by US Rx Care | Mar 17, 2021 | Uncategorized
Ever since the Affordable Care Act was enacted, critics of the law have said that employers would cut staff or reduce workers’ hours to avoid coming under the employer mandate requiring them to provide coverage for their staff.
But employers that decided to go that route could find themselves in a costly legal trap thanks to precedent-setting case that has been cited often by judges when confronted with challenges.
Workers at Dave & Buster’s, a restaurant chain, in July 2015 filed a lawsuit in the Southern District of New York alleging that the national restaurant chain reduced their hours to keep them from attaining full-time status for the purpose of avoiding the requirement to offer them health coverage under the ACA’s employer mandate.
In February 2016, the federal judge in the case, in declining the employer’s motion to dismiss the case, cited its likely breach of the Employee Retirement Income Security Act (ERISA), which prohibits employers from interfering with a worker’s right to benefits.
This case is significant because many other employers have implemented similar strategies striving to limit work hours for certain groups of employees for the purpose of avoiding penalties under the ACA.
Some background
The ACA’s employer mandate generally requires large employers (those with 50 or more full-time workers or full-time equivalent employees) to offer affordable and minimum value health coverage to their full-time employees (employees who regularly work an average at least 30 hours per week).
Employers are not generally required to offer coverage to employees working less than 30 hours per week on average.
Since the employer mandate took effect, many employers have been moving employees to part-time status to avoid triggering penalties under the employer mandate.
Why the case is important
The Dave & Buster’s employees alleged that the company violated ERISA by cutting their hours. They cited Section 510 of ERISA, which prohibits employers from discriminating against any participant or beneficiary for exercising a right under ERISA or an ERISA benefit plan.
The workers alleged that by reducing employees’ hours to keep them below the 30-hour weekly average to qualify as a full-time employee, Dave & Buster’s interfered with the attainment of the affected employees’ right to be eligible for company health benefits.
Dave & Buster’s in October 2015 filed a motion to dismiss the case, but the Southern District of New York federal judge denied the motion in February 2016.
The law firm of McDermott Will & Emery in its blog highlighted the importance of the decision, stating, “The opinion focuses on ERISA Section 510 and holds that the plaintiff has a viable claim that reducing her work hours was done for the purpose of interfering with her right to benefits under the company health plan.
“Second, the opinion finds that the complaint successfully alleged the employer’s ‘unlawful purpose’ and intention to interfere with benefits, pointing to allegations that company representatives publicly stated that they were reducing the number of full-time employees to avoid ACA costs.”
The law firm noted that the decision has given plaintiff’s attorneys a model for filing similar complaints when employers reduce hours to avoid their obligations under the ACA.
It also noted that if judges in other cases deny employers’ motions to dismiss cases, it will put the employer in a more difficult position because the employees’ attorneys will be able to take discovery and depositions, and to compel document production.
Any signs or proof of reducing hours to avoid their obligations under the ACA will make defending the case even more difficult, McDermott Will & Emery wrote.
If you have trimmed hours to avoid the employer mandate, or if you are contemplating doing so, it’s best that you first discuss these plans with your company lawyer.
by US Rx Care | Mar 10, 2021 | Uncategorized
The newly enacted Consolidated Appropriations Act, 2021 contains a number of provisions that will affect group health plans, with most changes aimed at helping insured workers with flexible spending accounts (FSAs), cost transparency and surprise billing.
Some of the provisions are permanent while others are temporary, slated to run through the anticipated end of the COVID-19 pandemic. Here’s a look at the highlights that will affect employer-sponsored health benefits.
FSA carryover rules loosened
The new law authorizes employers to amend their cafeteria plans and FSAs to either:
- Allow participating staff to carry over unused amounts from the 2020 plan year to the 2021 plan year (and from 2021 to 2022 as well), or
- Provide a 12-month period at the end of the 2020 and 2021 plan years.
Under existing law, employers can only allow employees to carry over $550 from one plan year to the next.
