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Phia Group Media


The Phia Group's 2nd Quarter 2019 Newsletter


Phone: 781-535-5600 | www.phiagroup.com

 


The Book of Russo:
From the Desk of the CEO

We are in full spring mode here at The Phia Group, enjoying warmer weather and record breaking growth. My pool is open, the Indians are playing (more like winning) baseball, and we are already seeing an uptick in renewals on behalf of our clients. While the self-funded space has more energy than ever, we are also seeing some situations where employers and brokers aren’t fully aware of what they are getting themselves into. Yes, you can be innovative and save money, but you must also understand that you are now a fiduciary, you must take on added exposure and risk. There are many moving pieces in the self-funded space, so the plug and play approach won’t always work. In fact, you will get the best results by not plugging and playing anything. This is where we come in, from setting up your plan design to handling your appeal issues, Phia is here to ensure you have a positive self-funding experience. I hope you enjoy the great newsletter we have put together for you. Happy reading!


Service Focus of the Quarter: Unwrapped and CNS
Phia Group Case Study - Frightening ASA Provisions
Phia Fit to Print
From the Blogosphere
Webinars
Podcasts
The Phia Group’s 2019 Charity
The Stacks
Phia’s Speaking Events
Employee of the Quarter
Phia News

 

Service Focus of the Quarter: Unwrapped and CNS

We have all witnessed instances of abusive provider billing. When imposed upon a self-funded health plan, the effects seem most disastrous. To combat this, some groups have migrated to a no-network, full reference-based pricing model. While that is ideal for some groups, it is still a small minority of plan sponsors who are willing or able to bear the risks associated with a full reference-based pricing program.

A more traditional way of combating high claims is one-off claim negotiations. The Phia Group calls this our Claim Negotiation & Signoff service (or CNS). Through this service, The Phia Group puts its legal team and expert negotiators to work, to combine legal expertise with objective cost data to obtain case-by-case negotiations with medical billers. A comprehensive set of data helps determine market-based prices, to put payors on a level playing field with their members’ medical providers, and secure written payment agreements that avoid balance-billing.

The Phia Group proudly boasts a 51% average discount off billed charges on claims within the CNS service. Unlike CNS, however, Phia Unwrapped is anything but traditional. Wrap, extender, and other leased networks offer small discounts and audit restrictions, affording providers nearly unlimited rights. With Phia Unwrapped, The Phia Group replaces wrap network access and modifies non-network payment methodologies, securing payable amounts that are unbeatably low. Phia Unwrapped places no minimum threshold on claims to be repriced or potential balance billing to be negotiated, and The Phia Group attempts to secure sign-off, ensuring providers will accept the plan’s payment as payment in full.

Out-of-network claims run through The Phia Group's Unwrapped program yielded a whopping average savings of 74% off billed charges (three times the average wrap discount in 2018). On average, The Phia Group sees roughly 2% of claims result in some form of balance-billing; these results are similar throughout many different plan types and geographies, proving that this program and these results can be applied nationwide.

Contact our Vice President of Sales and Marketing, attorney Tim Callender, to learn more about CNS or Phia Unwrapped. Tim can be reached by phone at 781-535-5631 or by email at TCallender@phiagroup.com.

 

Phia Case Study: Frightening ASA Provisions

The broker of a self-funded benefit plan was presented with an Administrative Services Agreement (or ASA), by which the prospective TPA would administer claims for the health plan. The broker presented our consulting division with the Administrative Services Agreement to review, as a matter of ordinary diligence. This review was focused on a holistic approach, rather than any particular provisions that were previously identified as troublesome.

Upon reading the ASA, The Phia Group’s reviewer noticed a provision relating to the network, which provided that the plan would be required to pay certain types of claims despite issues with medical necessity or experimental status. This ASA essentially rendered those important Plan exclusions unusable, which, needless to say, is a problem.

Among other issues to address within the ASA, The Phia Group placed a great deal of emphasis on that provision when providing the client with the review, and the broker was grateful that this matter was brought to light. This is especially important from a stop-loss perspective; it’s tough to know how exactly a given carrier will treat a particular situation without a discussion, and this language within the ASA couldn’t be discussed until it was identified.

With the information provided by The Phia Group, the broker and group were able to discuss the matter with the TPA and reach a resolution favorable to all parties involved – and the plan no longer had to worry that its ASA required it to pay claims that stop-loss would almost certainly deny!

 


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Fiduciary Burden of the Quarter: Ensuring Proper Application of OOP Limits!

The Department of Labor has explained that amounts that must be applied to an individual’s out-of-pocket maximum do not (but may, at the plan’s option) include “premiums, balance billing amounts for non-network providers, or spending for non-covered services.” A claim subject to reference-based pricing, as opposed to one subject to a contract with a provider, necessarily entails an out-of-network claim. Thus, according to the DOL’s original interpretation, balance-billed amounts resulting from non-network reference-based pricing are not included in the individual’s out-of-pocket cost limitations.

Subsequently, however, the DOL got wind of this whole reference-based pricing phenomenon, and altered its stance a bit. According to the regulators:

“…a plan that utilizes a reference-based pricing design (or similar network design) may treat those providers that accept the reference-based price as the only in-network providers and not count an individual’s out-of-pocket expenses for services rendered by other providers towards the MOOP limit only if the plan is using a reasonable method to ensure adequate access to quality providers at the reference price.”

In other words, it’s still the case that a patient’s OOP does not include balance-billed amounts – but that’s only if the plan “is using a reasonable method to ensure adequate access to quality providers at the reference price.” Our interpretation of that has been that reference-based pricing is still alive and well according to the DOL – but a given RBP plan must count balance-billed amounts toward patient OOP unless the plan provides patients options to avoid balance-billing. The DOL has not elaborated on what those options may be, but a reasonable interpretation is that contracts of any kind would work. Some plans choose to use a full PPO and only use RBP for out-of-network claims; other plans use a narrow network; others choose to sign contracts with certain choice facilities to provide their members with safe options; others still opt to sign no contracts whatsoever, but are sure to settle claims on the back-end to avoid balance-billing.

Whatever option you choose for your RBP plan, make sure you’re following the regulations! One important fiduciary duty of a Plan Administrator is to accurately calculate member OOP – and when it comes to reference-based pricing, that can get tricky.

 

Success Story of the Quarter: Overpayment Recovery

The Phia Group’s overpayment department was presented with a file whereby the TPA identified a claim that was overpaid to a medical provider; the overpayment reason was that Medicare was primary on the claims, but the TPA placed the self-funded health plan as primary in error. The plan had paid $76,000. The TPA knew that the plan would need to pay something as secondary, but certainly not its entire allowable. Further, the TPA had concerns that the group and its broker would hold the TPA responsible if the money couldn’t be recovered.

The Phia Group’s overpayment experts reached out to the provider, and initially were given the cold shoulder. After continuous communication with the provider and making sure to stay on the hospital’s radar, eventually the claim was escalated to the hospital’s CFO. After a series of lengthy discussions, the hospital’s CFO finally agreed to resubmit the claims to Medicare, but only agreed to refund the Plan the portion of the claim that was not in fact payable by Medicare, effectively treating the plan as secondary up to the full, billed charges.

At that point, one of The Phia Group’s attorneys contacted the hospital’s CFO, in an attempt to explain that even though the self-funded health plan pays secondary to Medicare, the health plan’s allowable amount is defined within the Plan Document, and is not the full billed charges. After The Phia Group’s overpayment team went back and forth for many weeks and explained the plan’s language numerous times the CFO seemed to understand.

Ultimately, it was revealed that Medicare paid the claims in question at the rate of $58,000. Because the plan’s allowable was the original $76,000, the plan paid the difference of $18,000 as secondary, but was refunded the $58,000 that Medicare paid as primary.

The moral of this story? If you find that money has been overpaid, The Phia Group can help you recover it! Contact our Vice President of Sales and Marketing, attorney Tim Callender, to learn more about The Phia Group’s overpayment recovery services. Tim can be reached by phone at 781-535-5631 or by email at TCallender@phiagroup.com.
 

 


 

Phia Fit to Print:

• Free Market Healthcare Solutions – You Have the Right to Know the Price – March 10, 2019

• Self-Insurers Publishing Corp. – The Self-Funded Case-Back To Basics – March 8, 2019

• BenefitsPro – How close are we to a federal paid family leave law? – March 6, 2019

• Self-Insurers Publishing Corp. – The Profit Motive-A Necessary Evil? – February 5, 2019

• Self-Insurers Publishing Corp. – A Texas Federal Judge Declares The Affordable Care Act Unconstitutional: What Next? – January 16, 2019

• Money Inc. – Texas v. United States: The Events that Followed and the Impact of the Government Shutdown – January 14, 2019

• Managed Healthcare Executive – Top 4 Challenges Healthcare Faces in 2019 – January 11, 2019



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From the Blogosphere:

Foreign Drugs: Savings Worth Traveling For. A roadtrip that might be worth taking.

To RBP, or Not to RBP: That is (one) of the Question(s). Reference-based pricing is one of the most mysterious self-funding structures out there.

Hey, Watch Your Language! Clear language describes what the plan will pay in a comprehensible manner.

New Action on Drug Pricing: Medicare-Like Rates? From ending pharmacy gag rules to outlawing the use of co-pay coupons.

Blocking the Birth Control Rule. Coverage of contraceptives for women and the availability of a religious or moral exemption (or an accommodation) has been hotly debated recently.

 

To stay up to date on other industry news, please visit our blog.



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Webinars

Click HERE to Register!

• On March 14, 2019, The Phia Group presented, “Transparency: A Building Block of Self-funding,” where we discussed some emerging and ongoing transparency issues, measures being taken to try to resolve them, and methods you can use to get the data you need in order to lower costs.

• On February 14, 2019, The Phia Group presented, “What We Love About Self-Funding in 2019,” where we discussed what makes self-funding such a great option for so many employers and employees, as well as the incredibly cool new innovations rolling out in 2019.

• On January 16, 2019, The Phia Group presented, “The Affordable Care Act in 2019: A Look Ahead,” where we discussed many legal and political battles that threaten the ACA's existence.

Be sure to check out all of our past webinars!



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Podcasts:Featuring Video Podcasts!

• On March 29, 2019, The Phia Group presented, “Breaking News - Federal Judge Blocks Expansion of AHPs,” where Adam and Brady discuss the Department of Labor’s new rules that expanded the sale of association health plans (“AHPs”) violate existing law.

• On March 26, 2019, The Phia Group presented, “Employee Takeover: Self-Funded Health Plans from the Member's POV,” where Phia’s Marketing & Accounts Manager, Matthew Painten, and Compliance & Regulatory Affairs Consultant, Philip Qualo, dissect Phia’s very own Self-funded health plan.

• On February 28, 2019, The Phia Group presented, “Bigger in Texas,” where Ron and Brady discuss Brady’s recent trip to Austin and presentation at the Texas Association of Benefit Administrators.

• On February 15, 2019, The Phia Group presented, “Hail to the Chief!,” where our hosts, Brady and Ron, dissect the President’s State of the Union Address.

• On February 5, 2019, The Phia Group presented, “Hospital Transparency!,” where out hosts, Ron and Brady discuss the new legal compliance and regulatory affairs team (“LCARA”) with team member Philip Qualo, and specifically address recent efforts to promote hospital transparency.

• On January 25, 2019, The Phia Group presented “Touchdown!,” how providers – like plan sponsors – are concerned with the state of things and want to identify what’s wrong, what’s right, and how we can collaborate on a new approach that works for us all, as members of a single industry – healthcare.

• On January 10, 2019, The Phia Group presented “Obamacare is Still the Law, Right?,” where Ron and Brady dissect the Texas decision that challenges the legality of the ACA.

• On January 2, 2019, The Phia Group presented “Leather Patches & Pipes,” where our host, Ron Peck sits down with Andrew Silverio and Jon Jablon to discuss the forthcoming master’s degree program in plan development they will be teaching.

Be sure to check out all of our latest podcasts!

 

Face of Phia

• On February 19, 2019, The Phia Group presented, “Taking Account with Lisa T!,” where our hosts sit down with The Phia Group’s Senior Controller, Lisa Tangney.

• On February 8, 2019, The Phia Group presented, “It’s Tomasz Time!,” where our hosts sit down with The Phia Group’s Senior Claim & Case Support Analyst, Tomasz Olszewski.

• On January 30, 2019, The Phia Group presented, “Ashley Turco… International Agent of Security!,” where our hosts sit down with The Phia Group’s Director of Compliance, Ashley Turco.

• On January 17, 2019, The Phia Group presented, “Tech Talk with Hemant,” where our hosts sit down with The Phia Group’s Vice President of Technology, Hemant Dua.

• On January 14, 2019, The Phia Group presented, “Setting the Pace with Tori: Help me Tori!,” where our hosts sit down with a member of The Phia Group’s Client Implementation Coordinator, Tori Pace.

• On January 7, 2019, The Phia Group presented, “Dishing with Delaney,” where our hosts sit down with The Phia Group’s Senior Training & Development Specialist, Katie Delaney.

 

 



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The Phia Group’s 2019 Charity

At The Phia Group, we value our community and everyone in it. As we grow and shape our company, we hope to do the same for the people around us.

The Phia Group's 2019 charity is the Boys & Girls Club of Brockton.

 

The mission of The Boys & Girls Club is to nurture strong minds, healthy bodies, and community spirit through youth-driven quality programming in a safe and fun environment.

The Boys & Girls Club of Brockton (BGCB) was founded in 1990 to create a positive place for the youth of Brockton, Massachusetts. It immediately met a need in the community; in the first year alone, 500 youths, ages 8-18, signed up as club members. In the 25 years since, the club has expanded its scope exponentially by offering a mix of Boys & Girls Clubs of America (BGCA) nationally developed programs and activities unique to this club.

Since their founding, more than 20,000 Brockton youths have been welcomed through their doors. Currently, they serve more than 1,000 boys and girls ages 5-18 annually through the academic year and summertime programming.

 

A Special Delivery from the Phia Family

 

The Phia Family loves to show their Patriots Pride! In anticipation of the Super Bowl, we channeled our excitement to raise over 2,000 hygiene items and $1,400 for the Boys & Girls Club of Brockton! As a thank you to the kind, thoughtful, giving members of the Phia Family, we decided to reward everyone at the office with a late opening the day after the Super Bowl.

 

 

Youth of the Year

 

Our favorite time of the year has arrived and we get the opportunity to choose our Youth of the Year. A member of the Boys & Girls Club of Brockton has been chosen by The Phia Group’s CEO, Adam Russo, to receive the prestigious award of Youth of the Year. This member will receive a $5,000 college scholarship and a brand new laptop that will help them through the four years of college. We are proud to announce that Julieth Nwosu was chosen to receive this prestigious award! Congratulations, Julieth, and best of luck in college!

 


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The Stacks

The Self-Funded Case – Back To Basics

By: Tim Callender, Esq. – March 2019 – Self-Insurers Publishing Corp.

Without a plan document, what is a self-funded plan, truly? It is a nebulous financial instrument, or bizarre oral contract slightly memorialized by HR emails and broker notes that exists without clear guidance or application. Yet this plan is still subject to incredible responsibility and liability. Needless to say, not only is having a plan document a good idea (if not required, depending on how you read the law) but it is an even better idea to have a well-written and understandable plan document. As discussed above, many plan sponsors become enamored with new and innovative solutions, ranging from specialty Rx cost control to a medical tourism program filled with plan member incentives. These are wonderful solutions that may yield outstanding results – but what if the plan document does not properly support and outline the specialty Rx program? What if the plan document fails to provide clear instruction to the plan member on how he/she can take advantage of the beneficial medical tourism program? Not only does the plan sponsor run the risk of implementing benefit structures that may cause legal problems, since they are not outlined in the plan document, but the plan sponsor will most surely lose out on gaining the benefit of these innovative solutions. Not to mention paying claims outside the terms of the plan’s stop-loss policy. Without a well-written and understandable plan document, the it is pointless to pursue more complex solutions and the goals of cost containment and rich benefits will surely never be met.

Click here to read the rest of this article


The Profit Motive – A Necessary Evil?

 

By: Andrew Silverio, Esq. – February 2019 – Self-Insurers Publishing Corp.

