Absent federal action, states take the lead on curbing drug costs

What's your state's stance on the cost of prescription drugs? See how Maryland has moved forward in their decision making for drug prices, giving themselves the ability to say "no" in this article from Benefits Pro written by Shefali Luthra.

You can read the original article here.


Lawmakers in Maryland are daring to legislate where their federal counterparts have not: As of Oct. 1, the state will be able to say “no” to some pharmaceutical price spikes.

A new law, which focuses on generic and off-patent drugs, empowers the state’s attorney general to step in if a drug’s price climbs 50 percent or more in a single year. The company must justify the hike. If the attorney general still finds the increase unwarranted, he or she can file suit in state court. Manufacturers face a fine of up to $10,000 for price gouging.

As Congress stalls on what voters say is a top health concern — high pharmaceutical costs — states increasingly are tackling the issue. Despite often-fierce industry opposition, a variety of bills are working their way through state governments. California, Nevada and New York are among those joining Maryland in passing legislation meant to undercut skyrocketing drug prices.

Maryland, though, is the first to penalize drugmakers for price hikes. Its law passed May 26 without the governor’s signature.

The state-level momentum raises the possibility that — as happened with hot-button issues such as gay marriage and smoke-free buildings — a patchwork of bills across the country could pave the way for more comprehensive national action. States feel the squeeze of these steep price tags in Medicaid and state employee benefit programs, and that applies pressure to find solutions.

“There is a noticeable uptick among state legislatures and state governments in terms of what kind of role states can play in addressing the cost of prescription drugs and access,” said Richard Cauchi, health program director at the National Conference of State Legislatures.

Many experts frame Maryland’s law as a test case that could help define what powers states have and what limits they face in doing battle with the pharmaceutical industry.

The generic-drug industry has already filed a lawsuit to block the law, arguing it’s unconstitutionally vague and an overreach of state powers. A district court is expected to rule soon.

The state-level actions focus on a variety of tactics:

“Transparency bills” would require pharmaceutical companies to detail a drug’s production and advertising costs when they raise prices over certain thresholds. Cost-limit measures would cap drug prices charged by drugmakers to Medicaid or other state-run programs, or limit what the state will pay for drugs. Supply-chain restrictions include regulating the roles of pharmacy benefit managers or limiting a consumer’s out-of-pocket costs.

A New York law on the books since spring allows officials to cap what its Medicaid program will pay for medications. If companies don’t sufficiently discount a drug, a state review will assess whether the price is out of step with medical value.

Maryland’s measure goes further — treating price gouging as a civil offense and taking alleged violators to court.

“It’s a really innovative approach. States are looking at how to replicate it, and how to expand on it,” said Ellen Albritton, a senior policy analyst at the left-leaning Families USA, which has consulted with states including Maryland on such policies.

Lawmakers have introduced similar legislation in states such as Massachusetts, Rhode Island, Tennessee and Montana. And in Ohio voters are weighing a ballot initiative in November that would limit what the state pays for prescription drugs in its Medicaid program and other state health plans.

Meanwhile, the California legislature passed a bill earlier in September that would require drugmakers to disclose when they are about to raise a price more than 16 percent over two years and justify the hike. It awaits Democratic Gov. Jerry Brown’s signature.

In June, Nevada lawmakers approved a law similar to California’s but limited to insulin prices. Vermont passed a transparency law in 2016 that would scrutinize up to 15 drugs for which the state spends “significant health care dollars” and prices had climbed by set amounts in recent years.

But states face a steep uphill climb in passing pricing legislation given the deep-pocketed pharmaceutical industry, which can finance strong opposition, whether through lobbying, legal action or advertising campaigns.

Last fall, voters rejected a California initiative that would have capped what the state pays for drugs — much like the Ohio measure under consideration. Industry groups spent more than $100 million to defeat it, putting it among California’s all-time most expensive ballot fights. Ohio’s measure is attracting similar heat, with drug companies outspending opponents about 5-to-1.

States also face policy challenges and limits to their statutory authority, which is why several have focused their efforts on specific parts of the drug-pricing pipeline.

Critics see these tailored initiatives as falling short or opening other loopholes. Requiring companies to report prices past a certain threshold, for example, might encourage them to consistently set prices just below that level.

Maryland’s law is noteworthy because it includes a fine for drugmakers if price increases are deemed excessive — though in the industry that $10,000 fine is likely nominal, suggested Rachel Sachs, an associate law professor at Washington University in St. Louis who researches drug regulations.

This law also doesn’t address the trickier policy question: a drug’s initial price tag, noted Rena Conti, an assistant professor in the University of Chicago who studies pharmaceutical economics.

And its focus on generics means that branded drugs, such as Mylan’s Epi-Pen or Kaleo’s overdose-reversing Evzio, wouldn’t be affected.

Yet there’s a good reason for this, noted Jeremy Greene, a professor of medicine and the history of medicine at Johns Hopkins University who is in favor of Maryland’s law.

Current interpretation of federal patent law suggests that the issues related to the development and affordability of on-patent drugs are under federal jurisdiction, outside the purview of states, he explained.

In Maryland, “the law was drafted narrowly to address specifically a problem we’ve only become aware of in recent years,” he said. That’s the high cost of older, off-patent drugs that face little market competition. “Here’s where the state of Maryland is trying to do something,” he said.

Still, a ruling against the state in the pending court case could have a chilling effect for other states, Sachs said, although it would be unlikely to quash their efforts.

“This is continuing to be a topic of discussion, and a problem for consumers,” said Sachs.

“At some point, some of these laws are going to go into effect — or the federal government is going to do something,” she added.

Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation. KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Source:

Luther S. (29 September 2017). "Absent federal action, states take the lead on curbing drug costs" [Web Blog Post]. Retrieved from address http://www.benefitspro.com/2017/09/29/absent-federal-action-states-take-the-lead-on-curb?page=2


Risk Insights: Donating to Disasters and Avoiding Scams

Hurricane Harvey is the strongest storm to make landfall in the United States since Hurricane Charley in 2004. News of the damage it has caused to southeastern Texas is prompting people to help in whatever ways they can. Unfortunately, there are dishonest people who prey upon people’s good intentions, creating fake charity campaigns to exploit victims and take advantage of those who want to help.

How to Avoid Scams

Despite the sense of urgency to help when disaster strikes, it is important to do some research before donating. Consider the following best practices to ensure that your resources go to a legitimate charity with experience in disaster relief:

  • Never wire money to someone who claims to be a charity. Legitimate charities do not ask for wire transfers. Once you wire the money, you’ll probably never get it back.
  • Be cautious about bloggers and social media posts that provide charity suggestions. Don’t assume that the person recommending the charity has fully researched the organization’s credibility.
  • Only donate through a charity’s official website, never through emails. Scammers have a knack for creating fake email accounts that seem legitimate.
  • Ensure that the charity explains on its website how your money will be used.

  • Be wary of charities that claim to give 100 percent of donations to victims. That is often a false claim, as well-structured organizations need to use some of their donations to cover administrative costs.
  • Never offer unnecessary personal information, such as your Social Security number or a copy of your driver’s license. However, it is common for legitimate charities to ask for your mailing address, and it is safe for you to provide it.

Despite the sense of urgency to help when disaster strikes, it is important to do some research before donating money. Don’t let dishonest people take advantage of your good intentions.

How to Choose a Charity

Even legitimate charities need to be considered with care. The Federal Trade Commission suggests avoiding new charities because, despite their legitimacy, they may not have the resources needed to get your money to its intended recipients.

Donors looking for a worthy charity can access an unbiased, objective list on a website called Charity Navigator. The site receives a Form 990 for all of its charities directly from the IRS, so it knows exactly how

the charities spend their money and use their donations. It also rates charities based on their location, tax status, length of operation, accountability, transparency and public support.

Gaining popularity for charitable donations is a crowdfunding website called GoFundMe, which allows people to raise money for a wide variety of circumstances. Despite its popularity, visitors to the site should be cautious about the campaigns to which they donate. Visitors can report suspicious campaigns directly to GoFundMe via its official website or to their state’s consumer protection hotline.

National Organizations

The following national organizations have long-standing reputations for providing disaster relief and accepting donations:

  • The American Red Cross provides shelter, food, emotional support and other necessities to people affected by disasters.
  • AmeriCares takes medicine and supplies to survivors.
  • Catholic Charities USA supports disaster response and recovery efforts that include direct assistance, rebuilding and health care services.
  • The Salvation Army provides shelter and emergency services to displaced individuals.

Remember that there are other ways to provide disaster relief that don’t involve monetary donations, especially if you live near the affected area. Local food banks and blood centers commonly ask for donations during relief efforts.

 

Sourced from – Zywave.com


Safety Focused Newsletter - September 2017

Safety Focused

Tips for Managing Workplace Fatigue

Not only does fatigue make you less productive and personable, it can also cause a serious safety risk if you work with hazardous equipment or materials. Read on to learn how to manage fatigue at work.

 

5 Ways to Eat Healthier at Work

Good nutrition is an essential part of a healthy lifestyle, and eating healthier can increase your productivity, lower the number of sick days you take and reduce your risk of being in an on-the-job accident. Read on to learn five tips for healthier eating at work.

NOT ONLY DOES FATIGUE MAKE YOU LESS PRODUCTIVE AND PERSONABLE, IT CAN ALSO CAUSE A SERIOUS SAFETY RISK IF YOU WORK WITH HAZARDOUS EQUIPMENT OR MATERIAL

Tips for Managing Workplace Fatigue

Hectic schedules, stress and lack of sleep can all contribute to fatigue, which is a common and dangerous workplace hazard. Symptoms of fatigue include moodiness, drowsiness, loss of energy, and lack of motivation and concentration.

These are not ideal qualities to display at your job. Not only does fatigue make you less productive and personable, it can also cause a serious safety risk if you work with hazardous equipment or materials.

To help manage workplace fatigue, consider doing the following:

  • Eat a snack that includes complex carbohydrates and protein (like an energy bar or half a peanut butter sandwich on whole-wheat bread).
  • Avoid sugar, which will make you crash later.
  • Go for a short walk to re-energize yourself.
  • Drink a glass of water.
  • Manage your stress, and get more sleep.
  • Exercise regularly.
  • Limit your caffeine intake to one or two drinks per day.

Fatigue can also be linked to an underlying medical problem, psychological condition or sleep disorder. Talk to your doctor if you experience chronic or debilitating fatigue.

5 Ways to Eat Healthier at Work

Most full-time employees eat at least one meal at work. Not only are a significant number of meals eaten in the workplace, but work is also where employees are most susceptible to distracted or stress-related eating.

Good nutrition is an essential part of a healthy lifestyle, and eating healthier can increase your productivity, lower the number of sick days you take and reduce your risk of being in an on-the-job accident.

To start eating heathier at work today, consider doing the following:

  1. Avoid junk food. Clean your desk or work area of junk food. This includes snacks like candy, chips or crackers.
  2. Make time to eat full meals. While work can get busy, it’s critical that you make time to eat a healthy meal. Not only does eating a nutritious breakfast or lunch increase your energy, but it can also help you remain fuller for longer, thus reducing snacking.

  1. Bring leftovers into work. When cooking your dinner each night, consider setting aside portions for your lunch the next day. Not only does this make meal planning easier, but it can also save you money.
  2. Bring in bottles of water. Make an effort to drink water throughout the day. This can help energize you, supress your appetite and aid in weight loss.
  3. Snack smart. Snacks aren’t entirely off the table when you’re trying to eat healthy. Foods like dried fruit, jerky, nuts and applesauce are all good alternatives to unhealthy chips and candy bars.