The law also allows employees who stop participating in their FSA because they were terminated to continue receiving reimbursement from unused funds through the end of the year during which they stopped participating.
Finally, under the CAA, employees can change how much they set aside into their FSA mid-year (usually they can only change their contribution levels ahead of a new plan year).
In all of the above cases, employers must approve these changes and update them in their plan documents.
Health plan transparency
The CAA also bars “gag clauses,” which bar health insurers from entering into contracts that restrict a plan from accessing and sharing certain information. This is effective as of Dec. 27, 2020.
The goal of these new rules is to increase transparency in pricing and quality information for health care consumers and plan sponsors.
In addition, there are new requirements for health plan ID cards for enrollees, and they will be required to include the following information starting with the 2022 plan year:
- Deductibles that are applicable to their coverage
- Out-of-pocket maximum limits
- Phone number and website address that enrollees can access for assistance.
Surprise billing
The CAA also created the No Surprises Act, which will, starting with the 2022 plan year, cap a plan enrollee’s cost-sharing obligations for out-of-network services to the plan’s applicable in-network cost-sharing level for the following three categories of services:
- Emergency services performed by an out-of-network provider or facility, and post-stabilization care if the patient cannot be moved to an in-network facility;
- Non-emergency services performed by out-of-network providers at in-network facilities, including hospitals, ambulatory surgical centers, labs, radiology facilities and imaging centers; and
- Air ambulance services provided by out-of-network providers.
The takeaway
With so many changes, employers who sponsor group health plans for their workers need to have a plan to make sure they and their health plans comply.
What to do now: If you offer FSAs to your staff and want them to be able to carry over funds from 2020 to 2021, and next year as well, you will need to make those changes to your plan documents.
Employers that sponsor group health plans should review their agreements with their health insurers and ensure that their plan contractors include language indicating that the contract complies with the prohibition on gag clauses.
What to prepare for: Starting with the 2022 plan year, employers should check with us or their insurer to make sure that the transparency changes are reflected in their plan documents and that their employees’ health plan cards also include the changes required by the new law.
Plans should also reflect the new rules created by the No Surprises Act.
by US Rx Care | Mar 2, 2021 | Uncategorized
The Centers for Medicare and Medicaid Services announced in late February that private group health plans cannot deny coverage or impose cost-sharing for COVID-19 diagnostic testing, regardless of whether or not the patient is experiencing symptoms or has been exposed to someone with the disease.
The CMS said it had issued the new guidance to make it easier for people to get tested with no out-of-pocket costs if they are planning to visit family members or take a flight, for example. Up until now, some health plans have not covered testing if a person is not experiencing symptoms or has not come into contact with someone who is later confirmed as being infected with COVID-19.
The guidance covers the part of the Families First Coronavirus Response Act of 2020 that required that plans and issuers must cover COVID-19 diagnostic testing without any cost-sharing requirements, prior authorization or other medical management requirements. Still, many people were denied getting tests because they had no symptoms or hadn’t been exposed to someone infected with the virus.
According to the guidance:
“Plans and issuers must provide coverage without imposing any cost-sharing requirements (including deductibles, copayments, and coinsurance), prior authorization, or other medical management requirements for COVID-19 diagnostic testing of asymptomatic individuals when the purpose of the testing is for individualized diagnosis or treatment of COVID-19.
“However, plans and issuers are not required to provide coverage of testing such as for public health surveillance or employment purposes. But there is also no prohibition or limitation on plans and issuers providing coverage for such tests.”
by US Rx Care | Feb 23, 2021 | Uncategorized
Thanks to stresses brought on by the COVID-19 pandemic, employee assistance programs have become more popular and crucial than ever before.
EAP managers report a surge in call volume from workers that need mental health help as they face the stresses of potentially becoming infected by the virus, losing a loved one or a friend to COVID-19 or financial problems due to reduced hours or a partner being laid off.
If you have an EAP, now is the right time to promote the program among your employees so those who really need it can get the help they need. Also, since you are likely paying for the EAP, there’s more incentive for you now to get your workers to take advantage of its offerings.
