by US Rx Care | Aug 12, 2020 | Uncategorized
New guidance from the Trump administration absolves insurers of the responsibility of paying for COVID-19 tests that are required for workers who are returning to the job.
The guidance, released by the departments of Health and Human Services, Labor and Treasury, means that employers will likely either have to foot the bill themselves as they screen workers during the pandemic or pass those costs on to their workers. But in states that require employers to test workers, passing testing costs on to staff is usually not an option.
There had been some confusion about who would pay for the tests after the Families First Coronavirus Response Act required insurers to cover COVID-19 tests without patient cost-sharing. The new guidance has added a new caveat to that rule: that insurers cannot require health plan enrollees to pay for the test if it is deemed “medically appropriate” by a health care provider.
“Testing conducted to screen for general workplace health and safety (such as employee “return to work” programs), for public health surveillance for SARS-CoV-2, or for any other purpose not primarily intended for individualized diagnosis or treatment of COVID-19 or another health condition, is beyond the scope of section 6001 of the [Families First Coronavirus Response Act],” the guidance states.
Resistance from advocacy groups
The guidance was met with resistance from employer and consumer groups, with the advocacy group Families USA arguing that the nation’s workers should not be saddled with additional costs during these economically uncertain times.
Employers can require employees to be tested before returning to work, but the Pacific Business Group on Health said it would be highly unusual for a large employer to require testing for employees without paying for the tests in full.
Democrats have asked the administration to withdraw the guidance, but the White House has said it won’t and that it would like to see Congress come up with a solution in its next economic stimulus package for the coronavirus pandemic.
The HHS has said that states should use the $10.25 billion that lawmakers appropriated for testing to help pay for tests of returning workers.
Insurance companies may opt to pay for such tests anyway, as a precautionary measure. America’s Health Insurance Plans, however, is calling on more government support to cover the costs, which it says could be between $6 billion and $25 billion annually.
by US Rx Care | Aug 6, 2020 | Uncategorized
A study has come out predicting that COVID-19, as devastating as it has been, will have little effect on 2021 group health plan rates, as well as offerings.
The study, by eHealth Inc., also found that many insurers have increased utilization of telemedicine and that many of them are extending benefits related to coronavirus testing and treatment.
Here are the main points of the study:
Waiving COVID-19 testing costs ― 97% of insurer respondents say they are waiving out-of-pocket costs for coronavirus testing.
Waiving treatment costs ― 58% of the insurers say they’re waiving out-of-pocket costs for COVID-19 treatment. Among insurers who say they have done this, 80% say they have waived all out-of-pocket costs, while 20% say they have waived only a portion of members’ out-of-pocket expenses.
Premium assistance ― 60% of carriers are letting enrollees financially affected by the coronavirus defer premium payments.
Few anticipate raising 2021 premiums due to coronavirus – 83% say they do not anticipate raising rates for 2021 in response to the crisis, while 17% anticipate raising rates no more than 5%. Eighty-seven percent of respondents offering Affordable Care Act plans say it is unlikely they will leave the ACA market due to the coronavirus.
More telemedicine services ― 96% of insurers say they are seeing increased demand for telemedicine services that include virtual doctor visits. Eighty-five percent think the crisis will drive increased demand for telemedicine benefits into the future.
Elective or non-emergency services spike – 80% of insurers expect a spike in these claims after the crisis is over. Seventy-three percent of those who anticipate this believe it will come within the next six to 12 months.
More use of mental health benefits – 33% of insurers surveyed say they have seen an increase in utilization of mental health benefits by members since the beginning of the coronavirus crisis.
Rate hikes, but more involvement
The Centers for Medicare and Medicaid Services has predicted that the country could spend $4 trillion on all forms of health care this year, which is 5.2% higher than in 2019.
Willis Towers Watson’s “COVID-19 Benefits Survey” estimates that due to COVID-19 testing and treatment, health insurance premiums could increase as much as 7% on top of the 5% increase employers previously projected for 2021.
At the same time, the survey found that despite facing unprecedented challenges and rapidly shifting business priorities due to COVID-19, many organizations are taking steps to protect the health and wellbeing of their employees. In particular, it found that:
- Employers are focusing on promoting virtual medical care by raising awareness and reducing point-of-care costs.
