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MyHealthGuide Newsletter Published weekly by MyHealthGuide, LLC (www.MyHealthGuide.com). This Newsletter is for personal, non-commercial use only. This weekly newsletter is FREE OF CHARGE to subscribers. Subscribe free. Send news, press releases and announcements to mailto:Info@MyHealthGuide.com. TABLE OF CONTENTS
Market Trends, Studies, Books & Opinions
Legal, Legislative & Regulatory News
Herpes Antivirals in the First Trimester of Pregnancy Do Not Appear to Increase Risk of Birth Defects Editorial Notes, Disclaimers & Disclosures TriZetto Acquires Tela Sourcing to Expand Business Process Outsourcing Services Capabilities for Healthcare Markets MyHealthGuide Source: The TriZetto Group, Inc, 8/26/2010, www.trizetto.com GREENWOOD VILLAGE, CO -- The TriZetto Group, Inc. announced that it has acquired all of the voting stock of privately held Tela Sourcing, Inc., a Baltimore-based business process outsourcing (BPO) services company that offers combined U.S. and India-based outsourcing capabilities to the healthcare industry. TriZetto is expanding its BPO capabilities to help its 350 payer customers more easily meet the cost challenges and new customer opportunities created by healthcare insurance reform. The combination of Tela's U.S. and Indian operations with TriZetto's current BPO capabilities in Baltimore is expected to add scale, scope and efficiency to the company's BPO capabilities. "The significant impact of healthcare reform on payers and others in the healthcare supply chain means an increasing need for outsourcing solutions," noted Mike Jenner, TriZetto's executive vice president who leads the company's services. "Tela represents a significant expansion of both the range of BPO services we can offer, as well as increasing our capacity and flexibility to blend on-shore and off-shore capabilities to fit customer needs." "Interest by health insurers in business process outsourcing (BPO) services blossomed in 2009 under the shadow of an economic downturn, demands for increased regulation and a renewed focus on healthcare reform," noted Gartner Analyst Maureen O'Neil in a January 2010 report titled BPO Gives Health Insurers the Opportunity to Shine Competitively. "To remain competitive in such a challenging environment, health insurers need new business and IT approaches that provide competitive differentiation, superior financial performance and regulatory compliance. Against this backdrop, BPO is becoming a key strategic option among many U.S. health insurers." Added Brij Sharma, Tela Sourcing's CEO who will lead TriZetto's combined BPO operations, "In today's environment, outsourcing is a strategic choice made by payers to help contain premiums, improve customer service and increase administrative efficiency. We have worked with several TriZetto clients. The combined TriZetto BPO team will now have more than 700 professionals in the U.S. and India, dedicated to delivering business rules configuration, front-end claims administration, enrollment and billing solutions that meet the business and operational needs of health plans and TPAs. Together, we will have a world-class, industrial-grade end-to-end BPO capability that can provide the flexibility, capacity and cost efficiency to meet a wide range of customer needs." About TriZetto Founded in 1997, TriZetto is the leading privately held healthcare information technology company to the healthcare payer industry, with its technology touching half of the U.S. insured population. TriZetto's vision for the industry, Integrated Healthcare Management, is the optimized coordination of benefits and care for healthcare consumers to improve the value of every healthcare dollar spent. The company's offerings include enterprise and component software, hosting, outsourcing services and consulting that help payers implement and optimize their operations and minimize the risk of bringing to market new products that drive competitive differentiation. Visit www.TriZetto.com. Eldorado's Javelina™ Selected by American Postal Workers Union Health Plan MyHealthGuide Source: Eldorado, a division of MphasiS, 8/25/2010, www.eldoinc.com and www.apwuhp.com Phoenix, AZ -- Eldorado (ELDORADO), a division of MphasiS, an HP Company and a leading provider of health benefit and claims management platforms, announced that American Postal Workers Union Health Plan (APWUHP), the fourth-largest national health insurance plan in the Federal Employees Health Benefits (FEHB) Program, serving more than 84,000 postal, retirees and their families, went live with ELDORADO's state-of-the-art Javelina™ solution. The plan, which is part of American Postal Workers Union (APWU), is using the browser-based system to improve claim and benefit administration, increase employee productivity, reduce administrative costs and enhance operational efficiencies. "The implementation was seamless," said Rocky Midgett, chief operating manager at APWU. "The go-live is a critical milestone for us, helping APWUHP to ensure accurate and consistent application of claims payment policies while accelerating the speed of reimbursement. ELDORADO worked closely with us to make sure Javelina met the plan's rigorous criteria for accuracy, speed, agility and flexibility." Before Javelina, Midgett explained, it was difficult for APWUHP to quickly and easily change benefit plan design, respond to dynamic market and regulatory developments, and integrate software applications due to a cumbersome claims & benefit management system. "Javelina's robustness, scalability, configurability and Service-Oriented Architecture platform enable us to become more agile, improve business