MyHealthGuide Newsletter
News for the Self-Funded Community
1/26/2015

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.comClick here if Newsletter stops arriving.

TABLE OF CONTENTS


General & Company News

People News

Market Trends, Studies, Books & Opinions

Legislative & Regulatory News

Medical News

Recurring Resources

Upcoming Conferences

Editorial Notes, Disclaimers & Disclosures


General & Company News



Houston International Insurance Group Announces the Acquisition of Elite Underwriting

MyHealthGuide Source: Houston International Insurance Group, 1/23/2015, www.hiig.com
 
Houston, TX -- Houston International Insurance Group (HIIG) announced that it had closed its acquisition of the business and assets of Elite Underwriting Services (Elite), a managing general Underwriting agency (MGU) based in Malvern, Pennsylvania specializing in excess medical insurance (Medical Stop Loss-MSL) and other Accident & Health (A&H) insurance products.

Matthew S. Naylor, who has built Elite over the past 10 years along with his father, Russell R. Naylor, will continue to manage operations as EVP at HIIG's new A&H Division, operating under the name HIIG-Elite Underwriting Service, in the expanding HIIG insurance group.

Matt Naylor, Chief Executive Officer of Elite, said, "My Dad and I are very pleased to have the opportunity to join with Stephen Way and HIIG for what we are sure will be an exciting journey."

Russ Naylor added, "With their partners The Westaim Corporation (TSX:WED.T), HIIG is well positioned financially to take their Group to a much higher level, while providing us the resources to grow our business and more efficiently service our clients and producers."

Stephen L. Way, Chief Executive Officer of HIIG, said, "Russ and Matt Naylor are a classy family team and a product of hard work and creativity. This transaction adds an important line of business to our expanding operations, but one in which we have considerable experience."

While Chief Executive at HCC Insurance Holdings, the Company he founded in 1974, Mr. Way built a market leading Medical Stop Loss (MSL) book of business which under his leadership reached more than $800 million in gross premium.

About Elite Underwriting

Established in 1986, Elite is an MGU specializing in underwriting MSL and other specialty A&H products. Elite currently writes almost $100 million in gross premiums, representing two highly rated life insurance companies of which one will continue to be involved after this transaction. HIIG-Elite will also issue policies in the HIIG subsidiary Great Midwest Insurance Company, rated A (Excellent) VIII by A.M.Best Company.  Visit www.eliteuw.com.

About Houston International Insurance Group (HIIG)

HIIG is an insurance holding company based in Houston, Texas with underwriting divisions focused on Accident & Health; Construction; Energy; Professional Liability; Transactional Property; and other Specialty business. HIIG has assets of more than $1 billion and shareholders' equity of more than $250 million. HIIG's insurance company subsidiaries consist of Houston Specialty Insurance Company, Imperium Insurance Company, Great Midwest Insurance Company, and Oklahoma Specialty Insurance Company. These insurance companies are rated A/A- (Excellent) by A.M. Best Company. Contact Byron Way, EVP/COO, at 713-935-4800 and visit www.hiig.com.

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CareATC Receives Investment from Omega Capital To Accelerate Rollout of Employer-Sponsored Clinics

MyHealthGuide Source: PRWEB, 1/14/2015, www.CareATC.com

Tulsa, Ok -- Tulsa-based private equity firm Omega Capital announced a growth equity investment in CareATC, Inc. The Oklahoma Life Science Fund and CareATC management also participated in the financing. Details of the transaction were not disclosed.

Headquartered in Tulsa, Okla., CareATC is a leading operator of onsite and near-site medical clinics for employers of all sizes. Since 2000, CareATC has provided customized healthcare solutions to employers that have reduced healthcare costs by promoting health, preventing disease, and providing a shorter path to care for employees. CareATC currently has over 100 clients in 16 states, serving over 85,000 patient lives. Customers include corporations, municipalities, and school districts.

"We are excited to partner with Omega Capital and the Oklahoma Life Science Fund on this financing," said Philip Kurtz, Chief Executive Officer of CareATC. "We want to accelerate our rollout of new clinics to keep pace with the demand for quality healthcare in or near the workplace."

"Employers have become very sophisticated about their rising healthcare costs and the direct linkage between employee wellness and productivity," said Jason Martin, President of Omega Capital. "We know that investments in preventative care and disease management pay big dividends."

"By eliminating barriers to care such as distance, wait times, and co-pays, CareATC is able to head off complications before they become costly in both human and financial terms," said Dr. William Paiva, Manager of the Oklahoma Life Science Fund.

As part of the transaction, Kurtz, Martin, Paiva and Ron Woods, founder of CareATC, will serve on the board of directors of CareATC.

Omega Capital is currently seeking acquisition and investment opportunities in the energy, aviation, machinery, industrial technology, healthcare and food processing industries. Additional information may be found at www.omegacapital.com.

About CareATC

Headquartered in Tulsa, Okla., CareATC is a leading operator of onsite and near-site medical clinics for employers of all sizes. Since 2000, CareATC has provided customized healthcare solutions to employers that have reduced healthcare costs by promoting health, preventing disease, and providing a shorter path to care for employees. CareATC currently has over 100 clients in 16 states, serving over 85,000 patient lives. Customers include corporations, municipalities, and school districts. Visit www.CareATC.com.

About Omega Capital

Omega Capital is a private equity firm headquartered in Tulsa, Oklahoma. Its inaugural fund, Omega Capital Fund I, L.P., closed in April 2014 with $30 million in commitments. The firm is backed by some of the most prominent entrepreneurs and family offices in the region. The firm's principals have deep experience across all stages of investing. Omega Capital seeks to acquire or invest in profitable lower middle market companies in a variety of industry sectors in Oklahoma and surrounding states. We focus on well-run companies with room to grow revenues and operating margins. In addition to the firm's own capital, we have access to capital from our investor-partners that allows us to pursue a broad range of transactions. Visit www.omegacapital.com.

