Bill headed to Senate would provide ‘safety blanket’ for benefit plans

The article below was published on May 1, 2017 by the Employee Benefit Adviser, written by Brian Kalish.

Nearly half of all employees are covered by a self-insured group health plan. Many companies that offer these plans have separate stop-loss insurance policies to protect them against the risk of catastrophically high claims. Some states and the Obama administration have attempted to regulate stop-loss insurance; a move the Self-Insurance Institute of America says would render it unaffordable.

To provide more certainty in the marketplace, the SIIA — a Simpsonville, S.C.-based member-based association — worked to introduce the Self-Insurance Protection Act.

The bill on April 5 passed the House of Representatives in a 400 to 16 vote and is now expected to be introduced in the Senate in the next few weeks. EBA spoke with SIIA’s CEO, Mike Ferguson, to understand more about the legislation. What follows is an edited version of the conversation.

EBA: What is the background on this bill?

Mike Ferguson: Shortly after the passage of the Affordable Care Act, there were policymakers within the Obama administration that became concerned that the growth of the self-funded market was coming at the expense of the public exchanges. The analysis was that the self-funding market is growing and the employers in the self-funding market are scooping up the good risks — their employees — and leaving the bad risks to go into the exchanges, which would create structural problems for the exchanges.

They further believed that the self-funded market was growing artificially, characterizing their analysis, facilitated by stop-loss insurance with relatively low attachment points. They believed that many of these self-funding plans were trying to look for an escape hatch out of the ACA requirements.

Really, these were fully-insured arrangements and they should be treated and defined as such for purposes of the ACA. There was discussion within the administration and a formal request for information was issued by HHS and DOL, which asked very pointed questions about self-funded insurance and stop-loss insurance. It was clear from the line of questioning that regulators were looking to try to show that employers were moving in this direction as a way to game the system and get out of the ACA mandates.

Subsequent to that, we learned there was discussion within the Obama administration on, ‘What do we do about this and how [do we] get our arms around these self-funded plans,’ because theACA did not provide any particular recourse.

EBA: How did the talk on Capitol Hill progress?

Ferguson: The discussion that we become aware of was, ‘What if we just take an aggressive definition of what insurance is and bring those employers back in as regulated entities as fully-insured employers or health insurance issuers?’

That was the internal discussions that were going on within agencies. A couple of years ago, in recognition of this, we said how do we address this because once you have a regulatory process commence, it is very difficult to push back on that. What we did, we worked with friends on the Hill to get legislation introduced, which would head off a regulatory interpretation of the definition of health insurance and health insurance coverage to specifically exclude self-insured plans with stop-loss insurance. This was in anticipation of potential regulatory action.

The previous version of that bill, like most pieces of legislation, ultimately did not move. This year, it has. And to put it in context, given the changes in the presidential administration, that threat is not at our doorstep anymore. But, our view is administrations can change in as early as four years. We don’t know who will be in the White House in three years and 10 months, so let’s go ahead and make sure that we get this done so that a future administration that might be unfriendly to self-insurance, does not have that avenue to disrupt the marketplace.

EBA: What does the legislation mean for employee benefit brokers?

Ferguson: It provides more certainty in the marketplace that stop-loss insurance will be available to self-funded plans. It does not change the current landscape of the self-funded marketplace. It is a safety blanket.

For employers that go to self-insurance, it is designed to be a long-term risk management strategy. Self-insurance is not designed for when an employer received a high quote on their health renewal premium and says, ‘OK, I’m going to pop over and be self-insured this year, but then switch to fully-insured two years down the road.’ That is not what employers should be looking at.

They should be looking at if they want to take a proactive long-term strategic risk to managing their healthcare risks, self-insurance can provide that option. But, it is most effective when it is an option that is deployed over multiple years. This legislation is a safety blanket for those advisers working with employers, because it takes one variable out of the regulatory environment going forward. It makes it almost impossible for anything at the federal level to disrupt their ability to self-insure to the extent that they have to access stop-loss insurance.

EBA: What is the bill’s future?

Ferguson: As a general matter, it is always tough to get anything through the Senate. That being said, since we had such a large vote margin out of the House, the Senate does, in many cases, look at that as a consideration on how it wants to move things.

Given that, we are cautiously optimistic. Cleary, we have full expectations that President Trump would sign the legislation to the extent that it is voted out of the Senate. The Senate is tricky to get anything done, even small rifle shot bills, like ours.