While eating home-cooked meals is one of the easiest ways to eat healthier, certain jobs require employees to be on the road often. This, unfortunately, can lead to eating out more.

In this case, being careful about the kinds of food you order and the portion sizes can make all the difference in managing weight gain.


OSHA Rule: Respirable Crystalline Silica

On March 25, 2016, the Occupational Safety and Health Administration (OSHA) issued a final rule regarding respirable crystalline silica. Under this rule, employers will be subject to new standards for protecting workers. The rule became effective on June 23, 2016, but employers in the construction industry have until Sept. 23, 2017, to comply with the rule. Employers in the maritime and general industries will have until June 23, 2018, to comply with the rule.

The rule includes standards that dramatically reduce the permissible exposure limit (PEL) for respirable crystalline silica to 50 micrograms per cubic meter of air (50 µg/m3). The rule also requires employers to implement specific measures to protect workers.

Links and Resources

·   Final rule on occupational exposure to respirable crystalline silica

·   OSHA FAQs on the respirable crystalline silica final rule

·   OSHA crystalline silica webpage; CDC silica webpage

·   Methods of sample analysis for construction, general and maritime industries

·   Medical surveillance guidelines for construction, general and maritime industries

 

This Compliance Overview presents a high-level summary of OSHA’s final rule regarding respirable crystalline silica.

HIGHLIGHTS

SILICA FINAL RULE

  • The final rule establishes a new permissible exposure limit for respirable crystalline silica.
  • Employers must implement specific measures to protect workers.
  • The intent of the rule is to reduce the risk of diseases caused by exposure to respirable crystalline silica.

IMPORTANT DATES

  • Employers in the construction industry must comply by Sept. 23, 2017.
  • Employers in the general and maritime industries must comply by June 23, 2018.

Background

Crystalline silica (silica) is a common mineral found in materials like sand, concrete, stone and mortar. Silica becomes hazardous when it is reduced to a dust and released into the air where it can be inhaled (called respirable silica). This commonly occurs in operations that involve cutting, sawing, drilling and crushing materials that contain silica. Operations in which sand products are used, such as glass manufacturing, metal casting and sand blasting, also tend to generate respirable silica. When silica dust particles are inhaled, they can penetrate deep into the lungs and cause disabling and sometimes fatal diseases, including silicosis, lung cancer, chronic obstructive pulmonary disorder and kidney disease.

OSHA first set PELs for respirable silica in 1971, allowing 100 µg/m3 for general industry and 250 µg/m3 for construction and shipyards. Since then, numerous advanced scientific studies determined that much lower levels of silica exposure can causes serious health effects. After reviewing the scientific evidence, OSHA determined that even though significant health risks remain at the 50 µg/m3 PEL, this is the lowest level that most affected operations can reasonably achieve through the use of engineering controls and work practices.

Covered Employers

In its final rule, OSHA issued two separate standards for protecting workers from exposure to respirable crystalline silica, one for the construction industry and another for the general and maritime industries.

Both standards are similar and provide comparable protections for workers, but OSHA issued them separately to account for differences in work activities, anticipated exposure levels and other conditions unique to each industry. Although exposure to respirable crystalline silica has also been documented in the agricultural sector, OSHA did not issue regulations for this industry.

General Requirements for Covered Employers

Under both standards, employers subject to OSHA’s final rule must:

  •    Implement engineering and work-practice control measures;
  •    Establish and implement a written exposure plan;
  •    Restrict housekeeping practices that expose workers to silica;
  •    Offer medical exams to workers who are exposed to silica;
  •    Train workers on operations that result in silica exposure and on ways to limit exposure; and
  •    Keep records of workers’ silica exposure and medical exams.

Employers in the construction industry must also designate a competent person to implement their written exposure control plans.

Exposure Control Requirements

To comply with exposure control requirements, general industry and maritime employers must measure respirable silica levels in the workplace any time they may possibly be at or above 25 µg/m3 (action level). They must also ensure that employees are not exposed to levels above 50 µg/m3 by limiting access to areas with high levels, using dust control measures (such as wetting and ventilation), and providing workers with respirators.

Construction employers have the option of either using those same methods or following specific dust-control methods that are outlined in Table 1 of OSHA’s final rule. Table 1 provides a list of common construction tasks and specific actions construction employers can take to protect workers who perform each task.

Written Exposure Plan

The final rule allows employers to tailor their written exposure control plans to their particular worksites. Minimum requirements include a description of all tasks that workers may have to do that could expose them to respirable silica and a description of the employer’s methods for protecting workers, including procedures used to restrict workers’ access to potential high-exposure areas.

Construction employers must also designate an individual who is capable of identifying existing and foreseeable silica hazards in the workplace and who has authorization to take prompt corrective measures to eliminate or minimize them.

Housekeeping

If housekeeping practices may expose workers to respirable silica, employers must use any feasible alternative as a means of reducing or eliminating the exposure risk.

Medical Surveillance

Employers must offer medical exams to workers who may be exposed to respirable silica levels of 25 µg/m3 or more for 30 or more days per year. The exams must be offered every three years and must include chest X-rays and lung function tests.

Compliance Schedule

Each standard includes a compliance schedule for covered employers. The table below provides an overview of the relevant deadlines.

Industry Deadline Exceptions
General and Maritime June 23, 2018 ·    Medical surveillance must be offered to workers who will be exposed to 25 µg/m3 or more of crystalline silica for 30 or more days a year starting on June 23, 2020; and

·    Hydraulic fracturing operations must implement engineering controls by June 23, 2021.

Construction Sept. 23, 2017 ·    Laboratory evaluation sample requirements begin on June 23, 2018.

 

SOURCED FROM ZYWAVE – https://www.zywave.com


Workers' Compensation Services Overview

How is your broker helping you lower your workers’ compensation premiums?

  • Workers’ compensation is a large and necessary cost, but there are still opportunities to save. We’ll help you reduce claims and control costs by establishing workplace safety policies, streamlining your reporting procedures and identifying top loss sources.