Working in the self-funded healthcare industry, it can be easy for us to develop tunnel vision and focus on cost containment and affordability at all costs, losing sight of other valid interests within and relating to the healthcare market. Quality of care is an obvious one – if not done properly, reductions in cost can come at the expense of quality (of course, this isn’t always the case in healthcare, a product which so often has a great deal of inefficiency built in). But there are other, less directly related interests which we should keep in mind when we zoom out and look at the broader system, for example in forming policy decisions. The healthcare market is an ecosystem, and like in any ecosystem, one organism becoming too powerful can ultimately be a bad thing for everyone. A super-predator in an isolated system can quickly hunt its own prey out of existence and starve.

Click here to read the rest of this article

 

A Texas Federal Judge Declares The Affordable Care Act Unconstitutional: What Next?

By: Brady Bizarro, Esq. – January 2019 – Self-Insurers Publishing Corp.

On February 26, 2018, eighteen state attorneys general and two Republican governors filed suit in a Texas district court against the federal government over the constitutionality of the Affordable Care Act (“ACA”). While Texas v. United States is not the first serious legal challenge brought against the Obama administration’s signature healthcare law (see, e.g., King v. Burwell, 135 S. Ct. 2480 (2015); see also National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012)), it is the first in which the executive branch broke with tradition and declared that it would not defend the ACA in court. The case has certainly represented the most serious threat to the ACA since the GOP’s legislative efforts to repeal the healthcare law failed last summer. As it turns out, this threat should have been taken more seriously by industry analysts. On December 14, 2018, Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas found that the ACA was unconstitutional.

Click here to read the rest of this article

To stay up to date on other industry news, please visit our blog.

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Phia’s 2019 Speaking Events:

Phia’s Speaking Engagements:

• 1/9/2019 – FMMA Conference – Austin, TX

• 2/27/2019 – Sunlife 2019 MVP Academy – Denver, CO

• 3/8/2019 – UnitedAg Conference – Anaheim, CA

• 3/19/2019 – SIIA Self-Insured Health Plan Executive Forum – Charlotte, NC

• 3/21/2019 – CGI Business Solutions Seminar – Woburn, MA

• 3/26/2019 – HFTA Broker Meeting – Tyler, TX

• 4/3/2019 – BenefitsPRO Broker Expo – Miami, FL

• 4/5/2019 – Pareto Conference – Nashville, TN

• 4/7/2019 – Captive Symposium – Cayman Islands

• 4/8/2019 – National Beer Wholesalers Association Legislative Conference – Washington DC

• 4/12/2019 – FMMA 2019 Annual Conference – Dallas, TX

• 4/23/2019 – Johns Hopkins Industry Education Series – Baltimore, MD

• 4/24/2019 – Sunlife 2019 MVP Academy – Kansas City, MO

• 4/25/2019 – BevCap’s Best Practices Workshop – Orlando, FL

• 4/26/2019 – Society of Professional Benefit Administrators Annual Conference – Washington, D.C.

• 5/2/2019 – MassAHU Benefest 2019 Conference – Westborough, MA

• 5/14/2019 – Cypress Unversity – Las Vegas, NV

• 5/30/2019 – Contrarian Captive – Austin, TX

• 6/11/2019 – Leavitt Conference – Big Sky, MT

• 7/15/2019 – HCAA TPA Summit – Dallas, TX

• 7/31/2019 – 2019 MVP Academy – Wellesley, MA

• 8/24/2019 – Well Health Workshop – Chicago, IL

• 10/27/2019 – 2019 Annual NASP Conference – Washington DC

 

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Get to Know Our Employee of the Quarter:
Andrew Fine

Congratulations to Andrew Fine, The Phia Group’s Q2 2019 Employee of the Quarter!

When Andrew first started at The Phia Group in 2017 as an intake specialist, it was clear that he was a perfect fit for not only his role, but for The Phia Group. Andrew is currently the Lead Intake Specialist for Phia’s Consulting department. Andrew has a great work ethic and maintains a positive attitude. The Consulting department can always rely on him to stay on top of client requests, as he is very efficient and organized.

 

Congratulations Andrew, and thank you for your many current and future contributions.

 

 


Phia News

 

Exceptional Business Award

The Phia Group is proud to announce that we have been presented with an Exceptional Business Award at the 11th Annual Mentor Recruitment Rally & Celebration! We take tremendous pride in our community and the youths of the Boys & Girls Club of Brockton - Allowing the young people of our community opportunities and platforms in which they can succeed has been rooted in our everyday business functions, leading to a promising future and a caring environment for all those involved.

 

 

Valentine’s Day at Phia

The Phia family celebrated Valentines Day with a guessing game! Everyone in the office was tasked with guessing how many candy hearts were in the glass jar… But we didn’t stop there… We challenged our followers on LinkedIn to join in on the fun. After an entire day of guesses being collected, we finally counted out the candy hearts. There were a total of 2,329 candy hearts in the glass jar! Congratulations to Jeff Hanna, of The Phia Group, who guessed 2,303. We would also like to congradulate Diana Denzin, who had the closest guess on our LinkedIn page, with a guess of 2,621.

 

 


 

Job Opportunities:

• Intake Specialist

• Attorney I

• Overpayments Recovery Assistant

• Health Benefit Plan Drafter

• Case Investigator I

• Provider Relations Client Concierge

See the latest job opportunities, here: https://www.phiagroup.com/About-Us/Careers

 

Promotions

• Ron Peck has been promoted from Sr. VP and General Counsel to Executive Vice President and General Counsel

• Julie Martin has been promoted from VP, Recovery Services to Sr. Vice President, Recovery Services

• Jen McCormick has been promoted from VP, Consulting to Sr. Vice President, Phia Group Consulting

• Chris Aquiar has been promoted from Director, Recovery Services to Vice President, Legal Recovery Services

• Hemant Dua has been promoted from Sr. Director of IT to Vice President of Technology

• Brady Bizarro has been promoted from Director, Healthcare Attorney to Director of Legal Compliance & Regulatory Affairs (LCARA)

• Andrew Silverio has been promoted from Health Benefit Plan Admin - Attorney III to Compliance & Oversight Counsel

• Philip Qualo has been promoted from HR Compliance Specialist to Compliance & Regulatory Affairs Consultant

• Sean Donnelly has been promoted from Corporate Counsel to Associate General Counsel

• Cara Carll has been promoted from Senior Team Lead to Manager of Case Evaluation, Customer Service & Claim Analysis

• Amanda Lima has been promoted from Provider Relations Team Lead to CEO Executive Assistant and Manager of Provider Relations

• Cindy Monfils has been promoted from Account Coordinator/Paralegal to COO Executive Assistant/Paralegal

• Jamie Johnson has been promoted from Team Lead, Sr. Recovery Team to Team Lead, Bodily Injury

• Rose Jardim has been promoted from Team Lead of Accounting to Supervisor of Accounting

• Ekta Gupta was promoted from Coordinator, Data Services Group to Manager, Data Services Group

• Erin Hussey has been promoted from Attorney I to Attorney II

• Andrew Fine has been promoted from Intake Specialist to Lead Intake Specialist.


 

New Hires

• Robyn Sullivan was hired as an Executive Assistant

• Robert Martinez was hired as an Attorney in the Provider Relations Department

• Robyn Cleaves was hired at a Team Lead in Accounting

• Shawndell Dias was hired as a Case Investigator

• Scott Byerely was hired as the Vice President, Operations and Total Quality Management



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info@phiagroup.com
781-535-5600

The Phia Group's 2nd Quarter 2018 Newsletter


Phone: 781-535-5600 | www.phiagroup.com


 

The Book of Russo:
From the Desk of the CEO

It is busy… I mean really busy. From conferences to claim issues, never has The Phia Group seen the volume and variety that it is seeing now. That is why this month’s webinar on April 19th is a must-see event. We are witnessing new and unique claim issues, ranging from surrogacy to scary IRS notices being sent to employers across the country. This webinar will discuss what we have learned and what you can do to protect yourselves and your clients. It is only spring here in Boston but the heatwave of self-funding is being felt across Phia. By the way, I wanted to congratulate the following 8 employees of The Phia Group for officially being approved to attend the Future Leaders Track at the 2018 National SIIA Conference in late September.

• Toussaint Anderson
• Ulyana Bevilacqua
• Brady Bizarro
• Amanda Grogan
• Garrick Hunt
• Amanda Lima
• Maribel McLaughlin
• Victoria Pace

These fine people will represent our company at SIIA’s first foray into ensuring the future of self-funding. I would encourage all of you to identify the future leaders of your organization and send them to SIIA as well. Happy reading!

 


Service Focus of the Quarter: Plan Appointed Claim Evaluator (PACE)
Phia Case Study: Overpayment Schmoverpayment
Success Story of the Quarter: The Phia Group Saves an Employer Thousands of Dollars
Phia Fit to Print
From the Blogosphere
Webinars
Podcasts
The Phia Group’s 2018 Charity
The Stacks
Phia’s Speaking Events
Employee of the Quarter
Phia News

Register for The Phia Group's Next Webinar

4 Horsemen of the Plan-pocalypse

Nostradamus? Miss Cleo? The Phia Group? In a psychic feat of foresight, The Phia Group’s team has gazed into their crystal ball and identified four issues that may not presently be keeping you up at night, but will certainly be disturbing your slumber very soon. From being forced to pay for surrogate pregnancy and births, to the IRS actively issuing letters notifying employers of 2015 tax year penalties; from a new wave of fraud, errors, and abuse leading to heretofore unseen overpayments, to case law addressing the rights of plans to utilize reference based pricing – you’ve been warned! We predict this complimentary webinar, taking place at 1pm (EST) on April 19, 2018, will open your eyes. Miss this webinar at your own peril… You’ve been warned!

Click HERE to Register!

 

Service Focus of the Quarter: Plan Appointed Claim Evaluator® (PACE)

Making determinations on medical claim appeals is a frightening prospect. The process can involve complex factual, legal, and medical issues, and can distract an employer plan sponsor from its ordinary business functions, posing a significant resource drain. The PACE service allows the plan sponsor to shift fiduciary duty away, onto the PACE, for final, internal claim appeals. With PACE, plan sponsors and TPAs assign the riskiest fiduciary duty (that is, the power to make payment decisions in response to final, internal appeals), to The Phia Group. This authority carries with it the most risk, because it is this final payment directive that may be scrutinized upon external review or in the courtroom.

Self-funding veterans and novices alike will benefit from PACE. Groups that are moving from fully-insured or ASO arrangements can use PACE as a valuable tool to aid in the transition; these groups have never before been faced with such fiduciary liability - with the PACE, that daunting responsibility can be delegated to a neutral and capable third party. In addition to having a third party expert analyze all final, internal appeals, before they reach an external review, the PACE also ensures that legally mandated independent review organizations (IROs) are in place, and the PACE handles facilitation of external appeals with these IROs. Regardless of whether the PACE upholds or reverses a denial, the PACE's service continues to apply. This includes coordinating efforts with stop-loss, plan sponsors, brokers, and TPAs whenever these partners do not align. PACE is a way for the employer to be able to focus less on the complexities of its health plan, fiduciary duties, and stop-loss concerns, and more on what matters - its business. PACE is also a way for the payor to rest easy knowing that it is not unwittingly assuming fiduciary duties on final, internal appeals.

For years, self-funded plan sponsors and TPAs have asked how they can avoid the risks inherent in self-funding, while still enjoying the benefits of that plan structure. According to The Phia Group's CEO, Adam Russo, "With a PACE in place, we're taking a giant step in the right direction. It's a game changer." Contact Tim Callender at tcallender@phiagroup.com or 781-535-5631 to learn more about how PACE can help you.

 

Phia Case Study: Overpayment, Schmoverpayment!

The Phia Group was presented with a situation in which a TPA had processed a claim in error. The issue was one of eligibility; the TPA processed the claim as usual, without realizing that the member had in fact termed the prior week. The TPA had the information, but through a fairly common record update delay, the claim was paid at the appropriate out-of-network rate - but for a termed member.

The group's broker contacted the TPA and was somewhat upset at the erroneous claim processing. The TPA explained the circumstances - and the TPA's Administrative Services Agreement did not hold the TPA responsible - but the broker expressed interest in pursuing the matter, given the sizeable amount of money involved. The broker was also looking into having the group switch TPAs.

When this matter was brought to the attention of The Phia Group's consulting team, our first two actions were to try to diffuse the situation between the broker and TPA, and to try to recoup the overpayment to keep both sides happy.

As it happened, The Phia Group's dedicated overpayment team had a prior relationship with this particular provider, and our overpayment recovery specialists were able to recover $40,000.00 of the $42,000.00 erroneous payment. That recovery satisfied the broker and the group, and the TPA agreed to credit the group the remaining $2,000.00 as a gesture of good faith (and a smart business decision to boot).

The recovery obtained by The Phia Group's overpayment team not only salvaged $40,000.00 for the group, but it avoided a feud between a TPA and broker, and also helped the TPA keep a valuable block of business that it would otherwise have lost.

 


 

Fiduciary Burden of the Quarter: Following the Plan Documents…Unless…

Generally, it is fairly simple to comply with the duty to follow the terms of the plan documents. That important duty, however, applies only "insofar as such documents and instruments are consistent with the provisions of [ERISA]." In other words, you must follow the plan documents, unless the plan documents violate ERISA, in which case you must follow ERISA instead. The powers that be have interpreted this as applying not just to ERISA, but to all federal laws. The result is that federal law "overrides" any conflicting terms of the plan documents - so Plan Administrators are sometimes forced to ignore the terms of the plan documents in favor of following federal law.

So what does this mean? Well, if the plan documents have provisions that violate federal law, the fiduciary duty morphs from one requiring the fiduciary to comply with the terms of the plan documents to one requiring the fiduciary to comply with the law instead of the plan document.

An example we have seen are the new regulations promulgated under ACA Section 1557 regarding transgender surgery. There is a certain amount of legal discord at the moment surrounding the interpretation of these regulations, but the status quo is that self-funded health plans are not permitted to exclude transgender surgery, or they risk violation of the Affordable Care Act. Many employers, however, have taken a stance against this mandate, by excluding transgender surgery within their plan documents. This is a textbook instance where the fiduciary duty would change: if following the terms of the plan document would be noncompliant with other federal laws, then the fiduciary is required to follow those federal laws instead.

This can be a very tricky situation, and it emphasizes the notion that the plan documents should always be as compliant and current as possible to avoid having to analyze situations like this. As always, if you have questions about your plan documents, fiduciary duties, or how to reconcile the two, please contact PGCReferral@phiagroup.com.

 


Success Story of the Quarter: The Phia Group Saves an Employer Thousands of Dollars

The IRS has recently been enforcing the Employer Shared Responsibility Mandate (“employer mandate”) by sending letters to employers implicating that they may have violated the employer mandate rules and may owe a substantial penalty called an Employer Shared Responsibility Payment (“ESRP”). This employer mandate was put in place by the Affordable Care Act (“ACA”). The ACA requires Applicable Large Employers (“ALEs”) who have 50 or more employees to (1) provide minimum essential health coverage to all full-time employees and their dependents (or the employer will face a subsection (a) penalty); or (2) offer eligible employer-sponsored coverage that is “affordable” and meets “minimum value” (or the employer will face a subsection (b) penalty). Employers who receive these letters may have to pay the ESRP, but have a chance to respond to the letter before the penalty is mandated.

A client was presented with one of these letters from an employer. The employer was facing over $50,000.00 dollars in penalties if they did not respond to the letter properly and explain why they were/were not at fault. The IRS has specific guidelines of how to respond to these letters. This can become very daunting and confusing for employers facing these high penalties. The client reached out to The Phia Group for consultation. Attorneys Krista Maschinot and Erin Hussey analyzed the situation and explained what the employer may or may not have done wrong to receive this large employer mandate penalty, and with their consultation, the employer was able to identify their mistake and properly respond to the IRS letter. After the employer explained their mistake and properly responded to the IRS letter, the IRS sent a second letter to the employer which lowered their penalty to less than $2,500.00, saving the employer thousands in penalties.

Disclaimer: As these forms are heavily based in IRS regulations and taxation, we strongly recommended to the broker that the employer should discuss this with their tax advisor and/or the entity that assisted in preparing their tax forms.
 


