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The Impact of State, Federal Laws, and Current Market Trends on Self-Funding

Attention, self-funders: things are happening! State and federal governments have been busy beavers, either passing legislation or at least looking into it. Whether it's surprise billing laws, Medicare-for-all initiatives, or public exchange options, you need to know about it.

Join The Phia Group's legal team as they share some interesting perspectives on the current legislative climate.

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No No-fault – Michigan Revamps its Auto Insurance Rules

By: Andrew Silverio, Esq.

Recently, the Michigan Senate passed sweeping legislation in an effort to get their auto insurance rates, which are the highest in the nation, under control.  The main way Michigan aims to accomplish this is by eliminating their requirement that auto insurance policies carry unlimited “Personal Protection Insurance” (commonly referred to elsewhere as “Personal Injury Protection” or “PIP” coverage), which is no-fault first party medical coverage.  Under the old system, with exposure to the carrier being quite literally unlimited, premiums predictably climbed to unsustainable levels.

The new law will require that carriers offer PPI options with $500,000 and $250,000 limits, as well as an unlimited option.  It also allows for a $50,000 limit for policyholders on Medicaid only, and importantly, allows policyholders to waive PPI coverage completely if they have Medicare coverage or “other health or accident coverage” which provides benefits for accident claims.

So, why are we talking about changes to auto insurance laws?  Because policies carrying these new limits will shift liability onto health plans.  In light of the previous availability of unlimited PPI coverage, many self-funded Michigan health plans already exclude charges resulting from auto accidents completely.  Under the new law, this should exclude an individual from waiving PPI, however it’s probably unreasonable to expect individuals to be educated enough or review applicable requirements in enough detail to understand these requirements, or for carriers offering these policies to do the legwork to determine whether an applicant’s health plan actually covers auto accident claims.  So, the end result may be that individuals are left with no coverage at all for auto accident claims.  This means that in addition to making sure that plan language is tight, it’s crucial for employers to educate their employees about health coverage and their responsibility to have other coverage available via auto insurance.

This could also impact how plans who don’t exclude auto claims completely – the approach of quickly paying everything up front without question with the understanding that unlimited PPI coverage is available for reimbursement after the fact is no longer such an appealing option.  No matter what the existing approach to these claims, now is the right time for Michigan employers to reexamine how they handle auto accident claims and coordinate with PPI coverage.


MA PAID FAMILY & MEDICAL LEAVE UPDATE: Required Contributions Delayed…and Increased

By: Philip Qualo, J.D.

The commencement of the required contributions for the Massachusetts Paid Family and Medical Leave (“PFML”) program was scheduled for July 1, 2019, but on June 11, 2019, Massachusetts Governor, Charlie Baker, along with members of the Commonwealth’s House and Senate, issued a joint statement agreeing to postpone the start of required contributions for the PFML program by three months. While the legislature will need to pass an emergency bill before the delay is official, this announcement is welcome news for employers scrambling to comply with what was supposed to be a July 1 contribution start date. Adversely, this announcement also brings unwelcome news to employers and their employees because in order to maintain the amount of pre-funding and not reduce total contributions paid to the PFML trust fund, the total contribution rate will be increased from .63% to .75%of wages  and will be deducted on October 1, 2019, the new start date for required contributions.

By way of background, the PFML law, enacted in 2018, provides a right to up to 26 weeks of combined family and medical leave in each benefit year, and pay during such leave, to eligible employees, former employees, and self-employed individuals in Massachusetts. The earliest that such leave and pay benefits will be available is January 1, 2021. Leave under the PFML is job protected and will require continuation of health benefits for the duration of such leaves. Pay during this leave is administered by the state and funded through employer and employee contributions that employers must remit to the state on a quarterly basis. Employers with more than 25 covered employees were required to contribute 60% of the medical leave portion on behalf of their employees. Covered employees’ contribution rate was initially established at 0.63% (0.52% for medical leave and .11% for family leave) of the covered individual’s gross wages or other payments to all covered individuals.

