Kaiser Permanente in Northern California conducted a study that breached numerous patient protection rules. The study was meant to explore if a fish oil-derived drug could help reduce complications from respiratory illnesses like COVID in high-risk cardiovascular patients.
Researchers' Misconduct: Two leading researchers, Dr. Alan Go and Dr. Andrew Ambrosy, were disciplined for failing to adhere to research compliance and patient safety protocols. They withheld critical information and attempted to cover up these lapses.
Study Termination and Suspension: The study was halted in December 2022, and eleven other studies by these researchers were suspended. An internal audit by Kaiser's Institutional Review Board (IRB) found "persistent failure" in following regulations.
Patient Safety Compromised: Notably, an elderly man with a known shellfish allergy, which should have excluded him from the study, was pressured to participate and subsequently experienced health issues potentially linked to the drug. The study also included participants with other exclusion criteria like cognitive impairments or language barriers.
Inadequate Oversight: The FDA criticized Kaiser's oversight, highlighting that their system for monitoring research safety and ethics was inadequate. The IRB lacked the authority to act swiftly due to delays from Kaiser leadership in providing necessary information.
Audit Findings: The audit revealed numerous violations including:
Enrollment of ineligible participants with allergies, cognitive issues, or language barriers.
Undue influence on participants to join or continue in the study.
Improper management of study protocols, leading to poor documentation and data handling.
Corrective Actions: After complaints and the audit results, Kaiser implemented corrective action plans, but specifics were not detailed. The researchers' appeal to continue the study was denied.
Broader Implications: This incident not only questions the integrity of the research conducted but also casts a shadow over Kaiser's research oversight, potentially affecting its reputation and the trust of its large patient base in California.
What are health insurer overrides? What do they mean for employers and employees? How do you know where they are most likely to lurk?
I've uncovered a new nugget of insider intel on this one - insurance brokerages are turning the volume up to 11 on their insatiable longing for these hidden payments.
Our Monthly Mineral Demonstration
- robust web-based resource with live advisors, reliable content, and
interactive technology solutions that provide an end-to-end People Risk
Management solution
Compliance News:
Pharmacies are Sharing Sensitive Health Data with Facebook
- "Looking for an at-home HIV or Plan B test on CVS’ website is not as
private an experience as one might think, and CVS is not the only
pharmacy sharing this kind of sensitive health data, according to a KFF
Health News investigation. We found trackers collecting browsing- and
purchase-related data on websites of 12 of the U.S.’ biggest drugstores,
including grocery store chains with pharmacies, and sharing the
sensitive information with companies like Meta (formerly Facebook);
Google, through its advertising and analytics products; and Microsoft,
through its search engine, Bing."
The IRS recently issued Notice 2023-37
to update its guidance for high deductible health plans (HDHPs) on
expenses related to COVID-19 testing and treatment. The notice also
clarifies whether certain items and services are treated as preventive
care under the tax rules for HDHPs, and confirms that for plan years
ending after Dec. 31, 2024, an HDHP is not permitted to provide benefits
for COVID-19 testing and treatment without a deductible.
Whether
an employer-sponsored health plan must cover gender-affirming care is
often dependent on whether the employer’s health plan is fully-insured
or self-insured; fully-insured plans must provide gender-affirming care
to the extent required by applicable state and federal law, while the
law on categorical exclusions for gender-affirming care in self-insured
plans continues to develop.
A
federal appeals court rejected claims filed by terminated employees who
sought FMLA leave along with many others, ruling that the employer had
good reason to believe the employees acted dishonestly and sought leave
for an improper purpose. Employers can also take away from this article a
few tips to curb FMLA leave abuse.
This
article offers insight into an array of labor and employment laws and
ordinances from across the country, state by state, that take effect
mid-year and will implicate employers’ compliance obligations.
New Trend in State Laws, Paid Leave for Any Reason -
"In May 2019, Maine became the first state in the nation to require
private employers to provide paid leave for any reason when Gov. Janet
Mills (D) signed LD 369. Nevada followed a month later, in June 2019,
when then-Gov. Steve Sisolak (D) signed SB 312, which also granted paid
leave for any reason. Illinois is poised to join their ranks on January
1, 2024. In March 2023, Gov. J.B. Pritzker (D) signed SB 208, which says
that beginning on January 1, 2024, private employers must offer their
workers five days paid time off for any reason after they’ve completed a
90-day probation period."
In Nevada, for example, Employers may limit the use of paid
leave to 40 total hours per benefit year and may prevent an employee
from using any accrued paid leave until the employee reaches their 90th
day of employment. Employers may also set minimum increments of paid
leave which an employee may elect to use, so long as that limit does not
exceed 4 hours.
Renewals Not Looking Good for UHC Clients:
"UnitedHealth Group extended its streak as the most profitable company
among major national insurers in the first quarter of 2023, reporting
$5.6 billion in earnings. By comparison, fellow healthcare giant CVS
Health reported the second-highest profit in the quarter at $2.1
billion, less than half of UnitedHealth's haul. CVS' profit also
declined year over year, as it posted nearly $2.4 billion in the first
quarter of 2022. UnitedHealth also takes the top spot on revenue for the
quarter, reporting $91.3 billion. That's up from $80.1 billion in the
prior-year quarter. CVS again lands at No. 2 on revenue, posting $85.3
billion."