 

Phia Fit to Print:

• Self-Insurers Publishing Corp. - Buyer Beware - No Good Deed Goes Unpunished - January 3, 2018

• Money Inc. - Too Good to Pass Up: How we Over Come the Loss of the Individual Mandate - January 24, 2018

• Money Inc. - The Best of Times and the Worst of Times… How Imperfect Regulatory Action May Still Create Opportunities for Self-Funding - February 22, 2018

• Self-Insurers Publishing Corp. - Trump Tax Bill Signals the Swan Song for Obamacare's Individual Mandate - March 4, 2018

• Money Inc. - Freedom Blue: Why the Trump Administration Picked Obamacare over Idaho - March 29, 2018



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From the Blogosphere:

Contraceptive Update - Appeals and Intervenors There is a process that must be followed before a party can intervene.

What do All These New Paid Sick Laws Mean for Employers? The regulations vary by state (and city).

Even the Best Plans can Backfire! It's very important in subrogation cases to consider all options.

Your Plan isn't a Cadillac …Yet. The ACA Health Insurance Provider Tax is applicable for fully-insured plans

 

To stay up to date on other industry news, please visit our blog.



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Webinars

4 Horsemen of the Plan-pocalypse

Nostradamus? Miss Cleo? The Phia Group? In a psychic feat of foresight, The Phia Group's team has gazed into their crystal ball and identified four issues that may not presently be keeping you up at night, but will certainly be disturbing your slumber very soon. From being forced to pay for surrogate pregnancy and births, to the IRS actively issuing letters notifying employers of 2015 tax year penalties; from a new wave of fraud, errors, and abuse leading to heretofore unseen overpayments, to case law addressing the rights of plans to utilize reference based pricing - you've been warned! We predict this complimentary webinar, taking place at 1pm (EDT) on April 19, 2018, will open your eyes. Miss this webinar at your own peril… You've been warned!

Click HERE to Register!

On March 20, 2018, The Phia Group presented, "Transparency: Using it to Your Advantage," where we discussed the need for, and effects of, contractual and price transparency on the self-funded industry - and how health plans, TPAs, and brokers can use transparency to their advantage.

On February 27, 2018, The Phia Group presented, "Evolve or Dissolve - Responding to Today's Tax Law to Save the Health Benefit Plan Industry Tomorrow," where we discussed what you need to know about the new law, and how to navigate the treacherous path that lies ahead.

On February 22, 2018, The Phia Group presented, "Keeping it Under Wraps: What the Networks Don't Advertise," where we discussed how the importance of cost-containment is at an all-time high.

On January 30, 2018, The Phia Group presented, "Plan on Saving by Saving Your Plan - Applying Lessons Learned to Create the Perfect Plan Document," where we discussed The Phia Group's Flagship Template.

On January 18, 2018, The Phia Group presented, "A Taxing Time: The Tax Bill's Impact on Self-Insurance," where we discussed the latest tax law.

Be sure to check out all of our past webinars!



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Podcasts:

•On March 23, 2018, The Phia Group presented, “Loopholes, Untouchables, and An Unlikely Ally,” where Adam, Ron, and Brady went around the horn discussing a few hot button topics.

•On March 16, 2018, The Phia Group presented “
Partners in Empowerment – A Prescription for Savings,” where Ron and Brady were thrilled to interview LG Hanzel of Rx Results.

•On March 1, 2018, The Phia Group presented “
Red Cross Blood Drive Special Episode,” where The Phia Group in partnership with the Red Cross hosted an on-site blood drive. Ron Peck interviewed members of The Phia Group staff and Red Cross regarding personal experiences, the Phia event, and the ever present need for donors.

•On February 26, 2018, The Phia Group presented “
3 Scoops of Knowledge,” where Adam, Ron and Brady celebrated the forthcoming change in seasons and warming weather, by each selecting a unique topic that was bugging them, and offered their opinions regarding how we should react.

•On February 16, 2018, The Phia Group presented “
Fireside Chat with The President,” where our first Empowering Plans guest, the Self-Insurance Institute of America’s CEO and President, Michael Ferguson, sat down with Adam, Ron and Brady to discuss everything – from past wins and losses, to plans for 2018.

•On February 7, 2018, The Phia Group presented “
Disruption or Not?,” where our hosts discussed the recent announcement that Amazon, Berkshire Hathaway and JPMorgan are looking to collaborate on “health care.”

•On January 29 2018, The Phia Group presented “
Game-changers” where our hosts discussed Adam’s recent travels and review events.

•On January 22, 2018, The Phia Group presented “
Mandate? We don’t need no stinking mandate,” where Adam, Ron, and regular co-host – Brady Bizarro – addressed the new tax law, elimination of the individual mandate, and how it may impact benefit plans of all types.

•On January 10, 2018, The Phia Group presented “
Lightning Strikes Twice – Top 2017 Issues Impacting 2018,” where the “Phia Group Boys” freestyled as they shared the issues they felt defined 2017 and are likely to influence 2018.

 

Be sure to check out all of our latest podcasts!



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The Phia Group’s 2018 Charity

At The Phia Group, we value our community and everyone in it. As we grow and shape our company, we hope to do the same for the people around us.

The Phia Group's 2018 charity is the Boys & Girls Club of Brockton.

The mission of The Boys & Girls Club is to nurture strong minds, healthy bodies, and community spirit through youth-driven quality programming in a safe and fun environment.

The Boys & Girls Club of Brockton (BGCB) was founded in 1990 to create a positive place for the youth of Brockton, Massachusetts. It immediately met a need in the community; in the first year alone, 500 youths, ages 8-18, signed up as club members. In the 25 years since, the club has expanded its scope exponentially by offering a mix of Boys & Girls Clubs of America (BGCA) nationally developed programs and activities unique to this club.

Since their founding, more than 20,000 Brockton youth have been welcomed through their doors. Currently, they serve more than 1,000 boys and girls ages 5-18 annually through academic year and summertime programming.

 

On Thursday, February 8th, CEO of The Phia Group, Adam Russo, invited 50+ children from The Boys & Girls Club of Brockton to a Seussical play at the Inly School in Adam's hometown of Scituate, MA. It was truly a pleasure to see the look on their faces while watching the play.

 

 

 

The Phia Group invites its staff to donate various items for the benefit of The Boys and Girls Club of Brockton. For more information or to get involved, visit www.bgcbrockton.org.



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The Stacks

Trump Tax Bill Signals the Swan Song for Obamacare's Individual Mandate

By: Sean Donnelly, Esq. - March 2018 - Self-Insurers Publishing Corp.

The "tax" bill that Congress passed in late December was somewhat of a wolf in sheep's clothing from a health care perspective. It certainly overhauled the tax code and instituted tax cuts for corporations and many American taxpayers, but it also doubled as a thinly veiled health care bill through its repealing of Obamacare's individual mandate. Authors of the tax bill postulated that such a repeal could save the federal government more than $330 billion over the next decade, as fewer Americans will end up receiving subsidies or Medicaid, savings that could then be used to finance the bill's tax cuts and lower tax rates. The tax bill was not the complete eradication of Obamacare that the Trump administration had set its sights on during the first year of Trump's presidency, but the dismantling of the individual mandate marks the first removal of a key pillar in the Obamacare foundation.

Click here to read the rest of this article


The Best of Times and the Worst of Times… How Imperfect Regulatory Action May Still Create Opportunities for Self-Funding

By: Jen McCormick, Esq. - February 2018

Regulators have been busy over the course of the past few months. Between the issuance of executive orders, a tax bill, and state regulatory action, employers are scrambling to understand the implications. And while regulatory action has been quick, it has not necessarily been thorough, creating possibilities and opportunities for self-funded health plans. Upon review of the various regulations, it seems new incentives for the creation of self-funded employer plans now exist. Employers may investigate taking advantage of this environment to form, create, or modify their self-funded benefit plans. Let's examine certain recent regulatory developments.

Click here to read the rest of this article.

 

Buyer Beware - No Good Deed Goes Unpunished

By: Ron E. Peck, Esq. - January 2018 - Self-Insurers Publishing Corp.

Employers and their advisors may soon find themselves accused of breaching their fiduciary duty if they continue to allow their benefit plans to pay inflated rates for medical services, without any justification for the excessive prices. Blindly paying fees that are not revealed until after the service is provided, to practitioners who cannot explain why their rates are many times more than comparable providers of equal or greater skill, is not a prudent use of plan assets and does violate one of the core tenets of the Employee Retirement Income Security Act of 1974 ("ERISA") and fiduciary law.

Click here to read the rest of this article.

 

To stay up to date on other industry news, please visit our blog.

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Phia’s 2018 Speaking Events:

Adam Russo’s 2018 Speaking Engagements:

• 1/23/18 - Q4 Intelligence Conference - Tampa, FL
• 2/2/2018 - Benefit Intelligence School District Conference - Phoenix, AZ
• 3/7/2018 - SIIA Self-Insured Health Plan Executive Forum - Charleston, NC
• 3/9/2018 - CGI Business Solutions Seminar - Manchester, NH
• 3/14/2018 - Pareto StructuRE Meeting - Park City, UT
• 4/12/2018 - Caprock Health Care Forum - Dallas, TX
• 4/25/2018 - Berkley Captive Symposium - Grand Cayman Islands
• 4/26/2018 - Innovative Risk - Grand Cayman Islands
• 4/30/2018 - World Health Care Congress - Washington, DC
• 5/17/2018 - Prairie States Broker Event - Chicago, IL
• 6/21/2018 - GBSI Conference - Springfield, MO
• 6/26/2018 - Leavitt Annual Event - Big Sky, MT

Ron Peck’s 2018 Speaking Engagements:

• 1/25/2018 - HealthFirst TPA Client Conference - Tyler, TX
• 3/6/2018 - SIIA National Conference - Charleston, SC
• 3/7/2018 - CGI Business Solutions Seminar - Manchester, NH
• 3/23/18 - Health Rosetta - Module 5: Next-Gen Plan Design - Boston, MA

Tim Callender’s 2018 Speaking Engagements:

• 2/14/2018 - BevCap Captive Group, 10th Anniversary Meeting - Kona, HI
• 4/25/2018 - Cypress University - Las Vegas, NV
• 5/7/2018 - UBA Spring Conference - Chicago, IL
• 5/16/2018 - Sun Life MVP Forum - Kansas City, KS
• 5/24/2018 - Pareto Captive Services, Contrarian Re Captive Meeting - Nashville, TN
• 6/25/2018 - Leavitt Conference - Big Sky, MT
• 7/17/2018 - HCAA TPA Summit - Minneapolis, MN

Jen McCormick’s 2018 Speaking Engagements:

• 4/17/2018 – Texas Association of Benefit Advisors – Dallas, TX
• 5/16/2018 – IOA RE – Indianapolis, IN

 

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Get to Know Our Employee of the Quarter: Catherine Dowie

Congratulations to Catherine Dowie, The Phia Group's Q1 2018 Employee of the Quarter!

When we think of passion, we think of Catherine. Not only is she working full time, but she is also going to law school full time at night. Even with all the work she has from attending law school, she still manages to find time at night, after school and on weekends, to work. Anyone can always go to her with a question on case law, and if she does not have an answer right away, she is always able to find an argument on the Plan's side.

 

 

Congratulations Catherine and thank you for your many current and future contributions.

 


 

Phia News

2017 Community Partner of the Year Award!

The Phia Group and Adam Russo were recently awarded the "2017 Community Partner of the Year Award" in Easton, Massachusetts, on March 1, 2018. The Community Partner of the Year Award is presented annually to a company, foundation, or community organization that has made significant contributions to advance the work of the Boys & Girls Club of Brockton. In 2017, The Phia Group gave more than just financial support to propel the programs forward, and their employees and leadership gave generously of our time and talents to create special, lasting memories for the boys and girls throughout the year.

 

 

The American Red Cross Visits Phia!

The American Red Cross came to visit The Phia Group and 18 of our employees successfully donated a pint of blood. With those 18 donations, we were able to save 54 lives. We take great pride in knowing the impact this can have. To learn more about the American Red Cross and how you can help save a life, make sure you check out The American Red Cross website.

 

Job Opportunities:

• Health Benefit Plan Administration - Attorney
• Consultant I

See the latest job opportunities, here: https://www.phiagroup.com/About-Us/Careers

 

Promotions

• Brady Bizarro was promoted from Staff Attorney to Director, Healthcare Attorney

• Amanda Lima was promoted from Medical Bill Negotiator to Team Lead, Provider Relations

• Ulyana Bevilacqua was promoted from Consultant I to Supervisor, PGC

• Jillian Painten was promoted from Claim Recovery Specialist IV to Team Leader

• Toussaint Anderson was promoted from Project Manager, PGC to Manager, PDM

• Kelly Dempsey was promoted from Staff Attorney to Director, Independent Consultation & Evaluation (ICE)

• Sabrina Centeio was promoted from Case Investigator to Claim Recovery Specialist III

• Amanda Grogan was promoted from Sr. Claim Recovery Specialist to Team Lead

• Kerri Sherman was promoted from Team Lead, CI / BI to Sr. Team Lead, CI / BI

• Cara Carll was promoted from Team Lead, Recovery MPC/WC to Sr. Team Lead, CA/CSR

• Lisa Tangney was promoted from Manager, Accounting to Controller

• Rose Jardim was promoted from Accounting Administrator to Team Lead, Accounting

• Hemant Dua was promoted from Dir. Applications & Business Intelligence to Sr. Director of Technology

• Garrick Hunt was promoted from Sales Executive to Sales Manager
 

New Hires

• Grace Barron was hired as a Customer Care Representative

• Jacob Falkof was hired as a Customer Care Representative

• David Clasby was hired as an IT Technologist

• Cindy Royle was hired as a Legal Assistant
 

Fun at Phia:

The Phia Family is one good-looking group of footballers! Our Superbowl Party was a hit and we thank all those who participated. Although we did have fans from both teams in the office that day, there were no casualties; and that in itself was a huge success!



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info@phiagroup.com
781-535-5600

The Phia Group's 1st Quarter 2018 Newsletter
Phia Group Newsletter 4th Quarter


Phone: 781-535-5600 | www.phiagroup.com


The Book of Russo:
From the Desk of the CEO

About six months ago I decided to start a project at The Phia Group focusing on how we can ensure the future viability of my company. The strategy for doing this was based on focusing on the young professional, also known as the millennial population, and attempting to figure out what makes them tick. How can I attract these folks to join Phia and make them want to stay with us throughout their career? The first thing that we did was survey the many young professionals that we have here at Phia in order to identify their thoughts, and what we found out truly opened my eyes. These workers want to understand why our company exists and not just what it is that we do.

Ron Peck, Matt Painten, and I spent months just getting back to the basics. After many focus groups and back-and-forth, I believe that we figured it out. This is the core essence of Phia and how we will attract, obtain, and retain not only employees, but clientele as well. I would love your feedback on what we came up with, so here it is:

The Problem
Health care costs too much and the price is increasing; employers are forced to offset costs onto employees through higher co-pays and deductibles.

The Phia Group’s Purpose
To make health benefits affordable for employers and employees

Why is this The Phia Group’s Purpose?
Hard working Americans deserve access to high quality, affordable health care.

What does it mean to “Empower Plans?”

To help employers maximize benefits, minimize costs, and take control of their own plans.

How do we “Empower Plans?”
We start by promoting and educating employers about self-funding. Then, we invent and implement cost containment services while delivering custom solutions to meet specific client needs.

I truly hope that 2018 is an amazing year for you and yours.  Happy reading my friends.


Service Focus of the Quarter: Plan Document/Summary Plan Description Risk Assessment
Phia Group Case Study
Phia Fit to Print
From the Blogosphere
Webinars
Podcasts
The Phia Group’s 2017 Charity
The Stacks
Phia’s Speaking Events
Employee of the Quarter
Phia News


Service Focus of the Quarter: Plan Document/Summary Plan Description Risk Assessment

In case you hadn’t heard, a new tax bill has been signed into law. Amongst other things, it appears the individual mandate ushered in by the ACA (aka ObamaCare) is being eliminated. The initial impact will be on the individual market, but we foresee healthy (low risk) individuals performing a cost benefit analysis and eventually choosing to drop out of their employer’s group health insurance. The first people likely to drop from such plans are likely those who are paying an arm and a leg to be enrolled in expensive, traditional, “fully funded” insurance. Yet, we fear that – soon after – the most desirable lives (healthy, low risk lives) will drop from their employers’ self funded plans… leaving only high risk / high cost lives. No plan – fully funded or self funded – can withstand losing those lives. It therefore behooves every self funded plan sponsor to figure out ways to offer more for less, and thus make plan enrollment attractive for all members – low and high risk, healthy and unhealthy alike. To do this, you must innovate and implement new benefits and cost containment tools. To do that, start with the plan document.