The Department of Family and Medical Leave (“DFML”) has yet to provide updated guidance on whether there will be a change in the medical and family leave allocation of the increased .75% contribution rate or any change in the required employer contribution. However, the DFML has confirmed that June 30th deadline for covered employers to comply with workplace poster and employee notification requirements has been extended to September 30, 2019. In the meantime, we recommend employers with employees based in Massachusetts continue to monitor the DFML website for updated guidance. To learn more about self-funded health plans click here


Tales From the Plan: Episode 1 – Putting the Benefit in Benefit Plan with Jennifer McCormick

In our inaugural episode of “Tales from the Plan,” our own Sr. VP of Consulting, Jennifer McCormick, opens up and candidly discusses her own experience as a consumer of healthcare and member of The Phia Group’s health plan.  Jen is brutally honest, and will make you realize that anyone can be taken advantage of, and anyone can take advantage of, our nation’s healthcare system.  This is mandatory listening.

Click here to check out the podcast!  (Make sure you subscribe to our YouTube and iTunes Channels!)


Faces of Phia: Episode 13 – Glutton for Punishment

Amanda Lima celebrates more than 6 years with Phia (most of that time working closely with Adam), by chatting about her time here, the company, and the amazing work she’s doing on our clients’ behalves – delving deeply into matters of excessive and abusive provider billing. This is a topic about which everyone is buzzing, and Amanda has got the dirt!

Click here to check out the podcast!  (Make sure you subscribe to our YouTube and iTunes Channels!)


Will Sex Discrimination be Re-Defined?

By: Erin M. Hussey

Section 1557 of the Affordable Care Act (“ACA”) prohibits discrimination on the basis of race, color, national origin, sex, age, or disability with regards to certain covered entities’ health programs. A covered entity is one that receives federal funding as outlined in the ACA.

The US Department of Health and Human Services (“HHS”) has issued a proposed rule that would revise the regulations implementing and enforcing Section 1557. This proposed rule, among other things, would essentially allow HHS not to include “gender identity” and “termination of pregnancy” within the definition of “sex discrimination.”

By way of background, HHS’s 2016 regulation on Section 1557 redefined sex discrimination to include gender identity and termination of pregnancy. However, on December 31, 2016, a US District Court issued a nationwide injunction on certain parts of Section 1557, including gender identity and termination of pregnancy, and that injunction is still in effect. As such, this proposed rule would follow suit with that injunction. HHS details that this part of the proposed rule would “not create a new definition of discrimination ‘on the basis of sex’ . . . [but] would enforce Section 1557 by returning to the government's longstanding interpretation of ‘sex’ under the ordinary meaning of the word Congress used.”

In addition, plans that are not directly subject to Section 1557, must still ensure that the employer sponsoring that plan remains in compliance with Title VII of the Civil Rights Act. Title VII prohibits employment discrimination based on race, color, religion, sex and national origin. The Equal Employment Opportunity Commission’s (“EEOC’s”) interpretation of its prohibition on sex discrimination includes discrimination based on gender identity and sexual orientation. However, there have been similar discussions of whether sex discrimination should be redefined under Title VII. HHS detailed this issue in their fact sheet on the proposed rule:

“On April 22, 2019, the U.S. Supreme Court granted petitions for writs of certiorari in three cases, which raise the question whether Title VII’s prohibition on discrimination on the basis of sex also bars discrimination on the basis of gender identity or sexual orientation.”

Therefore, while we wait to see if the proposed rules on Section 1557 are finalized, and for the outcome of the above-noted Supreme Court cases on Title VII, applicable health plans should remain cautious with regards to benefits and exclusions that may implicate sex discrimination issues. If you feel as if you are being discriminated against and would like to negotiate a fair rate, visit our claim negotiation page to learn more.