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Data Dimensions Achieves Strong Scores on 2014 Customer Satisfaction Survey

MyHealthGuide Source: Data Dimensions, 1/20/2015, www.datadimensions.com

JANESVILLE, WI  -- Respondents rated Data Dimensions highly in the company's 2014 customer satisfaction survey, with more than 90 percent of respondents ranking their experience with the company as positive.

Data Dimensions, a leader in the field of business process automation, asked respondents to rate their experience based on nine key metrics, including expertise and professionalism of staff, timeliness and effectiveness of problem resolution, performance against Service Level Agreements (SLAs), return on investment and overall customer service satisfaction. On a scale of one to five (with five being excellent), Data Dimensions earned an average score of 4.20.

Survey respondents were offered the option of commenting on their experience with Data Dimensions. Here's a sample of what they said:

  • "The Data Dimensions team is committed to excellence. I am always highly satisfied with our relationship. I have recommended Data Dimensions many times in the past and will continue to do so."
  • "Data Dimensions has been an excellent partner to date. They have been receptive to changes in process and scope of services."
  • "I have worked directly with Data Dimensions supervisors and adjudicators for several years. I am impressed with Data Dimensions' commitment to meeting our needs as they enable us to achieve our performance goals. The Data Dimensions staff is dedicated to providing us with a high quality product, which helps us meet the needs of our customers."

"We are very pleased with the response to our customer satisfaction survey," said Data Dimensions President and CEO Jon Boumstein. "The strong scores reinforce our commitment to delivering exceptional service to our clients and maintaining our team's high standards of professionalism, expertise and dedication to quality."

About Data Dimensions

Since 1982, Data Dimensions has been helping clients better manage business processes and workflows by bridging the gap of automation, technology, and physical capabilities. As an innovative leader in the area of information management and business process automation, we provide a complete range of outsourcing and professional services including mailroom management; document conversion services; data capture with OCR/ICR technologies; physical records storage and electronic retrieval services through our state of the art Tier III data center. Contact Will Pfeifer, Marketing Coordinator, at wpfeifer@datadimensions.com, 800-782-2907 and visit www.datadimensions.com.

Data Dimensions is a portfolio company of HealthEdge Investment Partners, LLC. HealthEdge is an operating-oriented private equity fund founded in 2005. HealthEdge's investment team has over 100 years of combined operating experience as operators and investors. Visit www.healthedgepartners.com.

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SIIA Introduces Conference Dedicated to Self-funded Taft-Hartley Plans

MyHealthGuide Source: Self-Insurance Institute of America, Inc. (SIIA), 1/20/2015, www.SIIA.org

Millions of American workers' and dependents their currently received quality health benefits through self-insured Taft-Harley plans. In an effort to help these plans operate in a more effective and cost effective way - and introduce fully-insured plans to the self-insurance option - the Self-Insurance Institute of America, Inc. (SIIA) will be holding a special one-day executive forum focused exclusively on how unions can maximize the value of self-insured health plans.

The Self-Insured Taft-Hartley Plan Executive Forum, scheduled for April 29-30, 2015 in Washington, DC, features top experts who will address numerous self-insurance topics, including:

  • Understanding the true value of a self-funded plan
  • Best in class plan design options
  • Choosing the best provider arrangements
  • How to obtain stop-loss insurance with the best terms and pricing
  • Innovative Approaches for providing coverage for early retirees
  • Recap session where presentation material will be reviewed and additional questions answered

In addition to the educational program, the Forum will feature dedicated networking sessions, including a welcome reception the evening prior to the program. For companies interested in promoting their corporate brand at this event, please contact Justin Miller at jmiller@siia.org for sponsorship opportunities.

Finally, here are some important dates for you to know. Register before February 27, 2015 and take advantage of discounted early bird fees. SIIA room block at the Marriott Metro Center will be released on April 7, 2015, so if you would like to stay at the host hotel, please register and make your room reservations at your earliest opportunity as we expect the hotel to be sold out.

About SIIA

The Self-Insurance Institute of America, Inc. (SIIA) is a dynamic, member-based association dedicated to protecting and promoting the business interests of companies involved in the self-insurance/alternative risk transfer (ART) industry, both domestically and internationally.  Call 800-851-7789 and visit www.SIIA.org.

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Segal Consulting: Time to Take Another Look at Stop-Loss Insurance

MyHealthGuide Source: Segal Consulting, 1/2015, Segal Newsletter Full Text Article and www.Segalco.com

Segal Newsletter reviews the basics of stop-loss insurance and how plan sponsors can use it to better manage the added risk and increased cost to plans that have made plan design changes to comply with the Affordable Care Act. It also looks at recent innovations and best practices for purchasing stop-loss insurance.

Two developments underscore the importance of taking a fresh look at stop-loss coverage. First, the Affordable Care Act has eliminated annual and lifetime dollar limits on essential health benefits. Second, the prevalence of high-cost claims has risen dramatically and the dollar level of those claims has increased.

The value of self-funding health benefits continues to show material savings over fully insured arrangements. As a result, more than 90 percent of Segal Consulting's health fund clients are now self-funded.