performance, facilitate exchange of information between disparate systems, reduce the total cost of ownership, and enhance services to members and physicians," he added. "We are excited to be an integral part of APWUHP's success in navigating today's complex healthcare and business challenges," said Tom Castleberry, Vice Chairman of ELDORADO. About APWUHP The American Postal Workers Union Health Plan (APWUHP) provides health coverage programs to employees or retirees covered under the Federal Employees Health Benefits (FEHB ) Program. APWUHP is a department of the American Postal Workers Union, AFL-CIO. It has been serving more than 84,000 members since 1960 when the FEHB Program first began. Visit www.apwuhp.com. About ELDORADO Based in Phoenix, Ariz., Eldorado, a division of MphasiS, an HP Company, specializes in health insurance application development, business process outsourcing (BPO) services, IT engineering and operational consulting. The company serves the full spectrum of organizations nationally and internationally engaged in managing health benefit plans including third party administrators (TPAs), health plans, employers and self-insured organizations. Together, Eldorado customers manage 5 million lives and handle 35 million claims annually. Call 602.604.3100 and visit www.eldoinc.com. HCC Life Opens New Regional Office to Enhance Stop Loss Services to Arizona
and California HCC Life Insurance Company Full functionality in the Scottsdale office will be transitioned over the next several weeks. About HCC Life Insurance Company For more than 30 years, HCC Life Insurance Company (HCC Life) has been leading the way in stop loss insurance for employers who self-fund their employee benefit plans. HCC Life Insurance Company's products, including Medical Stop Loss, HMO Reinsurance, Medical Excess and Group Term Life Insurance, are backed by the financial stability of parent company, HCC Insurance Holdings, Inc. (NYSE: HCC), and hold a rating of A+ (Superior) for financial strength, awarded by A.M. Best Company ratings services. Visit www.hcclife.com. USBenefits Expands with New Office Relocation USBenefits Telephone numbers will remain the same. Please Send all RFP's to: quotes@usbins.net. About USBenefits USBenefits Insurance Services, LLC is a full service Managing General Underwriter, providing Medical Stop Loss coverage for employee groups through qualified Third Party Administrators and select brokers. USBenefits has total responsibility for all administration, claims, and underwriting decisions pertaining to its Medical Stop Loss program. Staffing includes actuarial, claims, underwriting, administrative and marketing departments that work passionately to deliver financially stable Medical Stop Loss products. Contact Rick Paul, ASA, MAAA, President at (949) 468-3022, rp@usbins.net. Contact Marc Floyd, Executive Vice President, Marketing, at (949) 468-3023 and mf@usbins.net. Call (877) 877-4USB (4872) and visit www.usbins.net. CAP Digisoft Solutions Introduces New Medical Management Services for TPAs, Others MyHealthGuide Source: CAP Digisoft Solutions, Inc., 8/27/2010, www.capdigisoft.com Atlanta, GA -- CAP Digisoft Solutions, Inc., a global Business Process Outsourcing and Software Development Company, announces the introduction of advanced medical record navigational aids and file management support. With offices in Dallas, Texas, Atlanta, Georgia and Coimbatore, India, CAP Digisoft Solutions is an experienced provider of medical record sorting, organizing, indexing and factual summarizing. Now, navigating even the largest and most complex files is made extremely efficient with the availability of hyperlinks embedded in Indexes or Summaries plus a customized keyword search application for instant source document review. In order to meet the exacting needs of physicians, attorneys, payors and others who need to review all providers' records, a solution to identify and document Missing Records has also been created. Both textual medical records and handwritten notes are scrubbed to identify all mentions of medical providers such as physicians, hospitals, ambulatory surgery centers, imaging centers and laboratories. Identifiable source documents that cannot then be found in the assigned file are listed as "Missing Records" along with a citation to where the provider's name is mentioned. Arun Kumar, CAP Digisoft Solutions' Founder and CEO, states, "CDS has listened to our market and responded with solutions to optimize our customers' Workflow, Decision-Making and Profitability. We have focused on taking what are considered mundane yet mission critical tasks and delivered time and cost efficient solutions in a totally scalable environment." All records are sent via secure, HIPAA compliant File Transfer System protocol and managed by experienced, trained reviewers who utilize CDS' developed semi-automated software tool. This combination of applied technology and skilled staff allows CDS to work with both text and handwritten medical records and notes. Typical clients include TPAs, insurance carriers, attorneys & legal nurse consultants, case managers, record retrieval companies…literally anyone handling Personal Health Information. For more information or to submit a file for a free trial of any of CAP Digisoft Solutions' services, please contact Rick Litzky at 770-790-4780 or by email to rlitzky@capdigisoft.com. About CAP Digisoft Solutions CDS is a globally recognized Business Process Outsourcing (BPO) and Software Development Company, primarily focused on providing high-end business services that leverage manpower and technology to companies. With our efficient Business Process and IT Services, clients can