How effective is your return to work program?

  • The longer a workers’ compensation claim stays open, the more it will cost you. Hierl Insurance Inc. can help you implement a comprehensive return to work program that will protect your bottom line, while still providing your employees with appropriate care.

Did you know that you can see a massive return on investment for every dollar you put into workplace safety and health?

  • Our clients have access to numerous employee safety materials, including newsletters, flyers, bulletins and comprehensive safety manuals that can help promote a safety-minded workplace.

 

STATE-SPECIFIC EMPLOYER REQUIREMENTS

Get a quick, clear understanding of all of your workers’ compensation requirements with these comprehensive summaries. With these materials, you can rest easy knowing that your workers’ compensation obligations are met.

 

EMPLOYEE SAFETY MANUALS

Take steps to reduce workplace injuries with these customizable safety manuals, which feature general safety policies and procedures to support safety programs. Choose from a general template or from over 25 industry-specific versions.

 

RETURN TO WORK RESOURCES

Use these return to work materials to reduce the length of workers’ compensation claims and support your employees. These policies, forms and employee communications will help ensure that everyone at your business is on the same page and focused on recovery.

 

INJURY AND ILLNESS INVESTIGATION PROGRAMS

Make sure the injuries and illnesses only cost you a single time. These resources can help you establish best practices for investigating the true sources of workplace incidents and reduce the chance of reoccurrences.

 

WORKERS’ COMPENSATION ARTICLES

 

Stay up to date on new workers’ compensation developments with informative and easy-to-read articles. These articles examine a variety of topics and can help your business stay prepared before, during and after a workers’ compensation claim.

 

 

Sourced from Zywave - https://www.zywave.com.

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Compliance Recap January 2017

Make sure you stay up to date on January's compliances thanks to our partners United Benefits Advisors (UBA),

January was a significant month in the employee benefits world because the new U.S. administration issued an Executive Order announcing its intent to repeal the Patient Protection and Affordable Care Act (ACA). However, January was a relatively inactive month for new laws and administrative rulemaking because the new administration placed a freeze on rulemaking until presidential nominations of agency heads are confirmed.

The Department of Health and Human Services (HHS) released the 2017 poverty guidelines. The Department of Labor (DOL) released its inflation-adjusted civil monetary penalty amounts and an FAQ regarding the contraceptive services objection accommodation. The DOL, HHS, and the Treasury Department released FAQs about family HRA integration with a non-HRA group health plan. The IRS released its 2017 version of the Employer’s Tax Guide to Fringe Benefits and a memo on fixed indemnity health plan benefits tax treatment.

President Trump Signs Executive Order

On January 20, 2017, President Trump signed Executive Order: Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal.

The Executive Order directs the Department of Health and Human Services’ Secretary and the heads of all other executive departments and agencies with authority or responsibility under the Patient Protection and Affordable Care Act (ACA) to exercise all authority and discretion to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose a fiscal burden on any state, or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.

The Executive Order indicates that the Administrative Procedure Act and its rulemaking process still apply to regulatory revisions. Because confirmation proceedings are not concluded for the heads of the Departments of Health and Human Services, Labor, or the Treasury, the agencies are in a rule promulgation freeze until presidential nominations are confirmed.

HHS Releases 2017 Federal Poverty Guidelines

The 2017 poverty guidelines (also referred to as the FPL) were released by the Department of Health and Human Services (HHS). For a family/household of 1 in the contiguous United States, the FPL is $12,060. In Alaska, the FPL is $15,060 and in Hawaii the FPL is $13,860. Applicable large employers that wish to use the FPL affordability safe harbor under the employer shared responsibility/play or pay rules should ensure that their lowest employee-only premium is equal to or less than $97.38 a month, which is 9.69 percent of the FPL.

DOL Releases Inflation-Adjusted Federal Civil Penalty Amounts

On January 18, 2017, the Department of Labor issued the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2017 which is its first annual adjustment of federal civil monetary penalties. Here are some of the adjustments:

  • Form 5500: For failure to file, the maximum penalty increases from $2,063 to $2,097 daily for every day that the Form 5500 is late.
  • Summary of Benefits and Coverage: For failure to provide, the maximum penalty increases from $1,087 to $1,105 per failure.
  • Genetic Information Nondiscrimination Act: For violations, the maximum penalty increases from $110 per participant per day to $112.

The adjustments are effective for penalties assessed after January 13, 2017, for violations occurring after November 2, 2015.

DOL Releases FAQ Regarding Contraceptive Services Objection Accommodation

As part of implementing the Patient Protection and Affordable Care Act (ACA), the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) issued regulations to require coverage or women’s preventive services, which essentially includes all FDA-approved contraceptives, sterilization procedures, and patient education and counseling for women with reproductive capacity, as prescribed by the health care provider (collectively, contraceptive services).

The regulations exempt group health plans of “religious employers” (specifically defined in the law) from the requirement to provide contraceptive coverage. Later, amended regulations provide an accommodation for eligible organizations – which are not eligible for the religious employer exemption – that object on religious grounds to providing coverage for contraceptive services. Because of litigation, the Departments extended the accommodation to closely held for-profit entities.

Under the accommodation, an eligible organization that objects to providing contraceptive coverage for religious reasons may either:

  1. self-certify its objection to its health insurance issuer (to the extent it has an insured plan) or third party administrator (to the extent it has a self-insured plan) using a form provided by the Department of Labor (EBSA Form 700); or
  2. self-certify its objection and provide certain information to HHS without using any particular form.

Most recently, in 2016, the U.S. Supreme Court considered claims by several employers that, even with the accommodation provided in the regulations, the contraceptive coverage requirement violates the Religious Freedom Restoration Act (RFRA). The Court heard oral arguments and ultimately remanded the case (and parallel RFRA cases) to the lower courts to give the parties “an opportunity to arrive at an approach going forward that accommodates [the objecting employers’] religious exercise while at the same time ensuring that women covered by [the employers’] health plans ‘receive full and equal health coverage, including contraceptive coverage.’”

