In an effort to revive an important promise made to the American people prior to his election in 2016, President Trump recently signed 3 executive orders aimed at bringing the cost of prescription drugs more in line with what consumers in other countries pay. One order, directed at Medicare Part D plans, would require that PBMs pass discounts or manufacturer’s rebates directly to consumers rather than to their health plans.
A second order would permit individuals to import lower cost drugs from other countries, including Canada, and re-import insulin. The third order is intended to provide uninsured or underinsured individuals with life-saving medications such as insulin and epinephrine. It is doubtful that these executive orders will yield any immediate relief to consumers since legislative bodies and federal agencies will need to follow government protocols in order to put the orders into practice.
Inflation-adjusted limits for contributions to health savings accounts and high deductible health plans for the coming year were just announced. According to the announcement, eligible individuals with self-only HDHP coverage will be able to contribute $3,600 to their HSA in 2021, an increase of $50 from 2020. Those with family coverage will be able to contribute $7,200 in 2021 and those who are 55 years of age or older will be able to make an additional “catch-up” contribution of $1,000 to their HSA.
While minimum deductibles for HDHPs will remain the same for 2021 plan years at $1,400 for self-only coverage and $2,800 for family coverage, the maximum limits for out-of-pocket expenses will increase to $7,000 for individual coverage and $14,000 for family coverage.
America’s Health Insurance Plans, a national trade association whose member companies provide insurance coverage and health-related services to consumers and businesses, has released a study revealing the breakdown of today’s healthcare premium dollar, as follows:
- 23.3 cents of every premium dollar is used for prescription drugs
- 22.2 cents cover the cost of physician services
- 20.2 cents are used to pay for office and clinic visits
- 16.1 cents are used to cover hospital stays
- 13.5 cents are applied to care management, administrative expenses, business expenses, provider management and other fees
- 4.7 cents of every dollar go to taxes, and…
AHIP reports that on average, 2.3 cents of every premium dollar make it to the bottom line as net profit.
As reported by The Phia Group on March 29, 2019, a federal judge in Washington, D.C. ruled that the new Department of Labor rules expanding the marketing of Association Health Plans (AHPs) violate existing law. TPAs, brokers and employers see this as a significant blow to AHPs, especially new self-funded AHPs that have been preparing to launch on April 1, 2019.
Federal Judge John Bates sided with several states that took issue with the DOL’s final rules several months ago, arguing that a broad availability of AHPs is not within the scope of ERISA, which defines an employer as having at least two or more employees. The final rules were going to allow small employers, including working business owners (employers of one), to join with others based on either common geography or industry affiliation to form an AHP. It appears that the Judge’s ruling means that both criteria, geography and industry affiliation, must be met and that qualifying employers must have a minimum of two employees.
Thus far, we are not aware of any response filed by the DOL. We will continue to monitor reactions to the ruling and other developments regarding Association Health Plans.
There is a lot of misinformation surrounding medical cannabis, which can make it difficult to establish a plan document that accurately outlines its use. One particular obstacle is the lack of verified and sourced research regarding the medicinal use of cannabis, creating confusion around what the drug can and should be used for.
To address this confusion, benefit plans should limit coverage to areas where existing evidence supports the use. Create a benefit description that reflects approved applications determined by your state, while also limiting the care option to those members whose previous treatment options have failed. Experts agree that plan documents should clearly indicate that medical cannabis will not be authorized as a first line therapy.
Other parameters can be set, such as financial limitations within a certain time period, eligible products and dosages and even eligible suppliers. When addressing cost considerations, it’s important to know that medical cannabis should not be viewed as an alternative to prescription painkillers and opioids, but rather an add-on which does not eliminate those other costs.
In October, a bipartisan group of senators introduced a bill that would ease the ACA reporting mandates for employer-sponsored health plans. The bill would roll back the reporting requirements of Section 6056 and replace them with a voluntary reporting system. The bill would also allow payers to transmit employee notices electronically rather than having to send paper statements by mail.
While self-funded health plans must now comply with Sections 6055 and 6056, it is not yet clear how the bill would affect Section 6055 requirements. Senators Rob Portman of Ohio and Mark Warner of Virginia, sponsors of the bill, say their proposal would give the government a more effective way of applying premium tax credits to consumers who purchase insurance through an Exchange, something the administration has been trying to accomplish.
The gradual transition to high deductible health plans is having a significant impact on out-of-pocket costs, according to a study released by the Kaiser Family Foundation/Health Research & Educational Trust. In 2016, for the first time, just over half of all workers (51%) with single coverage faced a deductible of at least $1,000. The study also showed that 29% of workers were in high-deductible plans compared to just 20% two years earlier.