have more time and energy to concentrate on strengthening their core management, consequently increasing overall productivity and substantially saving costs. Visit www.capdigisoft.com. S5Health Announces New Benefit Broker Renewal Program Reducing Claim Costs while Improving Diabetic Health Outcomes MyHealthGuide Source: S5Health, 8/24/2010, www.S5Health.com Fishers, IN -- S5Health announced the development of a new program, the S5Health Benefit Broker Renewal Program 2010, specifically designed for health insurance professionals currently engaged in the 2010 Group Benefit Renewal Process. For a limited time, S5Health will offer healthcare insurance professionals, discounted access to the S5Health Diabetic toolkit when they implement an employer group into the platform for the 2010 Renewal Season. S5Health's comprehensive toolset helps reduce healthcare claim costs for all stakeholders in the healthcare ecosystem and improve the quality and affordability of health care for members living with diabetes. Innovative Tools Encourage Real Cost Savings thru Behavioral Change The S5Health platform offers an innovative way to realize real employer cost savings and improve the lives of people living with diabetes. S5Health is designed for diabetic patients by diabetic patients. The system offers interactive online tools to easily track trends and trouble areas, and connect with caregivers, payors, suppliers and other patients. S5Health empowers diabetic patients to better manage their health with easy to understand, visual dashboards and actionable reports to make real behavioral changes. S5health is more than a set of diabetes management tools. Many diabetic thought leaders agree that diabetic consumers currently do not have access to the tools they need. Consumers utilizing the S5Health Diabetes toolkit reported they better understand their personal biometric data and can make actionable changes to improve the way they feel. Brokers and employers will see an increase in adoption of disease management programs, saving employers money through reduced health costs for their employees, and reduced absenteeism. Easier to Securely Communicate with Providers and Social Network The S5Health toolkit is more than a set of consumer diabetes management tools. The S5Health platform solves healthcare insurance professionals' unique member portfolio management needs by providing brokers and their groups with a comprehensive and powerful online system that supports communication, customized branding, social and easy integration with existing programs and consumer facing platforms. Researchers agree that empowering a patient to be engaged in their healthcare and greater levels of social support, particularly diabetes-related support from spouses and other family members are associated with better regimen adherence. Social support also serves to buffer the adverse effect of stress on diabetes management. Successful management of diabetes contributes to controlling healthcare costs short term and over the long term. TPAs interested in realizing real employer cost savings and improvement of diabetes management, can access the tools for free by visiting https://s5health.sdmindy.com or learn more by contacting S5Health for additional information. About S5Health S5Health is a healthcare technology company located in Fishers, Indiana. S5Health was founded to empower diabetic patients to manage their health by providing interactive online tools to easily track trends and trouble areas, and connect with caregivers, payors, suppliers and other patients. S5Health's technology imports data from any diabetic pump or meter and creates simple to understand dashboards and reports to track blood sugar, insulin and carbohydrate levels. Our social media and secure email allows a patient to interact with other organizations or people that are involved in his/her care and build a personal support team. Alerts and reminders can be set for prescription refills or upcoming appointments. Visit www.S5Health.com. SLG Announces Excess Loss Policy Changes and
Clarifications Regarding PPACA Healthcare Reform
Additionally SLG/QBE Underwriting Management has determined that there will be no impact to stop loss rates for the adoption of the following provision(s) upon plan anniversary:
Policyholders electing to amend their plan documents for early and/or timely adoption of PPACA provisions or electing to expand coverage beyond that which may be required will need to submit an Amendment or Restated Plan Document for coverage review and approval under the QBE Excess Loss Policy. Please note that the adoption and interpretation of the new federal guidelines appears to be fluid and subject to change. SLG/QBE reserves the right to change or modify Excess Loss Policy Provisions and Underwriting Guidelines based upon implementation and clarifications of the new regulations. About SLG Benefits & Insurance, LLC SLG Benefit's mission is to offer a medical stop loss product that will help our TPA and broker partners grow their businesses and support the self-funding concept. With increases in medical inflation, Plan Sponsors will increasingly rely on their brokers and TPA's to provide funding solutions. Our goal is to provide unparalleled product and expertise to our business partners. Our priority is to exceed the needs of our clients and deliver superior results to our risk takers. Visit www.slgbenefits.com. Vermont Issues 900th Captive Insurance Company License MyHealthGuide Source: Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA), 8/10/2010, www.VermontCaptive.com MONTPELIER, VT -- The State of Vermont has issued its 900th captive insurance company license according