Editor's Note:  Below is an outline. Click Segal Newsletter Full Text Article for full text.
  • A primer on stop-loss insurance
  • The Affordable Care Act
  • Key Factors: Setting the Threshold, Choosing a claims Basis, Lasering and Disclosure
  • Determining a Plan's Risk Tolerance
  • Innovations in Stop-loss Coverage
    • High thresholds
    • Rate cap
    • No-new-laser contracts
    • A defined rate renewal methodology
    • Prescription drug-only stop-loss insurance
  • Best Practices in Purchasing Stop-loss Insurance
    • Select the appropriate specific deductible levels.
    • Negotiate a renewal provision
    • Plan ahead.
    • Consider including prescription drug coverage under the stop-loss policy remove retirees and their spouses who are covered by Medicare from the stop-loss coverage.
    • Take a close look at aggregating specific stop-loss insurance provide disclosure information to the insurers who are bidding on the contract during the initial bid submission.
    • Establish a timeline for the bidding process.
  • What to avoid when purchasing stop-loss insurance
    • Gaps in coverage.
    • Carriers with poor financial ratings.
    • Bids with different assumptions and underlying conditions

About Segal Consulting

For 75 years, Segal Consulting has been providing benefits and human resources consulting for multiemployer funds and public sector organizations. As a privately-held employee-owned actuarial and consulting firm, Segal is an independent organization. Our independence allows us to provide completely unbiased consulting services for our clients.  Contact Michael S. Tesoriero at 212.251.5280, mtesoriero@segalco.com and visit www.Segalco.com.

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Trustmark Group, Inc. and Subsidiaries' Ratings Affirmed by A.M. Best

MyHealthGuide Source: A.M. Best, 1/20/2015, www.AMBest.com

OLDWICK -- A.M. Best has affirmed the financial strength ratings of A- (Excellent) and the issuer credit ratings (ICR) of "a-" of Trustmark Insurance Company, Trustmark Life Insurance Company (Trustmark Life) (both domiciled in Lake Forest, IL) and Trustmark Life Insurance Company of New York (Trustmark Life NY) (Albany, NY) (collectively referred to as Trustmark).

Concurrently, A.M. Best has affirmed the ICR of "bbb-" of the holding company, Trustmark Group, Inc. (TGI) and the debt rating of "bb" on $75 million floating rate trust preferred securities, due 2035 ($39 million currently outstanding), issued by Trustmark Finance Trust I. The outlook for all ratings is stable.

Successful Transition to Self-funding

The ratings reflect Trustmark's successful exit from the fully insured major medical product line, trend of favorable earnings, solid risk-adjusted capitalization and diversity in product offerings. Trustmark exited the fully insured major medical product line at the end of 2014 and has successfully transitioned its small-group block of business to self-funding. Furthermore, the organization continues to expand its small-group medical stop-loss products into additional states. Trustmark has reported consistent profitability, which has allowed the organization to maintain solid risk-adjusted capitalization levels, although earnings have been partially offset by dividend payments to the parent organization. Trustmark has product diversity through its voluntary and small-group, self-funded medical insurance product offerings and through its non-insurance operations, which include benefit administration and wellness offerings.

Offsetting these positive factors is the challenging operating environment, which includes an increasing number of competitors and the pressures of the economic environment. Furthermore, the small-group, self-funded product operates with narrow margins and competition consisting of larger carriers, some of which have their own networks.

TGI's debt-to-capital ratio is approximately 12%, which is considered low, and the group maintains ample interest coverage.

A.M.A.M. Best believes that positive rating movement for Trustmark is unlikely in the near to medium term. Factors that could result in negative rating actions include adverse trends in capital and/or lack of profitable growth in its core lines of business.

About A.M. Best

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.  Visit www.AMBest.com.

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People New


BlueCross BlueShield of SC Seeks Lead Reinsurance Underwriter

MyHealthGuide Source: BlueCross BlueShield of SC, 1/22/2015, www.bcbssc.com

BlueCross BlueShield of South Carolina has an immediate opening for one of our managing general underwriting subsidiaries located in North Wales, PA. We are a dynamic organization offering many value-added benefits, including, but not limited to, health/dental/life insurance, 401k and education assistance. We are looking for an energetic and career-minded individual who wants to be part of an enthusiastic team.

Position Summary

  • Underwrite and actuarially support a profitable book of business in the HMO reinsurance, provider excess and medical excess marketplaces and service all business to targeted profitability and service objectives.
  • Utilizing effective risk selection techniques and maintaining financial discipline, secure optimum rates and terms for each policy while maintaining an appropriate loss ratio.
  • Participate in strategic, tactical and operational management of the company.
  • Some travel is required.

Required Education

  • Bachelor's degree in Actuarial Science, Business or any job-related field of study or four years of underwriting/actuarial experience.

Required Work Experience

  • 12 years of underwriting or actuarial product line management experience, primarily in the medical reinsurance market.

Required Skills and Abilities

  • Strong analytical, decision-making/problem-solving, time management and advanced math skills.
  • Excellent verbal and written communication, interpersonal and strategic-thinking skills.
  • Good judgment.
  • Thorough knowledge of group insurance, managed care and direct medical claims products.
  • Ability to handle confidential or sensitive information with discretion.
  • Extensive knowledge of underwriting/risk principles and their applications.
  • Ability to create and foster a culture of teamwork, excellence and continuous improvement through the use of strong leadership skills.
  • Ability to use standard office equipment.
  • Ability to use Microsoft Office Suite.

Interested candidates must apply online at:
http://jobs.brassring.com/1033/ASP/TG/cim_jobdetail.asp?partnerid=25328&siteid=5117&AReq=9173BR&Codes=PROFTRADE

We are an Equal Opportunity/Affirmative Action Employer. We will consider all qualified applicants for employment regardless of age, race, color, national origin, sex, religion, veteran status, disability, weight, sexual orientation, gender identity, genetic information or any other legally protected status.

About BlueCross BlueShield of South Carolina

Headquartered in Columbia, S.C., and operating in South Carolina for more than 65 years, BlueCross BlueShield of South Carolina is an independent licensee of the Blue Cross and Blue Shield Association. The only South Carolina-owned and operated health insurance carrier, BlueCross BlueShield of South Carolina comprises more than 20 companies involved in health insurance services, U.S. DoD health program and Medicare contracts, other insurance and employee benefits services, and a philanthropic foundation that funds programs to improve health care and access to health care for South Carolinians.