One of the benefits of self-funding is that the employer has the freedom and flexibility to design a benefit plan that truly meets the needs of its employees; making it attractive to the low risk healthy lives we need to fund the plan, and to whom we need to make the plan attractive (now that they aren’t “required” to enroll). The employer also has the ability to structure the plan so as to prudently manage the assets of the plan; this can be done, in particular, through innovative plan language meant to proactively tackle potential issues such as risk and cost.

Our Plan Document/Summary Plan Description Risk Assessments will identify areas the employer may want to consider for additional review, as well as provide a brief explanation of why certain items are important.

Once completed, plan sponsors can implement new measures to make their plans very attractive to even the healthiest folks. Things like new payment methodologies of out of network claims, medical tourism, and more can result in benefit plans offering more for less – and thus remaining a “must have” for those important healthy participants – even when enrollment is optional – but it all starts with the plan document.

Contact Tim Callender at tcallender@phiagroup.com or 781-535-5631 to learn more about how a Plan Document/Summary Plan Description Risk Assessment can help you.

Protect Your ASA: Update Your Agreements Today!

The Phia Group is privileged to work with so many different players in the self-funded industry and health insurance field in general. As a result, we often see issues developing and devise solutions before they have a chance to seriously impact our allies.

One such issue that has become a bigger problem of late, negatively impacting third party administrators, plan sponsors, brokers and stop-loss carriers, occurs when a self funded benefit plan or their broker-advisor wishes to utilize a stop-loss carrier that the TPA has neither vetted nor placed. Despite the fact that the TPA played no role in selecting the carrier, that TPA - more often than not - is still targeted by the plan sponsor if and when the carrier subsequently refuses to reimburse the plan or some other conflict arises.

For those TPAs utilizing The Phia Group's best-in-class template administrative services agreement (ASA), language is included that generally addresses this issue, but as the problem has escalated - it now requires special attention. With that in mind, The Phia Group has developed a form, which is signed by the plan sponsor and TPA, and is added to existing ASAs as an exhibit.

This addendum can be revised to fit with any ASA. Please contact Garrick Hunt at ghunt@phiagroup.com or call him at (781) 535-5644 to learn how you can obtain access to this very important form.

 




 

Cutting back on Questionnaires:

It is The Phia Group’s mission to reduce the cost of healthcare through the use of innovative legal techniques and the most sophisticated technology. In keeping with this goal The Phia Group is always taking steps to improve all of our services, including our earliest: subrogation. Recent upgrades to The Phia System™ and advancements in our investigational techniques have led to faster identification of third party liability claims and quicker engagement by The Phia Group’s team, without relying upon or otherwise communicating with the plan participants. These new resources allow us to identify opportunities more often and more effectively, while at the same time reducing the volume of accident questionnaires we send to plan participants. While accident questionnaires are still a useful tool when investigating and collecting accident details – they are no longer the only tool. As such, we are pleased to now provide all of our subrogation clients with the ability to increase, decrease, or cease the use of plan participant accident questionnaires. Clients can also opt to utilize their own letters, or have the employer communicate directly with plan participants. The choice is yours!

The Phia Group is committed to ensuring you and your clients are provided with nothing but the highest quality service, best-in-class performance, and a member first approach. That is why we are continuously improving our services to provide the best performance (and most options) possible.

To discuss these new customization capabilities, or our other services, please contact Trevor Schramn at tschramn@phiagroup.com or call (781) 535-5692.

 



Phia Group Case Study: Retroactive Plan Amendments

A self-funded group’s broker approached The Phia Group’s consulting department (via PGCReferral@phiagroup.com) and asked us to help respond to a provider’s appeal of a large dialysis claim. The provider was out-of-network, so thankfully there were no PPO contract concerns – but at the time the services were rendered, the SPD defined its payment rate as the prevailing charge in the area. One month after receiving the final claims for which the Plan was responsible, the Plan chose to effect an amendment that limited payment for all dialysis claims to 145% of the Medicare rate, and the amendment was back-dated to the beginning of the year (before the member began dialysis treatments).

The Plan desired to use its new carve-out amendment to reprice the existing claims, but had received negative feedback on that proposition from its TPA, since the TPA felt that the language in the SPD at the time the claims were incurred is the language that must be adhered to. The broker asked The Phia Group for advice, and our advice was identical to that of the TPA – that a retroactive carve-out is not a valid way to price the already-incurred claims. Regardless, the Plan chose to pay all past claims based on that new amendment, despite the language not being in the SPD when the services were rendered.

As expected, the provider pushed back against the lower-than-expected reimbursement, and commenced a lawsuit over the balance of $500,000. The Phia Group provided the Plan assistance with settling the claims to avoid litigation, since litigation almost certainly would have resulted in the Plan paying the prevailing charges in the area…plus interest…plus penalties.

The moral of the story is that self-funded plans, their TPAs, and their brokers should be proactive in making sure the SPD contains the proper protections – since once a claim comes in, it is sometimes too late to contain costs. In other words, if you think you may need to carve out high dollar claims (like dialysis) in the future, fix your plan document now! Don’t wait, until it’s too late; (The Phia Group’s Phia Document Management service – including the Flagship Template – can help make sure that SPDs say what you need them to say).




Fiduciary Burden of the Quarter: Strictly Following the Plan Document!

Plan Administrators owe a fiduciary duty to strictly follow the terms of the governing plan documents. The SPD is the “supreme law of the land” for a health plan, and violating even one minor exclusion is technically a violation of the Plan Administrator’s considerable fiduciary duty. Since we’ve been warning the industry about this for years, it didn’t shock us when we heard that the Department of Labor had filed a lawsuit against a benefit plan for paying claims based on Medicare rates, without having included the proper language within the SPD.

We understand that Plan Documents are complex, and amending them is not exactly an enjoyable process. But if the health plan wants to implement procedures to save money, there are some deal-breakers – such as making sure the SPD affords the Plan the right to do what the plan is going to do.

ERISA empowers a plan sponsor to put almost any language of its choosing into its SPD. That’s a great thing, and plans that take advantage have experienced novel savings and have had remarkable self-funding experiences. If a benefit plan wants to pay claims differently from what is currently in the SPD, it can certainly do so – but not until the SPD reflects it, and not until the SPD is altered at the appropriate time.

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Phia Fit to Print:

• Self-Insurers Publishing Corp. – The Future of Self-Funding - An Insider's Take – October 3, 2017

• Money Inc. – Self-funding Amid Obamacare Uncertainty – November 2, 2017

• Self-Insurers Publishing Corp. – Interim Final Rules Update – November 4, 2017

• Self-Insurers Publishing Corp. – Managing Plan Communication During a Time of Legislative Uncertainty – December 1, 2017

• HealthLeaders Magazine – Insurers Facing Impossible Scenario: Cover Everyone, But No Individual Mandate – December 13, 2017



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From the Blogosphere:

An Appealing Option. Facing a final appeal.

Phia Undercover: Two Chargemasters at Addiction Centers. Dealing with a high rate biller.

Welcome to the Fiduciary Jungle! The writing is on the wall; what will you do about it?

Sacrificing the Individual Mandate on the Alter of Tax Reform. The glue holding all of Obamacare together.

 

To stay up to date on other industry news, please visit our blog.



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Webinars

Plan on Saving by Saving Your Plan

On January 30, 2017, The Phia Group will present “Plan on Saving by Saving Your Plan,” where our legal team will explain the Flagship template, differences from the existing template, and why the Flagship may be right for you.

Click HERE to Register!

On January 18, 2018, The Phia Group presented “A Taxing Time: The Tax Bill’s Impact on Self-Insurance,” where we discussed the latest tax law.

On December 19, 2017, The Phia Group presented “With Great (Cost-Containment) Power Comes Great (Fiduciary) Responsibility,” where we describe various ways to cut costs, what must be done to ensure that fiduciary duties are being met, and what happens if they are not.

On November 14, 2017, The Phia Group presented “Living in the Now: Prepare for 2018,” where we discussed where the market is heading and what you need to do to keep up with it.

On October 17, 2017, The Phia Group presented “Best Practices for Today's Plan Documents,” where our legal team discussed best and worst plan document practices, provide some creative ideas for plan formation, and suggest some concepts to help perfect plan document drafting.

Be sure to check out all of our past webinars!



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Podcasts:

• On December 21, 2017, The Phia Group presented “Breaking Down the GOP Tax Bill and How It Affects You,” where The Phia Group's CEO Adam Russo and Attorney Brady Bizarro discuss the new GOP tax bill in depth.

• On December 18, 2017, The Phia Group presented “Protect Your ASA,” where Adam Russo, Ron Peck, and Jen McCormick discuss the rising trend in stop-loss insurance being placed by entities other than the TPA, yet the TPA is held responsible if things go sour.

• On December 6, 2017, The Phia Group presented “Plans and Conspiracy,” where our legal team discussed the recent news regarding CVS purchasing Aetna, as well as a new opportunity to customize plan document reviews to address different levels of need.

• On November 21, 2017, The Phia Group presented “The Biggest Threats to Self-Funding: A Lightning Round,” where Adam Russo, Ron Peck, and Brady Bizarro discuss the biggest threats to the self-funded industry.

• On November 3, 2017, The Phia Group presented “Planning for Stormy Seas Ahead,” where Adam Russo, Ron Peck, and Jennifer McCormick discuss all of the many issues creating waves as it relates to benefit plan documents, and what steps we can all take to safely navigate those waters – including setting sail on The Phia Group Flagship Template!

• On October 19 2017, The Phia Group presented “Trumping Costs and Climbing the Hill,” where Adam Russo, Ron Peck, and Brady Bizarro discussed discuss the wild and crazy happenings in DC.

• On October 13, 2017, The Phia Group presented “The Man with the Plan,” where Adam Russo and Ron Peck discuss the often overlooked but – in their opinion – all important plan document.

• On September 28, 2017, The Phia Group presented “Responsibility - Beyond the Contract,” where Adam Russo and Ron Peck discuss trends impacting health plans, employers, and employees.

 

Be sure to check out all of our latest podcasts!

 



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The Phia Group’s 2017 Charity

At The Phia Group, we value our community and everyone in it. As we grow and shape our company, we hope to do the same for the people around us.

The Phia Group's 2018 charity is the Boys & Girls Club of Brockton.

The mission of The Boys & Girls Club is to nurture strong minds, healthy bodies, and community spirit through youth-driven quality programming in a safe and fun environment.

The Boys & Girls Club of Brockton (BGCB) was founded in 1990 to create a positive place for the youth of Brockton, Massachusetts. It immediately met a need in the community; in the first year alone, 500 youths, ages 8-18, signed up as club members. In the 25 years since, the club has expanded its scope exponentially by offering a mix of Boys & Girls Clubs of America (BGCA) nationally developed programs and activities unique to this club.

Since their founding, more than 20,000 Brockton youth have been welcomed through their doors. Currently, they serve more than 1,000 boys and girls ages 5-18 annually through academic year and summertime programming.

 

On Wednesday, December 21st, CEO of The Phia Group, Adam Russo, made a special visit to The Boys & Girls club of Brockton. During his visit, Adam handed out over 200 gifts that were purchased and wrapped by The Phia Group. It is truly a pleasure to see the look on their faces when Santa brings them exactly what they asked for on their wish list.

 

 

 

The Phia Group invites its staff to donate various items for the benefit of The Boys and Girls Club of Brockton. For more information or to get involved, visit www.bgcbrockton.org.



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The Stacks

Managing Plan Communication During a Time of Legislative Uncertainty

By: Corrie Cripps – December 2017 – Self-Insurers Publishing Corp.


While the congressional efforts to repeal and replace the Affordable Care Act (ACA) in 2017 have failed, the Trump administration is now taking executive and regulatory action to modify various aspects of the ACA. In addition, other guidance that may affect group health plans in 2018 is still pending. The following is a summary of the recent regulatory actions that will affect self-insured plans in 2018.

Click here to read the rest of this article


Interim Final Rules Update

By: Krista Maschinot, Esq. – November 2017 – Self-Insurers Publishing Corp.

On October 6, 2017, the Trump Administration issued two Interim Final Rules (IFR) related to the Affordable Care Act’s (ACA) contraceptive mandate. These rules apply to all employers and create additional considerations for employers sponsoring self-funded plans and their third-party administrators (TPAs).

Click here to read the rest of this article.


The Future of Self-Funding-An Insider's Take

By: Adam V. Russo, Esq. – October 2017 – Self-Insurers Publishing Corp.


According to the 2016 Milliman Medical Index, the typical family of four costs $25,826 annually in premium and out of pocket expenses and 57% of costs are borne by the employer. Self-funding the right way can reduce these figures significantly and we as an industry must focus on this. At our company, a single employee pays $127.62 for health insurance a month. This compares to the $554 average in the state of Massachusetts, based on the 2017 UBA survey.

Click here to read the rest of this article.

 

To stay up to date on other industry news, please visit our blog.

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Phia’s Q4 Speaking Events:

Phia’s Speaking Engagements:

Adam Russo’s 2018 Speaking Engagements:

• 1/23/18 – Q4 Intelligence Conference – Tampa, FL

• 2/2/2018 – Benefit Intelligence School District Conference – Phoenix, AZ

• 2/7/2018 – CGI Business Solutions Seminar – Manchester, NH

• 3/7/2018 – SIIA Self-Insured Health Plan Executive Forum – Charleston, NC

 

Ron Peck’s 2017 Speaking Engagements:

• 1/25/2018 – HealthFirst TPA Client Conference – Tyler, TX

• 3/6/2018 – SIIA National Conference – Charleston, SC

• 3/7/2018 – CGI Business Solutions Seminar – Manchester, NH

 


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Get to Know Our Employee of the Quarter:
Brady Bizarro

Congratulations to Brady Bizarro, The Phia Group’s Q4 2017 Employee of the Quarter!

Brady joined The Phia Group, LLC as an attorney in early 2016. As a member of The Phia Group's in-house legal team, he focuses on contract review, ERISA, ACA, and HIPAA compliance, claim negotiation, and providing general consultative advice on matters involving the health insurance industry and employee benefits law.

Congratulations Brady and thank you for your many current and future contributions.

 

Get to Know Our Employees of the Year: Amanda Grogan & Hemant Dua

 

 

Amanda: An attorney’s office sent the following to Amanda’s manager: “I wanted to take a moment to tell you what a professional, courteous, knowledgeable, and helpful employee Amanda Grogan is. Besides her helping me with a very difficult file she understands how her industry and her desk works, including the language we need in order to do these files and that is something that should be applauded.”

Hemant: “What more can be said about the man that came to our company and within 3 months deployed a brand new claims system that was in development for 2 years, within 6 months rewrote 75% of the logic code to ensure proper processing of our clients’ claims data in TPS, within 9 months stabilized TPS and pioneered ground breaking performance improvements that were unfathomable with EZD and most recently trained Zach, our new Principal Developer, and on-boarded our new offshore development team, Hitachi. He has been an integral part to this year’s success and his drive to resolve every issue for the TPS users is commendable. He has been a great mentor to many Phia employees that have been with the company for years, showing his business acumen to learn our processes quickly and apply them. His ability to provide solutions, teach the user how the solution was achieved and encourage the user to utilize the newly learned skills in their future endeavors makes Hemant a true sensei. Phia is lucky to have such an amazing individual working to make Phia great again!”

Congratulations Amanda & Hemant and thank you for your many current and future contributions.

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Phia News

    • Rock Stars of Health Award o The Phia Group was recently awarded the “Rock Stars of Health GOLD Award” during The Rock Stars of Health Summit held in Missoula, Montana on September 29, 2017. The award recognizes innovation in the implementation of employee health initiatives that unify expertise in wellness, employee health, safety, risk management, and employee benefits.

