OSHA’s Anti-retaliation Rules for ACA

Do you know that Fed-OSHA has regulations on whistleblowing and employer retaliation under the Affordable Care Act?

The rules set forth procedures and time frames for reporting and processing whistleblower complaints by employees against their employers and expand the instances in which an employee can sue their employer for retaliation under the ACA.Read More

Proposed Regs on Small Business Association Plans Could Invite Fraud

Proposed regulations that would allow small businesses and individuals to band together to purchase group coverage could open up a new era of fraud in U.S. health insurance, according to comments filed by a number of groups.

Former Department of Labor officials, insurance companies and employee advocacy groups sounded the warning in letters to the DOL during the proposed regulations’ comment period, which ended March 6, according to a report by Bloomberg Law.Read More

Five Ways Employers Can Save on Health Care Costs

In recent years, many companies have been dealing with rising health care costs largely by transferring more of the expense and risk on to their employees.

But some employers have found smarter, more creative ways to limit health costs without further burdening valued employees. Here are some of the best solutions:Read More

As IRS Sends out Enforcement Letters, Be Prepared

Even though the Trump administration continues taking steps to try to dismantle the Affordable Care Act, the law applies to employers and the IRS is enforcing it by the book.

Businesses are increasingly receiving IRS Letter 226J, which states that they may be in violation of the employer mandate, typically by either not offering coverage when they are legally required to do so or not offering “affordable” coverage to their employees.Read More

Apple Also Plans to Get into Health Care Game to Create Efficiencies

First Amazon, J.P. Morgan and Berkshire Hathaway announced that they would form a consortium to tackle runaway health care and health insurance costs for their employees, and now another big hitter has announced it too plans to enter the fray – Apple.

While not giving away too many details, chief executive officer Tim Cook said during Apple’s shareholders’ meeting that the company would do more than just wellness apps and devices and try to tackle real health care costs in a variety of ways. Read More

How adviser John Sbrocco is able to return money to clients

An article brought to us by Randy Barret for Employee Benefit Adviser


John Sbrocco likes winning. That was his goal as a professional poker player earlier in life and he’s still at it as CEO of Questige Consulting.

But now running over the table means besting insurance companies and pharmacy benefit managers and lowering healthcare costs for his customers, most of which are partially or fully self-insured.

“By focusing on a strategy that drives immediate impact to the supply chain, it allows us to produce negative trend for clients,” Sbrocco says. “Our top goal is for them to pay less now than they did five years ago.”

Read More

Amazon, JPMorgan, Berkshire Tie-up Could Shake up Health Care

In a move that could either reshape health care delivery in America or barely register as a blip, three corporate and financial giants have unveiled a new company that they hope will reduce health care costs.   Amazon, Berkshire Hathaway and JPMorgan Chase, which seem to have had enough with high health insurance costs for their employees, are instead taking the bull by the horns and say they will take a new approach to health care for their workers.  In announcing the venture, Berkshire Hathaway chairman and CEO Warren Buffett said that continuously climbing health care costs are “a hungry tapeworm on the American economy.”  The move was greeted with excitement, with hopes that the trio of big hitters could bring an innovative approach to cost-containment that could be replicated for other employers around the country.  Without providing much in terms of details, that said they would leverage their combined scale and expertise to develop technologies that would allow their employees and dependents to enjoy “simplified, high-quality and transparent healthcare at a reasonable cost.  Many observers are hoping that fresh sets of eyes will be able to take a creative approach to funding insurance coverage and delivering health care for less as cost inflation continues unabated.  The big question is how they will be able to influence pricing, particularly considering that there have been many different approaches to funding reimbursement to providers and none has yielded a method that seriously controls costs and cost inflation.

Tackling costs from the tech angle

The trio of companies, however, seems to be more interested in approaching the cost question from the technology angle. Amazon is already heavily involved in tech and e-commerce, and the banking industry (of which Chase is a member) is light years ahead of the health industry in terms of technology and user-friendly consumer interfaces.  Berkshire Hathaway brings capital to the equation.  Also, the companies have more than 1 million employees combined, which would allow them to wield significant clout in negotiating contracts with hospitals, pharmacies and doctor networks. They could use this to hold them accountable for billing as well as health outcomes.  The tie-up could also focus on runaway pharmaceutical costs. During much of 2017, it was rumored that Amazon was considering a move into the pharmacy business and it could be able to use its clout to possibly sway drug prices.  One analyst told the New York Times that we could see the new company introduce “an online healthcare dashboard that connects employees with the closest and the best doctor specializing in whatever ailment they select from a drop-down menu. Perhaps the companies would strike deals to offer employee discounts with service providers like medical testing facilities.”  The companies said the initiative would be “free from profit-making incentives and constraints.”If the three giants develop a healthcare organization without a profit motive and instead an aim to shave health care costs, it could bring about serious savings. There are many parts of the healthcare industry that are high-cost, high-margin sectors that thrive on significant markups.  Jamie Dimon, chief executive of JPMorgan Chase, said in a statement that the effort could eventually be expanded to benefit all Americans.  For now, it’s early days and as we learn more about this interesting new venture, we’ll keep you abreast of developments.





