New Jersey Aids Stop-Loss

supreme-courtIn a recent legislative update from SIIA, it was noted that the New Jersey Department of Banking and Insurance (DOBI) approved regulations lowering minimum stop-loss attachment points for large groups of 51 lives and above, effective in late August.

This move allows the large group individual attachment points to be $20,000 per individual, reduced from $25,000 and sets the minimum aggregate attachment point at 110% of expected claims, down from 125%. These changes broaden the levels of stop-loss or excess risk coverage available to self-funded health plans and brings New Jersey’s definition in line with the NAIC Stop Loss Insurance Model Act.

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Self-Funding Keeps Growing

With time running out on an opportunity for Congress to repeal and replace the Affordable Care Act and open enrollment season approaching, thousands of small and mid-sized businesses are likely bracing for another round of premium increases. A growing number of employers, however, will choose to avoid the uncertainty plaguing traditional group insurance markets by moving to a self-funded health plan – an option that provides an opportunity for savings and far more plan design flexibility.

Healthcare benefits continue to be perhaps the biggest obstacle facing small and mid-sized businesses. The Self Insurance Institute of America reports that between 2011 and 2016, the average annual deductible for employer-sponsored plans increased by 49% and the percentage of firms with fewer than 200 employees still providing health benefits fell from 68% in 2010 to 55% in 2016.

Self-funding on the other hand, has proven to be a far more responsible alternative for employers, enabling thousands to not only use their health benefit plan to attract and retain high quality employees, but to do so at an affordable cost. While self-funding has long been a staple for the nation’s largest employers, nearly a third of companies with 200 or more employees now offer at least one self-funded option.

Everyone Benefits from Flexibility

There are many reasons for the growth of self-funding, with flexibility and access to valuable claims data high on the list. Since self-funded plans are governed by ERISA, they avoid many of the costly mandates governing fully insured plans. To manage risk, stop loss coverage is obtained to cover claims that exceed anticipated levels. If claims are below anticipated levels, the plan retains the savings that would have been paid to an insurance carrier in the form of non-refundable premiums. Benefits can be customized to meet the unique needs of the group. When an independent TPA is engaged to administer the plan, claims data can be analyzed to identify chronic conditions and other key cost drivers. Services such as telemedicine and mobile transparency tools can be added to make physician access more convenient and more affordable. From plan design to data analysis, everyone benefits from the flexibility that a self-funded plan can provide. It’s the biggest reason why more small and mid-sized companies continue to move to self-funding with help from an independent TPA.

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Stop Loss Legislation

stop-lossIn New York, industry efforts to support self-funding for smaller groups have led to legislation extending the grandfathering of existing stop-loss policies for groups of 51 to 100 for an additional year, through January 1, 2019.

Other legislation impacting access to stop-loss insurance products by smaller groups has taken effect in Minnesota and is slated to become effective in New Mexico on July 1st. Attachment points are still being discussed in New Mexico and it appears that new opportunities for smaller groups may emerge in Minnesota as well. Since our last newsletter, legislation prohibiting small group stop-loss failed to advance beyond committee debate in the State of Maine.

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EBSO Benefits Develops Enterprise-Wide Solution with Enquiron Partnership

EBSO, Inc., a third party administrator with corporate headquarters in Milwaukee and St. Paul has expanded their partnership with Enquiron to provide Enquiron’s solutions to all of their self-funded clients. This expansion allows EBSO to deliver value to more clients and further assure that their clients are kept well informed regarding changing employer laws and regulations, placing EBSO’s expertise far above their competitors in the TPA marketplace.

“By including the Enquiron suite in our standard service offering, EBSO is able to extend the peace of mind we bring to our broker partners and clients,” said Bruce Flunker, President of EBSO Inc. “Gone are the days of responding to a client with the words: ‘you’ll have to check with your benefits attorney.'”

Each EBSO client now has unlimited access to Enquiron’s award-winning HR, employment and ERISA law content, tools, and guidance, including articles, training courses, guides, forms and more. Clients’ access to employment law and ERISA attorneys saves both time and significant amounts of money each year.

“We are excited that EBSO and Enquiron have expanded our partnership,” said Brian Hansen, Vice President of Business Development at Enquiron. “We are committed to listening to our partners and crafting a product suite that will deliver practical value to their clients and position them well against their competition.”

About EBSO Inc.

EBSO, Inc. is a third party administrator.  With corporate headquarters in Milwaukee and St. Paul, EBSO has grown to become a leader in the TPA industry. Today EBSO has offices throughout the United States including Arizona, Minnesota, Iowa, Kentucky, New Mexico, Ohio and Wisconsin. EBSO’s philosophy is to seek out the best resources, the timeliest information and the most innovative technology and use it to provide customers with cost-effective solutions in a way that is personal, fast, direct and honest.