- Over 80% of employers have or are planning to offer expand access to virtual mental health services.
- About two in five employers are planning to revise their 2021 health care strategy.
- Nearly two-thirds of companies will prioritize access to mental health solutions in their 2021 health care program.
- Employers are looking to communicate more on existing benefits.
- Employers plan to enhance mental health services and stress management.
- Companies are addressing benefits for employees on leave and furlough.
by US Rx Care | Jul 28, 2020 | Uncategorized
Watching their group health plan premiums climb higher with each passing year, some employers start looking into alternative funding strategies in hopes they can get a better handle on their employees’ health costs.
While group plans are the standard, larger employers have typically had more options for funding their group health coverage. But now even small and medium-sized employers – even companies with fewer than 100 employees – can benefit from alternative funding approaches.
There are three main types of alternative funding strategies that are available to employers:
- Captives
- Private exchanges
- Full and partial self-funding.
Captives
With a captive, multiple employers pool their resources and share the risk in providing health insurance to their employees. It is essentially a self-insured pool built into a captive insurance company (an insurer that is owned by the entity that created it). The captive has staff that will administer the health plan.
Captives are also multi-year agreements, so once an employer commits to make it worth their investment, they need to stick with it for a period of time.
Group captives will often have a specific funding mechanism that is broken down into four layers:
Layer 1: The employer is responsible for the first $25,000 of any claim made by one of its employees.
Layer 2: All employers involved in the captive will share the costs of that claim if it exceeds $25,000, up to $250,000.
Layer 3: For claims that cost more than $250,000, the captive will secure reinsurance coverage to cover amounts above that level. This reinsurance is also called “stop-loss” insurance.
Layer 4: Another layer of protection known as “aggregate stop-loss” coverage protects each employer in the captive for the total claims of their employees, ranging from 115% to 125% of expected claim costs in a year.
Private exchanges
Typically, businesses using a private exchange will offer employees a credit that can be applied toward the purchase of a health plan. Employees can then access a variety of health plans through an online portal and can chose and enroll in plans that meet their needs.
Private exchanges are run by insurance carriers or consultancies, and plans on the exchange are regulated as group coverage. Employees shopping on these exchanges are not eligible for the Affordable Care Act’s tax credits or cost-sharing subsidies.
Most employers currently using private exchanges are large; therefore, most private exchange plans are regulated as large-group coverage and are not part of the ACA’s single risk pool. However, to the extent that smaller employers participate in private exchanges, they are subject to the ACA’s small-group rating regulations and risk-pool requirements.
One of the main features of private exchanges is that they enable employees to comparison-shop among multiple health insurance plans.
Self-insuring
There are many different types of self-insurance, from minimum-premium or risk-sharing arrangements to a fully self-funded plan, in which the employer is responsible for all claims.
Employers can choose from:
Retrospective premium arrangements – The insurer will credit back a portion of the unused premium to the employer (typically as a credit for the following year). This is often used in a fully insured arrangement.
Minimum premium arrangements – The employer pays fixed costs (administration charges, stop-loss insurance and network access fees) and claim costs up to a maximum liability each month.
Partial self-funding -The employer takes on more liability and pays fixed costs (administration, network access, stop-loss premiums and some fees and taxes). It’s partial self-funding because the employer will purchase individual stop-loss insurance, which caps the employer’s liability on any given claim to a certain amount, say $50,000.
That way, the employer is self-insuring most of their employees’ medical needs, but is protected in case some of those claims become catastrophic.
Full self-funding – This is like partial self-funding except that there is no stop-loss insurance and the employer is responsible for all costs that are not shared by its employees. This kind of arrangement is usually only available to large employers.
The takeaway
These alternative funding approaches are what is available now. But the industry is innovating to making health care and insurance more affordable for all involved.
by US Rx Care | Jul 21, 2020 | Uncategorized
Employment practices and employee benefit-related lawsuits are on the rise – and employers have to be eternally vigilant when it comes to meeting their compliance obligations as plan sponsors.
Take the case of Visteon, a global automotive industry supplier, which outsourced its payroll and enrollment/disenrollment functions to outside plan administrators.