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Drug Costs Starting to Drive Group Plan Inflation

Under the Affordable Care Act, group health insurance costs have been rising at a much slower rate than they had during the decade preceding its passage.

In fact, the rate of annual premium growth in the group market has hovered around 5% – more than half of what it was between 2001 and 2010. Also, health care’s share of the national economy actually fell from 17.4% in 2010 to 17.2% by 2013. However, that trend hasn’t lasted and in 2016 the share was 17.9%.

There has been a lot of debate about why rates have been increasing and some pundits say that if it were not for spiraling pharmaceutical costs, the rate of health insurance inflation would be lower.

While the drug industry would deny pharmaceutical costs are what’s driving health care cost inflation, the numbers show otherwise, according to an analysis by Modern Healthcare, an industry trade publication.

Here are the figures that drive home the point. Between 2013 and 2016, personal health care consumption rose 16.7%, according to the Centers for Medicare & Medicaid Services (CMS). This is what was driving that inflation:

  • Hospital spending: Up 15.5%
  • Professional services (mostly physician office-based care): Up 16%
  • Drug spending: Up 23.9%

Source: CMS

For 2018 group health plans, the inflation components of the three main areas could not be starker:

  • Hospital costs: 6.1% (from 2017)
  • Physician costs: 4.3%
  • Pharmaceuticals: 10.9%

Source: Segal Company

The situation may actually be worse than the numbers hint at. Retail drug sales don’t include the most expensive medicines – those delivered in hospital outpatient and physician offices. The CMS doesn’t track that data separately, but one can get a glimpse of what’s happening by examining the latest financial reports from major hospital systems.

Controlling drug costs

Prescription drug costs now account for about 17% of total U.S. healthcare spending and were the fastest rising component of that spending over the past year.

Drug costs have been difficult for health care providers and the insurance industry to tackle.

The pharmaceutical industry has been able to fend off government efforts to counter price hikes. It successfully lobbied Congress in 2003 to bar Medicare from negotiating prices in the new Part D program.


The industry has been aided by opposition from physician and patient advocacy groups, who fear that cost-benefit calculations will be used to cut them off from high-priced but effective medicines.

Benefits consulting firm Segal Company asked managed care organizations, health insurers, pharmacy benefit managers and third-party administrators to rank the cost-management strategies implemented by group health plans in 2017. Here are the top five:

    • Using specialty pharmacy management– This focuses on controlling costs of specialty drugs, many of which cost more than an annual health premium for a year’s worth of dosing.
    • Intensifying pharmacy management programs– This includes negotiating better pricing for commonly used drugs.
    • Contracting with value-based providers.
    • Increasing financial incentives in wellness plans.
    • Adopting high-deductible health plans.


These strategies show plan sponsors are looking to drive utilization to high-quality, low-cost providers in lieu of simply passing the costs on to their employees.



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Proposal Would Allow Small Employers to Band Together to Purchase Coverage

The U.S. Department of Labor is moving ahead with plans that would allow small businesses and sole proprietors to band together to purchase group health insurance plans.

The DOL aims to permit these small business health plans – also known as “association health plans” – to skirt the regulatory requirements of some states and the Affordable Care Act.

Under the proposal, small businesses and sole proprietors would have more freedom to band together to provide affordable, quality health insurance for employees.

This would be done by creating an association plan that would help them secure competitive premium rates through economies of scale. An association with a few thousand members would have more bargaining power than an individual small employer and open the door to a wider array of insurance options, according to the DOL.

The proposal essentially modifies the definition of “employer” under the Employee Retirement Income Security Act regarding what type of organizations can sponsor group health plans. It adds “association” to that definition, so that such associations could sponsor group health coverage. In other words, the proposal would allow an association to be formed for the purpose of offering a health plan.

The proposal, experts say, could be expanded to allow employers throughout the country to form an association if they can pass a commonality of interest test, such as:

  • Operating in the same trade or industry, or
  • Operating in the same metropolitan area, state or region.

Additionally, the proposed regulations would let sole proprietors join small business health plans to provide coverage for themselves as well as for their spouses and children.

The proposed rules would allow these plans to skirt many of the provisions that the ACA requires of small plans, including that they include “essential health benefits.” Currently, large employer group plans and self-funded plans are not required to comply with the essential benefit requirements.

The DOL was carefu to note that the proposal would bar health plans from rejecting coverage to anyone with pre-existing conditions and would include nondiscrimination provisions under the Health Insurance Portability and Accountability Act and the ACA.



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