Will the Doctor See You Now? The Health System's Changing Landscape
- "About 48% of primary care physicians currently work in practices
they do not own. Two-thirds of those doctors don’t work for other
physicians but are employed by private equity investors or other
corporate entities, according to data in the “Primary Care Chartbook,”
which is collected and published by the Graham Center.... it now takes
an average of 21 days just to get in to see a doctor of family medicine,
defined as a subgroup of primary care, which includes general
internists and pediatricians. Those physicians are many patients’ first
stop for health care."
What you need to know about Ozempic & Mounjaro
- "But I want all my patients and the public to know that the appetite
and weight loss effects do not last forever. Effects on hunger, cravings
control, sweet cravings, mood & fullness are TEMPORARY and return
to baseline between years 1 & 2. This was shown in surveys taken
from patients using the medication over the long term."
Just 3% of adults show no major health risk factors linked to death
- "Overall, most of us have something wrong with us, and we’re more
likely to have a lifestyle health-risk factor now than in the ’80s and
that’s actually associated with even greater mortality risk now than
before."
Ozempic, Weight-Loss Drugs Probed Over Reports of Suicidal Thoughts
- "Novo Nordisk A/S’s weight-loss medications are under investigation
by the European Union’s drugs regulator after a small number of reports
of suicidal risks were referred to the watchdog. The European Medicines
Agency is looking at adverse events noted by the Icelandic Medicines
Agency, including two cases of suicidal thoughts linked to the drugs
Saxenda and Ozempic, the EMA said in a statement Monday."
From Armchair Lawyer to Bathroom Auditor. A Peculiar Friday at the Office
In the late afternoon on Friday, at the brim of the weekend, my phone shrieked with a call of urgency. It was from a client named Nancy, who, with an audible eye-roll, launched into an account of her current predicament. Here's a condensed retelling of our dialogue.
“Craig, we have a pressing compliance concern that needs an immediate solution. Regrettably, it's not tied to benefits, but I’m betting you might be of assistance.”
You come to work one day, and notice Susan is not there. Nobody knows what happened to her, and everyone appears oddly tight-lipped about her absence. Finally, you and your coworkers are told she has taken a leave of absence. No other details are given. Attorneys, corporate compliance officers, and human resource personnel have been properly coached as to the myriad of stringent health privacy rules in the workplace, and everyone is rightfully paranoid.
I am reminded of an eccentric law professor I had who relished saying, “No good deed goes unpunished,” whenever discussing the inevitable unintended consequences of legislation or contract terms.
But after 22 years of HIPAA Privacy, I am not even sure the main impetus behind its passage was ever a good deed – at least not for those who have weaponized its use against employers.
The Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule was designed to protect individuals’ medical records and other personal health information. However, the latest practices by health insurance carriers raise serious concerns about how they circumvent these rules to maximize premiums. ...
I spent some time with Armstrong and Getty this morning, discussing this story and the hidden tax built into all of our employer plans due to Medicare and Medicaid's chronic inefficiency and underpayment.
This is my latest; it can be read in full over at BeneftsPRO.
Abstract: This article examines the fiduciary obligation of CFOs, VPs of HR, and other health and welfare plan fiduciaries under the Employee Retirement Income Security Act (ERISA) to evaluate Reference-Based Pricing (RBP) in the context of their health insurance plans. The article argues that, given the federal government's endorsement of RBP and its proven efficacy in reducing employer costs and expanding participant options, it is now virtually impossible for a plan fiduciary to lawfully discharge their duties in accordance with ERISA without at least considering the implementation of RBP.
Introduction
The landscape of American healthcare has undergone significant transformations in the past decade, with the emergence of numerous innovations and cost-saving measures. The most impactful development is the rise of Reference-Based Pricing (RBP), a pricing model proving to be a game-changer for employer-sponsored health insurance plans. This article argues that, given the demonstrated benefits of RBP, CFOs, VPs of HR, and other plan fiduciaries under ERISA are now under a fiduciary obligation to evaluate the potential incorporation of RBP into their health insurance plans – at least with respect to employers that are large enough to consider particularly self-funding their health plans.
I. Fiduciary Obligations Under ERISA
ERISA imposes a fiduciary duty on plan administrators to act solely in the interest of plan participants and beneficiaries and for the exclusive purpose of providing benefits and defraying reasonable expenses of administering the plan. To fulfill this duty, fiduciaries must adhere to certain principles, including prudence, diversification, and adherence to plan documents.
The duty of prudence requires fiduciaries to act with the care, skill, prudence, and diligence that a prudent person would use in a similar situation. This duty is not merely a passive obligation; rather, it compels fiduciaries to actively engage in the management and oversight of plan assets, constantly seeking opportunities to enhance the value and cost-effectiveness of the plan.
Donovan v. Bierwirth, 680 F.2d 263, 271 (2d Cir. 1982) emphasizes the importance of fiduciaries acting with prudence and diligence in managing ERISA plans:
In every case charging breach of ERISA fiduciary duty, ... the central inquiry is whether the fiduciary has acted 'with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.'