To address the Court’s statement, the Departments published their request for information (RFI) regarding the Court’s statement and received more than 54,000 public comments. Based on the comments submitted, the Departments released FAQs About Affordable Care Act Implementation Part 36 to indicate that they not making changes to the accommodation for the following reasons:

  • No feasible approach has been identified that would resolve the religious objectors’ concerns, while still ensuring that the affected women receive full and equal health coverage, including contraceptive coverage.
  • The process described in the Court’s supplemental briefing order would not be acceptable to those with religious objections to the contraceptive coverage requirements.
  • There are administrative and operational changes to a process like the one described in the Court’s order that are more significant than the Departments had previously understood and that would potentially undermine women’s access to full and equal coverage.

Agencies Release FAQs About Family HRA Integration with Non-HRA Group Health Plan

The Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments) released FAQs About Affordable Care Implementation Part 37 to address health reimbursement arrangement (HRA) integration with group health plans.

The Departments indicate that, for purposes of determining whether a family HRA is “integrated” with a non-HRA group health plan, an employer may rely on an employee’s reasonable representation that the employee and other individuals covered by the family HRA are also covered by another qualifying non-HRA group health plan.

Also, a family HRA is permitted to be integrated with a combination of coverage under other qualifying non-HRA group health plans if all individuals who are covered under the family HRA are also covered under other qualifying non-HRA group health plan coverage.

For example, a family HRA covering an employee, spouse, and one dependent child may be integrated with the combination of (1) the employee’s self-only coverage under the non-HRA group health plan of the employee’s employer, and (2) the spouse and dependent child’s coverage under the non-HRA group health plan of the spouse’s employer, if both non-HRA group health plans are qualifying nonHRA group health plans.

IRS Releases 2017 Version of the Employer’s Tax Guide to Fringe Benefits

The IRS released its 2017 Version of Publication 15-B which provides information on the employment tax treatment of various fringe benefits. Fringe benefits are taxable unless an exclusion applies. The publication lists the qualified benefits that a cafeteria plan may include and examples of benefits that a cafeteria plan is not permitted to include. It also provides the 2017 dollar limits for various benefits.

IRS Issues Memo on Fixed-Indemnity Health Plan Benefits Tax Treatment

On January 20, 2017, the IRS released a Memorandum on the tax treatment of benefits paid by fixedindemnity health plans that addresses: (1) whether payments to an employee under an employerprovided fixed-indemnity health plan are excludible from the employee’s income under Internal Revenue Code §105, and (2) whether payments to an employee under an employer-provided fixedindemnity health plan are excludible from the employee’s income under Internal Revenue Code §105 if the payments are made by salary reduction through a §125 cafeteria plan.

Some examples of fixed indemnity health plans are AFLAC or similar coverage, or cancer insurance policies.

Generally, the Internal Revenue Code imposes taxes on wages paid with respect to employment. For federal income tax withholding, the Internal Revenue Code generally requires every employer who pays wages to deduct and withhold taxes on those wages.

The IRS concluded that an employer may not exclude payments under an employer-provided fixedindemnity health plan from an employee’s gross income if the coverage’s value was excluded from the employee’s gross income and wages. Further, an employer may not exclude payments under an employer-provided fixed-indemnity health plan if the plan’s premiums were made by salary reduction through a §125 cafeteria plan.

In the context of an employer-provided fixed-indemnity health plan, when the employer’s payment for coverage by the fixed-indemnity plan is excluded from the employee’s gross income, then the payments by the plan are not excluded from the employee’s gross income

In contrast, when the premiums are paid with after-tax dollars, the payments by the plan are excluded from the employee’s gross income.

To download the full compliance recap click Here.


Clarification on Work-related Recordkeeping and Exemptions

OSHA requires employers to keep and maintain records of work-related injuries and illnesses. However, if an employee develops an injury or illness while performing a personal task or is injured outside of his or her normal work hours, it can be difficult to determine your OSHA obligations. That’s why OSHA recently clarified the requirements necessary for an injury or illness to be exempt from recordkeeping requirements.

In the clarification, OSHA presented an example in which an employee brought a plow to work, which he intended to loan to a co-worker. After the employee’s regular shift ended, he attempted to move the plow to the co-worker’s truck. However, in the process, the employee injured his back.

OSHA stated that the injury presented in this example would not be considered work-related, and would therefore be exempt from recordkeeping regulations. This is because the injury met both of the requirements needed to fall under the personal-task exemption:

* The injury or illness must solely be the result of an employee performing a personal task at the workplace

* The injury or illness must occur outside of an employee’s assigned work hours, including during formal and informal break times.


Compliance Recap: October 2016

October was a busy month for administrative rulemaking in the employee benefits world.

The Internal Revenue Service (IRS) released final instructions for Forms 1094-C and 1095-C, guidance on the taxability of health care sharing ministry employer contributions, and health care information reporting tips. The Department of Health and Human Services (HHS) released guidance on HIPAA and cloud computing. The Department of Labor (DOL) issued final regulations governing employee retaliation and whistleblower protection. The Centers for Medicare and Medicaid Services (CMS) issued guidance on off-Marketplace enrollment periods for stand-alone dental plans. The IRS, DOL, and HHS released notice of enforcement relief extension for higher education institutions, FAQs about preventive services coverage and mental health and substance use disorder parity implementation, and final regulations regarding short-term, limited-duration insurance, excepted benefits, and lifetime and annual limits.