    • Year Up at Phia! o The Phia Group has been beyond thrilled with our talented, dedicated members who have come to us through Year Up. Sheyla and Josh have become such essential members of our team – we feel truly blessed to call them a part of the Phia Family. We sat down with them to hear their thoughts and experiences. Find out what they had to say!

    Job Opportunities:

    • Consultant I

    • Health Benefit Plan Administration – Attorney

    • IT Technologist

    • Administrative Assistant – Recovery

    • Case Analyst

    See the latest job opportunities, here: https://www.phiagroup.com/About-Us/Careers

     

    Promotions

    • Keith McMahon was promoted from Claim Recovery Specialist IV – WC to Claim Recovery Specialist IV – BI

    • Casey Balchunas was promoted from Claim Recovery Specialist III to Claim Recovery Specialist IV

    • Joseph Bacon was promoted from Legal Assistant to Claim Recovery Specialist

    • Sabrina Centeio was promoted from Case Handler to Claims Recovery Specialist III

    • Jillian Painten was promoted from Claim Recovery Specialist IV to Team Leader

    • Cori DeCristoforo was promoted from Customer Service to Case Evaluation

    • Jiyra Martinez was promoted from a part-time employee to a full-time employee

    New Hires

    • Harry Horton was hired as an Attorney

    • Rea Kostopulos was hired as a Talent Acquisition Specialist

    • Dixie Hayenga was hired as a Consultant

    • Kerry Brennan was hired as a Legal Assistant


     

    Fun at Phia:

    Our Phia Family is so festive! Our “Ugly Sweater Day” was a hit and we thank all those who participated; congratulations to Josh (pictured below sporting a little red number, complete with a reindeer puppy, plus bells and ornaments) for winning “Ugliest Sweater”!

    How great are these costumes? This year the Phia Halloween Costume Contest was truly a nail-biter. Who would win? The Cowardly Lion? The clown? The fan favorite “Orange Blob,” bravely worn by Sheyla ultimately took home the gold. Thank you to all who participated, you truly made it a stellar Halloween!

     



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info@phiagroup.com
781-535-5600

The Stacks - 1st Quarter 2018
Managing Plan Communication During a Time of Legislative Uncertainty
By: Corrie Cripps

For many employer-sponsored group health plans, this is open enrollment season.  This normally busy time of year, coupled with the general public’s uncertainty about potential health care policy changes, has produced a more stressful environment than usual.  

What’s happening at the federal level

While the congressional efforts to repeal and replace the Affordable Care Act (ACA) in 2017 have failed, the Trump administration is now taking executive and regulatory action to modify various aspects of the ACA. In addition, other guidance that may affect group health plans in 2018 is still pending. The following is a summary of the recent regulatory actions that will affect self-insured plans in 2018.

Accommodation/exemption from the ACA’s contraceptive mandate
On October 6, 2017, the Department of Labor (DOL) issued interim final rules (effective immediately) on religious and moral exemptions and accommodations to the ACA’s contraceptive mandate.1,2

These interim final rules allow a much broader group of employers and insurers to exempt themselves from covering contraceptives such as birth control pills on religious or moral grounds. While the interim final regulations do maintain the existing accommodations process, the process is now optional. In other words, employers could choose not to request an accommodation, or choose to revoke their current accommodation and instead claim exemption status. The key difference in an accommodation versus an exemption essentially impacts the third party administrator (TPA). Under the exemption, the TPA would no longer be responsible for providing the contraceptive coverage. The rules outline the process if an employer now chooses to revoke its current accommodation (which includes notifying the TPA and plan participants).

DOJ memo on gender identity/orientation
In a memorandum issued on October 4, 2017, to agency heads and US attorneys, Attorney General Jeff Sessions issued guidance to agency heads and US attorneys concluding that transgender individuals are not automatically protected from discrimination under Title VII of the Civil Rights Act of 1964.3
 
It is important to note that the Department of Justice’s (DOJ) recent guidance conflicts with the Equal Employment Opportunity Commission’s (EEOC), an independent commission, stance that transgender employees are protected under Title VII.
 
The December 31, 2016, U.S. District Court injunction (applicable nationwide) on certain parts of the ACA Section 1557—the prohibitions against discrimination on the basis of gender identity and termination of pregnancy—is still in effect.4  The DOJ’s recent guidance does not specifically address ACA Section 1557. The U.S. Department of Health and Human Services (HHS) is expected to issue a new proposed rule on ACA Section 1557, which will likely include a religious exemption.
 
Disability claims and appeals rules may be delayed until April 1, 2018
Last December the Employee Benefits Security Administration at the DOL issued a final rule on disability benefit plans claims procedures changes, which are slated to become effective on January 1, 2018.5  There is now a proposed rule to move the compliance date to April 1, 2018 for these regulations.6 

These regulations are applicable to all Employee Retirement Income Security Act (ERISA) plans that offer disability benefits. The regulations generally align procedures for disability claims with those for group health plans under the ACA.

HIPAA administrative simplification rules
On October 4, 2017, HHS withdrew the January 2, 2014 proposed rule that would have required a controlling health plan (CHP) to submit information certifying compliance with certain Health Insurance Portability and Accountability Act (HIPAA) electronic transaction operating rules and standards.7

The withdrawal of this proposed rule does not remove the requirements for covered entities to comply with any of those regulations codified at 45 CFR parts 160 and 162. The other HIPAA Administration Simplification requirement to obtain and use Health Plan Identifiers (HPIDs) has been delayed since October 2014, with no new guidance issued.8

ACA emergency room regulations
The American College of Emergency Physicians (ACEP) filed suit in May 2016 against the Departments of Health and Human Services, Labor and the Treasury (the Departments) regarding the ACA regulation for emergency services, applicable to non-grandfathered plans. Specifically, ACEP is concerned with the part of the rule that sets forth how much insurers/plans are required to pay out-of-network physicians for emergency health care services.

On August 31, 2017, a federal court ruled that the Departments acted arbitrarily and capriciously in adopting final regulations under the patient protections provisions for emergency services.9  The court stated that the Departments did not "seriously respond" to the transparency and manipulation concerns raised in comments by providers and advocacy groups to the interim final rules. The court’s ruling does not invalidate the final regulations; instead the ruling sends the regulations back to the Departments and requires them to respond to ACEP’s concerns and proposals in a substantive manner.

EEOC wellness regulation review
On August 22, 2017, the U.S. District Court for the District of Columbia concluded that the U.S. Equal Employment Opportunity Commission’s (EEOC) interpretation of a “voluntary” wellness program in its regulations is arbitrary and capricious, and has sent the regulations back to the EEOC for reconsideration.10 

In AARP v. EEOC, the AARP filed a lawsuit against the EEOC regarding its wellness program rules, which state that employers can cap incentives to participate in the wellness programs at 30% of an employee’s health insurance costs. The AARP argued that these incentives are so high that they are not truly “voluntary”, which means that older plan participants would have to incur financial penalties if they chose not to participate or divulge sensitive medical information in cases where the incentive requirement is that a health risk assessment be completed.

The court ruled in AARP's favor, determining that the EEOC did not justify its conclusion that the 30% incentive level is a reasonable interpretation of voluntariness. However, instead of vacating the regulations the court remanded them to the EEOC for reconsideration.

The EEOC has stated in its status report to the Court that it will need until August 2018 to reconsider its regulations on employer wellness programs and expects to issue a new final rule by October 2019.11  AARP is expected to respond to the EEOC’s status report and argue that revised regulations should be issued sooner.

Executive order on health care
On October 12, 2017, the President issued an executive order on health care, which directs the Departments of Health and Human Services (HHS), Labor, and Treasury (the Departments) to develop regulations and guidance that could permit new health insurance options for employers and consumers.12

The executive order seeks to allow the Departments to look for ways to make it easier for small businesses to join Association Health Plans, expand on the availability and use of Health Reimbursement Arrangements (HRAs), as well as allow the sale of insurance across state lines.

The executive order does not specify a date in which a proposed rule from the Departments will be released.

IRS will reject individual tax returns that are silent on health coverage question
The Internal Revenue Service (IRS) announced it will not accept electronically filed tax returns, and may suspend paper returns, where the individual does not answer the health coverage question.13   Employers will need to ensure they are furnishing the Form 1095-B or the Form 1095-C, whichever is applicable, to certain employees by January 31, 2018.

What are the public’s concerns
Two recent studies show that Americans rank health care policy changes as one of their biggest concerns.14,15 

The Transamerica Center for Health Studies study found that more than two-thirds (67 percent) of Americans reported having at least one chronic health condition, and 42 percent say losing health care because of a pre-existing condition is among their biggest fears.

The uncertain political environment around health care and the rising costs of health care undoubtedly cause stress, which ultimately affects the individual’s health status. In addition, many individuals are not taking advantage of the incentive programs and/or wellness programs offered by their employers, even though more employers are offering such programs.16,17  

How to communicate plan changes and spread awareness of incentives
In order to neutralize the impact of uncertainty on plan participants, plans will need to engage more authentically with plan participants. For example, if a plan is removing coverage of a benefit, the plan administrator, or representative, should articulate the reason for the change, and be responsive to the plan participants’ feedback. And if new benefits or programs are being added to the plan, those should be communicated as well. As the results from the Transamerica Center study indicate, while employers might believe that their wellness and incentive programs are clear as day to their employees, many employees aren’t even aware that these programs exist in their employer-sponsored health plans.

In addition, there are notice requirements under ERISA and the ACA that plans need to follow when making plan changes. A recent lawsuit from the DOL reiterates the importance of complying with the ERISA documentation requirements. The DOL filed suit against Macy’s and two of its TPAs alleging violations of ERISA’s fiduciary duties.18   The DOL states that at some point the plan changed the formula to calculate reimbursement of out-of-network claims, but Macy’s did not update its plan documents to notify plan participants of this change. The lawsuit states that this caused plan participants to overpay on certain claims.

This lawsuit shows the continued importance of keeping ERISA plan documentation up-to-date and ensuring that plan administration is consistent with the written terms of the plan.

Conclusion

For plans and TPAs, being well-informed on regulatory developments is always of the upmost importance, but is particularly important for this renewal and open enrollment season due to rapid changes in the regulatory landscape. In addition to keeping plan documents updated, employers and plans should also clearly communicate any changes to help ease the transition for plan participants and avoid liability landmines.

Corrie Cripps is a plan drafter/compliance consultant with The Phia Group.  She specializes in plan document drafting and review, as well as a myriad of compliance matters, notably including those related to the Affordable Care Act.  
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1Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 26 CFR Part 54, 29 CFR Part 2590, 45 CFR Part 147, October 13, 2017, https://www.gpo.gov/fdsys/pkg/FR-2017-10-13/pdf/2017-21851.pdf, (last visited November 6, 2017).
2Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 26 CFR Part 54, 29 CFR Part 2590, 45 CFR Part 147, October 13, 2017,  https://www.gpo.gov/fdsys/pkg/FR-2017-10-13/pdf/2017-21852.pdf, (last visited November 6, 2017).
3Office of the Attorney General, Revised Treatment of Transgender Employment Discrimination Claims Under Title VII of the Civil Rights Act of 1964, October 4, 2017, https://www.documentcloud.org/documents/4067437-Sessions-memo-reversing-gender-identity-civil.html, (last visited November 6, 2017).
4Section 1557 of the Patient Protection and Affordable Care Act, https://www.hhs.gov/civil-rights/for-individuals/section-1557/index.html, (last visited November 6, 2017).
5Claims Procedure for Plans Providing Disability Benefits, 29 CFR Part 2560, https://www.gpo.gov/fdsys/pkg/FR-2016-12-19/pdf/2016-30070.pdf, (last visited November 6, 2017).
6Claims Procedure for Plans Providing Disability Benefits; Extension of Applicability Date, 29 CFR Part 2560, https://www.gpo.gov/fdsys/pkg/FR-2017-10-12/pdf/2017-22082.pdf, (last visited November 6, 2017).
7Administrative Simplification: Certification of Compliance for Health Plans; Withdrawal, 45 CFR Parts 160 and 162, https://www.gpo.gov/fdsys/pkg/FR-2017-10-04/pdf/2017-21424.pdf, (last visited November 6, 2017).
8HPID, https://www.cms.gov/Regulations-and-Guidance/Administrative-Simplification/Unique-Identifier/HPID.html, (last visited November 6, 2017).
9United States District Court for the District of Columbia, American College of Emergency Physicians v. Thomas E. Price, MD., https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2016cv0913-23, (last visited November 6, 2017).
10United States District Court for the District of Columbia, AARP v. United States Equal Employment Opportunity Commission, https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2016cv2113-47, (last visited November 6, 2017).
11AARP v. United States Equal Employment Opportunity Commission, Defendant’s Status Report, https://gallery.mailchimp.com/582bc250bf108dcead582e3b8/files/c23461a4-8a49-4bad-b6b4-36e8f9fbb615/2017_09_21.EEOC_wellness_regs_status_report.pdf, (last visited November 6, 2017).
12Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States. https://www.whitehouse.gov/the-press-office/2017/10/12/presidential-executive-order-promoting-healthcare-choice-and-competition, October 12, 2017, (last visited November 6, 2017).
13ACA Information Center for Tax Professionals, https://www.irs.gov/tax-professionals/aca-information-center-for-tax-professionals, (last visited November 6, 2017).
14Transamerica Center for Health Studies, Healthcare Consumers in a Time of Uncertainty: Fifth Annual Nationwide TCHS Survey, https://www.transamericacenterforhealthstudies.org/docs/default-source/research/healthcare-consumers-in-a-time-of-uncertainty.pdf?sfvrsn=2, November 1, 2017, (last visited November 6, 2017).
15American Psychological Association, Stress in America™: The State of Our Nation, http://www.apa.org/news/press/releases/stress/2017/state-nation.pdf, November 2017, (last visited November 6, 2017).
16Transamerica Center for Health Studies, Healthcare Consumers in a Time of Uncertainty: Fifth Annual Nationwide TCHS Survey, https://www.transamericacenterforhealthstudies.org/docs/default-source/research/healthcare-consumers-in-a-time-of-uncertainty.pdf?sfvrsn=2, (last visited November 6, 2017).
17Fidelity Investments® and the National Business Group on Health®, Embracing a Broader Definition of Well-Being: Eighth Annual Employer-Sponsored Health and Well-being Survey,
https://workplace.fidelity.com/sites/default/files/NBGH%20Fidelity_2017_WellbeingWebinar_Presentation05022017.pdf, March 2017, (last visited November 6, 2017).
18Acosta v. Macy’s Inc., S.D. Ohio, No. 1:17-cv-00541
_____________________________________________________________________________________________________________
Interim Final Rules Update
By: Krista Maschinot, Esq.

With the calendar year coming to a close, plan sponsors and plan administrators had been breathing a sigh of relief that renewal season will go smoothly as Congress failed to pass any major legislation affecting the Affordable Care Act this year.  As with years past, however, a last-minute curveball was thrown at them that proves this year will be no different than previous years.  
 
On October 6, 2017, the Trump Administration issued two Interim Final Rules (IFR) related to the Affordable Care Act’s (ACA) contraceptive mandate.  These rules apply to all employers and create additional considerations for employers sponsoring self-funded plans and their third-party administrators (TPAs).  These new Department of Health and Human Services (HHS) regulations, the “Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act” and the “Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act,” allow for an exemption to the contraceptive mandate for a broader spectrum of companies and organizations.  Specifically, the rule expands the types of entities that can claim an exemption or an accommodation from the contraceptive mandate on the grounds of religious beliefs or for moral reasons.  

Background
This is not a new discussion.  In 2012, the contraceptive mandate in the ACA required all employers to provide contraceptive coverage to participants on a no cost-sharing basis, in-network.  Religious employers, such as churches, were exempt from the mandate and were not required to file any documentation with the government.  There was also an accommodation process put into place for religious organizations that opposed covering contraceptive services for their employees and students. In 2013, a self-certification form, EBSA Form 700, was created and required for self-funded health plans claiming a religious accommodation from the mandate.  Multiple lawsuits were filed during this time resulting in a split among the circuits as to which entities could claim exemption from the mandate.  