But because of internal mistakes at the firms that Visteon outsourced these noncore HR functions to, some of its former employees who should have received COBRA eligibility notices after leaving the firm never received them. At first it was just a handful, but ultimately 741 co-workers signed on to a class-action lawsuit
Visteon argued in court that it was not its own mistakes that had caused the error, and that it had made a good-faith effort to hire outside experts to take over this function for them. Payroll and enrollment, after all, are not core competencies for an auto parts supplier, the company said, and it had been relying on the expertise of these other payroll companies to properly execute these functions and provide these notices.
The court didn’t buy Visteon’s argument. Rather, it held the company responsible in 2013 for poor internal tracking systems, negligence in overseeing its third party administrators, and failure to accept responsibility for its COBRA notification efforts.
That exposed them to the statutory penalty of $110 per worker per day for failure to provide notification.
In the end, for doing what tens of thousands of employers are doing nationwide – relying on third party administrators to handle payroll functions that are regulated under COBRA – Visteon was slapped with $1.8 million in penalties.
Employers are frequent lawsuit targets
As much as companies rely on their employees to generate profits, simply having them around and administering their benefit plans potentially exposes employers to significant possible liability.
According to a survey from insurer CNA, employment-related disputes are the fastest-growing category of civil lawsuits in America.
Employers face risk from the potential of lawsuits employees may bring for alleged failure to fulfill their fiduciary duties as sponsors of retirement plans under ERISA, for example, or for accidental or unauthorized leaks of personally identifiable information, which carries significant penalties under HIPAA.
Sponsors of defined contribution pension plans, such as 401(k)s, are particularly frequent targets of lawsuits for various fiduciary failures, errors or omissions.
Protecting your firm from legal action
So how can employers protect themselves against the potential costs of employee benefit-related litigation? You should:
- Carefully monitor your plan third party administrators. Insist that they document their own compliance practices to you. Don’t take their word for it.
- Reconcile your own lists of recently departed employees with your payroll company’s COBRA notifications.
- Understand that your commercial general liability insurance policy usually will not cover you against liability arising from improper administration of employee benefit plans, ERISA, COBRA, USERRA, wage and hour laws, Title VII related lawsuits, and the like.
- Consider employment practices liability insurance. This coverage will often protect against lawsuits like this and cover legal expenses, and even judgments.
- Conduct regular reviews with advisers of investments in pension and 401(k) plans. Investments should be reviewed at least annually – and quarterly is not unusual.
- Ensure that fees paid to 401(k) and other plan administrators are not excessive. You don’t have to go with the cheapest provider (that can be trouble, too). But if you do choose a higher-fee vendor, document why you made that decision so that you can show your reasoning in court and defend your decision-making as sound and prudent.
- Invest in data security and HR compliance expertise.
by US Rx Care | Jul 14, 2020 | Uncategorized
Employers whose businesses continue to operate are obviously concerned about the coronavirus spreading through their worksites, so many have started testing their workers.
Recent U.S. Equal Employment Opportunity Commission guidance authorized employers to conduct COVID-19 testing and check temperatures of employees. But doing so could expose a business to a number of employee legal actions from invasion of privacy to discrimination and wage and hour charges, say employment law attorneys.
While the EEOC guidance refers to existing Americans with Disabilities Act regulations requiring that any mandatory medical test of employees be “job related and consistent with business necessity,” it left many questions unanswered.
So, if you decide to start testing workers, you will have to navigate a number of issues, such as:
- Which tests are appropriate?
- What are the standards for protecting workers’ privacy?
- Should employees be paid for the time they wait in line to be tested?
- Should you get written consent?
- How will you ensure that the policy is applied consistently?
Employment law experts say there is often a surge in employee lawsuits when new rules or guidance are being issued, and more so with such a sensitive issue as one’s health during a pandemic.
The kinds of claims that employers may see as a result of employee testing include:
- Invasion of privacy
- Failure to protect employees’ personal health information
- Discrimination
- Retaliation
- Wage and hour actions if waiting for testing takes time.
What you can do
Typically, employers would not be allowed to test a worker’s temperature for a specific disease, but these are unusual times and the threat of infection is too great.