UBA Updates

UBA released five new advisors in October:

UBA updated existing guidance:

IRS Releases Health and Welfare Plan Inflation-Adjusted Limits for 2017

The IRS recently released its Rev. Proc. 2016-55, including these health and welfare plan inflation-adjusted limits for 2017:

  • Requirement to Maintain Minimum Essential Coverage. For calendar year 2017, the applicable dollar amount used to determine the penalty for failure to maintain minimum essential coverage is $695.
  • Employee Health Insurance Expense of Small Employers. For taxable years beginning in 2017, the dollar amount is $26,200. This amount is used for limiting the small employer health insurance credit and for determining who is an eligible small employer for purposes of the credit.
  • Cafeteria Plans. For the taxable years beginning in 2017, the annual dollar limitation on voluntary employee salary reductions for contributions to health flexible spending arrangements is $2,600.
  • Medical Savings Accounts.
    • Self-only coverage. For taxable years beginning in 2017, the term "high deductible health plan" means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,250 and not more than $3,350, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,500.
    • Family coverage. For taxable years beginning in 2017, the term "high deductible health plan" means, for family coverage, a health plan that has an annual deductible that is not less than $4,500 and not more than $6,750, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,250.

Final Instructions for Forms 1094-C and 1095-C

The IRS recently released the 2016 Forms and Instructions for 6055 and 6056 reporting. Under the Patient Protection and Affordable Care Act (ACA), individuals are required to have health insurance, while applicable large employers are required to offer health benefits to their full-time employees. In order for the IRS to verify that individuals and employers have met their requirements under the ACA, employers with 50 or more full-time or full-time equivalent employees and insurers are required to report on the health coverage they offer. UBA released an Advisor that describes the final instructions for using Forms 1094-B, 1095-B, 1094-C, and 1095-C.

HIPAA Privacy Notice Deadline

HIPAA requires health plans to distribute:

  • a notice of privacy practices (NPP) to all newly eligible participants in the health plan,
  • a new NPP within 60 days of a material change to the notice, and
  • a notice of NPP availability to all participants once every three years.

In most cases, the insurer is likely handling notice distribution if the plan is fully-insured; the plan sponsor is generally responsible for notice distribution if the health plan is self-funded.

Under the HITECH regulations, effective September 23, 2013, all plans were required to revise their NPPs by September 23, 2013. This means that many employers, who have opted not to provide the notice annually, are likely due to provide the notice again in 2016.

For a health plan that posts its notice on its website, the revised notice (or information about the material changes and how to get a copy) had to be sent to participants in the health plan's next annual mailing after September 23, 2013, the effective date of the revisions.

For a health plan without a website, the health plan had to distribute the revised notice (or information about the material change and how to get a copy) to participants within 60 days of the effective date of the material change.

Because HIPAA requires health plans to provide notice of NPP availability to all participants once every three years, if a health plan has not already send its notice of NPP availability this year, then it should do so within the three-year deadline of when it complied with the final regulations in 2013.

HHS Issues Guidance on HIPAA and Cloud Computing

HHS provided guidance that cloud services providers (CSP) are business associates under HIPAA when a covered entity engages a CSP's services to create, receive, maintain, or transmit electronic protected health information (ePHI).

Further, when a business associate subcontracts with a CSP to create, receive, maintain, or transmit ePHI on its behalf, the CSP subcontractor itself is a business associate.

HHS explains that this business associate relationship exists even if the CSP processes or stores only encrypted ePHI and lacks an encryption key for the data. According to HHS, lacking an encryption key does not exempt a CSP from business associate status and obligations under the HIPAA Rules. Practically speaking, the covered entity (or business associate) and the CSP must enter into a HIPAA-compliant business associate agreement (BAA), and the CSP is both contractually liable for meeting the terms of the BAA and directly liable for compliance with the HIPAA rules' applicable requirements.

DOL OSHA Final Regulation Regarding Employee Retaliation and Whistleblower Protection

On October 13, 2016, the Department of Labor's Occupational Safety and Health Administration (OSHA) issued final regulations governing employee retaliation and whistleblower protection under the Fair Labor Standards Act (FLSA) Section 18C, which was added under health care reform.

Section 18C protects employees who may have been subject to retaliation for receiving premium tax credits for coverage purchased on an Exchange, of for reporting potential violations of key health care reform requirements (such as the prohibition on rescission or provision of preventive services without cost-sharing). This type of FLSA compliance must be filed within 180 days of the time when the alleged violation occurs. OSHA's website has an online complaint form, although no particular form is required and a complaint may be oral or in writing.

Read about the final regulations.

IRS Information Letter 2016-0051 Regarding Taxability of Employer Contributions to Health Care Sharing Ministry

The IRS answered the question of whether an employer can contribute to the premiums of employees who decline employer group health plan coverage and instead participate in a health care sharing ministry (HCSM).

Per the IRS, because participation in an HCSM is not employer-provided coverage under an accident or health plan, the law does not exclude employer payment for the cost of employee participation from the employee's gross income. Instead, the law considers it as taxable income and wages to the employee.

CMS FAQ on Off-Marketplace Enrollment Periods for Stand-Alone Dental Plans

CMS recently released an FAQ stating that Exchange-certified stand-alone dental plans offered off-Exchange may accept enrollments outside the Exchange enrollment periods.

Enforcement Relief Extension for Higher Education Institutions Offering Student Premium Reduction Arrangements

On October 21, 2016, the Department of Labor, Department of Health and Human Services, and Department of the Treasury released an FAQ to extend enforcement relief for higher education institutions offering premium reduction arrangements to their students. Pending further guidance, the Departments will not assert that a premium reduction arrangement fails to satisfy the annual dollar limits prohibition and preventive services requirement if the arrangement is offered in connection with other student health coverage (insured or self-insured). UBA released an Advisor regarding the agencies' enforcement relief extension.

IRS Health Care Tax Tip

On October 26, 2016, the IRS released its Health Care Tax Tip 2016-75 that provides seven reporting tips.

1.     The health care law requires applicable large employers (ALEs) to report information about health insurance coverage offered to its full-time employees and their dependents as well as to the IRS.