EAPs are obviously beneficial to workers when they are in trying times or dealing with a life emergency. When employees access EAPs during hard times, that also benefits the employer in the form of fewer days away from work and reduced presentism, which is defined as being at work but not being productive due to issues that may be weighing on the employee.
The “2020 Annual Report for the Workplace Outcome Suite” found that workers who access their EAPs significantly increase their productivity once they have had accessed their program and received counseling.
The study found that return on investment for employers depended on their size:
Small employers’ ROI — 3:1. Average cost savings per employee: $2,000.
Medium-size employers’ ROI — 5:1. Average cost savings per employee: $2,500.
Large employers’ ROI — 9:1. Average cost savings per employee: $3,000.
For workers the results are also strong. Another study, this one conducted on 56 EAP vendors by the National Behavioral Consortium, found that after EAP use:
- 86% of EAP-using workers had clinical improvements from the help they received.
- 86% improved their work productivity.
- 64% had fewer days off from work.
- 94% reported that they were satisfied with the service.
What an EAP offers
EAPs are a work-based intervention program designed to identify and assist employees in resolving personal problems that may be adversely affecting their performance at work.
Services offered vary, but some of the more common ones include:
Resolving workplace personality conflicts — Advice and suggestions on how to work with a difficult manager or co-worker.
Drug addiction prevention — Advice on how to deal with the employee’s addiction, or how to deal with a family member’s addiction.
Counseling — This can cover any mental health issue an employee or family member is dealing with, including depression, anxiety, anger management, or other needs an employee or their family members may be dealing with, as well as grief counseling.
Health and caregiving assistance — How best to manage return-to-work issues after a workers’ comp claim, manage a disability or medical issue at work or obtain help for an ill or elderly loved one.
Legal and family assistance — Marriage counseling, divorce, or child custody advice.
Financial counseling — How to avoid bankruptcy, pay down credit card debt or create a budget.
A note about confidentiality: Employers do not get to know who is utilizing the service, what the reasons are or how often employees call, due to Health Insurance Portability and Accountability Act regulations.
Get the word out
EAPs are only worthwhile for the employer and employee if they are utilized. Often your workers suffer in silence and you are unlikely aware of the stresses and troubles they may be facing in their personal lives that can spill over into their work lives.
That’s why it’s important that you get the word out among your employees about your EAP. Let them know that accessing the program is done in full confidentiality and nothing is shared with the employer. They should be urged to take advantage of the services if they are under pressure in their lives.
That will help both you the employer and your staff. If you do not have an EAP in place, call us and we can help you.
by US Rx Care | Feb 16, 2021 | Uncategorized
As the COVID-19 pandemic drags on and many Americans see unmet needs outside of their health insurance, more and more workers are increasingly signing up for the voluntary benefits their employers offer.
While many workers in the past had skipped on voluntary benefits, they have grown concerned that a good group health insurance plan may not be enough to provide all the coverage they need.
It’s important for employers to react to this trend as the pandemic has put many people on edge about how they can continue to pay the bills if they are laid up with COVID-19, and especially if they have long-haul symptoms that have plagued some people for months after first getting sick.
Employers who fail to upgrade offerings could see higher turnover and more difficulty in retaining and attracting talent.
More employers have added these insurance products to their voluntary benefit offerings. According to a recent Aflac survey, more than 80% of employers are looking at offering insurance plans that cover costs associated with coronavirus or a future pandemic.
Also, many insurers are actively developing new plans and enhancing existing plans that pay benefits for prevention, diagnosis and treatment of a variety of virus strains.
Extra peace of mind
Voluntary benefits offer both employers and employees added peace of mind in uncertain times. These plans serve a dual role: In addition to helping pay expenses health insurance doesn’t cover, they also serve as a financial safety net if covered illnesses arise as complications of the coronavirus.
There are a number of plans that can provide coverage that would be outside the scope of health insurance, including:
- Hospital indemnity insurance – This is a supplemental plan designed to pay for the costs of a hospital admission that may not be covered by other insurance. It will cover out-of-pocket expenses like medical copays, deductibles and regular expenses, such as food, rent and utilities.