to the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA). The newest captive is owned by to Lincoln Financial Group. Vermont's 900th license means the state has issued more than four times as many captive licenses than its next closest domestic competitor. "This benchmark gives Vermonters a strong sense of pride and achievement that our commitment to this industry for nearly 30 years has been heard loud and clear," said Governor Jim Douglas. "Vermont will continue to offer a stable regulatory environment, governmental officials that are accessible, and world-class professional support services." "While reports show limited activity in the captive sector, Vermont is bucking the trend with a strong first half of the year and it is very encouraging that interest continues to be robust," said Dan Towle, Vermont's Director of Financial Services for the Vermont Agency of Commerce & Community Development. "We're going to continue our efforts to grow Vermont's captive industry and maintain our lead as the ‘Gold Standard' of captive domiciles." Special purpose financial captives (SPFC) formed in the State of Vermont for the securitization of insurance reserves has been a strong growth sector for the Green Mountain State. Vermont currently has more than 20 SPFC's that wrote more than $6 billion in gross written premium last year. About Vermont Captives Vermont is the largest captive insurance domicile in the U.S. and the third largest in the world. Forty-two of the companies that make up the Fortune 100 and 18 of the companies that make up the Dow 30 have Vermont captives. Visit www.VermontCaptive.com. Aon and Hewitt Clear Waiting Period for Pending Merger MyHealthGuide Source: PRNewswire-FirstCall, 8/25/2010, www.hewitt.com and www.aon.com CHICAGO -- Aon Corporation (NYSE: AON) and Hewitt Associates, Inc. (NYSE: HEW) announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, relating to Aon's proposed merger with Hewitt has expired, thereby satisfying a condition to the closing of the transaction. The transaction remains subject to the satisfaction of other customary closing conditions, including foreign regulatory approvals and approval by the stockholders of both Aon and Hewitt. About Hewitt Hewitt Associates (NYSE: HEW) provides leading organizations around the world with expert human resources consulting and outsourcing solutions to help them anticipate and solve their most complex benefits, talent, and related financial challenges. Hewitt works with companies to design, implement, communicate, and administer a wide range of human resources, retirement, investment management, health care, compensation, and talent management strategies. With a history of exceptional client service since 1940, Hewitt has offices in more than 30 countries and employs approximately 23,000 associates who are helping make the world a better place to work. Visit www.hewitt.com. About Aon Aon Corporation (NYSE: AON) is a leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. Through its more than 36,000 colleagues worldwide, Aon delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally through more than 500 offices in more than 120 countries. Visit www.aon.com. BEST Re Names Carolyn Shepherd as New Director of Sales and Marketing MyHealthGuide Source: BEST Re, 8/23/2010, www.bestre.net and www.besthealthplans.com Meridian, ID -- BEST Re is delighted to announce that Carolyn Shepherd has joined our team as the Director of Sales and Marketing. Carolyn will oversee BEST Re's portfolio of stop loss products and expand business relationships with Third Party Administrators from our Forest, Virginia office. Carolyn comes to us with over 20 years of sales and marketing experience in the insurance industry. During her career she has worked as a regional marketing director for Perico Life Insurance Company. Carolyn Shepherd can be contacted at (877) 868-5775, ext. 225 or at cshepherd@bestre.net. About BEST Re BEST Re is a member of the BEST Life family of companies. As a full service managing general underwriter, we offer medical stop loss insurance for employee groups through qualified third party administrators and broker/consultants. All our administration, claims and underwriting decisions are made at one location, and we are fully staffed with actuarial, administration, claims, marketing and underwriting professionals. BEST Re can offer you responsive, viable and innovative solutions to meet your stop loss insurance needs. Visit www.bestre.net for more information. Contact Ken Hockaday at 888.893.5041, ext.366, khockaday@bestre.net and visit www.bestre.net and www.besthealthplans.com. PHX Announces Addition of Bob Hemmer as Chief Financial Officer MyHealthGuide Source: PHX, 8/13/2010, www.phx-online.com Bedminster, NJ -- PHX announced that Robert M. Hemmer has joined the executive team as the company's first Chief Financial Officer. The establishment of this new position underscores PHX's commitment to growth and service excellence. Bob will be charged with helping to evaluate opportunities for investment, expansion, and acquisition as well as support the company's aggressive growth strategy by establishing world-class financial controls and processes and by providing for the capital needs of the business as it continues to invest in its future. "We are very fortunate to find an executive of Bob's caliber to help us take our company to the next level of our growth strategies. Bob brings a great deal of experience to this team and will be an important asset to our continuing success." said Todd Roberti, Director, Corporate Strategy, PHX. "Bob will join PHX's Executive Committee and will be responsible for all major administrative