2.     ALEs must report information about themselves, the coverage they offered - if any - and the individuals covered under the policy.

3.     ALEs are required to furnish a statement to each full-time employee that includes the same information provided to the IRS by January 31, 2017.

4.     ALEs that file 250 or more information returns during the calendar year must file the returns electronically.

5.     ALEs must file Form 1095-C Employer-Provided Health Insurance Offer and Coverage with the IRS annually, no later than February 28, 2017, or March 31, 2017, if filed electronically. Forms 1095-C are filed accompanied by the transmittal form, Form 1094-C.

6.     Self-insured employers that are applicable large employers, and therefore are also subject to the information reporting requirements for offers of employer-sponsored health insurance coverage, must combine reporting under both provisions by filing a single information return, Form 1095-C, and transmittal, Form 1094-C.

7.     The ACA Assurance Testing System opens November 7, 2016, for tax year 2016 testing. Software developers - including employers and issuers who passed AATS for tax year 2015 - will not have to retest for tax year 2016; the Tax Year Software Packages will be moved into Production status. New participants need to comply with test requirements for tax year 2016.

FAQs About Preventive Services Coverage and Mental Health and Substance Use Disorder Parity Implementation

On October 27, 2016, the Treasury, DOL, and HHS (collectively, the Departments) issued "FAQs About Affordable Act Implementation Part 34 and Mental Health and Substance Use Disorder Parity Implementation."

In their FAQs, the Departments seek public comment by January 3, 2017, on tobacco cessation coverage. The Departments intend to clarify the items and services that must be provided without cost sharing to comply with the United States Preventative Services Task Force's updated tobacco cessation interventions recommendation applicable to plan years or policy years beginning on or after September 22, 2016.

In their FAQs, the Departments also seek public comment by January 3, 2017, on potential model forms that could be used by participants and their representatives to request information on various nonquantitative treatment limitations (NQTLs). The Departments also seek public comment on the disclosure process in connection with mental health / substance use disorder (MH/SUD) benefits and on steps that could improve state market conduct examinations or federal oversight of compliance by plans and issuers, or both.

Their FAQs also answered questions about receiving help in obtaining documents and interpreting documents related to MH/SUD benefit denial. Participants may use the Parity Consumer Web Portal to connect to an agency for help.

Further, their FAQs discussed the data that a plan or issuer can use to conduct its analyses. Under the Departments' regulations pursuant to the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), group health plans and issuers must use a "reasonable method" for the MHPAEA's substantially all and predominant analyses, which includes using reasonable data to produce reasonable projections.

Group health plans and issuers should not use claims data from an issuer's or third party administrator's entire book of business in an unreasonable manner to calculate the amount of a particular group health plan's or issuer's payments under MHPAEA. The Departments clarify that, for large group market and self-insured group health plans, a group health plan or issuer must consider group health plan-level claims data to perform the substantially all and predominant analyses and must rely on such data if it is credible to perform the required projections.

The FAQs state that the MHPAEA regulations do not permit a plan or issuer to apply stricter NQTLs to all benefits for mental health conditions in a classification than those applied to all medical/surgical benefits in the same classification. Further, the Departments' regulations require that a plan or insurance issuer may not impose an NQTL with respect to MH/SUD benefits in a benefit classification unless, under the terms of the plan as written and in operation, the processes, strategies, evidentiary standards, or other factors used in applying the NQTL are comparable and applied no more stringently with respect to MH/SUD benefits than with respect to medical/surgical benefits in the same classification.

Final Regulations Regarding Short-Term Limited Duration Insurance, Excepted Benefits, and Lifetime / Annual Limits

On October 31, 2016, the Department of the Treasury, Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively, the Departments) issued final regulations regarding the definition of short-term, limited-duration insurance, standards for travel insurance and supplemental health insurance coverage to be considered excepted benefits, and an amendment relating to the prohibition on lifetime and annual dollar limits.

Read about the final regulations.

Question of the Month

Q. An employer has a United States division with fewer than 20 employees; the parent company is located in a foreign county. Can the United States division's employee count be separated from the parent company for COBRA eligibility determination?

A. The USA division cannot be treated separately from its parent company for the purpose of employee count for COBRA eligibility determination. However, be aware that if the employer has immunity under the Foreign Sovereign Immunities Act, then COBRA would not apply. The employer's attorney must determine if this immunity applies.

Most employers are obligated to follow COBRA's rules if they provide group health plans. There is also an exemption for small employers who normally employed fewer than 20 employees on a typical business day in the year preceding the year for which exemption is sought. The typical business day standard is satisfied only if the employer had fewer than 20 employees on at least 50 percent of its typical business days during the preceding calendar year.

COBRA does not address the situation of a domestic subsidiary of a foreign corporation. To resolve the issue, the courts have determined that COBRA does not apply at all to any employer that is immune from jurisdiction pursuant to the Foreign Sovereign Immunities Act (FSIA) because it is a foreign state or instrumentality of that state.

In a Ninth Circuit case, employees sued a British Columbia processing plant and its parent corporation for violating COBRA. The court determined that the parent corporation was an agent of the Alberta province and thus immune from jurisdiction so COBRA did not apply to the parent corporation. However, the court found that the British Columbia processing plan did not fall within FSIA and that the processing plan was subject to COBRA.

In a separate case, a corporation located in Puerto Rico claimed that it was an exempt small employer. It employed 27 people; the corporation argued that, under Puerto Rico law, the employer's 2 owners and 7 relatives should not be counted as employees. The court disagreed and applied COBRA's definition of employee. The court held that the corporation was subject to the COBRA continuation coverage requirements.

Further, under controlled group rules, foreign corporations are not excluded from membership in a controlled group of corporations. Controlled group analysis is complex so the employer should consult with its attorney to determine whether the group is a controlled group.

