It’s that time of year again – renewal season! What is often overlooked is the type of stop loss carrier to partner with for the next plan year. Stop loss choices are often made just on the premium cost, however plans should look at more than just the price. Stop loss is something most self funded benefit plans rely upon to ensure their financial viability and long term success. Yet, too often plans seek to change benefit structures or implement cost containment programs without coordinating those changes with stop loss. Understanding procedures preemptively, reviewing a plan document side-by-side with the stop loss policy, and agreeing upon language interpretations are some of the important things plans and carriers must do to achieve harmony.
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By: Kelly Dempsey, Esq.
The last few weeks have been difficult for several states and U.S. territories. Hurricanes Harvey and Irma have caused significant flooding and damage. In addition to the loss of power, many people are homeless and corporations/employers are without a place to conduct business. Depending on the level of damage, it may take a long time for different areas of the country to rebound and rebuild. Chances are that employee benefits, specifically the health plan, are the last thing on employers’ and employees’ minds, but there are some very important considerations. So what do Hurricanes Harvey and Irma mean for employers, employer sponsored health plans, TPAs, and employees?
Self-funded health plans are required to comply with various federal laws that carry different responsibilities including, but not limited to, ERISA, COBRA, FMLA, HIPAA, and the ACA. These federal laws come with a wide array of notice requirements and time frames for processing claims and appeals and other requests for documents or information. As such, the Department of Labor and the Department of Health and Human Services (collectively referred to as “the Departments”) have issued press releases and bulletins that provide general guidance and limit exposure to penalties. These press releases were specifically issued after Hurricane Harvey; however, it’s likely that additional releases will be issued to address Hurricane Irma. Below are links to important press releases; however, the following is one of the key summary statements:
The guiding principle for plans must be to act reasonably, prudently and in the interest of the workers and their families who rely on their health plans for their physical and economic well-being. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits in such cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time-frames.
Health plans and their supporting vendors will likely need to review situations on a case by case basis to determine what is reasonable for each plan and employer.
If you’ve listened to any recent Phia Group webinars, presentations or podcasts, or read our blog or published articles, you already know we’ve been focusing on leaves of absence and gaps between handbooks and plan documents. You’re probably thinking, “Yes, I know, so what’s your point?” With all the damage to homes and job sites, it is possible employees may seek leaves of absence and/or employees will ask questions about existing leaves of absence and how the leave is impacted if an employer ceases operations. While FMLA is generally not available for employees to use as time off to attend to personal matters such as cleaning up debris, flood damage, home repair, etc., FMLA may come into play if an employee or their family member suffers a serious health condition as a result of the hurricane. For those employees that were already out on FMLA, if an employer ceases operations, the time operations are stopped would not count towards FMLA leave. As always, FMLA and other leave situations should also be reviewed on a case by case basis.
In summary, the Departments have issued guidance specifically related to Hurricane Harvey; however, we anticipate additional guidance associated with Irma as well. The bottom line is that employers, health plans, and applicable vendors will need to act reasonably when administering the health plans (i.e., processing claims and appeals, issuing notices such as COBRA notices, etc.) and take into consideration the locations and entities that were impacted and allow grace periods or other relief as applicable.
Important Press Releases and Relevant Guidance:
- U.S. Department of Labor Issues Compliance Guidance For Employee Benefit Plans Impacted by Hurricane Harvey
- Secretary Acosta Joins Vice President Pence in Texas
- FAQs for Participants and Beneficiaries Following Hurricane Harvey
- Hurricane Harvey & HIPAA Bulletin: Limited Waiver of HIPAA Sanctions and Penalties During a Declared Emergency
When it comes to securing stop-loss, too many benefit plans think the ball is only in the stop loss carrier’s court. Today, our hosts explain what plan administrators can do to cut out conflict and tie up loose ends before they suffer a costly loss. Ensuring an ongoing and fruitful relationship between plans and stop loss tomorrow requires intensive work today. Addressing these potential costly issues now will guarantee reimbursements are in the bag later.
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