functions." Bob comes to PHX as a seasoned executive with over 12 years of C-level experience in privately held service companies pursuing growth strategies, including 10 years as CFO of NYCE Corporation. Earlier in his career, Bob spent 18 years with ADP Corporation, working in both its corporate office as well as several operating divisions, some of which were spun out as independent companies. He has also participated in numerous M&A transactions on both the buy and sell side. About PHX PHX delivers advanced cost management solutions for health plans. The company combines claim processing automation with professional services to deliver a centralized approach to cost management, increasing savings in both the near and long term while dramatically reducing errors and turnaround time. PHX services include data analytics, benchmarking, predictive modeling, PPO network management, out-of-network negotiations, claims editing, and clinical bill review and audit. The firm's solutions are used by the industry's leading insurance companies, Taft-Hartley Funds, HMOs, and TPAs. Visit www.phx-online.com. Prime Health Services Names Todd Hurt as Vice President of Provider Contracting MyHealthGuide Source: Prime Health Services, Inc., 8/24/2010, www.primehealthservices.com Nashville, TN -- Todd Hurt has been named Vice President of Provider Contracting at Prime Health Services, Inc., one of the nation's largest non-risk bearing PPO and medical cost-containment companies. Hurt joined Prime Health in 2006 and most recently was Director of Provider Contracting. He assumes authority over the Contracting Division at Prime Health Services and answers directly to the company's Principles. His primary duties will include conducting all activity related to Prime Health Services national contracting efforts and custom contracting for clients. "Todd has been an excellent asset to Prime Health over the years. Todd is one of the hardest working individuals I have ever met, and has a full understanding of the Prime Health model and the current market in relation to Non-Risk Bearing PPOs. Todd is a ‘get it done' kind of guy. Thus, I know that Todd will do an excellent job in overseeing our custom contracting efforts for our clients that choose this service as well as for the continued growth of our broad based PPO," said Brian A. Sharp, CEO of Prime Health Services. Hurt has over ten years of healthcare experience, coming to Prime Health from Magellan Health Services. Todd has coupled over seven years of unique BHO customer and physician relations experience with four years provider contracting experience with Prime Health. About Prime Health Founded in 1996 and based in Brentwood, TN, Prime Health Services (Prime Health) is a managed care company that offers a full spectrum of services, including a Preferred Provider Organization (PPO) ready for access with customizable solutions, as well as repricing offerings. Prime Health's PPOs include Workers' Compensation, Group Health, and Auto Liability networks. Prime Health has over 500,000 providers and facilities nationwide forming the Prime Health National Delivery System. Prime Health offers our National Delivery System to the TPA, insurance carrier, and self-insured markets. Call 866-348-3887 and visit www.primehealthservices.com. Market Trends, Studies, Books & Opinions change:healthcare Cites Studies Confirming Transparency Key to Reducing Healthcare Costs MyHealthGuide Source: change:healthcare, 7/24/2010,
www.changehealthcare.com Key findings:
Based in Brentwood, Tennessee, change:healthcare guides employers, employees and third party administrators in making more informed healthcare consumer purchase decisions that save money, without plan design changes or cost shifting. Specifically, the firm helps employers and their workers choose the most affordable providers for medical services by analyzing a company's medical claims and continually sending cost-savings alerts to employees when savings opportunities are found. Their primary tool is a system of Ways to Save Alerts™ that proactively notifies users when there's a cost savings opportunity and tracks and reports savings. It recently helped employees at one client company realize an immediate savings, on average, of $112 per person. "We've found that when you give people transparent information about their
healthcare and the value-driven choices that are out there, invariably they
make far more insightful decisions about their care, its cost and its
quality." Parks said. "I have no doubt that with greater transparency
placing more information and control into consumer hands, Americans could
realize millions in healthcare cost savings. It's nice to see the Society of
Actuaries agrees with us." About change:healthcare change:healthcare, inc. is a technology company offering over 750 highly personalized ways to save on prescriptions and medical services. The company's real dollar ROI-tracking solution is available through third party administrators, self-insured employers and health plans interested in helping employees and members better manage their out-of-pocket healthcare expenses. Contact Frank Limpus at 615-668-9938, frank.limpus@comcast.net and visit www.changehealthcare.com. UBA Survey: Consumer Driven Health Plan Growth Slow
As Enrollments Decline for First Time
Employers often offset the higher out-of-pocket costs of CDHPs by offering
employees a health reimbursement arrangement (HRA) or a health savings
account (HSA) and contributing funds. The 2010 UBA Health Plan Survey found
the average employer contribution to an HRA was $1,481 (up from $1,310 in
2009) for a single employee and $2,857 for a family (up from $2,502 in
2009).