 

Content provided by our partner, United Benefits Advisers, (UBA)


2016 Health Plan Survey: Topline Trends at a Glance

Great review of the 2016 Health Plan Survey from our partner, United Benefit Advisors (UBA) by Jason Reeves

The 2016 UBA Health Plan Survey contains the validated responses of 19,557 health plans and 11,524 employers, who cumulatively employ over two and a half million employees and insure more than five million total lives. Our data reflects the experiences of 99% of U.S. businesses in rough proportion to their actual prevalence, not just the largest employers who are often the sole focus in other surveys. As a result, our findings are extensive, so we’ve compiled a topline list of the biggest trends below.

Cost-shifting, plan changes and other protections work to hold rates steady.

  • Increased prevalence and enrollment in lower-cost CDHP and HMO plans.
  • “Grandmothered” employers continue to have the options they need to select cheaper plans (ACA- compliant community-rated plans versus pre-ACA composite/health-rated plans) depending on the health status of their groups.
  • The Protecting Affordable Coverage for Employees (PACE) Act protects employers with 51 to 99 employees from higher-cost plans.
  • Increased out-of-network deductibles and out-of-pocket maximums, as well as prescription drug cost shifting, are among the plan design changes influencing premiums.
  • UBA Partners leverage their bargaining power.

Overall costs vary significantly by industry and geography.

  • Retail, construction and hospitality employees cost the least to cover; government employees (the historical cost leader) cost the most.
  • Plans in the Northeast cost the most; plans in the Central U.S. cost the least.
  • Retail and construction employees pay the most toward their coverage; government employees pay the least (bad news for taxpayers).

Plan design changes strain employees financially.

PPOs, CDHPs have the biggest impact.

  • Preferred provider organization (PPO) plans cost more than average, but still dominate the market.
  • Consumer-directed health plans (CDHPs) cost less than average and enrollment is increasing.

Overall, wellness program adoption holds steady, but program design is changing.

  • Health risk assessments continue to decline, while chronic condition coaching is on the rise.

Metal levels drive plan decisions.

  • Most plans are at the gold or platinum metal level. In the future, we expect this to change since it will be more difficult to meet the ACA metal level requirements and still keep rates in check.

Key trends to watch in 2017:

  • Slow, but steady: increase in self-funding for all group sizes, decrease in employees electing dependent coverage, increase in plan options, and mail order pharmaceutical programs more for convenience than cost savings.
  • Cautious trend: increased CDHP prevalence/enrollment.
  • Rapidly emerging: increase of five-tier prescription drug plans, increased out-of-pocket maximums.

See the original article Here.

 


Proposed Summary of Benefits and Coverage Template and Updates

Original post ubabenefits.com

A Summary of Benefits and Coverage (SBC) is four-page (double-sided) communication required by the federal government. It must contain specific information, in a specific order and with a minimum size type, about a group health benefit's coverage and limitations. In February 2016, the Department of Labor (DOL) issued proposed revisions to the template and related materials. The agency expects final templates and materials to apply to plan or policy years beginning on or after January 1, 2017. The proposal includes both a blank template and a sample completed template along with instructions for completion. The agency has also invited public commentson the proposed template, to be submitted on or before March 28, 2016. All information about current and proposed SBCs, including a proposed uniform glossary and more can be found on the DOL's website.

For fully insured plans, the insurer is responsible for providing the SBC to the plan administrator (usually this is the employer). The plan administrator and the insurer are both responsible for providing the SBC to participants, although only one of them actually has to do this.

For self-funded plans, the plan administrator is responsible for providing the SBC to participants. Assistance may be available from the plan administrator's TPA, advisor, etc., but the plan administrator is ultimately responsible. (The plan administrator is generally the employer, not the claims administrator.)

Proposed Changes

The proposed template is shorter than the original four-page (double sided) communication. It includes a new "important question" that asks "Are there services covered before you meet your deductible?" and requires family plans to disclose whether or not the plan has embedded deductibles or out-of-pocket limits. This is reported in the "why this matters" column in relation to the question "what is the overall deductible?" and plans must list "If you have other family members on the policy, they have to meet their own individual deductible until the overall family deductible has been met" or alternatively, "If you have other family members on the policy, the overall family deductible must be met before the plan begins to pay."

Tiered networks must be disclosed and the question "Will you pay less if you use a network provider" is now included. The proposed SBC also includes language that warns participants that they could receive out-of-network providers while they are in an in-network facility. The SBC also indicates a consumer could receive a "balance bill" from an out-of-network provider.

The "explanatory coverage page" was dropped from the proposed template.

The provided coverage examples provide clarification to the "having a baby" example and the "managing type 2 diabetes" example, in addition to providing a third example of "dealing with a simple fracture." The coverage example must be calculated assuming that a participant does not earn wellness credits or participate in an employer's wellness program. If the employer has a wellness program that could reduce the employee's costs, they must include the following language: "These numbers assume the patient does not participate in the plan's wellness program. If you participate in the plan's wellness program, you may be able to reduce your costs. For more information about the wellness program, please contact: [insert]."

The column for "Limitations, Exceptions, & Other Important Information" must contain core limitations, which include:

  • When a service category or a substantial portion of a service category is excluded from coverage (i.e., column should indicate "brand name drugs excluded" in health benefit plans that only cover generic drugs);
  • When cost sharing for covered in-network services does not count toward the out-of-pocket limit;
  • Limits on the number of visits or on specific dollar amounts payable under the health benefit plan; and
  • When prior authorization is required for services.

The proposed template and instructions indicate that qualified health plans (those certified and sold on the Marketplace) that cover excepted abortions (such as those in cases of rape or incest, or when a mother's life is at stake) and plans that cover non-excepted abortion services must list "abortion" in the covered services box. Plans that exclude abortion must list it in the "excluded services" box, and plans that cover only excepted abortions must list in the "excluded services" box as "abortion (except in cases of rape, incest, or when the life of the mother is endangered)." Health plans that are not qualified health plans are not required to disclose abortion coverage, but they may do so if they wish.