We have a lot of friends in the Senate. We expect the companion bill will have several prominent co-sponsors when it is announced and given that there was minimal Democratic opposition in the House, we hope that will translate to a similar dynamic in the Senate.

How to Get Employees to Use Their Preventive Care

The article below was published on July 21, 2016 by the International Foundation of Employee Benefit Plans, written by Brenda Hofmann.

Preventive care is vital to keep your employees healthy. The more employees take advantage of available preventive care, the more cost-effective their care becomes. They stay healthy, you save on health care costs—It’s a win-win for employees and employers.

You know that the Affordable Care Act (ACA) requires that health plans cover recommended preventive services at no cost to the individual, but do your employees? If you’re not already doing so, consider communicating to your workforce the free preventive care benefits that are available to them.

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You may want to adjust the language to best fit your plan or workforce, but here are some samples of communication to get you started:

Take Advantage of Free Preventive Care

Who: You! Men, women and children are all covered.

What: Depending on your age, you may have access to—at no cost to you—preventive services such as:

  • Blood pressure, diabetes and cholesterol tests
  • Many cancer screenings, including mammograms and colonoscopies
  • Counseling on topics such as quitting smoking, losing weight, eating healthfully, treating depression and reducing alcohol use
  • Regular well-baby and well-child visits, from birth to age 21
  • Routine vaccinations against diseases such as measles, polio and meningitis
  • Counseling, screening and vaccines to ensure healthy pregnancies

See the full list at Healthcare.gov.

When: Now. These preventive services are already covered under our plan.

Where: Preventive services are free when delivered by an in-network doctor.

Why: Preventive care screening can detect disease in the early stages when it is most treatable. Following preventive care guidelines, along with the advice of your doctor, can help you stay healthy.

How: Know what’s considered preventive care and review the guidelines. For example, although a colonoscopy is a preventive care screening, it’s only covered for people aged 50 or older. Additionally, colonoscopies that are done to evaluate specific problems are usually classified as diagnostic procedures (not screenings) and are not covered.

Avoid unexpected costs by clearly stating when you make your appointment that your visit is for a covered preventive care service. For example, if you’re making your well-woman visit on the phone, say “I’m making an appointment for my free preventive care well-woman visit.”

Also, medical complaints aren’t preventive. If you discuss other issues with your doctor, the visit is no longer preventive and you’ll be charged a fee. For example, if during your well-woman visit, your doctor does blood work for thyroid problems you are having, these additional services won’t be covered under free preventive care. Don’t hesitate to ask your doctor whether screenings he or she recommends will cost you.

More Move to Self-Funding

self-fundingThe Employee Benefit Research Institute reports that nearly 20% of mid-sized employers made the jump to self-insurance from 2013 to 2015. A major attraction is the availability of data and analytics, enabling the employer to learn how healthcare dollars are being spent. A growing number of employers are using this data to incentivize employees who lower claim costs by choosing more efficient hospitals or freestanding imaging centers when tests such as an MRI are needed.

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House Education & Workforce Considers Self-Insurance Protection Act

The article below is from SIIA eBlast on March 1, 2017

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Photo from SIIA eBlast

March 1, 2017- The U.S. House Committee on Education & the Workforce has concluded a hearing today where it heard testimony from SIIA Chairman Jay Ritchie on the Self-Insurance Protection Act (SIPA). The hearing, entitled “Legislative Proposals to Improve Health Care Coverage and Provide Lower Costs for Families,” also considered legislative proposals to implement association health plans, long supported by SIIA, in addition to wellness programs, often a key component of self-insured plans.

During his testimony, Ritchie told committee members, “Self-insurance offers employers across the country a platform to effectively and efficiently manage their healthcare expenditures.  The self-insured market is focused on creating cost-effective and beneficial outcomes for employee populations.”

The Self-Insurance Protection Act seeks to preclude potential federal regulatory action that could limit access to stop-loss insurance, which would compromise the ability of many employers to sponsor self-insured group health plans. This high profile committee hearing participation is the latest example of SIIA’s growing influence and visibility on Capitol Hill.

A copy of Mr. Ritchie’s full testimony can be found here. In addition, a recording of the hearing is available on the Committee’s website here.