The 2010 UBA Health Plan Survey will be available to the public on Nov. 1. Only UBA Member Firms have access to the more than 250,000 pages of granular state, region and industry data. Stafford also said the analysis of the 2010 UBA Health Plan Survey data will continue over the next several months and, as in past years, additional findings will be forthcoming. UBA has Member Firms in virtually every major U.S. market. To locate one and learn more about the 2010 UBA Health Plan Survey, visit www.UBAbenefits.com. About The 2010 UBA Health Plan Survey With responses from 17,113 health plans sponsored by 11,413 employers
nationwide, the 2010 UBA Health Plan Survey is the nation's largest and most
comprehensive survey of plan design and plan costs. As the largest survey of
its kind, the UBA Health Plan Survey defines benchmarks by a greater number
of specific industries, regions and employer size categories than is
available from any other resource. The 2009 UBA Employer Benefit
Perspectives (which delineates employers' positions and opinions on Employee
Communications, Personal Health Management and Scope of Benefits Offered)
and the 2010 UBA Employer Opinion Survey (including the Special Supplement
on Health Care Reform) serve as companion pieces to the 2010 UBA Health Plan
Survey. United Benefit Advisors, is an alliance of more than 145 premier independent benefit advisory firms with offices in more than 165 offices throughout the U.S, Canada and the U.K., and is one of the nation's top five employee benefits advisory organizations. As trusted and knowledgeable advisors, UBA Members collaborate with more than 2,000 professionals to seek out ideas, insight, expertise and best-in-class solutions that positively impact employers and make a real difference in the lives of their employees and families. Employers, advisors and industry-related organizations interested in obtaining powerful results from our shared wisdom should visit UBA online at www.UBAbenefits.com to locate your local UBA Member Firm. Visit www.UBAbenefits.com. Legal, Legislative & Regulatory News Supreme Court Reverses Lower Courts and Restores ERISA Plan's Discretion MyHealthGuide Source: Employer's Guide to Self-Insuring Health Benefits, Thompson Publishing Group via PassionForSubro, 8/2010 Employers and other plan administrators are due greater deference in their benefits plan decisions than some lower courts have allowed, the U.S. Supreme Court ruled after admonishing two lower courts for failing to follow the High Court's prior decisions establishing ERISA law on plan administration. The High Court also admonished the current administration as well as courts for attempting to introduce more complex, inefficient and costly requirements in plan decision-making, and for encouraging court interference in those plan decisions. Indirectly, the Supreme Court opinion puts in stark contrast to ERISA's principles of uniformity and efficiency in plan administration the Patient Protection and Affordable Care Act's (PPACA) complex and less artful crafting of plan administration requirements, which undermine uniformity and efficiency — thus implicating much more costly reform requirements. "A single honest mistake" does not justify stripping a plan administrator of deference for subsequent related interpretations of the plan, the U.S. Supreme Court said as it overturned a lower court ruling that would have stripped the plan of the more favorable abuse-of discretion standard of review. The High Court's reversal thereby preserves the administrator's broad authority to interpret benefit plan terms. "People make mistakes. Even administrators of ERISA plans," Chief Justice John Roberts wrote in the Court's 5-3 opinion in Conkright v. Frommert, 2010 WL 1558979 (April 1, 2010), which allows ERISA plan administrators to retain deferential review even after an erroneous interpretation of the plan. Deference was restored because the plan was acting in good faith, its miscalculations were honest, the errors were isolated, and a "one-strike-you're-out" approach was unreasonable, the Court held. Also, deference is necessary because if courts can toughen the standard of review mid-process, litigation becomes more labyrinthine and frequent, and plan administration becomes more complicated. On the other hand, Roberts wrote, patterns of erroneous plan interpretations — even in good faith — are still grounds for forfeiting deference. Although the case involved pension benefits, the High Court's affirmation of the plan's right to reserve deferential review is important to ERISA health plans. The case helps depict the circumstances under which courts may strip discretionary authority and when authority can be defended. The Facts of the Case The dispute was about whether Xerox Corp. improperly calculated employee retirement benefits. Xerox