Press Release from Education and the Workforce Committee Chairwomen Virginia Foxx on April 5, 2017.
The House today passed the Self-Insurance Protection Act (H.R. 1304), legislation that would protect access to affordable health care options for workers and families. Introduced by Rep. Phil Roe (R-TN), the legislation would reaffirm long-standing policies to ensure workers can continue to receive flexible, affordable health care coverage through self-insured plans. The bill passed by a bipartisan vote of 400 to 16.
“By protecting access to self-insurance, we can help ensure employers have the tools they need to control health care costs for working families,” Rep. Roe said. “Millions of Americans rely on flexible self-insured plans and the benefits they provide. Federal bureaucrats should never have the opportunity to limit or threaten this popular health care option. This legislation prevents bureaucratic overreach and represents an important step toward promoting choice in health care.”
“This legislation provides certainty for working families who depend on self-insured health care plans,” Chairwoman Virginia Foxx (R-NC) said. “Workers and employers are already facing limited choices in health care, and the least we can do is preserve the choices they still have. I want to thank Representative Roe for championing this commonsense bill. While there’s more we can and should do to ensure access to high-quality, affordable health care coverage, this bill is a positive step for workers and their families.”
BACKGROUND: To ensure workers and employers continue to have access to affordable, flexible health plans through self-insurance, Rep. Phil Roe (R-TN) introduced the Self-Insurance Protection Act (H.R. 1304). The legislation would amend the Employee Retirement Income Security Act, the Public Health Service Act, and the Internal Revenue Code to clarify that federal regulators cannot redefine stop-loss insurance as traditional health insurance. H.R. 1304 would preserve self-insurance and:
- Reaffirm long-standing policies. Stop-loss insurance is not health insurance, and it has never been considered health insurance under federal law. H.R. 1304 would reaffirm this long-standing policy.
- Protect access to affordable health care coverage. By preserving self-insurance, workers and employers will continue to benefit from a health care plan model that has proven to lower costs and provide greater flexibility.
- Prevent bureaucratic overreach. Clarifying that regulators cannot redefine stop-loss insurance would prevent future administrations from limiting a popular health care option for workers and employers.
For a copy of the bill, click here.
For a fact sheet on the bill, click here.
If you haven’t interacted with a doctor by smart phone, email or webcam recently, you’ll be interested to know that the American Telemedicine Association reports that more than 15 million Americans received some kind of medical care remotely last year.
For those employed by a large company or living in a major metro area, it is common to view telemedicine as a virtual doctor visit or a substitute for an in-person office visit. The fact is that electronic communications are impacting the delivery of healthcare in many ways.
- Some doctors are consulting with one another to make critical decisions on heart attack and stroke victims
- Patients are using smart phones to relay blood pressure, heart rate and other vital signs to their doctors in order to better manage chronic conditions
- Virtual Care Centers are providing remote support to ICUs and ERs in small, rural hospitals where a physician may not be on site 24/7
Many question whether the quality of care is keeping pace with the rapid expansion of telemedicine, and state rules governing telemedicine are constantly evolving. At the same time, health plans and a growing number of members view the services as a convenient way to get medical care without leaving home or work.
The AMA recently approved new ethical guidelines for telemedicine, calling for participating doctors to recognize its limitations and ensure that sufficient information is available before making a clinical recommendation. With existing telemedicine providers expanding and major teaching institutions gearing up, there appears to be no slowdown in sight.
The Internal Revenue Service (IRS) recently issued guidance that increases the applicable dollar amount used to determine the Patient-Centered Outcomes Research Institute (PCORI) fee, for plan years that end on or after October 1, 2016 and before October 1, 2017.
PCORI fees are imposed on plan sponsors of applicable self-insured health plans for each plan year ending on or after October 1, 2012 and before October 1, 2019. The fees support research to evaluate and compare health outcomes and the clinical effectiveness of certain medical treatments, services, procedures, and drugs.
For plan years ending on or after October 1, 2015 and before October 1, 2016, the fee for an employer sponsoring an applicable self-insured plan was $2.17 multiplied by the average number of lives covered under the plan. Details on how to determine the average number of lives covered under a plan, as well as various examples, are included in final regulations.
Pursuant to IRS Notice 2016-64, for plan years ending on or after October 1, 2016 and before October 1, 2017, the fee is $2.26 (multiplied by the average number of lives covered under the plan).
For plan years ending on or after October 1, 2017 and before October 1, 2019, the fee will be further adjusted to reflect inflation.
Be sure to check out our PCORI Fees for Self-Insured Plans section for more information.