In 2014, the Supreme Court weighed in and, in Burwell v. Hobby Lobby, held that requiring closely-held corporations to abide by the HHS regulations requiring no-cost access to contraceptives being made available to female employees violated the Religious Freedom Restoration Act (RFRA) in situations where the owners’ religious beliefs were contrary to the regulations.1   In addition to Hobby Lobby, there was another Supreme Court case, Zubik v. Burwell, regarding the accommodation process.  The Supreme Court decided not to issue a decision in the consolidated cases challenging the accommodation process for the contraceptive mandate for employers with religious objections to contraceptives.

Under the Trump Administration’s new rules, the pool of employers that will be able to opt out of the contraceptive mandate is greatly expanded as the rules allow for employers that have a sincerely-held religious or moral objection to the provision of all or a subset of contraceptives or sterilization items, procedures, or services, or related patient education and counseling, to opt out of the women’s preventive care mandate.  The expanded group of entities with religious objections includes:

•    Churches, integrated auxiliaries, and religious orders;
•    Nonprofit organizations;
•    For-profit entities;
•    Non-governmental employers;
•    Institutions of higher education;
•    Individuals with employer sponsored or individual market coverage; and
•    Issuers that provide coverage to plan sponsors or individuals that are exempt.2


As you can see from the list, this change will permit a much larger pool of companies to carve-out certain women’s preventive care benefits under their health plans.

While these interim final rules allow a much broader group of employers and insurers to exempt themselves from covering contraceptives such as birth control pills on religious or moral grounds, they do not alter the rules regarding the TPA’s/insurer’s role once the employer has opted out of providing the contraceptive coverage.  In other words, the regulations still require TPAs who administer the self-funded medical plan for those entities who opt out of the mandate to otherwise arrange for these women’s preventive benefits. While the interim final regulations do maintain the existing accommodations process, the process is now optional. Employers could choose not to request an accommodation, or choose to revoke their current accommodation, which would mean that the TPA would no longer be responsible for providing contraceptive coverage. The rules outline the process if an employer now chooses to revoke its current accommodation (which includes notifying the TPA and plan participants).

Process
Under Burwell, closely-held corporations that chose to opt out of contraceptive coverage could send a letter to HHS stating that they objected to offering contraceptive coverage in their health plans or they could complete EBSA Form 700, if they preferred.  Under the new rules, the accommodation is now an optional process and employers can choose whether or not to provide any sort of notice or self-certification in order to inform the government of their intent to no longer provide coverage under the mandate.  Employers are still responsible for notifying plan participants of any changes in coverage.

Pending Action
Upon issuance, the rules were questioned.  For example, Maura Healey, the Attorney General for the Commonwealth of Massachusetts, filed a lawsuit in federal court on Friday, October 6th, in an attempt to block the new rules from taking effect.  According to the Complaint, the IFR will result in thousands of women in Massachusetts being substantially harmed should the contraception mandate of the ACA be nullified by allowing employers to block contraceptive care and services based upon the employers’ religious and moral objections to contraception.3   The Complaint further states that implementation of the IFR will “jeopardize the health care of women in Massachusetts and nationwide, promote the religious freedom of corporations over the autonomy of women, and leave the states to bear additional health care costs both with regard to contraceptive and prenatal care as well as other services associated with unintended pregnancies and related negative health outcomes for both women and their children.”4   As of the date of this article, an Answer has not been issued by HHS.  This creates questions and confusion for how to apply to the IFR.

Next Steps
With plan renewal season just around the corner, the applicability of this rule for self-funded plans and their TPAs needs immediate clarification.  Under Burwell, the regulations required TPAs who administered the self-funded medical plan for those entities who could opt out of the mandate (via an exemption or accommodation, etc.) to otherwise arrange for these women’s preventive benefits.  According to the interim final regulations, the accommodations process is still applicable but is now optional.  TPAs will want to be on the look-out to ensure they have processes and procedures in place to address this accommodation process, or a revocation of a current accommodation, internally.

Should a plan decide to no longer offer contraceptives, the plan must still abide by the reporting and disclosure rules of the Employee Retirement Income Security Act (ERISA).   As this would be a reduction of benefits, the Summary of Material Reduction (SMR) rules would apply. A plan has to disclose a material reduction sixty (60) days after the adoption of the change.  However, this post-change notification may not necessarily align with fiduciary duties and it is best to give as much warning about a change as possible. The Summary of Benefits and Coverage (SBC) rules also include distribution requirements and, in short, if a change to the plan creates the need to change or update the SBC and the change is made mid-plan year, the plan must give sixty (60) days’ advance notice.  When changes are made at plan renewal, the SBC distribution requirement for open enrollment is generally thirty (30) days’ notice before the start of the plan year.   These requirements may create a significant amount of administrative work and potentially be costly for the plan. Plans will need to consider the administrative burdens that will arise if coverage is no longer available, the notification requirements, and how changes could possibly affect their stop loss coverage.

As a result of this regulation, there are many questions that we hope to have resolved with future guidance.  Employers considering the exemption and/or accommodation will need to take into consideration the lack of guidance provided and the potential effect these unanswered questions may have on the plan and the plan participants.  Employers and interested parties can submit their comments to HHS regarding the new rules throughout the comment period, which closes on December 5, 2017.
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1Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 22 (2014)
2Departments of Health and Human Services, Fact Sheet: Religious and Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act (2017), https://www.hhs.gov/sites/default/files/fact-sheet-religious-exemptions-and-accommodations-for-coverage.pdf.
3Commonwealth v. U.S Dep’t of Health and Human Services et al., No. 1:2017cv11930 (D. Mass. Filed Oct. 6, 2017). 
4Id.
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The Future of Self-Funding - An Insider's Take
By: Adam V. Russo, Esq.

According to the 2016 Milliman Medical Index, the typical family of four costs $25,826 annually in premium and out of pocket expenses and 57% of costs are borne by the employer. Self-funding the right way can reduce these figures significantly and we as an industry must focus on this. At our company, a single employee pays $127.62 for health insurance a month. This compares to the $554 average in the state of Massachusetts, based on the 2017 UBA survey.

Click here to read the rest of this article.

The Phia Group's 4th Quarter 2017 Newsletter
Phia Group Newsletter 2nd Quarter

Phone: 781-535-5600 | www.phiagroup.com


The Book of Russo:
From the Desk of the CEO

The fall season is here and that means cooler weather, shorter days, changing leaves… and lots of travel for those of us in the self funding space.  The airport terminal is starting to get to me, but as we all know, once October ends, we have a few months at home before the spring events.   But that doesn't mean that it's not busy; in fact, with the amount of new business that so many of you are bringing to the table, it's busier than ever here at The Phia Group. 

We are talking about new plan documents to write, new stop loss policies to assess, more data to scrub for recovery opportunities, and more claims to review.  But all of this growth comes with potential land mines. We cannot take our eyes off the ball and must continue to innovate while being cautious of not overstepping.  There are so many ways we can empower our plans but we need to ensure that we do it right.

Speaking of right, I am excited about the release of our flagship template.  I spoke to our clients and one thing you wanted was our full template plan document, but with the variables pre-selected… a best practices plan document that had our chosen provisions in place already, saving you 75% of your time filling out long checklists.  Consider it done!  That’s just one example of the news we have to share.  So, without further ado, enjoy the season and happy reading.

Reducing Questionnaires:

Thanks to evolving technology and new resources, The Phia Group can identify subrogation opportunities without sending questionnaires to plan participants.  These recent upgrades to The Phia System™ and advancements in our investigational techniques lead to faster identification of third party liability claims and quicker engagement by The Phia Group’s team, without communicating with the plan participants – identifying opportunities more often, while reducing the volume of accident questionnaires we send to plan participants.  While accident questionnaires are still a useful tool – they are no longer the only tool.  That’s why I am pleased to provide you with the ability to decrease or cease the use of accident questionnaires.  To discuss these new customization capabilities, or our other services, please contact Garrick Hunt at ghunt@phiagroup.com or call (781) 535-5644.



Service Focus of the Quarter: The Phia Group Flagship Template
New Services and Offerings
Phia Group Case Study
Phia Fit to Print
From the Blogosphere
Webinars
Podcasts
The Phia Group’s 2017 Charity
The Stacks
Phia’s Speaking Events
Employee of the Quarter
Phia News


Service Focus of the Quarter: The Phia Group Flagship Template

Our plan document can now be yours in a fraction of the time. Taking the guesswork out of best practices and utilizing optimal provisions, The Phia Group Flagship Template offers an unrivaled plan document, with time and cost effectiveness in mind.

Let us make your life easier and your plan document drafting experience more accurate. With minimal time or monetary investment, you can now take advantage of the industry's most thorough yet efficient plan document production tool. Despite having 75% fewer questions than any other customizable plan document template, The Phia Group Flagship Template is both compliant with federal law, as well as innovative in its use of cost-containment tools and participant incentivizing provisions.

It should therefore come as no surprise that following in-depth review and assessment, The Phia Group Flagship Template is supported by many leading stop loss carriers.

Contact Garrick Hunt at ghunt@phiagroup.com or 781-535-5644 to learn more about how The Phia Flagship Template can help you.


New Services and Offerings:

New Phia Tableau Reporting Portal Tool now available:

At The Phia Group, we value transparency and customer satisfaction above all else. In recognition of those priorities, we routinely improve our client facing reports and reporting capabilities. To that end, we are proud to announce that we will be further expanding our reporting service features. Through the use of Tableau (https://www.tableau.com/), reports will now offer a new level of customization, enabling you and The Phia Group to collaborate like never before. These features are not only available to our Subrogation and Third Party Claim Recovery clients, but also customers utilizing any of our Provider Relations services (such as Phia Unwrapped, Balance Bill Support, and Claim Negotiation and Signoff).

For more information regarding the new Phia Tableau Reporting Tool and pricing, please contact Garrick Hunt at ghunt@phiagroup.com or call him at (781) 535-5644


Cutting back on Questionnaires:

It is The Phia Group’s mission to reduce the cost of healthcare through the use of innovative legal techniques and the most sophisticated technology. In keeping with this goal The Phia Group is always taking steps to improve all of our services, including our earliest: subrogation. Recent upgrades to The Phia System™ and advancements in our investigational techniques have led to faster identification of third party liability claims and quicker engagement by The Phia Group’s team, without relying upon or otherwise communicating with the plan participants. These new resources allow us to identify opportunities more often and more effectively, while at the same time reducing the volume of accident questionnaires we send to plan participants. While accident questionnaires are still a useful tool when investigating and collecting accident details – they are no longer the only tool. As such, we are pleased to now provide all of our subrogation clients with the ability to increase, decrease, or cease the use of plan participant accident questionnaires. Clients can also opt to utilize their own letters, or have the employer communicate directly with plan participants.

The Phia Group is committed to ensuring you and your clients are provided with nothing but the highest quality service, best-in-class performance, and a member first approach. That is why we are continuously improving our services to provide the best performance (and most options) possible.

To discuss these new customization capabilities, or our other services, please contact Garrick Hunt at
ghunt@phiagroup.com or call (781) 535-5644.

 


Phia Group Case Study:

The Phia Group was presented with a case where a self-funded health plan paid a claim based on a network rate; the billed charges were $211,500, and the network rate was 51% of billed charges – netting payment of $107,865. When submitted to stop-loss the group’s carrier denied a portion of the claim paid, citing the stop-loss policy exclusion of all amounts in excess of Usual and Customary amounts, as determined by the carrier.

The kicker: that was all the stop-loss policy’s exclusion said - Usual and Customary was not defined anywhere within the policy.

The carrier was of the opinion that 150% of the Medicare rate was Usual and Customary, and upon that basis allowed only $22,000 – denying reimbursement of nearly $87,000 that the Plan paid pursuant to its PPO contract. The group attempted to appeal the denial, but the carrier stood firm; the group was all but ready to give up the fight, when the group changed brokers and the new broker’s first order of business was to consult The Phia Group.

The Phia Group got in touch with the stop-loss carrier on the group’s behalf and attempted to explain the group’s position. The existence of the PPO contract and required payment amount combined with the carrier’s lack of explicit, supporting policy language in the stop-loss policy (along with other arguments – legal and common sense) formed the basis of our position. After many rounds of discussions, the carrier agreed to reimburse the entire claim paid except for $2,073 in “ineligible” charges.

The plan’s liability for the denied stop-loss claim was $87,000, and The Phia Group’s intervention helped save $85,000.


Fiduciary Burden of the Quarter:

Traditionally, we have discussed fiduciary burdens in terms of companies that perform “plan” functions– such as repricing claims or administering appeals – but this quarter has seen certain instances in which those that perform “settlor” functions (most prominently a broker placing stop-loss or network coverage) have encountered some fiduciary issues. For example: a recent dispute between a plan, its broker, a network administrator, and stop-loss carrier in which the broker apparently placed inadequate or insufficient stop-loss coverage to support a network’s standard policies. The issue is that the network contract required payment of claims that the carrier did not cover; caught in the cross-fire is the broker, who placed this business, and who allegedly should have been aware of the potential discrepancy.

The allegation? That the broker simply provided bad guidance regarding the choice of which network/carrier combination the plan should use. It is a very easy mistake to make and one that can potentially be made by anyone placing business. Our advice to brokers, TPAs, and other advisors, is to make sure you are as diligent as possible when making decisions for, or even making suggestions to, your clients. Self-funded plan sponsors and plan administrators rely heavily on their advisors; when they are given questionable advice, the backlash can be huge – and it can be unexpected.

Our popular services: plan document review, stop loss policy review, and Gap-Free Analysis  (which compares the stop-loss policy to a plan document, network contract, or other materials), can help identify issues and potential “gaps” in coverage before they happen. This can mean the difference between spending $120,000 on a new Maserati, and spending $120,000 to indemnify your client from an unexpected stop-loss denial.

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Phia Fit to Print:

• Money Inc. – “Affordable” Health Insurance Is Not “Affordable” Health Care – May 11, 2017

• Boston Voyager – Meet Ron E. Peck of The Phia Group in Braintree – August 7, 2017

• Money Inc. – All Against One and One Not for All: A Case Against a Single Payer System – August 21, 2017

• Bloomberg – Employers Taking Action to Control Health-Care Costs – September 5, 2017

• California Broker Magazine – Even as “Repeal and Replace” Falters Self-funding Remains Strong September 7, 2017

• Self-Insurers Publishing Corp. – State-mandated Continuation of Coverage and ERISA Preemption: What Self-funded Employers Need to Know – August 4, 2017

• Self-Insurers Publishing Corp. – Taking Health Care International - The Growing Trends of Importing Care and Exporting Patients – July 3, 2017



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From the Blogosphere:

Stop Loss and My Infinite Sadness. You get what you pay for.

Uncertainty Prevails in the Health Care Debate. The dog days of summer have come and gone.

Reverse Medical Tourism. US patients are seeking services abroad to obtain services and care at more affordable rates.

Spinning the Web of the Plan Document. No, this isn’t about spiders.

 

To stay up to date on other industry news, please visit our blog.



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Webinars

Best Practices for Today's Plan Documents

On October 17, 2017, The Phia Group will present “Best Practices for Today's Plan Documents,” where our legal team will discuss best and worst plan document practices, provide some creative ideas for plan formation, and suggest some concepts to help perfect plan document drafting.

Click HERE to Register!

On September 21, 2017, The Phia Group presented “It’s Time To Renew – Revisiting Stop Loss Trends,” where we discussed understanding procedures preemptively, reviewing a plan document side-by-side with the stop loss policy, and agreeing upon language interpretations.

On August 22, 2017, The Phia Group presented “A True Impact on the Bottom Line – Identifying Current Issues, Implementing Solutions & Seeing Results,” where we discussed the biggest issues impacting the health benefits industry today.

On July 13, 2017, The Phia Group presented “Consulting Headlines – The Hottest Topics in Benefit Plan Administration,” where our legal team discussed how laws are changing, regulations are shifting, and benefit plans are scrambling to keep up.



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Podcasts:

On September 11, 2017, The Phia Group presented “Cutting Out Conflict,” where our legal team explained what plan administrators can do to cut out conflict and tie up loose ends before they suffer a costly loss.

On August 21, 2017, The Phia Group presented “In Reference to reference Based Pricing,” where Adam Russo and Ron Peck picked apart the method for containing costs, identified the pros and cons of an “RBP” plan, and discussed options to customize such a program.