employees had left the company and been rehired. When they left Xerox, they got lump-sum distributions of accrued pension benefits. After they were rehired, the plan subtracted those distributions from future benefits. The Xerox plan required the administrator to offset the employee's final benefits by an amount "attributable" to any prior lump-sum distribution. To that end, the plan administrator used a "phantom account" method (which calculated the hypothetical amount the employee's investment would have reached had it remained in the plan) to calculate the amount offset from new benefits. The employees sued, arguing that the plan's method over-deducted from their current benefits, and violated ERISA. The employees further argued that the plan and the summary plan description (SPD) did not provide for the use of that method. Lower Courts Strip Discretion The U.S. District Court for the Western District of New York granted summary judgment for the Xerox plan administrator, holding that the use of the phantom account method was not improper and the employees had adequate notice of that method's use. But the 2nd U.S. Circuit Court of Appeals overturned that decision (Conkright v. Frommert, 535 F.3d 111 (2nd Cir., July 24, 2008)), concluding that the phantom account method constituted a retroactive cut-back of benefits in violation of ERISA. The circuit court also determined that the plan and its administrator had impermissibly amended the plan to include that mechanism, and remanded the case to the district court. On remand, the plan proposed a new interpretation to calculate the employee offsets. The district court refused to accord any deference to that interpretation and adopted the employees' approach (with a smaller offset). And on appeal, the 2nd Circuit upheld the district court's decision not to apply a deferential standard and rebuffed challenges to the district court's decision on the merits. The plan brought the case to the Supreme Court, which held that the district court should have used the deferential standard of review. Supreme Court Decision The Xerox employees (backed by a U.S. government amicus brief) claimed that deference is less important once a plan administrator's interpretation has been found to be unreasonable. The Supreme Court rejected that, holding that deference is important because it makes it easier for administrators to govern plans, and encourages employers to sponsor ERISA plans. It looked at two important cases for precedent. A plan administrator with discretionary authority to interpret a plan is entitled to deference in exercising that discretion, the Supreme Court held in Firestone Tire & Rubber Co. v. Bruch, 489 S. Ct. 101 (1989). The High Court in that ruling stated that under trust law the instrument creating the trust influences the standard of review. If the trust instrument reserves deference, then "the trustee's interpretation will not be disturbed if reasonable." Building on that decision, the Court later held in Metropolitan Life Ins. Co. v. Glenn, 128 S. Ct. 2343 (2008), that when plan terms grant discretionary authority to the plan administrator, courts will review challenges to such decisions under a deferential standard of review, even when the administrator is operating under a systemic conflict of interest. The Supreme Court criticized the 2nd Circuit for its holding that a court does not need to apply a deferential standard because an administrator had in the past interpreted the plan in a way that violated ERISA. "We reject this one-strike-and-you're-out approach," Chief Justice Roberts wrote, adding that such an approach has no basis in Firestone's precedent, "which set out a broad standard of deference without any suggestion that the standard was susceptible to ad hoc exceptions." Herpes Antivirals in the First Trimester
of Pregnancy Do Not Appear to Increase Risk of Birth Defects Among 1,804 pregnancies exposed to acyclovir, valacyclovir, or famciclovir in the first trimester,
Researchers conclude that in this large nationwide cohort, exposure to acyclovir or valacyclovir in the first trimester of pregnancy was not associated with an increased risk of major birth defects.
Recurring Resources
Standard Stop-Loss Employer Disclosure Form Endorsed
MyHealthGuide Source: Self-Insurance
Institute of America (SIIA,
www.SIIA.org), Society of Professional Benefit
Administrators (SPBA,
www.SPBATPA.org), Recurring article
Self-Insurance Institute of America (
www.SIIA.org
) and Society of Professional Benefit Administrators ( www.SPBATPA.org
) have endorsed a standardized stop-loss disclosure form,
which also includes ICD-9 codes. The documents are intended
to help facilitate the sharing of health data information
between self-insured entities/TPAs and stop-loss
insurers/MGUs for the purpose of medical stop-loss
underwriting.