BlueCross BlueShield of South Carolina offers employers third party administration services through TCC of South Carolina and Planned Administrators, Inc. On behalf of BlueCross, TCC of South Carolina and Planned Administrators, Inc. offer third party administration services. They are separate companies.  Visit www.bcbssc.com.

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BlueCross BlueShield of SC Seeks TPA Claims Director

MyHealthGuide Source: BlueCross BlueShield of SC, 1/22/2015, www.bcbssc.com

BlueCross BlueShield of South Carolina has an immediate opening for one of our managing general underwriting subsidiaries located in Jacksonville, FL. We are a dynamic organization offering many value-added benefits, including, but not limited to, health/dental/life insurance, 401k and education assistance. We are looking for an energetic and career-minded individual who wants to be part of an enthusiastic team.

Position Summary

  • Responsible for the effective and efficient control of all claims auditing functions.
  • Some travel is required.

Required Education

  • Bachelor's degree.

Required Work Experience

  • Ten or more years of third party administrator (TPA) claims auditing experience, including either five years in a supervisor/management role or five years of equivalent military experience in grade E5 or above.

Required Skills and Abilities

  • Excellent customer service, organizational and critical-thinking skills.
  • Ability to be detail/result oriented.
  • Strong analytical skills.
  • Knowledge of group insurance, managed care and direct medical claims products.
  • Advanced knowledge of aggregate claims auditing.
  • Knowledge in COB, Medicare, HIPAA, CPT, ICD-9 and benefit plan interpretation.
  • Ability to persuade, negotiate with or influence others.
  • Presentation skills.
  • Proven leadership skills.
  • Ability to operate standard office equipment.
  • Ability to use Microsoft Office Suite.

Interested candidates must apply online at:
http://jobs.brassring.com/1033/ASP/TG/cim_jobdetail.asp?partnerid=25328&siteid=5117&AReq=8930BR&Codes=PROFTRADE

We are an Equal Opportunity/Affirmative Action Employer. We will consider all qualified applicants for employment regardless of age, race, color, national origin, sex, religion, veteran status, disability, weight, sexual orientation, gender identity, genetic information or any other legally protected status.

About BlueCross BlueShield of South Carolina

Headquartered in Columbia, S.C., and operating in South Carolina for more than 65 years, BlueCross BlueShield of South Carolina is an independent licensee of the Blue Cross and Blue Shield Association. The only South Carolina-owned and operated health insurance carrier, BlueCross BlueShield of South Carolina comprises more than 20 companies involved in health insurance services, U.S. DoD health program and Medicare contracts, other insurance and employee benefits services, and a philanthropic foundation that funds programs to improve health care and access to health care for South Carolinians.

BlueCross BlueShield of South Carolina offers employers third party administration services through TCC of South Carolina and Planned Administrators, Inc. On behalf of BlueCross, TCC of South Carolina and Planned Administrators, Inc. offer third party administration services. They are separate companies.  Visit www.bcbssc.com.

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Benefits Captive Consultant Available

MyHealthGuide Source: Jim DiFalco, 1/16/2015

Experienced benefits captive consultant available to help brokers develop and launch a captive offering for clients and prospects.

Services to include:

  • 1) Develop captive strategy that leverages broker's book of business and prospect pipeline,
  • 2) Design captive structure that ties together all key vendors, and
  • 3) Launch captive program to clients and prospects including branded collateral, sales training, meetings with captive prospects, and closing sales.

Engagements available beginning February, 2015. For information please contact Jim DiFalco by clicking Benefits Captive Consultant.

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Market Trends, Studies, Books & Opinions


United Benefit Advisors Reveals 2014 Industry Trends Among Employer Sponsored Health Plans

MyHealthGuide Source:  United Benefit Advisors, 1/13/2015, United Benefit Advisors Health Plan Survey

Indianapolis, IN -- New survey data from the 2014 United Benefit Advisors Health Plan Survey, the nation's largest health plan survey of nearly 10,000 employers, reveals differences among employer sponsored health plans across various industries, looking specifically at employer cost versus employee contribution.

Key Findings

  • Average total cost per employee in 2014 was $9,504, of which the average employer cost was $6,276 and average employee contribution, $3,228.
  • Government (Public Administration) health insurance plans have the highest average cost per employee at $11,329 (17.5% higher than average), with the lowest employee contribution of $2,040, which is 45% less than the average employee.
  • The prevalence of consumer-driven health plans (CDHPs) continues to grow, as does employee enrollment in these plans, despite lower contributions to health savings accounts (HSAs) (which are often tied to CDHPs to entice participation).
  • Prescription drug plans are increasingly offering four or more tiers, along with ever-increasing copays--a trend that might fall off as they must all eventually tie to out-of-pocket maximums under PPACA.
  • 80% of all large employer (1,000+ employees) plans are self-funded. Many UBA Partners believe that self-funding will be increasingly desirable to employers of all sizes in the coming years as a way to avoid various cost and compliance aspects of health care reform.
  • While self-funding among small employers (those with 1 to 199 employees) increased a modest 1.7%, this will be an important number to watch in upcoming survey years, especially since self-funded plans don't have to adhere to community rating rules and state-mandated benefits.
  • 58.8% of plans offering wellness benefits came from employers with 1,000 or more employees.
    • 50.9% of employers with 500 to 999 employees offer wellness.
    • 35.5% of employers with 200 to 499 employees
    • 8% of employers with fewer than 25 people.

"The government sector historically has provided generous employee benefits," says Les McPhearson, CEO of UBA. "The risk that taxpayers face is the forthcoming ‘Cadillac Tax' if public employers can't get their health care costs under the $10,200 premium threshold. The Cadillac Tax is hefty – a non-deductible 40% excise tax on the excess benefit – which would increase the average cost per employee."