On August 11, 2017, The Phia Group presented “Stopping the Bleeding,” where The Phia Group’s CEO, Adam Russo and Attorney Brady Bizarro interviewed Garrick Hunt, Phia’s Sales Executive.

On August 7, 2017, The Phia Group presented “Repeal & Replace Fails: What’s Next,” where The Phia Group's CEO, Adam Russo, Sr. VP, Ron Peck, and Attorney Brady Bizarro discussed the dramatic events on Capitol Hill and the shocking failure of Senate Republicans to repeal and replace Obamacare.

On July 17, 2017, The Phia Group presented “Your Friendly Neighborhood Provider,” where Ron Peck, Jon Jablon and Andrew Silverio shared stories and examples of providers working with payers to preserve the private employer based group health plan industry.

On July 10, 2017, The Phia Group presented “The Cost of Care,” where The Phia Group's CEO, Adam Russo and Sr. VP, Ron Peck, interviewed Attorney Jon Jablon - Director of Provider Relations

Be sure to check out all of our latest podcasts!

 



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The Phia Group’s 2017 Charity

At The Phia Group, we value our community and everyone in it. As we grow and shape our company, we hope to do the same for the people around us.

The Phia Group's 2017 charity is the Boys & Girls Club of Brockton.

The mission of The Boys & Girls Club is to nurture strong minds, healthy bodies, and community spirit through youth-driven quality programming in a safe and fun environment.

The Boys & Girls Club of Brockton (BGCB) was founded in 1990 to create a positive place for the youth of Brockton, Massachusetts. It immediately met a need in the community; in the first year alone, 500 youths, ages 8-18, signed up as club members. In the 25 years since, the club has expanded its scope exponentially by offering a mix of Boys & Girls Clubs of America (BGCA) nationally developed programs and activities unique to this club.

Since their founding, more than 20,000 Brockton youth have been welcomed through their doors. Currently, they serve more than 1,000 boys and girls ages 5-18 annually through academic year and summertime programming.

On Friday, August 24th, employees of The Phia Group participated in the annual volunteer day at The Boys & Girls club of Brockton. Employees of The Phia Group hosted a number of activities that all of the children truly enjoyed. This year, The Phia Group collected and donated $4,500 to help keep this program running and enjoyable for years to come!  


The Phia Group invites its staff to donate various items for the benefit of The Boys and Girls Club of Brockton. For more information or to get involved, visit www.bgcbrockton.org.



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The Stacks

Aid-in-dying Laws and the Implications for Self-Funded Plans

By: Maribel E. McLaughlin, Esq. – September 2017 - Self-Insurers Publishing Corp.


Two years ago, a woman close to my mother was diagnosed with an aggressive form of brain cancer. Along with her two daughters, she went through the various treatment options presented to her and determined that she was going to try all of them. She wanted to put her best foot forward for her daughters and her granddaughter, and she found the strength to fight the cancer with every cell in her body.

Click here to read the rest of this article


State-mandated Continuation of Coverage and ERISA Preemption: What Self-funded Employers Need to Know

By: Brady Bizarro, Esq. – August 2017 - Self-Insurers Publishing Corp.

According to one prominent health law attorney, “Although in its text ‘hospital’ appears only once and ‘physician’ not all, ERISA may be the most important law [prior to the Affordable Care Act] affecting health care in the United States.” William Sage, “Health Law 2000”: The Legal System and the Changing Health Care Market, 15(3) Health Aff. 9 (Aug. 1996). Understanding the intricacies of the Employee Retirement Income Security Act of 1973 (“ERISA”) and its preemption clause can be a challenge for even the most assiduous attorney. The statute supersedes any and all state laws insofar as they “relate to” any employee benefit plan. It also contains a “savings clause” which preserves the state’s traditional role of regulating insurance. That clause is then qualified by the “deemer clause,” which acts as a kind of escape hatch through the savings clause. For employers, that escape hatch is key because it allows them to avoid state insurance regulations by self-funding their health plans rather than by purchasing health insurance. Increasingly, however, states are testing the limits of preemption by passing leave laws which mandate that employers continue health insurance coverage for eligible employees out on leave.

Click here to read the rest of this article.


Taking Health Care International – The Growing Trends of Importing Care and Exporting Patients

By: Andrew Silverio, Esq. – July 2017 – Self-Insurers Publishing Corp.


Esteemed physicist Richard Feynman is remembered by many for the phrase “If you think you understand quantum mechanics, you don’t understand quantum mechanics.” This sentiment rings true for the continually evolving landscape of our healthcare system as well, and the problems facing all of us, particularly as insurers, employers, and patients. For those of us within the healthcare or health risk industries, the more we learn about the problems we face and what is causing them, the more we realize just how complex the landscape is and what an impossible task it would be for any single solution to reel in the cost of care.

Click here to read the rest of this article.

To stay up to date on other industry news, please visit our blog.

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Phia’s Q4 Speaking Events:

Phia’s Speaking Engagements:

• 7/12/17 – Montana Captive Conference – Whitefish, MT “High Performing Self-Insured Health Plans – The Key to Successful Stop-loss Captive Programs”

• 8/9/17 – NAHU Region 1 Meeting – Stamford, CT “The Best gets Better: Getting the Most out of Your Self-Funded Plans”

• 9/19/17 – Custom Design Benefits – Cincinnati, OH “The Top 10 Innovations in Self-Funding”

• 9/27/17 – TABA’s 2017 Fall Conference and Membership Meeting - The Woodlands, TX “Gap Traps: Avoiding Variances between the Employee Handbook and the Plan Document”

• 10/3/17 – NHAHU – Bedford, NH “Top 10 Do’s & Don’ts of Self-Funding”

• 10/4/17 – Hewitt Coleman Broker Meeting – Greenville, SC “The Future of Self-Funding & Reference Based Pricing”

• 10/16/17 – Captivated Health Membership Meeting – Woburn, MA “Empower & Engage Through Your Handbook”

Ron Peck’s 2017 Speaking Engagements:

• 9/19/17 – CIC-DC 2017 Annual Conference – Washington, D.C. “Cost Containment Strategies”

Tim Callender’s 2017 Speaking Engagements:
• 7/17/17 – Health Care Administrator’s Association TPA Summit – St. Louis, MO “Conference Emcee”

• 8/17/17 – FMMA 2017 Annual Conference – Oklahoma City, OK “Critical Strategies in Self-Funding to Promote the Free Market”

• 9/21/17 – Metro Detroit Association of Health Underwriters, Annual Conference – Troy, MI “The Real Causes of High Healthcare Costs & True Cost-Containment Strategies to Combat Cost.”

• 10/10/17 – SIIA, National Educational Conference & Expo – Phoenix, AZ “Through the Looking Glass – a Non-Vendor Take on Reference Based Pricing”

Brady Bizarro's 2017 Speaking Engagements:
• 7/18/17 – HCAA TPA Summit 2017 – St. Louis, MO “Ethics”

• 8/9/17 – TPAC 2017 Conference – Philadelphia, PA “Most Common Mistakes Employers Make in Their Plan Documents.”

• 9/26/17 – TABA’s 2017 Fall Conference and Membership Meeting - The Woodlands, TX “Gap Traps: Avoiding Variances between the Employee Handbook and the Plan Document”

 

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Get to Know Our Employee of the Quarter:
Kerri Sherman

Congratulations to Kerri Sherman, The Phia Group’s Q3 2017 Employee of the Quarter!

“Kerri consistently goes above and beyond to help all of us when help is needed. Kerri is always around to provide assistance and help out wherever she can! Whether it be training, or making sure we have all the tools we need to complete our work. She has been in the training room at times working with new people, but always keeps us informed of where she will be and what she is doing, so if any issues arise, we know how to proceed. We think she is a fantastic multi-tasker and is always supportive. She always provides quick feedback if something requires immediate attention and always provides detailed explanations of everything that needs to be done in order to solve the issue. We have appreciated all the hard work she has done to help me keep my case load at bay especially while we were preparing to go on vacation. We think she has been phenomenal and we are happy to have her on our team. She is reasonable and fair, while maintaining professionalism.”



Congratulations Kerri and thank you for your many current and future contributions.


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Phia News

    Catherine Dowie’s Latest Win

    We would like to congratulate Catherine Dowie on her latest win! Phia’s own Catherine Dowie won a $25,000 prize in the Philip Shawe Scholarship Competition, tying for second place in a pool of 240 applicants who submitted briefs to the crowd sourcing contest. We are proud to have you on our team. Get all of the details in recent article published by Suffolk University Law School.


    Job Opportunities:

    • Customer Service Representative

    • Claims Specialist

    • Medical Bill Negotiator

    • Health Benefit Plan Consultant I

    • Health Benefit Plan Administration – Attorney II

    • Product Development Manager

    See the latest job opportunities, here: https://www.phiagroup.com/About-Us/Careers

     

    Babies

    • Jamie Johnson gave birth to Miles and Kaia on 7/10/2017


    Promotions

    • Ulyana Bevilacqua was promoted from Consultant to Supervisor, PGC

    • Elizabeth Pels was promoted from Legal Assistant to Claim Recovery Specialist

    • Joseph Bacon was promoted from Legal Assistant to Claim Recovery Specialist


    • Vourneen O’Donovan was promoted from Legal Assistant to Claim Recovery Specialist

    • Cheyenne Fonseca was promoted from Legal Assistant to Claim Recovery Specialist

    New Hires

    • Joseph Bacon was hired as a Legal Assistant

    • Naveen Omkar was hired as an IT Technologist

    • Trevor Schramn was hired as a Sales and Accounts Coordinator

    • Jeff Booth was hired as a Training and Development Manager

    • Jen Montalto was hired as a Case Investigator/Stop Loss

    • Mike Mears was hired as a Claim Analyst

    • Gordon Glenn was hired as an IT Technologist

    • Olesya Avramenko was hired as a Consultant I


    • Michelle Rowland was hired as a Consultant I

    • Alexandra Simboski was hired as a Consultant I

    • Patrick Ouellette was hired as a Juris Doctor

    • Andrew Fine was hired as an Intake Specialist

    • Erin Hussey was hired as an Attorney I

    • Catina Griffiths was hired as a Case Investigator

    • Samad Khan was hired as a Contract Administrator


    • Zackery McLaren was hired as a Case Investigator

    • Kaley Dennison was hired as a Case Investigator

    • Ekta Gupta was hired as an ETL Specialist

    • Kathy baker was hired as a Claim Recovery Specialist IV-WC

    • Annie Heskin was hired as a Talent Acquisition Specialist

    Fun at Phia:

    Solar Eclipse of 2017




    Rock Star Recognition:

    The Phia Group was recently awarded the “Rock Stars of Health GOLD Award” during The Rock Stars of Health Summit held in Missoula, Montana on September 29, 2017.




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info@phiagroup.com
781-535-5600

The Stacks - 4th Quarter 2017

Aid-in-dying laws and the Implications for Self-Funded Plans
By: Maribel E. McLaughlin, Esq.

Two years ago, a woman close to my mother was diagnosed with an aggressive form of brain cancer. Along with her two daughters, she went through the various treatment options presented to her and determined that she was going to try all of them.  She wanted to put her best foot forward for her daughters and her granddaughter, and she found the strength to fight the cancer with every cell in her body.  After sixteen months of treatment, losing her hair, the inability to eat properly, and her body being riddled with the toxins that were used to fight the cancer, she decided that she wanted to end her life; her way, on her own terms.  She had a lengthy discussion with her daughters about her choice, and as sad as they were that they would soon be losing their mother, they understood that their mother wanted to live every moment to its fullest, but, when she was ready, she would make the decision to die on her own terms.  One particularly difficult night, she pushed herself to take one last walk through the Newport Cliff Walk with her daughters and granddaughter, enjoyed her last Del’s lemonade, savored the final clam chowder she was going to have, and decided that this was her chance to end her life on a high note.  That night, she took a higher dose of the medicine that she had been taking for the last sixteen months, and never woke up.  She purposely overdosed; or, as many would call it, she committed suicide.

D.C.’s New Death with Dignity Act
The Death with Dignity Act went into effect on February 18, 2017 in Washington D.C., and last month, doctors were able to begin the process of prescribing life-ending drugs to terminally ill patients; adding the District to six states that currently authorize that practice.  

The D.C. Health Department launched a website where physicians can register to participate in the “Death with Dignity” program, where doctors, pharmacists, and patients can learn about the law’s requirements and patients and doctors can download required forms.  Patients must be older than eighteen with a prognosis of less than six months to live in order to be eligible. In addition, they must have made two requests at least fifteen days apart for life-ending medications. They must ingest the drugs themselves, and two witnesses must attest that the patient is making the decision voluntarily.

Affordable Cara Act & Physician-Assisted Suicide
According to Section 1553 of the Affordable Care Act (“ACA”) , a health plan may not discriminate against an individual or institutional healthcare entity because the entity does not provide any healthcare item or service that causes, or assists in causing, the death of any individual, such as by assisted suicide, euthanasia, or mercy killing.  Put another way, if terminally ill patient requests that his doctor help him end his life, and the doctor refuses for moral or other reasons, that doctor is protected against discrimination by federal law.  This protects the doctor that may be targeted by insurance company because of their refusal to help patients end their lives.

California’s Election of Death of Dignity Law
In California, one of the six states, the law does not make it easy for a patient to elect death with dignity; the patient must be terminally ill to request a doctor’s prescription for medications intended to end their lives peacefully.  The End of Life Option Act creates a long list of administrative obstacles that both patients and doctors must overcome. At the time of the law’s enactment, it became the fifth state to implement an aid-in-dying law, and it is currently also the most stringent.  Patients must get a prescription from a participating physician.  This is not as easy as it may seem A coordinator may connect the patient with a physician that participates; but, if the patient is a U.S. military veteran that receives healthcare from the U.S. Department of Veterans Affairs, that patient will not be able to utilize this state law since federal law prohibits the use of federal funds for this purpose.  Additionally, the forty-eight Catholic and Catholic-affiliated hospitals located in California will not provide patients with the option to end their lives.   

Cost of Death vs. Cost of Healthcare
Another obstacle that patients may come across is the cost of the drugs involved with the assisted suicide practice.  The patient’s health plan may not cover them - and the states that have allowed the practice of assisted suicide do not require health insurers to cover the medications.  Under The Employee Retirement Income Security Act of 1974 (ERISA), there are minimum standards for voluntarily established health plans in private industry to provide protection for individuals in these plans; plans must provide participants with information about plan features and funding, and furnish information regularly and free of charge.  Nothing about the Acts requires that a self-funded plan under ERISA, cover the cost of the death-with-dignity practice. Luckily under ERISA, a Plan still has the liberty to create their health benefits. A health plan, when drafting their Plan Document, can choose to either allow this practice, or not. The ACA prohibits the discrimination of a provider that does not provide assisted suicide services.  The Act does not require health plans to allow the practice. The option is left to the Plan.

Healthcare costs in the United States have risen astronomically over the past decade and many people fear that insurance companies may look to assisted suicide as a way for a health plan to save money of expensive medical care.  One report concluded that it would save approximately $627 million dollars in 1995.   Some, who oppose assisted suicide, argue that insurance companies may begin to limit expensive procedures for patients who are suffering from terminal illnesses such as cancer, AIDS, and multiple sclerosis.  Others argue that even though the aggregate savings is small, the impact on an individual company or an individual family would be a powerful enough financial incentive to encourage the practice even where it was not intended.   Many fear that patients would be more likely to consider physician-assisted suicide as a better alternative with the added bonus of saving their family money and the burden of prolonged, expensive care. Insurance companies may try to exclude life-saving or life-extending drugs and pressure people into thinking about the practice of physician assisted suicide.