Stop-Loss Carriers and MGUs Adopt the
Standardized Form
The list below represents an estimated
$3.3 Billion in Stop-Loss premium. Assuming a medical
self-funded community Stop-Loss market of $4 Billion, then
over 80% of the market has adopted the form.
If you are a Stop-Loss carrier or MGU
that has adopted the standard disclosure form, please let us
know at
Info@MyHealthGuide.com.
BEST
Re on behalf of US FIRE & BEST LIFE
HMA MGU, LLC, MGU
Independence
Holding Company (Standard
Security Life Insurance Company of New York,
Madison National Life
and
Independence American Insurance Company)
Intermediary Insurance Services, Inc. (IISI), MGU on
behalf of QBE Insurance
Company and
American National
Life Insurance Company of Texas
J.
Allan Hall & Associates, Inc., MGU on behalf of their
underwriting facility,
Lloyd's of London
National Benefit Resources, MGU on behalf of
UnitedHealth Group insurance companies
R. E. Moulton, Inc. /
American United Life Insurance Company (OneAmerica
Companies)
RMTS,
LLC, MGU on behalf of their carriers
Nationwide Life
Insurance Company,
Gerber Life Insurance Company, and
Trustmark Insurance Company (as filed)
Star Line Group,
MGU on behalf of American
National Life Insurance,
Nationwide Life Insurance Company and
Lloyd's of London.
Stop-Loss Concepts, Inc., MGU on behalf of their
carriers, Gerber Life
Insurance Company and
QBE Insurance Company.
Latest Survey Results Recommending Adoption
Respondents from the self-funded
community have voted 86% in favor of adoption of the
standard form for Stop-Loss disclosure. For all survey
results, see
www.MyHealthGuide.com/disclosures.htm.
Standard Form Adoption May Not Mean Standardization
While
surveyed members (n=112) from the self-funded community
voted 86% in favor of adoption of the standard form for
Stop-Loss disclosure and a majority of the Stop-Loss market
has adopted the form, complete standardization is
still a goal.
LaRea Albert
of Health
First TPA
"These comments show that, at least down
at the operating level, many underwriters and their managers
'do not get it'! If the form is 'approved', but insist on
the unique information carrier by carrier, then that's not
accepting the standard, " says John Lord, Vice
President-Specialty Zurich Specialty Health, and a member of
the Industry Study Group which developed the Standard
Disclosure Form. "Clearly we have work to do to get
the message out to all the right people." The following draft documents may be downloaded and viewed at www.myhealthguide.com/disclosures.htm.
About Employer Disclosure The Employer Disclosure, required by most Stop-Loss carriers and MGUs, has grown in sophistication and use. Today, most Stop-Loss sources require an employer disclosure before a new or renewal quote is offered. Ideally, the Employer Disclosure lists all known high cost claims, claims that have exceed a given dollar threshold, or patient/employees with certain diagnoses. Failure to disclose these individuals can later lead to claim denials. For the past several years, an industry study group has worked on "standardizing" the reporting process with the objective that all insurers would come to accept the reporting system/form as an industry standard. September 9, 2010 One Day Forum on Consumer-Directed Health Care presented by CDHC Solutions. Forum helps employers prepare for and manage the new "Health Care Law" and Give A-to-Z Insight into Consumer-Directed Health Care Solutions. The health bill is law, so what changes does this bring now and in the near term for your company and/or clients health care benefits plans? Hear what leading experts are recommending and what your peers are doing. Cobb Galleria Centre, Atlanta, GA. Registration: Karen Raudabaugh (kraudabaugh@fieldmedia.com), Event Coordinator, 404-671-9551. Information: www.cdhcsolutionsmag.com/forum
September 13-14, 2010
September 13-14, 2010
September 15-16, 2010
September 20-22, 2010
September 27-29, 2010
October 6-8, 2010
October 12-15, 2010
October 17-20, 2010
October 20-22, 2010
October 25-26, 2010
November 8-11, 2010
November 8-9, 2010
A special rate of $159.00 (plus tax) per night has been arranged for the conference. The special room rate will be available until October 17, 2010, or until the group block is sold-out, whichever comes first. Make your reservations online and enter Group/Convention Code: HCC. Or call Hilton reservations at 443-573-8700 or 800-445-8667 and mention Group/Convention Code: HCC or Health Care Compliance for the special rate. Information and registration: 888-580-8373, service@hcca-info.org, www.hcca-info.org
November 14-17, 2010
January 31-February 1, 2011 Editorial Notes, Disclaimers & Disclosures
Ernie Clevenger |