About United Benefit Advisors Health Plan Survey

Since 2005, United Benefit Advisors® (UBA) has surveyed thousands of employers across the nation regarding their health plan offerings, their ongoing plan decisions in the face of significant legislative and marketplace changes, and the impact of these changes on their employees and businesses. The UBA survey represents the nation's largest health plan benchmarking survey and the most comprehensive source of reliable benchmarking data.

Data in the 2014 UBA Health Plan Survey are based on responses from 9,950 employers sponsoring 16,467 health plans nationwide. This unparalleled number of reported plans is nearly three times larger than the next two of the nation’s largest health plan benchmarking surveys combined. The resulting volume of data provides employers of all sizes more detailed-- and therefore more meaningful--benchmarks and trends than any other source.About UBA

United Benefit Advisors® (UBA) is the nation's leading independent employee benefits advisory organization with more than 200 Partner offices in the United States, Canada, and the United Kingdom.  Visit www.ubabenefits.com.

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Legislative & Regulatory News


PBMs Should be Required to Disclose Fees and Compensation to Sponsors of ERISA Health Plans

MyHealthGuide Source: ERISA Advisory Council, 1/2015, DOL Full Text Article

The 2014 ERISA Advisory Council examined whether Pharmacy Benefit Managers ("PBMs") should be required to disclose fees and compensation to sponsors of ERISA health plans in order for sponsors to satisfy their obligation to pay only reasonable compensation to entities that provide goods and services to ERISA plans.

See ERISA, Section 408(b)(2).In 2012, the U.S. Department of Labor ("Department") issued regulations requiring providers to disclose direct and indirect compensation to pension plans ("Section 408(b)(2) Regulations").The Department reserved the question of whether the Section 408(b)(2) Regulations should apply to welfare plans.

After receiving testimony and information from multiple sources, including representatives of PBMs, plan sponsors, plan consultants, plan auditors, pharmacy groups, governmental agencies, and other interested persons, the Council recommends that the Department should consider making Section 408(b)(2) Regulations applicable to welfare plan arrangements with PBMs, and thereby deem such arrangements reasonable only where PBMs disclose direct and indirect compensation, including compensation paid among related parties such as subcontractors, in a manner consistent with current Section 408(b)(2) Regulations.

The Council also recommends that the Department should consider issuing guidance to assist plan sponsors in determining whether to and how to conduct a PBM audit of direct and indirect compensation.

ERISA Advisory Council Recommendation

The Department should consider making Section 408(b)(2) Regulations applicable to welfare plan arrangements with PBMs, and thereby deem such arrangements reasonable only where PBMs disclose direct and indirect compensation, including compensation paid among related parties such as subcontractors, in a manner consistent with current Section 408(b)(2) Regulations.

Findings Related to Recommendation

  • Plan sponsors of group health plans who testified at the Council hearings were unanimous in their view that they face many challenges managing pharmacy benefits on a cost effective basis. However, plan sponsors uniformly testified that PBM services are a valuable part of this effort.
  • Testimony submitted to the Council revealed that drug pricing methodologies and PBM compensation are complex and evolving, including rebates, price spreads, discounts, and other payments from retail pharmacy chains and manufacturers. Substantial evidence was submitted to the Council from ERISA plan sponsors and others that many PBMs do not fully disclose compensation in a manner which is readily understandable to even the most sophisticated plan sponsors and consultants.
  • Testimony before the Council indicated that some forms of PBM compensation have the potential for creating conflicts of interest. Sponsors of ERISA health plans may or may not be aware of these potential conflicts.
  • ERISA group health plans that contract directly with PBMs frequently use consultants to assist in negotiations with the PBM. Testimony was submitted to the Council that it is common for consultants to receive indirect compensation. The payment of indirect compensation to consultants who are advising plan sponsors in negotiations with the PBM may create the potential for conflicts of interest that may be adverse to the plan sponsor. Sponsors of ERISA health plans may or may not be informed of such indirect compensation.
  • Plan sponsors testified that disclosure of PBM compensation would better enable them to comply with their obligations to determine reasonable compensation under Section 408(b)(2). Nondisclosure creates the potential for impediments to plan sponsors' ability to comply with 408(b)(2).
  • Voluntary efforts to address PBM direct and indirect compensation disclosure through accreditation and certification are not currently providing a workable alternative to most plan sponsors. In 2010, the Pharmaceutical Care Management Association (PCMA) testified before the Department that "many plan sponsors belong to third-party accreditation programs, like the URAC Pharmacy Benefits Management Standards and the Pharmacy Coalition of the HR Policy Association." The Council heard testimony from representatives of the HR Policy Association that their certification program is no longer functioning. With respect to compensation disclosure, the URAC PBM guide is not available to the public and does not provide detailed guidance on the disclosure of direct and indirect PBM compensation.
  • The Council received testimony that for plan sponsors to understand the reasonableness of PBM fees, plan sponsors need to know what services are being outsourced by the PBM and what is paid for the outsourced services.

Best practices related to PBM contract language

  • A plan sponsor witness testified that a PBM contract should clearly define contract terms such as rebates, revenue, transparency, AWP, MAC (Maximum Allowable Cost) list pricing, audit guidelines, and termination rights. Define whether 100% of the rebates are reduced by fees paid by the PBM to other entities in the supply chain. Pricing may differ based upon the delivery channel (retail/mail) and supply levels (30 days vs. 90 days). The PBM may be purchasing the drug in lots of 50,000 plus at substantially lower prices.
  • A plan sponsor witness testified that a PBM contract should include transparency provisions that illuminate all of the entities in the supply chain, whether they are the PBM's subsidiaries or affiliates or whether they are the PBM's subcontractors or agents. A plan sponsor witness testified that a PBM contract should include a most favored nations pricing clause.
  • A plan sponsor witness testified that a PBM contract should include termination "without cause" language to protect the plan from being locked into a longer term unfavorable contract.
  • A plan sponsor witness testified that a PBM contract should include language that plan participants are not required to pay a full copay where the drug cost plus dispensing fee is less than the plan copayment. This avoids the potential for PBM "clawback," which was described as occurring when a plan participant may be charged a higher rate at the pharmacy than the participant's plan is required to pay for a certain drug, where the participant is paying the entire cost of the drug, such as in the case of a high deductible plan where the deductible has not been met.
  • A plan sponsor witness testified that the PBM contract should include audit language with the right to audit for no less than 24 months and specify the documents to be produced in the audit.
  • A plan sponsor witness testified that the PBM contract should include limits on the number of times per year that a PBM may make changes to the formulary or preferred-drug list, along with requiring prior notification of any changes.

