Health & Welfare Plans Newsletter

October 18, 2017

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The Alexander-Murray Market Stabilization Package: What's In It, and Where Is It Going?
"The key component to the deal is stable funding for the cost-sharing reduction (CSR) subsidies ... [Also included] is a loosening of criteria for the section 1332 waiver process under the ACA ... [It] changes the requirement that state proposals be 'as affordable as' ACA coverage would be; it requires only that they have 'comparable affordability.'.... The pending agreement also [1] includes up to $106 million to restore consumer outreach efforts that the Trump Administration had rescinded.... [2] would allow anyone to buy a Copper plan, regardless of age or income level.... [3] authorizes funding for state reinsurance programs ... [4] would compel CMS to generate regulations implementing the section 1333 interstate compact component of the ACA, which so far have not been issued."
Health Affairs

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High-Cost Claims Are Raising Employer Risk
"Two factors have combined over the past few years to heighten employer risk for high-cost claims: [1] the rise of costly new medical technology and treatments -- including specialty drugs -- and [2] the ACA requirement to remove limits on annual and lifetime benefits payable. As a result, the market for employer stop loss insurance has become increasingly complicated and costly."
Mercer

Is Your HDHP Ruining Your Disease Management and Wellness Program Outcomes?
"[A recent study] suggests that HDHPs resulted in participants accessing preventive healthcare less, even when the preventive visit was completely covered with no cost sharing. Office visits to medical providers were noted to decrease, with subsequent reductions in imaging and lab studies. These reductions appear to be related to both inappropriate and appropriate care. Furthermore, a reduction in medication adherence was noticed -- that is, participants were less likely to fill and use medications they were prescribed."
Hill, Chesson & Woody

Health Insurer Anthem Brings Pharmacy Business In-House, Taps CVS to Help
"Health insurer Anthem Inc will start managing its billions of dollars of patient prescriptions itself in 2020 ... ending a deal with Express Scripts Holding that had deteriorated into lawsuits over terms. Anthem, which sued the pharmacy benefit manager last year over claims of being overcharged by $3 billion annually, said it would use drug retailer CVS Health Corp to handle prescription fulfillment and claims processing for five years for the new company, called IngenioRX."
Reuters

Kraft Retirees Had No Vested Right to Health Care Benefits Beyond Termination of CBAs
"Kraft contended there was nothing in the language of the relevant [collective bargaining agreements (CBAs)], [memoranda of agreements (MOAs)] or SPDs that promised to provide medical benefits to retirees that would continue beyond the termination of the CBA in effect when the individual retired or that the medical benefits could never be changed.... [T]he relevant SPDs both expressly provide a right to 'amend or terminate' the health plan at any time... [T]he court declined to consider extrinsic evidence offered by the union in an effort to demonstrate vested rights." [Gruss v. Kraft Heinz Foods Co., Inc., No. 15-788 (W.D. Wis. Sept. 15, 2017)]
Wolters Kluwer Law & Business

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Beware of These Four Disability Insurance Contract Details
"And/or provisions dictate when a disability insurance policy pays.... Employers should have a firm grasp on what, if any, pre-existing conditions prevent a member from making a disability claim.... [S]ome Return to Work clauses allow a partial return to work, while others do not.... [It's] important to know how claims would pay out if someone with variable pay went on disability. Familiarize yourself with this clause and ensure it's appropriate to your specific workforce."
Corporate Synergies

Underinsured Rate Increased Sharply in 2016
"Twenty-eight percent of working-age adults in the United States who had health insurance all year were underinsured in 2016, up from 23 percent in 2014 ... More than half of the underinsured (52%) had medical bill problems and 45 percent went without needed health care because of cost.... More than half (56%) of the estimated 41 million adults who are underinsured get their coverage through an employer."
The Commonwealth Fund

Trump's ACA Moves Put Focus on Courts
"The administration announced last week that it would immediately stop making monthly cost-sharing reduction (CSR) payments to reimburse insurers for subsidies to low-income individuals who buy ACA exchange coverage.... A number of states quickly responded to the announcement with a lawsuit seeking an injunction to ensure that the payments continue ... The decision also puts new pressure on Congress to appropriate funding for the subsidies."
Mercer

Experiences of the Non-Group Marketplace Enrollees
"This report examines people's experiences with the current health insurance market, with a particular focus on individuals who currently have health insurance they purchased themselves.... 10.3 million people have health insurance that they purchased through the ACA exchanges or marketplaces. For comparison, the report also examines individuals ages 18-64 without health insurance as well as those who get their insurance through their employer."
Henry J. Kaiser Family Foundation

Make Better Health and Wealth Decisions During Open Enrollment
"[1] Build your health care budget, starting with last year's out-of-pocket costs. [2] Find creative ways to save and look for new locations for you to receive health services. [3] Compare different plans and know the differences in insurance premiums and deductible levels. [4] Consider adding new benefits at various stages of your life. [5] Make your health and financial decisions before the enrollment deadline."
Fidelity

[Opinion]

NCPA Statement for House HELP Committee Hearing on the Cost of Prescription Drugs: How the Drug Delivery System Affects What Patients Pay (PDF)
"PBMs serve as the 'middlemen' in most prescription drug transactions in the United States. First, they leverage the number of beneficiaries in a plan to negotiate lucrative rebates from pharmaceutical manufacturers. Second, they formulate limited pharmacy provider networks that will supply or dispense these drugs to plans' beneficiaries and in turn, charge plan sponsors for these products.... PBMs extract 'spread' profits from both activities. Unless a plan has negotiated a true 'pass through' contract with its PBM -- and typically only the largest and most sophisticated plans are able to do so -- the PBM will keep a significant percentage of the rebate dollars that they have obtained only by virtue of the number of the plans' beneficiaries for themselves."
National Community Pharmacists Association [NCPA]

Discussions
on the BenefitsLink Message Boards

QSEHRA and Employer Contributions
"Client company adopted a QSEHRA. Participants will purchase individual HDHP insurance policies and be reimbursed by QSEHRA. May the company make direct HSA deposits on behalf of employees? (If employees make deposits, the amount is deductible on form 1040 but is subject to FICA taxes.) Is there a way for the company to make the deposits so that the company 'does not offer a group health plan to any of its employees' that violates IRC section 9831(d)(3)(B)(ii)?"
BenefitsLink Message Boards

Code Section 403(b)(9) Limits on Contributions for Pastor
"I am trying to understand employer contribution limits to 403(b)(9) plans and 'includible compensation' for a church pastor who is behind on her retirement savings and trying to maximize total contributions. The church is willing to match the pastor's contributions up to IRS limits."
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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2017 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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