About Enquiron®

Enquiron, www.enquiron.com, headquartered in Boston, Massachusetts, provides consultative business solutions to employers in all 50 states, across various industries, sectors and sizes. Since 1996, Enquiron has revolutionized the way that services impacting HR, Employment Law, Health Care, Retirement, Cyber and more are delivered to and utilized by employers. Enquiron has locations across the United States and is a trusted partner to organizations who need specific answers to specific questions.

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Responding to Growing Demand for Transparency

Experts agree that a lack of true price transparency has contributed significantly to the inefficiency in healthcare. Several websites compare the costs for certain procedures at varying hospitals, but it’s still very difficult, if not impossible, to make an informed choice when preparing for a non-emergency procedure. As a result, most people still go to doctors participating in a covered network and follow physician referrals when a specialist is required. In most cases, these choices are made without any knowledge of the cost.

Powerful Mobile Technology

Today, leading TPAs are providing self-funded health plan members with a variety of very powerful mobile transparency tools. One new mobile app enables members to identify fair pricing for more than 200 common procedures, including surgeries, imaging and diagnostic testing. By linking a rewards program, the app awards financial incentives when high quality, competitively priced providers are selected over those with lesser ratings.

Another software maker that describes a third of healthcare procedures as “shoppable”, has introduced a mobile app that enables plan members to search for physicians by procedure, location and price. This tool even goes beyond facts and figures to provide detailed descriptions of the procedure being searched. When members need further assistance, care navigators are available to provide online support via a live chat option.

Expert Administration Still Matters

While a totally open pricing system may never be possible in a business as complex as healthcare, TPAs are making self-funded health plans more transparent all the time. Strategies such as Reference Based Pricing and Concierge Health Advocacy are having a tremendous impact on cost and employee engagement. And while insurance carriers typically withhold claims data from fully insured groups, TPAs are experts at helping their clients put valuable claims data to work to identify cost drivers and manage chronic conditions in ways that help the plan avoid catastrophic claims in the future.

As the transition from volume to value-based healthcare continues, more responsibility will land in the hands of plan members. Smart employers know that a well-designed health plan can foster positive change and lower costs only if members understand their benefits. As long as self-funded plans, highly personal service and creative ideas are allowed to flourish, the number of engaged consumers capable of making economically wise healthcare decisions will continue to grow.

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Encourage Cost Savings by Sharing

medical-moneyA recent article in The Self-Insurer magazine described a very simple, straightforward approach to combating the rising cost of healthcare. It featured an approach a law firm is using to encourage and incentivize employees to utilize more cost-efficient healthcare providers.

The firm provides its members with the data needed to compare costs for various procedures, then shares the savings that accrue to their self-funded health plan when a more cost-efficient provider is selected. In some cases, members have received checks for hundreds and even thousands of dollars. Everyone wins according to the CEO and in the process, members learn that shopping for healthcare can be the responsible and rewarding thing to do.

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Leveling the Self-Funding Field

The article below, titled Leveling the self-funded field, written by Robert Bull, was originally published by Employee Benefit Adviser on July 18, 2017.

Technology is changing every aspect of the way businesses operate — and that includes health plan self-funding.

It used to be that self-funding was limited to only the largest companies that could afford the manpower to either administer their own plans or develop their own proprietary administrative software. Today, new data technologies are leveling the playing field, making it affordable for virtually all employers to self-fund.

For too long HR teams have shied away from self-funding due to the perceived administrative burden. But technology has removed this barrier, making it easier to track eligibility and generate billing information. What used to be a painstaking manual process has been automated, and HR teams at self-funded companies can now provide richer benefits at a lower price. A good healthcare plan goes miles in attracting and keeping quality employees — and ensuring that they’re productive by minimizing absenteeism due to a lack of care for either themselves or their family members.

self-funding'Here’s what to look for when shopping for a top-notch self-funding solution:

1. The ability to consolidate information and manage all healthcare-related data from a single system. Most employers deal with multiple service providers — stop loss, vision, pharmacy, dental, medical, wellness, and third-party administrators, just to name a few. But they should insist that all of the relevant data is consolidated onto one system. For one thing, it’s much simpler and less time consuming to administer and pay all of their providers from a single source. For another, it takes much less time and effort to master a single application — as opposed to having to learn the ins and outs of each provider’s software.

When the data from multiple vendors are integrated onto a single platform, the time-consuming process of having to reconcile across providers every month is eliminated. The plan’s administrator can instantly determine counts and claims. Likewise, multiple payment processes can be eliminated in favor of a single, consistent payment method.

Best of all, HR can take all this data, which reflects employee behavior and everything related to treatment, and use it for predictive modeling. With that level of insight, the employer can develop a plan that truly meets its — and its employees — needs.

2. Data transparency. For an employer to take on the added risk of self-funding, it needs to be able to closely examine its data and determine the underlying trends. Without pricing and transaction transparency, it is impossible to perform a meaningful cost analysis.

As opposed to fully-insured plans, where the data is the property of the insurance carrier, with a self-funded plan the employer owns the plan’s data. And once the employer can access its claims, demographic and pricing information, it can make accurate decisions about what is best for the company and its employees.