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SIIA ERISA Preemption Legal Challenge Backed by United States Chamber of Commerce and the National Coordinating Committee for Multiemployer Plans

MyHealthGuide Source: The Self-Insurance Institute of America, 1/23/2015, wwww.SIIA.org

Signaling the importance of current state regulatory challenges to ERISA preemption, the United States Chamber of Commerce and the National Coordinating Committee for Multiemployer Plans (NCCMP) have filed separate Amicus briefs encouraging the U.S. Supreme Court to accept SIIA's appeal in its ongoing litigation against the state of Michigan in response to that state's Health Insurance Claims Assessment Act.

SIIA contends that the Act should be preempted by ERISA because it improperly affects plan administration. The Sixth Circuit Court of Appeals ruled against the association, taking a much more narrow interpretation of plan administration that establishes a problematic precedent.

"The fact that you have both business and labor coming together to support our association's legal defense initiative demonstrates the significance of this threat," said SIIA President & CEO Mike Ferguson. "Absent strong and consistent push back, it is reasonable to conclude that states will continue to arguably exceed their regulatory authority, which of course will comprise ERISA's central objective of national uniformity for benefit plan administration."

The U.S. Chamber of Commerce is the world's largest business organization representing the interests of more than three million businesses of all sizes, sectors, and regions. NCCMP is the leading organization for national, regional and local multiemployer pension and health and welfare plans.

About SIIA

The Self-Insurance Institute of America, Inc. (SIIA) is a dynamic, member-based association dedicated to protecting and promoting the business interests of companies involved in the self-insurance/alternative risk transfer (ART) industry, both domestically and internationally.  Contact Adam Brackemyre at abrackemyre@siia.org and visit www.SIIA.org.

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Medical News


Hospitalization for Pneumonia Increases Short-Term Risk for CVD 

MyHealthGuide Source: Vicente F. Corrales-Medina, MD, et. al., 1/20/2015, JAMA Abstract

Hospitalization for pneumonia was associated with increased short-term and long-term risk of CVD, suggesting that pneumonia may be a risk factor for CVD, according to a study published in the Journal of American Medical Association.

The study analyzed two community-based cohorts: the Cardiovascular Health Study (CHS, n = 5,888; enrollment age, ≥65 years; enrollment period, 1989–1994) and the Atherosclerosis Risk in Communities study (ARIC, n = 15 792; enrollment age, 45-64 years; enrollment period, 1987–1989).

Participants were followed up through December 31, 2010. Researchers matched each participant hospitalized with pneumonia to 2 controls. Pneumonia cases and controls were followed for occurrence of CVD over 10 years after matching. We estimated hazard ratios (HRs) for CVD at different time intervals, adjusting for demographics, CVD risk factors, subclinical CVD, comorbidities, and functional status.

The main outcome following hospitalization for pneumonia was CVD (myocardial infarction, stroke, and fatal coronary heart disease).

Study findings

  • Of 591 pneumonia cases in CHS, 206 had CVD events over 10 years after pneumonia hospitalization.
  • CVD risk after pneumonia was highest in the first year.
  • CVD occurred in 54 pneumonia cases and 6 controls (non-pneumonia cases) in the first 30 days, over a 4-fold increase.
  • CVD occurred in an additional 11 cases and 9 controls between 31 and 90 days, almost a 3-fold increase (from inception).
  • CVD occurred in an additional 22 cases and 55 controls between 91 days and 1 year, a 2-fold increase (from inception).
  • Additional CVD risk remained elevated into the tenth year, when 4 cases and 12 controls developed CVD, a 1.9 fold increase over the 10 year period.
  • In ARIC, a similar pattern was observed.

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Recurring Resources 


Medical Stop-Loss Providers Ranked by Annual Premium Survey (last updated 11/1/2014)

Source: MyHealthGuide

Editor's Note: The following is a recurring article. This Newsletter is often asked by readers for a list of medical stop-loss providers and their respective premiums. Below the first of a recurring article that attempts to lists stop-loss providers and annual premiums. Sources includes press releases, AM Best reports, conference presentations and more.

Stop-loss Premium Ranking
Compiled by MyHealthGuide Newsletter

Reader response and correction is encouraged.
Sources will be cited. Please send updates / changes to Info@MyHealthGuide.com

