By: Jon Jablon, Esq.
You may have heard about our new Phia Certification program, through which The Phia Group requires all employees to be “certified” to the company’s satisfaction. Certification is obtained by watching, reading, and listening to a series of training materials and then taking a series of tests to confirm the employee’s understanding of our industry and all aspects of The Phia Group’s operations.
One particularly noteworthy question is:
Which of the following is the most accurate?
As you may have surmised, the answer is option B, which is essentially an “all of the above” type of answer. This is especially noteworthy because we find that folks in our industry often think of “gaps” as occurring only between the plan document and stop-loss policy, while in practice there are lots of other gaps that can cause lots of unforeseen problems for health plans.
A perfect example – and one that we deal with quite frequently – is when there is a gap between the plan document and a network contract. This can be one the most problematic of all gaps, since it can come out of nowhere. The issue arises like this:
A plan incurs an in-network claim, billed at $50,000. The SPD provides the plan the responsibility to audit all claims, and an audit reveals that the appropriate payable rate (the plan’s U&C rate) for this claim is $30,000. Meanwhile, the network contract provides a 10% discount off billed charges for this particular claim – resulting in the plan paying $30,000 based on the SPD, but owing $45,000 as the network rate. This is a very common scenario and not one that can be solved quite so easily; even if the plan says “oh right – the network contract! We’ll pay the network rate to avoid a fight with the network,” the dilemma may not be over, since stop-loss presumably has underwritten coverage based on the assumption that the plan’s U&C rate will be paid, resulting in stop-loss possibly denying the $15,000 paid in excess of the plan’s U&C rate. Even though there’s a network contract and the plan may have no choice but to pay it, there’s always the chance that the stop-loss policy will define its payment on other terms.
Moral of the story? Gaps in coverage can arise between the plan document and any other document – including network contracts, ASAs, stop-loss policies, employee handbooks, PBM agreements, vendor agreements, and more. Check your contracts, and make sure your SPD aligns with all of them! (Email PGCReferral@phiagroup.com to learn more.)
By: Jen McCormick, Esq.We frequently talk about the various types of gaps in coverage – gaps between the plan document and the stop loss policy, the network agreement and even the employer handbook. The mission for gap-less coverage should not stop there however. Recently, we have seen situations where employers have gaps in between their documented practices and their payroll practices. For example, an employer may allow continuation of coverage after a leave of absence for up to 3 months. The problem, however, is that the employer’s payroll system does not allow for manual adjustments and coverage must end after a specified (i.e. two week period). This creates an issue as an employee is paying for coverage but is not eligible for that coverage under any plan materials. As a result, employers should not only double check that their plan materials are in sync but that their plan practices (i.e. payroll and otherwise) are aligned with those materials.
By: Jen McCormick, Esq.
As many states (and cities) are starting to beginning to enact paid sick and/or leave time regulations, employers will need to understand the impact and implications. The regulations vary by state (and city), but require eligible employers to grant certain employees paid sick time. Various regulations are in effect already, and some are yet to become effect. Regardless of the effective date of these regulations, it’s clear that employers will need to make changes and consider how the regulations will impact their employer handbooks, plan documents (i.e. continuation of coverage) and stop loss. Now is the time to get the ball rolling in reviewing these materials so employers can be prepared.