- Critical illness insurance – These plans pay out in the event of covered critical illnesses. This insurance can help alleviate financial worries during a serious illness by providing a lump-sum cash payment to the insured person when they’re diagnosed with a specific critical illness. The benefit provides cash at a time when it may be needed most.
- Life insurance – In case the unthinkable happens.
- Disability insurance – These plans pay benefits when insureds are unable to work due to covered illnesses or injuries. If you have disability insurance and become injured or sick and lose your ability to work, you’ll get paid monthly disability insurance benefits to cover your lost income.
Disability insurance can be bought individually, but many employers offer long-term and short-term disability insurance as part of an employee benefits package, like health insurance.
The pandemic has highlighted the need for these and other employee benefits that take care of the whole individual, rather than focusing on just health insurance.
Executives at insurers that offer these products say that as Americans struggle to balance their work and home lives, particularly if they work from home as a result of the pandemic, they are looking to their employers for more support to help cover holes in their benefits.
The key: Education
If employers have too many voluntary benefit offerings and don’t do a good job of explaining how they complement each other, it can only lead to confusion among their employees. And if they are confused, the chance that they will opt for any of the plans is greatly diminished.
That’s why education about the products, and how if set up properly they can provide a powerful level of protection for a variety of events, is crucial. If you’re interested in expanding the voluntary benefits you offer your employees, now is the time. We can help you get the ball rolling and help educate your staff on their choices and why they are important.
by US Rx Care | Feb 11, 2021 | Uncategorized
Drugmakers increased more brand-name list prices this January than in any other January in the past 10 years.
The month is marked by drug price increases every year, but a review by the nonprofit 46brooklyin found that pharmaceutical companies had pushed through 929price increases in the first 25 days of the year. That’s more than the 737 price hikes they made in all of January 2020.
46brooklyn also examined the top 25 drugs by gross spending in Medicare Part D and found that the pharmaceutical companies had increased the prices of 20 of them by an average of 4.3% in January.
The median 2021 price hike by all drugmakers was 4.9% so far. 46brooklyin surmised that the drug companies were using the COVID-19 crisis and the free vaccines for people to push through higher prices.
The median increase thus far compares with 5% in 2020. 46brooklyn noted that “Essentially, while the number of price increases is up, other measures are showing trends that are not materially out of step with prior years.”
The company cited Pfizer, the first company to gain approval for its COVID-19 vaccine in the U.S., which raised the prices of 193 of its name-brand drugs in the first 25 days of the year. That’s compared with increases for 81 drugs in all of January 2020, a month that also included price decreases for 20 medicines. In January 2019, Pfizer raised the prices of 49 drugs and lowered the price of one drug.
While Pfizer’s median increase was 0.5% this January, the average hike for the company’s most popular brand-name drugs was 5%. The latter includes price increases for popular medications like Xeljanz, which treats rheumatoid arthritis, psoriatic arthritis and ulcerative colitis; Lyrica, used for nerve and muscle pain; Ibrance, a breast cancer inhibitor; and the sedative Xanax.
Interestingly, the surge in price hikes comes after a slow 2020, when the list prices for brand-name drugs grew at their slowest pace in two decades, according to 46brooklyn.
A continuing trend
The price rises are a continuation of a decades-long trend. According to a 2020 study published in the Journal of the American Medical Association, the net cost of medicine went up three times faster than the general rate of inflation during the past decade.
Specialty drugs are the main drivers of rising prices. They account for about half of total spending even though they only make up 2.2% of prescription volume.
It should be noted here that patients rarely pay the list price for drugs, and neither do insurers which contract with pharmacy benefit managers to reduce their drug outlays. Final costs for people will vary depending on their insurance, deductibles and copays.
Also, the actual — or net — price, is greatly affected by rebates and discounts from the list price. These numbers are never revealed to patients and many large PBMs continue to keep these figures secret.