  Stop-loss Provider Years Providing Stop Loss Associated Carriers / MGUs Annual stop-loss Premium
(Millions)
Capital /Equity
(Millions)
Source
1. CIGNA     $1,907
2013
  CIGNA 2013 10-K, page 46 2/27/2014
2. Sun Life Financial     $915.2
2013
  Scott Beliveau, Sun Financial 4/28/2014
3. HCC Life Insurance Company >35 Years HCC Life
(A.M. Best Rated: A+)
Perico Life
(A.M. Best Rated: A+)
$862
2014 10Q (2x $431 for 6 mons)
$3,900 HCC Insurance Holdings, Inc. Release,
6/30/2014
4. HM Insurance Group >30 Years HM Insurance Group
(A.M. Best Rated: A-)
$762.4
2013
$507
12/31/2013
Mike Sullivan, President & COO
2/4/2014
5. Symetra >36 Years Symetra Life Insurance Company
(A.M. Best Rated: A)
(Block - $475M
MRM - $255M)
$730
2012
$3,375
9/30/2014
Michael Fry, Executive Vice President, Symetra;
Mike McLean, Chairman Medical Risk Managers, Inc.
1/7/2014
6. ING Employee Benefits > 35 Years ReliaStar Life
(A.M. Best Rated: A)
$560
2013
$1,942
12/31/2013
Joe Keller, Lead Financial Analyst, ING Employee Benefits,
3/18/2014
7. Companion Life > 20 Years   $440
10/8/2014
  Philip Gardham, Vice President, Specialty Markets,
10/8/2014
8. National Union Fire Insurance Company of Pittsburgh >35 Years AIG Benefit Solutions $215
5/2014
  Jeff Gavlick, VP, Stop Loss Products, AIG Benefit Solutions
6/20/2014
9. Independence Holding Company   Standard Security Life Insurance Company of New York,
Madison National Life, Independence American Insurance Company
$200   Roy T.K. Thung, CEO, Letter to Stockholders
3/31/2014
10. Zurich North America     $130   Tracey Brennan, Zurich North America.
7/22/2011
11. Munich Re Stop Loss, Inc.   AIC, TransAmerica $110
2012
  Susan McGrath Bowman,
Chief Operating Officer, Munich Re Stop Loss, Inc.
4/25/2013
12. The Union Labor Life Insurance Company  (ULLICO) >25 Years ULLICO
(A.M. Best Rated: B++)
$96
2/2014
  Victor Moran, Second Vice President, Actuarial Operations.  3/12/2014
13.
Markel Insurance Company <5 Years Markel Insurance Company
(A.M. Best Rated: A-)
$3 $$3,388
12/31/2011
Mark Nichols, Managing Director.
7/20/2012

Other stop-loss leaders include the following list. However, we await reader response providing stop-loss premium volume (and additional carriers) so that each could be added to the table above. 

  • ACE America
  • Aetna
  • Amalgamated Life
  • American Fidelity Assurance Company 
  • American National Life Insurance Company of Texas
  • Berkley Accident and Health
  • BEST Re 
  • Blue CrossBlue Cross Blue Shield (various regions)
  • Gerber Life Insurance Company
  • International Insurance Agency Services, LLC
    (IIS)
  • Lloyd's of London
  • Nationwide Life Insurance Company
  • Pan American Life
  • QBE Insurance Company
  • Trustmark Insurance Company
  • UnitedHealthcare

Stop-loss Premium Volume is not the Whole Story

Industry executives question the purpose of a chart reporting only stop-loss premium without additional information such as:

  • Ratings from Best, S&P, Moodys and others (data collection began 6/2012)
  • Capital size of the insurance company (data collection began 6/2012)
  • Reinsurance purchased and from whom
  • Length in the business (data collection began 6/2012)
  • Number of open litigation claims
  • Is stop-loss a core business or ancillary business?
  • % age of risk retained vs. ceded
  • Average stop-loss claim processing turn-around time
  • % age of claims denied
Should reader interest indicate such measures are important, this Newsletter will attempt to collect and report.  

Reader response and correction is encouraged. Sources will be cited. Please send updates / changes to Info@MyHealthGuide.com.  

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The Value of Self-Funding

MyHealthGuide Source: The Self-Insurance Educational Foundation, Inc. (SIEF), 2014, www.SIEFOnline.org

Click The Value of Self-Funding for overview, reasons, tools and examples of self-funding.

Self-funding is an important contributor to the financial and physical health of America's wellness future. Self-funding is more than processing claims and receiving premiums, it provides quality coverage and proactive healthcare management for employers of all sizes and industries.

About the SIEF

The Self-Insurance Educational Foundation, Inc. (SIEF) is a 501(c)(3) non-profit organization affiliated with the Self-Insurance Institute of America, Inc. (SIIA). The foundation's mission is to raise the awareness and understanding of self-insurance among the business community, policy-makers, consumers, the media and other interested parties. Visit www.SIEFOnline.org.

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Upcoming Conferences


January 25-27, 2015
AAPAN 2015 Annual Forum presented by American Association of Payers Administration & Networks.  The theme for this year's forum is "Thinking Forward -- Rethink, Retool, Realign." This will be your opportunity to join industry leaders and an exciting lineup of speakers as we examine how best to position our businesses in this fundamentally changed healthcare environment. You will hear firsthand from experts and colleagues about challenges and opportunities at the state and federal level that are unique to TPAs, PPOs, and Workers' Comp professionals. Information: aseiler@aapan.org and (502) 403-1122.  Ritz-Carlton, Laguna Niguel in Dana Point, CA.

February 4-5, 2015
11th Annual Executive Forum on Rewarding Healthy Behaviors presented by World Congress.  Featured: Nicholas "Dr. Nick" Yphantides, MD, MPH; Chief Medical Officer, Health & Human Services Agency, San Diego County.  With National Health Care reform and the emerging priority of population health, employers have the opportunity to think outside the workplace box with regard to design and implementation of their health and wellness programs. Dr. Nick will highlight and illustrate the opportunities for employers to be proactive in partnering or at least aligning with regional population health innovations. As someone who has spent much of his professional career as a "board certified medical hypocrite," he brings a very personal and passionate perspective to the current strategic opportunities for employer based transformational interventions. Bellagio Las Vegas.  Information and registration: 781-939-2400 or www.worldcongress.com/rewarding 

February 9-11, 2015
2015 Executive Forum presented by Heath Care Administrators Association (HCAA).  Featuring:  A Physician-Senator's Look Into the Crystal Ball of Healthcare Reform (Senator Bill Frist, M.D.), Will the Long Term Impact of ACA Expand or Shrink Self Funding? (Tim Jost, Law Professor and Commentator) and other experts. Encore at Wynn Las Vegas. Las Vegas, NV. www.hcaa.org/events/event_details.asp?id=488303

