an employer must cover certain testing even if it is not something where the cost can be passed on to the health plan.

Most self-funded group health plans are following the spirit of the law, and we recognize this is a difficult area to navigate as guidelines and mandates are evolving frequently while we all learn more about the virus. Here at the Phia Group, we welcome the opportunity to consult and help self-funded plans contain their costs and ensure the safety and well-being of their participants.

New Rules on Prescription Drug Importation Are Released – Or Are They?

On August 11, 2020

By: Andrew Silverio, Esq.

On July 24, 2020, the White House issued an “Executive Order on Increasing Drug Importation to Lower Prices for American Patients” as part of a handful of executive orders aimed at drug costs (available at  At first glance, the order seems to take sweeping steps to facilitate the importation of prescription drugs, but does any of it really represent a departure from existing law?  The order specifically orders the Secretary of HHS to take action in three ways:

  1. Facilitate waivers to individuals against the prohibition on importation, “provided such importation poses no additional risk to public safety,” pursuant to section 804(j)(2) of the Federal Food, Drug, and Cosmetic Act (FDCA);
  2. Authorize the re-importation of insulin products upon a finding that doing so is required for emergency care; and
  3. Complete the rulemaking process started by the proposed rule (more information below) to allow importation of certain drugs from Canada.

As it relates to the first item, it’s clear that this does not represent any new law or authority.  Under section 804(j)(2) of the FDCA, “The Secretary may grant to individuals, by regulation or on a case-by-case basis, a waiver of the prohibition of importation of a prescription drug or device or class of prescription drugs or devices, under such conditions as the Secretary determines to be appropriate.”  This order is simply an instruction to utilize said authority, and it is not clear how or whether these waivers would differ from the existing FDA policy of enforcement discretion, which is quite broad and under which individuals are rarely prosecuted for importing prescription drugs for personal use.  The important caveat that the importation must pose “no additional risk to public safety” suggests that there may be no real change at all, as this is one of the biggest factors in the FDA’s existing policy of enforcement discretion, and the key element cited by the FDA and pharmacy stakeholders in pushing back against importation.

In regard to the second item, the specific inclusion of insulin is interesting, and perhaps represents the most significant element of this order.  The proposed rules outlined in 2019 by the FDA and HHS did not specifically include insulin (available at, and the drug’s special storage and safety requirements are a barrier to its inclusion in existing avenues of importation.

While we’re on the topic of the proposed rule, the third item in the executive order is nothing more than an instruction to continue that rulemaking process.  So, is this order a dramatic step toward real federal action allowing drug importation, or just a token announcement that doesn’t really accomplish anything?  Unfortunately, it’s simply too early to tell, and we will have to wait and see what HHS does in response.  It is worth noting that when the proposed rule came out, it was met with harsh criticism from our northern neighbors, many of whom discussed potential action by the Canadian government to counter any such importation efforts in order to protect their own drug supply.  As such, action taken  by the United States in regard to Canadian drug importation won’t be the only factor in whether the practice ultimately becomes both legal and practical.

The Phia Group, LLC Announces the promotion of Nick Fitzsimmons as Senior Director of Provider Relations

On August 7, 2020

For Immediate Release

August 7, 2020

Canton, MA - The Phia Group LLC, the health benefit industry's leading cost-containment service provider, announces the promotion of Nick Fitzsimmons as Senior Director of Provider Relations.  "Nick has been partnered with The Phia Group for 2 years, helping us grow our Provider Relations department where, as part of that team, he distinguished himself as a key strategic contributor,” stated Adam Russo, CEO of The Phia Group. “Nick is a seasoned and experienced cost-containment guru and I look forward to his continued leadership in Provider Relations as we continue to grow and add to our suite of services.”

Nick Fitzsimmons’ cost-containment journey began with Global Excel Management in 1996, managing a team of over 50 employees comprised of negotiators and sales representatives. He also led the network utilization, negotiation strategies, and later rose to the ranks of senior executive leadership.  “The Phia Group is a good fit for me as they are all about innovation, which is what I am looking for.”  stated Nick Fitzsimmons. “I want to be where the action is, and The Phia Group never sits still pursuing their deep commitment to lower the cost of healthcare.”

For more information regarding The Phia Group, please contact Vice President of Sales and Marketing, Tim Callender, by email at or by phone at 781-535-5631.

About The Phia Group:

The Phia Group, LLC, headquartered in Canton, Massachusetts, is an experienced provider of health care cost containment techniques offering comprehensive services, designed to control health care costs and protect plan assets.  By providing industry-leading consultation, plan drafting, subrogation and other cost containment solutions, The Phia Group is truly Empowering Plans.

Empowering Plans: P88 - SCOTUS & HHS – ICYMI

On August 3, 2020

In this episode of the Empowering Plans podcast, Jen and Nick discuss significant developments in nondiscrimination regulations, and the implications for those in the self-funding industry. They talk through the evolution of Section 1557 of the ACA, the new final rule issued by HHS, the Supreme Court’s recent decision on Title VII of the Civil Rights Act, and the looming legal challenges as the health care field attempts to reconcile what we’re hearing from the Supreme Court and HHS. They piece together what all this means for employer-sponsored plans, and offer some advice as to how employers and plans should respond.

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