Collins and the Suicide Exclusion
Health plans are permitted to include a suicide exclusion that would enable the plan administrator to deny claims associated with the suicide. In Collins v. Unum Life Insurance Co., 185 F. Supp.3d 860 (2016),  the Supreme Court held that “Unum reasonably interpreted the suicide exclusion to encompass insane suicide, [and that] Mr. Collins' sanity at death has no bearing on the outcome.”  The issue in this case involved a state law which stated that a suicide exclusion would be only be valid if liability was limited to an insured “who, whether sane or insane, dies by his own act.”  Former Navy SEAL David M. Collins served this country for seventeen years, during which he was deployed to Iraq, Afghanistan, and Kuwait. He served in dangerous and stressful situations, many of which exposed him to enemy gunfire and blasts from mortar fire.   Despite seeking treatment, Mr. Collins was found dead in the driver's seat of his car with a gunshot wound to his head on March 12, 2014. The death was ruled a suicide.  Prior to his death, Mr. Collins had been working for Blackbird Technologies, where he participated in an employee benefit plan that provided basic and supplemental life insurance through group policies funded and administered by Unum Life Insurance Company of America.  When Mr. Collins died, his widow, Jennifer Mullen Collins, applied for benefits under both policies. Unum granted benefits under the basic policy, but denied benefits under the supplemental policy's suicide exclusion.  In addition, the Court held that it found “substantial evidence in the administrative record to support Unum's conclusion that the suicide exclusion applied.”

Option to Elect or Exclude Suicide
Plan administrators can take the position of either excluding assisted-suicide claims or paying them.  They can allow the practice, and give the power to the patient to make the decision for themselves, and ultimately save the Plan money for care that the patient would have ultimately not wanted; or, they can exclude the practice and have the peace of mind that everything that should have been covered was covered.  Whether you’re a broker, a health plan sponsor, third-party administrator, or reinsurer, this is something that should not only spike an interest, but also it should worry you if you have health plans in the states that allow physician assisted suicide practices.  Specialists in plan document drafting can provide assistance in reviewing your plan document and ensuring that the plan document addresses this issue specifically.
_________________________________________
1 HHS Office of the Secretary & Office for Civil Rights (OCR), Section 1553 - Refusal to provide assisted suicide services HHS.gov (2015), https://www.hhs.gov/civil-rights/for-individuals/refusal-provide-assisted-suicide-services/index.html (last visited Aug 9, 2017).
2 42 U.S. Code § 18113 (2010)
3 AB-15 End of life.(2015-2016), Bill Text - ABX2-15 End of life. (2015), https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520162AB15 (last visited Aug 9, 2017).
4 Id.
5 Emily Bazar, Aid-In-Dying: Not So Easy Kaiser Health News (2017), http://khn.org/news/aid-in-dying-not-so-easy/ (last visited Aug 9, 2017).
6 29 U.S.C. 18 § 1001
7 Physician Assisted Suicide and Health Care Costs, Low Fat Diet Plan, http://lowfatdietplan.com/weight-loss-routine/end-of-life-care/physician-assisted-suicide-and-health-care-costs (last visited Aug 9, 2017).
8 Id
9 Id.
10 Collins v. Unum Life Insurance Co., 185 F. Supp.3d 860 (2016)
11 Id. at 882
12 Id. at 871
13 Id. at 863
14 Id. at 864
15 Id. at 863
16 Id. at 865
17 Id. at 880
________________________________________________________________________________________________________________________
State-mandated Continuation of Coverage and ERISA Preemption: What Self-funded Employers Need to Know
By: Brady Bizarro, Esq.

According to one prominent health law attorney, “Although in its text ‘hospital’ appears only once and ‘physician’ not all, ERISA may be the most important law [prior to the Affordable Care Act] affecting health care in the United States.” William Sage, “Health Law 2000”: The Legal System and the Changing Health Care Market, 15(3) Health Aff. 9 (Aug. 1996). Understanding the intricacies of the Employee Retirement Income Security Act of 1973 (“ERISA”) and its preemption clause can be a challenge for even the most assiduous attorney. The statute supersedes any and all state laws insofar as they “relate to” any employee benefit plan. It also contains a “savings clause” which preserves the state’s traditional role of regulating insurance. That clause is then qualified by the “deemer clause,” which acts as a kind of escape hatch through the savings clause. For employers, that escape hatch is key because it allows them to avoid state insurance regulations by self-funding their health plans rather than by purchasing health insurance. Increasingly, however, states are testing the limits of preemption by passing leave laws which mandate that employers continue health insurance coverage for eligible employees out on leave.

Perhaps the best known leave law is the federal Family and Medical Leave Act of 1993 (“FMLA”). The statute, like most other federal laws, applies regardless of the source of insurance. It requires employers to provide twelve weeks of unpaid, job-protected leave for an employee’s own serious health condition, for the birth or adoption of a child, or to care for a spouse, parent, or child with an illness. Significantly, the law also requires employers to maintain group health benefits for employees who take FMLA leave. Even though this continuation of coverage requirement clearly impacts self-funded ERISA plans, federal laws such as the FMLA are outside the scope of ERISA preemption.

At the state level, five states have now passed laws to address a perceived gap in the FMLA, granting eligible employees paid family leave: California, New Jersey, Rhode Island, Washington, and New York. Rhode Island law requires four weeks of paid leave, California and New Jersey each offer six weeks of paid leave, and Washington offers up to twelve weeks per year. New York’s Paid Family Leave Act (“PFL”), scheduled to take effect on January 1, 2018, offers one of the longest and most comprehensive paid family leave laws in the country. What makes the PFL unique is not just that it requires employers to provide twelve weeks of paid family leave; it also requires employers to continue health insurance coverage to employees out on leave. While this state-mandated employer obligation would seem to fall squarely under the purview of ERISA preemption, it turns out that determining the scope of ERISA preemption is an arduous task.

The key question to answer is whether the state law at issue “relates to” an ERISA plan.  The U.S. Supreme Court has said that a state law “relates to” an employee benefit plan covered by ERISA if it refers to or has a connection with that plan, even if the law is not designed to affect the plan or the effect is only indirect. See, e.g., Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990). This implies that there is no relevant distinction between obligations imposed on the employer versus on the employee benefit plan for purposes of determining whether ERISA preemption applies. Simply put, state laws which impose obligations on employers, and not specifically plans, may still be preempted. In addition, the Court has held that ERISA does not preempt state laws which have only a tenuous, remote, or peripheral connection with an ERISA plan, as is typically the case with laws of general applicability.

The Court directly addressed ERISA preemption and a state law which mandated the extension of health insurance coverage in District of Columbia v. Greater Washington Bd. of Trade, 506 U.S. 125 (1992). In Greater Washington, the Court reviewed a Washington, D.C. law which required employers who provided health insurance for their employees to provide equivalent health insurance coverage for employees eligible for workers’ compensation benefits. The Court explained that when a state law specifically refers to benefit plans regulated by ERISA, that provides a sufficient basis for preemption. It made no difference to the Court that the law also related to ERISA-exempt worker-compensation plans or non-ERISA plans. Once it is determined that a state law relates to ERISA plans, this is sufficient irrespective of whether the law also relates to ERISA-exempt plans.
 
In earlier cases, petitioners argued that ERISA preemption should be construed to require a two-step analysis: if the state law “related to” an ERISA-covered plan, they argued, it may still survive preemption if employers could comply with the law through separately administered plans exempt from ERISA (making the distinction between a plan requirement and an employer requirement). See generally Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985). In Greater Washington, the U.S. Supreme Court dismissed that analysis, stating, “We cannot engraft a two-step analysis onto a one-step statute.” See Greater Washington, at 133. Despite the Court’s rulings, the breadth of the “relate to” clause remained unclear and the question of state-mandated continuation of coverage was not directly addressed.

In 2005, the Department of Labor (“DOL”) seemed to put this issue to rest in an advisory opinion on the applicability of leave substitution provisions of the Washington State Family Care Act (“FCA”) to employee benefit plans. The FCA permits employees entitled to sick leave or other paid time off to use that paid time off to care for certain relatives of the employee who had health conditions or medical emergencies. As part of its analysis, the DOL analyzed section 401(b) of the FMLA, which provides that state family leave laws at least as generous as the FMLA are not preempted by “this Act or any amendment made by this Act.” 29 U.S.C. § 2651(b). Further, the DOL cited to a 1993 Senate report which recounts a colloquy between Senators Chris Dodd (D-CT) and Russ Feingold (D-WI). The discussion involved the leave substitution provisions of the Wisconsin FMLA and ERISA preemption. The record revealed that Senator Dodd, the chief sponsor of the FMLA, remarked, “The authors of this legislation intend to prevent ERISA and any other [f]ederal law from undercutting the family and medical leave laws of States that currently allow the provision of substitution of accrued paid leave for unpaid family leave…” The DOL relied on this exchange as additional support for the notion that state family leave laws at least as generous as the FMLA (including leave laws that provide continuation of health insurance or other benefits) are not preempted by ERISA or any other federal law.

As a result of the department’s guidance, it appeared as if state family leave laws enjoyed special protections from ERISA preemption. In 2014, the Sixth Circuit Court of Appeals considered the same issue and reached the opposite conclusion. In Sherfel v. Newson, 768 F.3d 561 (2014), the Court found that the leave substitution provisions of Wisconsin’s FMLA sufficiently “related to” an ERISA plan such that they were preempted by ERISA. Specifically, the Court held that the state law would “mandate the payment of benefits contrary to the [written] terms of an ERISA plan,” thus undermining one of ERISA’s chief purposes; achieving a uniform administrative scheme for employers. Newson, at 564. As part of its analysis of the preemption issue, the Court also dismissed the legislative history relied upon by the DOL in an uncommonly blunt (and borderline satirical) manner. Considering whether legislators intended to preclude the preemption of state family leave laws by ERISA, the Court observed, “[T]he idea that this colloquy ever passed the lips of any Senator is an obvious fiction. Colloquies of this sort get inserted into the Congressional Record all the time, usually at the request of a lobbyist…” Newson, at 570.

By ruling that a state family leave law was preempted by ERISA, the Sixth Circuit Court of Appeals aligned itself with the U.S. Supreme Court’s earlier jurisprudence on preemption. It remains to be seen how other Circuit Courts will address similar challenges to state leave laws; especially those that mandate continuation of coverage. The conservative approach for employers would be to continue health coverage when required by state law; however, the Sixth Circuit is the highest court to address this issue to date, and self-funded employers would be on solid footing to use ERISA preemption as a shield against state-mandated continuation of coverage.

Paid family leave is one of the few policies in Washington, D.C. that has bipartisan support, and employers should expect to see more states pass laws akin to New York’s Paid Family Leave Act. The President explicitly referred to paid family leave in a speech to a joint session of Congress on February 28, and his 2018 budget proposes six weeks of federal paid parental leave. While it remains unclear if that policy will become law, the trend is likely to continue at the state level, and as those laws impact self-funded health plans, the issue of continuation of coverage and ERISA preemption will increasingly attract the scrutiny of the courts.

Brady Bizarro, Esq. is an attorney with The Phia Group, LLC.
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Taking Health Care International – The Growing Trends of Importing Care and Exporting Patients
By: Andrew Silverio, Esq.

Esteemed physicist Richard Feynman is remembered by many for the phrase “If you think you understand quantum mechanics, you don’t understand quantum mechanics.”  This sentiment rings true for the continually evolving landscape of our healthcare system as well, and the problems facing all of us, particularly as insurers, employers, and patients.  For those of us within the healthcare or health risk industries, the more we learn about the problems we face and what is causing them, the more we realize just how complex the landscape is and what an impossible task it would be for any single solution to reel in the cost of care.

In tow with the cost of care, health premiums as well as per capita healthcare spending in America steadily increase every year.  This should not be news to anyone, and countless strategies have been proposed to slow and eventually reverse this inflation.  But, for many, the immediate objective isn’t to “fix” healthcare or undo the decades of developments which brought us here.  For many, the immediate goal is just to get care for their employees and families in an affordable way.  Although this problem is not uniquely American, we spend more of our GDP on healthcare than any other country (by a wide margin), and care is more expensive here than anywhere else.  As such, several newer strategies for cost containment are reaching beyond our borders into the international market – and doing so with impressive results.

One strategy aims to avoid the exceedingly high prices of some prescription medications in America by simply getting them from elsewhere.  Countries designated as “Tier 1” countries (including Canada, the UK, Australia, and New Zealand) have safety and efficacy standards which equal or exceed American standards, and enjoy significantly lower prices for drugs which are often chemically identical.  So, why hasn’t the American prescription drug market self-corrected due to this international competition?  The simple answer, and the reason many employers are hesitant to take advantage of this option, is that the practice is illegal.  Under federal law, drugs which are manufactured for sale outside the country are not FDA approved, as there is no potential for oversight in the manufacturing process.  Additionally, even if the foreign version of the drug is chemically identical in every respect, FDA guidelines address more than just the chemical makeup of the drug – they relate to labeling, storage, and transportation as well.  So, even a drug manufactured within the United States for sale outside of the country would be considered illegal if it was later re-imported into the country.

So, if importing foreign drugs is illegal, how is it a viable option for cost containment?  It’s possible, under the right circumstances, due to a well documented FDA policy of “enforcement discretion”.  Under this policy, the FDA does not prosecute individuals who import a limited quantity of prescription medications from abroad for personal use.  This discretion is based on several factors, including that the drug is for personal use only and that the amount imported is no more than a 3 month supply. So, if a program is set up correctly, the savings on many costly medications can be huge, with very minimal risk to the employer.  Two important things to consider, though, are safety and plan document design.  Regarding safety, it’s important to remember that just because a drug comes from a “Tier 1” country does not mean it is safe.  Just as you (probably) wouldn’t buy prescription drugs from someone out of a suitcase on the street, it’s important to ensure that you are working with reputable people and pharmacies abroad when dealing with this type of program.  There have been incidents involving drugs which were imported from Tier 1 countries after being manufactured in other countries with more lax standards, as well as incidents were drugs were found to be outright counterfeits.  Regarding plan document design, any given plan document likely has some existing barriers to making a seamless transition into reimbursing for expenses such as these.  Any exclusions or language which would conflict must be removed, and these changes should be approved by the plan’s stop-loss carrier and TPA (and ideally the PBM as well).  But again, when set up and run properly, this type of program can generate significant savings with minimal risk to the employer or patient.

Another trend picking up steam is specialized medical tourism.  Medical tourism is certainly nothing new, both within the country and internationally, but we are seeing a new trend – providers gearing their business model to specifically target medical tourism, and sometimes even specific conditions/illnesses.  When a facility specializing in a certain surgical procedure or implant, or treating a disease with particularly costly treatment, sets up shop just over the boarder or just offshore, it’s surely no coincidence.

A prime example of this is Health City Cayman Islands. Health City is a brand new facility (they took their first patient in 2014) that offers a broad spectrum of healthcare services, but none illustrate the savings potential better than their hepatitis C program.  Of course, a medical tourism offering only helps an employer save money if patients want to utilize it.  Health City seems to understand this – along with the appeal of their tropical location they offer travel planning assistance, transportation, and concierge services including arranging local activities and excursions.  The leading prescription hepatitis C medications can cost nearly $100,000 in the United States for a single 12 week course of treatment.  Many employers may be surprised to hear that in light of this, as compared to simply purchasing the drug at the local pharmacy, it can actually be significantly less expensive to put a patient on a plane (with a companion) and fly them to the Caribbean for treatment, including all ancillary services and testing and prescription medications dispensed onsite, all as part of what is essentially a free vacation.  The same concept is being applied with increasing regularity to other treatment, including surgical procedures.

Just as with drug importation, there are some practical house cleaning tasks a plan must take care of before introducing any sort of medical tourism benefit, particularly if patients will be traveling internationally.  A common barrier could be any existing plan exclusions for international treatment.  This and any other conflicting exclusions must be removed and cleared with interested parties, just as with an importation reimbursement benefit.  Another consideration with a medical tourism benefit is potential conflicts with the employer’s network agreement.  Many such agreements require that the in-network incentive be the “best” available, so if the in-network coinsurance is 20%, and the plan offers a “zero out-of-pocket” option to incentivize patients to use the new program, there could be trouble.  By that same token, the limitation could only apply within the network’s service area, which would mean there is no problem.  It is important to have a professional review these agreements to make sure the employer isn’t creating any liability for itself.

While many great minds continue to grapple with the puzzle of bringing American health costs down, many patients and employers simply cannot afford to wait for a complete solution.  These globally-minded strategies are just a few of the creative ways employer plans, vendors, and providers are attempting to make care more affordable and accessible.  The potential for savings is huge, and the quality of care can be just as high as or higher than comparable treatment domestically. Ultimately, those who reap the benefits will be those who are willing to innovate, and utilize new methods and strategies outside of the traditional employee benefit playbook.