February 12, 2015 - 1:00 PM EST to 2:00 PM EST
Pushback & Counter-Attack presented by The Phia GroupHow attorneys, providers, and the government are combating your efforts to contain costs... and what you should be doing about it! ERISA has been a target of scrutiny since its passage. Rights to subrogation, coordination of benefits, audit claims and enforce plan provisions - though pillars of cost containment - are constantly attacked. Attempts to prudently manage plan assets, though required by federal law, are met with pushback at every level. Now, with the passage of PPACA, old and new methods to maximize plan benefits and minimize costs are challenged. Join The Phia Group's team of attorneys on Thursday, February 12th at 1PM EST as they discuss the hurdles we face, both old and new; and what we can do to not only survive, but thrive in the face of such adversity.  Registration: https://attendee.gotowebinar.com/register/3128062566504566786

February 26, 2015
8th Annual MASI Winter Conference presented by Mississippi Association of Self-Insurers. Subjects include The Affordable Care Act: What Employers Need to Know, The Broken Approach to Treating Back Pain, Effective Pain Management -- The Better Way, The Unbelievable Cost of Pre-Mature Birth, Pharmacogenetic Testing -- Trend of the Future?, Health, Wellness and Work Comp -- Three Legs of One Stool and more.  MASI is a state association dedicated to protecting and promoting self-insured healthcare and workers' comp in Mississippi.  Contact Dan Gibson, Executive Director, at (601) 354-0199, dangibson@masiweb.orgJackson- North/Ridgeland Embassy Suites.  Information and registration: www.masiweb.org 

March 4-6, 2015
Self-Insured Health Plan Executive Forum presented by Self-Insurance Institute of America.  J.W. Marriott Camelback, Scottsdale, AZ.  www.SIIA.org

March 18-20, 2015
SPBA Spring Meeting (members only). Washington, DC. Society of Professional Benefit Administrators (SPBA). www.SPBATPA.org


April 13-15, 2015
International Conference presented by Self-Insurance Institute of America. Latin America is a promising new frontier for self-insurance/captive insurance. Based on this perspective, SIIA is taking its International Conference to one of the leading economic hubs in Latin America to explore and discuss emerging self-insurance business opportunities in this important region of the world. Consistent with this outlook, the educational program will cover the following topics:

• Evolving regulatory environment for self-insured health plans in Latin America
• Captive insurance opportunities in Latin America
• Multi-national pooling for group benefits programs in Latin America
• Evolving roles for TPAs, brokers and carriers in Latin America
• Insurance carrier panel discussion
• The Panama Canal - a self-insurance case study
• Self-insurance opportunities in the Caribbean
• Medical travel in Latin America

Hilton Panama, Panama City, Panama.  Call 800/851-7789 and visit www.SIIA.org

April 29-30, 2015
Self-Insured Taft-Hartley Plan Executive Forum (NEW EVENT!) presented by Self-Insurance Institute of America. This one-day forum features a focused educational program designed to showcase self-insurance strategies and information that is sure help unions provide even more robust benefits while more effectively controlling costs. Register before February 27, 2015 and take advantage of discounted early bird fees. SIIA room block at the Marriott Metro Center will be released on April 7, 2015, so if you would like to stay at the host hotel, please register and make your room reservations at your earliest opportunity as we expect the hotel to be sold out. Marriott Metro Center, Washington, DC.  Information and registration: www.siia.org/i4a/pages/index.cfm?pageid=6794 

May 6-8, 2015
Northshore's 26th Annual Claims Conference.  Salem, Massachusetts. This is an invitation only event. If you are interested in attending or presenting at next year's conference, you may contact Steve Murphy at smurphy@niis.com


May 12-14, 2015
Self-Insured Workers' Compensation Executive Forum presented by Self-Insurance Institute of America. Windsor Court Hotel, New Orleans, LA www.SIIA.org

July 21-23, 2015
MCIA Annual Conference presented by The Montana Captive Insurance Association, Inc. (MCIA) at the Lodge at Whitefish Lake in Whitefish, MT.  Contact mcia@mtcaptives.org and visit www.mtcaptives.org

September 28-30, 2015
SPBA Fall Meeting (members only). Scottsdale, AZ. Society of Professional Benefit Administrators (SPBA). www.SPBATPA.org

October 18-20, 2015
National Educational Conference & Expo presented by Self-Insurance Institute of America. Marriott Marquis, Washington, DC  www.SIIA.org 

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March 30-April 1, 2016
SPBA Spring Meeting (members only). Washington, DC. Society of Professional Benefit Administrators (SPBA). www.SPBATPA.org

October 17-19, 2016
SPBA Fall Meeting (members only). Minneapolis, MN. Society of Professional Benefit Administrators (SPBA). www.SPBATPA.org

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March 15-17, 2017
SPBA Spring Meeting (members only). Washington, DC. Society of Professional Benefit Administrators (SPBA). www.SPBATPA.org

September 13-15, 2017
SPBA Fall Meeting (members only). Cincinnati, OH. Society of Professional Benefit Administrators (SPBA). www.SPBATPA.org

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Editorial Notes, Disclaimers & Disclosures


  • Articles are edited for length and clarity.
  • Articles are selected based on relevance and diversity.
  • No content in this Newsletter should be construed as legal advice. All legal questions should be directed to your own personal or corporate legal resource.
  • Internet links are tested at the time of publication.  However, links change or expire often.
  • Articles do not necessarily reflect views held by the Publisher.
  • Disclosure: Owner of MyHealthGuide also has ownership interest in CareHere, LLC® and LabInsight®
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Clevenger Ernie Clevenger
President & Publisher
MyHealthGuide, LLC
Clevenger@MyHealthGuide.com