The data can also be used to influence employee behavior. By educating a workforce about those behaviors that are wasteful and ineffective, the employer can reap significant savings for itself and its employees. And by analyzing the response rate to different messages and campaigns, HR can then determine what incentives would be useful to obtain even greater compliance.

3. Real-time data access. It’s not enough to have healthcare plan data; it needs to be timely or its utility is diminished. The best way for employers to be proactive is for them to be able to see what is happening with claims and cash flow on a monthly, weekly or even a daily basis. At a minimum, the employer should review its data at least quarterly. And the larger the employer, the greater the number of employees and claims, the more frequently the data needs to be examined.

Three years ago, it would have taken three weeks to scrub a mid-size employer’s claims data. Now it can take just two hours.

4. Safeguards. Data is power. That’s why an employer wants to ensure that only authorized personnel have access to healthcare plan data and analytics. There are legal and privacy considerations as well. That’s why it’s crucial to have robust security that maintains an audit trail of who touches what data and when. In case of an error or a breach, the event can be traced back to the people involved at the moment where it occurred.

Self-funding will continue to be transformed by technology. Cloud-based software is making it possible for ever smaller employers to implement and administer self-funded plans. Embracing and utilizing these tools can lead to lower premiums, greater access to health care and reduced costs for employer and employee alike.

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More Move to Self-Funding

The 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 free standing imaging centers when tests such as an MRI are needed.

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House Passes Legislation Protecting Access to Affordable Health Care Options

Press Release from Education and the Workforce Committee Chairwomen Virginia Foxx on April 5, 2017.

The House today passed the Self-Insurance Protection Act (H.R. 1304), legislation that would protect access to affordable health care options for workers and families. Introduced by Rep. Phil Roe (R-TN), the legislation would reaffirm long-standing policies to ensure workers can continue to receive flexible, affordable health care coverage through self-insured plans. The bill passed by a bipartisan vote of 400 to 16.

“By protecting access to self-insurance, we can help ensure employers have the tools they need to control health care costs for working families,” Rep. Roe said. “Millions of Americans rely on flexible self-insured plans and the benefits they provide. Federal bureaucrats should never have the opportunity to limit or threaten this popular health care option. This legislation prevents bureaucratic overreach and represents an important step toward promoting choice in health care.”

“This legislation provides certainty for working families who depend on self-insured health care plans,” Chairwoman Virginia Foxx (R-NC) said. “Workers and employers are already facing limited choices in health care, and the least we can do is preserve the choices they still have. I want to thank Representative Roe for championing this commonsense bill. While there’s more we can and should do to ensure access to high-quality, affordable health care coverage, this bill is a positive step for workers and their families.”

BACKGROUND: To ensure workers and employers continue to have access to affordable, flexible health plans through self-insurance, Rep. Phil Roe (R-TN) introduced the Self-Insurance Protection Act (H.R. 1304). The legislation would amend the Employee Retirement Income Security Act, the Public Health Service Act, and the Internal Revenue Code to clarify that federal regulators cannot redefine stop-loss insurance as traditional health insurance. H.R. 1304 would preserve self-insurance and:

  • Reaffirm long-standing policies. Stop-loss insurance is not health insurance, and it has never been considered health insurance under federal law. H.R. 1304 would reaffirm this long-standing policy.
  • Protect access to affordable health care coverage. By preserving self-insurance, workers and employers will continue to benefit from a health care plan model that has proven to lower costs and provide greater flexibility.
  • Prevent bureaucratic overreach. Clarifying that regulators cannot redefine stop-loss insurance would prevent future administrations from limiting a popular health care option for workers and employers.

For a copy of the bill, click here.

For a fact sheet on the bill, click here.

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The End of the American Health Care Act (AHCA)

Instead of preparing for the changes that were expected from the American Health Care Act (AHCA), employers now need to continue or resume their efforts to maintain compliance with the ACA. As House Speaker Ryan said, “I don’t know what else to say other than Obamacare is the law of the land. It’ll remain law of the land until it’s replaced,” he said. “We’re going to be living with Obamacare for the foreseeable future.”

Determining where we go from here seems to be anyone’s guess, but after watching the industry ebb and flow for decades, our best advice is to stay calm and carry on as self-funded health plans continue to cover an estimated 75% of the U.S. workforce.

ACA The Law of the Land

Until the Republican majority decides to try again or Obamacare implodes, as President Donald Trump and others say is inevitable, individuals and employers with 50 or more full-time employees will have to live with the Affordable Care Act. Many who thought the American Health Care Act (AHCA) meant the certain loss of coverage made possible by the ACA can breathe easier. Providers and employer groups, many of which have adopted self-funding in order to better cope with the added regulations of Obamacare, can take comfort in the fact that drastic change has been avoided, at least for the foreseeable future.

EBSO will be monitoring the events on Capitol Hill and will continue to provide updates as things arise. As always, thank you for being a valued Client and/or Business Partner.

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