By: Jen McCormick, Esq.
As many states (and cities) are starting to beginning to enact paid sick and/or leave time regulations, employers will need to understand the impact and implications. The regulations vary by state (and city), but require eligible employers to grant certain employees paid sick time. Various regulations are in effect already, and some are yet to become effect. Regardless of the effective date of these regulations, it’s clear that employers will need to make changes and consider how the regulations will impact their employer handbooks, plan documents (i.e. continuation of coverage) and stop loss. Now is the time to get the ball rolling in reviewing these materials so employers can be prepared.
You either keep moving, or get out of the way. As changes in the tax law threaten all benefit plans, removing the individual mandate and making enrollment optional, the threat of economic unviability looms. To remain intact, benefit plans must maintain their risk pools, and to maintain their risk pools they must attract low risk lives. Without an individual mandate, how is this achieved? With passion and determination, solutions exist for benefit plans that choose to empower themselves. Those that are unwilling to sacrifice the security of the "status quo" face financial ruin. Instead, today you can take the challenging steps needed to make benefit plans attractive to all participants, and thereby protect plan assets.
Join The Phia Group's Adam Russo, Ron Peck, and Brady Bizarro as they discuss what you need to know about the new law, and how to navigate the treacherous path that lies ahead.
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In this episode, Adam, Ron and Brady celebrate the forthcoming change in seasons and warming weather, by each selecting a unique topic that is bugging them, and offering their opinions regarding how we should react. This is one cool sampling of self-funded flavor you won’t want to miss.In this episode, Adam, Ron and Brady celebrate the forthcoming change in seasons and warming weather, by each selecting a unique topic that is bugging them, and offering their opinions regarding how we should react. This is one cool sampling of self-funded flavor you won’t want to miss.In this episode, Adam, Ron and Brady celebrate the forthcoming change in seasons and warming weather, by each selecting a unique topic that is bugging them, and offering their opinions regarding how we should react. This is one cool sampling of self-funded flavor you won’t want to miss.
In this episode, Adam, Ron and Brady celebrate the forthcoming change in seasons and warming weather, by each selecting a unique topic that is bugging them, and offering their opinions regarding how we should react. This is one cool sampling of self-funded flavor you won’t want to miss.
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It’s 2018, and the importance of cost-containment is at an all-time high. Everywhere you look in the self-funded industry is a vendor trying to help health plans control costs; as can be expected, some methods are effective and maximize savings, whereas others…well…not so much.
Join The Phia Group’s legal team as they discuss wrap networks – both in theory and in practice – and what alternatives might be available to modern self-funded health plans.
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By: Brady Bizarro, Esq.
You may recall that, in our January webinar, we mentioned some of the efforts to roll back the Affordable Care Act (“ACA”) at the federal and state levels. Some states were considering proposing (and some actually did propose) their own individual health insurance mandate. Others, like Massachusetts, were considering applying for waivers to their Medicaid programs to permit them to reduce the number of benefits covered in an effort to save money. None of these actions have been as bold as what it taking place in the state of Idaho.
In early January, Governor Butch Otter signed an executive order that would let health insurers in his state sell new plans to market that do not comply with ACA rules. The order would permit the creation of a separate health insurance marketplace where pre-ACA rules would govern. Specifically, the Department of Insurance (“DOI”) announced that insurers would be able to:
Despite many protestations from both sides of the political aisle, including analysis by legal experts that this move is likely unconstitutional, the Trump administration has remained silent on these developments so far. On February 14th, the state’s largest insurer, Blue Cross of Idaho, announced that it will sell five “state-based” plans according to the guidance issued by the DOI. These plans, known as “Freedom Blue,” will be much cheaper than ACA plans, as much as 30 to 50 percent less.
What is important to note here is that Idaho is responding (albeit in its own way) to a recognized, serious problem with the current state of the ACA: many lower to middle class residents who earn too much money to qualify for ACA subsidies are dropping out of the market because they cannot afford their premiums. In Idaho, approximately 110,000 have done just that. Combined with the effective repeal of the individual mandate, this spells potential disaster for state exchanges because those healthy individuals who pay full price are leaving sicker individuals reliant on subsidies in the risk pool. This is not a sustainable situation, and Idaho’s bold reaction is an attempt to lower prices to keep its risk pool healthy. It is unclear how the new Secretary of Health and Human Services, Alex Azar, will respond, but finding ways to stabilize risk pools will be extremely important in 2018, or else we should expect more states to flaunt federal rules and test the administration.
This is it! Our first Empowering Plans guest, and it’s a doozy. In this episode none other than the Self-Insurance Institute of America’s CEO and President, Michael Ferguson, sits down with Adam, Ron and Brady to discuss everything – from past wins and losses, to plans for 2018. From conflicts within the industry, to threats from beyond… Mike doesn’t hold back, and you – like we – get to enjoy the results.
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By: Patrick Ouellete, Esq.