If you have questions on the hearing or would like more information on SIIA’s advocacy activities, please contact Ryan Work, SIIA vice president of government relations, at rwork@siia.org.

For a more complete understanding of public policy developments that may affect the self-insurance marketplace, make plans to attend SIIA’s Legislative/Regulatory Conference, scheduled for May 2-4, 2017 in Washington, DC.  Sign up before this Friday and take advantage of discounted early bird registration fees. Event details can be accessed on-line at www.siia.org, or by calling 800/851-7789.

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A change for small biz could cost some employers their custom health plans

The article below is from Crain’s New York Business, written by Caroline Lewis

Park Slope Food Coop is among the employers that could be forced to join the small-group health insurance market

Faced with rising premiums in the group health insurance market, the Park Slope Food Coop opted five years ago to create a custom plan for its 74 full-time employees and their family members and pay for the costs directly.

“I’m convinced we would have had to raise prices if we weren’t self-insured,” said Joseph Holtz, general manager, who estimates self-insurance saves the co-op $300,000 to $500,000 a year.

The co-op is one of several hundred New York employers that will be forced to stop self-insuring next year, thanks to a change in the state’s definition of a small business. Small businesses, until recently defined as having between one and 50 employees, are not eligible to purchase so-called stop-loss insurance, which kicks in when health care costs exceed a certain threshold. Without it, self-insurance is too risky. Now the state’s definition includes companies with 51 to 100 employees. The law had largely gone unnoticed before the change, said Michael Ferguson, chief operating officer of the Self-Insurance Institute of America. “In the under-50 market, not a lot of companies are self-insuring,” he said.

The deadline for employers of 51 to 100 people to give up their self-insured coverage was extended from 2016 to 2018, but legislation that would permanently grandfather them in has so far stalled in Albany.

The state Department of Financial Services declined to comment on the rationale for denying small businesses the ability to self-insure. According to The Commonwealth Fund, if employers with 51 to 100 employees self-insure in large numbers, they could undermine the risk pool of the small-group market, leaving it with older, sicker beneficiaries.

The Coalition for the Homeless, a nonprofit with 65 full-time employees, is among those hoping to continue to self-insure. If no solution is found, the organization said it will have to join the small-group market when its plan expires in November 2018.

“We could probably get a plan that provides similar coverage for a similar amount of money,” said Dave Giffen, the coalition’s executive director. However, he added, the organization wouldn’t be able to “share in the upside” if employees use less health care than anticipated.

Self-insuring has also allowed the organization more flexibility in designing its plan and has resulted in fewer burdens on employees, said Giffen. For instance, he said, the plan allows employees to bypass step therapy, or the process of trying less costly drugs first, when accessing medication. It also aims to keep down the cost of visiting out-of-network providers.

“At an organization like this, where we’re perpetually understaffed and asking people to work long hours in a very difficult job, we want to make sure they have not just adequate health coverage but generous health coverage,” said Giffen.

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Study Shows a 36.8% Increase for Self-Insured Plans In Private-Sector Establishments & More…

A recent Notes article from Employee Benefit Research Institute (ebri.org) examines 1996-2015 trends in self-insured health plans among private-sector establishments offering health plans and among their covered workers, with a particular focus on 2013 to 2015, so as to assess whether the Affordable Care Act (ACA) might have affected these trends. The data comes from the Medical Expenditure Panel Survey Insurance Component (MEPS-IC).

Self-Insured Health Plans: Recent Trends by Firm Size, 1996-2015

by Paul Fronstin, Ph.D., Employee Benefit Research Institute

Here are the key findings from the Employee Benefit Research Institute (EBRI):

  • The percentage of private-sector establishments offering health plans at least one of which is self-insured has increased from 28.5% in 1996 to 39% in 2015 (36.8% increase).
  • Between 2013 and 2015, the percentages of establishments offering health plans with at least one self-insured plan has increased for midsized establishments from 25.3% to 30.1% (a 19% increase); for small establishments from 13.3% to 14.2% (a 7% increase); and has decreased from 83.9% to 80.4% for large establishments (a 4% decrease).
  • Similarly, the percentage of health-plan-covered workers enrolled in self-insured health plans has increased from 58.2% to 60% (a 3% increase) from 2013 to 2015. The largest increases in self-insured plan coverage among covered workers have occurred in establishments with 25-99 employees and with 100-999 employees.

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