Most lawyers are interpreting the EEOC guidance as meaning that employers may take steps to determine whether employees entering the workplace have COVID-19 because an individual with the coronavirus will pose a direct threat to the health of others. Therefore, an employer may choose to administer COVID-19 testing to employees before they enter the workplace to determine if they have the virus.
To cover your bases, you should plan your testing in detail, including:
- How you will be conducting tests (providing at-home test swab kits, testing upon arrival, or offsite).
- Designate a person who is authorized to conduct tests.
- Document how you will be administering tests.
- Plan for how you will account for false positives or false negatives.
- Decide how often should you be testing.
- Budget for the testing.
- What will you do if a worker tests positive or has a fever (if you are just checking temperatures)?
- Don’t have exceptions to the policy or, if you do, keep them to a minimum. The more exceptions to a policy, the more likely you are to be sued.
- The policy should comply with guidance from the Centers for Disease Control and Prevention, such as using non-contact thermometers and ensuring social distancing during the process.
Insurance
The risk of being sued when administering testing is real and you should do everything you can to make sure it’s carried out fairly and consistently. But even if you do everything by the book, you can still be sued.
During bad economic times when people are losing their jobs, employee lawsuits tend to rise and, even if you are eventually found to have acted within the confines of the law, you still have to pay the legal fees.
One type of policy that could step in to protect you is employment practices liability insurance. EPLI will cover awards and legal costs in employee-initiated lawsuits. Each policy is different though, so it’s best to consult with us first.
If you are testing or are considering testing your staff, you may want to consider it.
by US Rx Care | Jun 23, 2020 | Uncategorized
Some health insurers are helping business workers in group plans maintain employee benefits during the COVID-19 pandemic, a new survey has found.
Social distancing and stay-at-home orders have put the hurt on hundreds of thousands of businesses across the country, which has forced them to reduce employees’ hours, furlough them or lay them off.
Besides all those employees seeing their pay drastically curtailed or disappear altogether, it also affects their employee benefits, with health coverage topping the list.
With so many people concerned they may lose coverage and business owners equally worried about their employees, some insurers are stepping up by extending coverage for affected group plan participants.
The survey by insurance research organization LIMRA found that 42% of group health plans are automatically continuing coverage for all employees for a specified period of time, and another 22% are extending eligibility on a case-by-case basis to employees whose status has changed.
About 35% of insurance companies have adjusted reinstatement rules to make it easier for those affected by COVID-19 to regain coverage, and a similar number are extending the timeframe in which employees may elect to pay or continue coverage if separated from their employer.
Nearly all carriers in the survey said they are offering premium grace periods of 60 days on average to workers unable to pay their premiums due to COVID-19, while others plan to reassess or extend those timelines if needed.
These moves are important, considering that about 70% of all workers in the U.S. receive health coverage from their jobs, according to LIMRA.
The typical scenario
When an employee is laid off or furloughed, their hours are essentially reduced to zero, which can result in a loss of eligibility to participate in their employer’s group health plan.
Group health insurers will have written documents that outline the rules for particular plans. These rules include a definition of eligible employees, including how long an employee can be absent from work before the employee will lose eligibility for insurance coverage.
Health plan documents do not usually differentiate between an employee who is terminated and one who is laid off and one who is furloughed.
To be eligible under the typical plan’s rules, an employee must work a minimum number of hours per week (usually at least 30). If an employee is under protected leave – such as Family Medical Leave Act protection – benefits continue during leave.
In other words, an employee who is not meeting the hours requirement or is not actively at work (work from home is considered actively at work) based on being terminated, furloughed or laid off – even temporarily – will generally have their benefits terminated. They should then receive an offer of COBRA or state continuation, unless state law does not require it due to an employer’s size.
However, if an employee continues to remain eligible for the business’s group health plan during an unpaid absence, the employer will need to determine how to handle their insurance premium payments.
The takeaway
If you are concerned about benefits continuation for laid-off, furloughed or terminated employees, you can call us to see if your health plan has made any special arrangements during the COVID-19 outbreak.
We can check to see if there is any way to continue coverage for any affected employees, and for how long and at what cost to you.