The Employer Shared Responsibility Provision of the Affordable Care Act (ACA) continues to serve as a polarizing topic among employers and ACA supporters as the Internal Revenue Service (IRS) moves forward with its compliance efforts. Regardless of disposition, however, applicable large employers (ALEs) should take note of IRS enforcement trends to date in 2018.
Employers that have 50 or more full-time equivalent employees must offer coverage that meets minimum value and affordability standards, as defined by the ACA. Those that do not meet these reporting requirements (also called the Employer Mandate) are to be assessed penalties by the IRS.
Each Employer Shared Responsibility Payment (ESRP), or tax penalty, is assessed based on whether an ALE offered minimum essential coverage to at least 95 percent of its full-time employees (and their dependents) and the number of employees who were offered (or not offered) coverage. An ALE member that owes the payment of $2,000 for each full-time employee (after excluding the first 30 full-time employees) would pay $166.67 monthly (i.e. 1/12 of $2,000) per month per full-time employee. The $2,000 amount is indexed for inflation:
The Congressional Budget Office and Joint Committee on Taxation estimated back in 2014 that penalty payments by employers would total $139 billion from 2015 to 2024. It will bear watching whether those numbers come to fruition. The IRS noted in a November 2017 FAQ that non-compliant ALEs would retroactively be assessed employer shared responsibility payments that have accrued dating back to 2015. Following through with its promise, the IRS has already begun to send out IRS Letter 226J notices to employers to notify them of ESRP liabilities relating to ACA information filings for the 2015 tax year. The IRS provided a FAQ to ALE recipients in January 2018 as to how to understand and respond to these letters, which may be a good start for those unfamiliar with Employer Mandate and ESRP regulations.
These recent IRS sample letters and FAQs reinforce the reality that employer responsibilities related to the ACA’s Employer Mandate do not appear to be going away any time soon. ALEs would be wise to have their proverbial documentation ducks in a row in the instance they receive an IRS Letter 226J notice. Employer groups in the self-funded health insurance industry should to stay up to date on IRS announcements to best understand the agency’s enforcement plans. It is incumbent upon these groups to review its applicable Forms 1094-C and 1095-C documentation and have a potential response strategy in place.
On January 5, 2018, the Department of Labor (DOL) responded with a proposed regulation which would extend the circumstances in which an association may function as an “employer” under ERISA, and would alter the way in which it would be regulated. The proposed regulations make two important modifications: (1) create a unique dual status for working owners and (2) modifies the interpretation of the commonality of interest requirements. The “dual status” requirement would permit a working owner or sole proprietor to function as both the employer for purposes of joining the association and as the employee for purposes of being covered by the plan. The “commonality of interest” requirement would allow formation of an association for the purpose of offering health insurance. The rule does not impose prohibitions on forming new associations (or specify size limitations), but it does provide formal organizational requirements for associations. While it may seem this rule will not have a major impact on self-funding, these two changes will expand the pool of employers who may be eligible to create, join or establish a self-funded. This could create new opportunities.
By: Chris Aguiar, Esq.
As we saw last week, you cannot add the Patriots’ winning the Super Bowl to the list of absolutes in life (despite what my New England brethren might tell you). After death and taxes, few things are a given. Something similar can be said, that success is not a given, in the world of subrogation/reimbursement.
Last week, I had the pleasure of traveling to Kansas City, Kansas to testify on behalf of a client in a Preliminary Injunction Hearing in Federal District Court as we attempted to obtain a Temporary Restraining Order, a court proceeding to officially freeze the ability of an attorney or his client from spending money to which the Plan asserts an equitable lien by agreement. We spent weeks preparing, researching, committing facts to memory, and rehearsing examinations so that we could put our client in the best position to succeed. Unfortunately, the Judge had other Plans. Despite having witnesses from Kansas and beyond ready to testify – the Judge did not allow any testimony to be heard.
In the end, we were ultimately able to secure everything we needed for our client, but it's notable that something as simple (and typically predicable) as the procedure that a hearing will follow was entirely up to the discretion of the Judge that day. The Judge seemed to have an agenda, and there would be no deviating from it. We ended up on the right side of that agenda, but what if the alternative had been true –a significant risk given that Kansas qualifies as an anti-subrogation state. It’s very important in subrogation cases to consider all options. In many cases there is no doubt that the Plan’s rights are strong, but enforcement often comes at a significant cost. Unfortunately, in the world of Health Subrogation where Plan expenses appear to be limitless while tort reform and other factors allow auto policies to be limited to, in many cases, less than $100,000.00, the cost of enforcing the rights of the Plan in full can leave the Plan worse off than it started. That can even be true when things go exactly right – imagine when a Judge decides to throw a wrench into “the Plan”!
In this episode, our hosts discuss the recent announcement that Amazon, Berkshire Hathaway and JPMorgan are looking to collaborate on “health care.” Is this just a new way to supply medical goods, deliver care, or handle the entire exchange (including enrollment and payment)? How can broker/advisors, plan administrators, and other members of the industry benefit from this change? And who should be most concerned? This and more await you in “Empowering Plans.”