AI is being used extensively in the area of the pre-authorization of your medical claims. Prior to approving a medical service or procedure, insurance companies often require a pre-authorization process where doctors must submit detailed information about the medical necessity of the service or procedure. AI algorithms can analyze this information to quickly determine whether the service or procedure meets the insurer's criteria for coverage.
Lawfully, AI is not supposed to autonomously make these decisions without human intervention. The final decision on whether to approve or deny a claim is supposed to rest with human reviewers who use the information provided by AI systems as one of many factors to consider. So what happens when those human reviewers are doctors that reflexively sign the denial in less than two seconds without reading or even opening the patient file?
Well, increased profits for the Government Healthcare Complex and a fresh glimpse at the utopia of AI medicine. This whole article is worth your time to read. It is an excellent glimpse behind the curtain. The following is from ProPublica:
The company [Cigna] has built a system that allows its doctors to instantly reject a claim on medical grounds without opening the patient file, leaving people with unexpected bills, according to corporate documents and interviews with former Cigna officials. Over a period of two months last year, Cigna doctors denied over 300,000 requests for payments using this method, spending an average of 1.2 seconds on each case, the documents show. The company has reported it covers or administers health care plans for 18 million people....
A Cigna algorithm flags mismatches between diagnoses and what the company considers acceptable tests and procedures for those ailments....
'We literally click and submit,' one former Cigna doctor said. 'It takes all of 10 seconds to do 50 at a time.'...
Cigna does not expect many appeals. In one corporate document, Cigna estimated that only 5% of people would appeal a denial resulting from a PXDX review.
FSAs (Flexible Spending Accounts), HSAs (Health Savings Accounts), and HRAs (Health Reimbursement Arrangements) are all types of tax-advantaged accounts that can be used to pay for qualified medical expenses.
Physical therapy, nutritional supplements, and gym memberships may be eligible expenses that can, in rare cases, be reimbursed using these accounts, but there are some specific rules and limitations about which, you must be cognizant.
For FSAs, eligible expenses are determined by your employer's plan and may vary. You can usually use FSA funds to pay for physical therapy with a prescription from a healthcare provider. Nutritional supplements and gym memberships are likely not eligible expenses, unless they are prescribed by a healthcare provider for a specific medical condition.
For HSAs, physical therapy, nutritional supplements, and gym memberships may be eligible expenses, again, if they are deemed medically necessary by a healthcare provider. In that case, you can use HSA funds to pay for these expenses as long as they are not considered cosmetic or meant for general health and wellness purposes.
For HRAs, the rules and eligibility requirements will vary depending on your employer's plan. It's important to check with your employer or plan administrator to see if physical therapy, nutritional supplements, or gym memberships are eligible expenses. In most cases, these procedures will only be covered if they are deemed necessary by a healthcare provider.
In general, it's important to keep receipts and documentation of your expenses, and to check with your plan administrator to make sure that the expenses you are considering are eligible before using your FSA, HSA, or HRA funds to pay for them.
The IRS recently issued new guidance on this topic. There was nothing earth-shatteringly new in their statement, but more clarity has been provided. Here is a summary of the IRS's pronouncement by Thompson Reuters:
For the cost of therapy to be a medical expense, the therapy must treat a disease—thus, amounts paid for therapy to treat a diagnosed mental illness are medical expenses, while amounts paid for marital counseling are not. Likewise, the costs of nutritional counseling and weight-loss programs are medical expenses only if the counseling or program treats a specific disease diagnosed by a physician (e.g., obesity or diabetes); otherwise, these costs are not medical expenses. The cost of a gym membership is a medical expense only if the membership was purchased for the sole purpose of affecting a structure or function of the body (e.g., a prescribed plan for physical therapy to treat an injury) or treating a specific disease diagnosed by a physician (e.g., obesity or heart disease). However, the cost of exercise for the improvement of general health is not a medical expense, even if recommended by a doctor.
The Compliance Traps, Administrative Nightmares, Subtle Discrediting & Employee Frustration Voluntary Benefits Often Bring
Special guest column by Dagny
Taggart | March 2023
As a wee lass, my grandmother used to admonish, “don’t go
borrowing trouble.”
I only fully internalized or “grokked,” as the kids say,
that message once installing voluntary benefit plans.
In the eyes of the ginormous corporations that have devoured
nearly all the insurance brokerage market, I’m reasonably sure this makes me a
bad broker. Because, you see, once you are publicly traded, your stock prices
and your national VP’s job are tied inextricably to the holy grail of
growth. Client retention is nice and may
even earn you a pat on the head or some other form of little doggie treat, but growth,
my lass, well, that shall set ye free!
I’ll never forget a conversation with a notoriously
unscrupulous brokerage owner in the San Francisco Bay Area. We were at some
stuffy, pompous, self-congratulatory industry meeting where brokers take a
temporary leave from the golf course to discuss how to best grow revenue (your
premium).
The greasy, slick-haired, dark pinstripe-suited,
mafioso-looking founder told our CEO, “I’ll never understand why you put so
much stock in retention. Once a client has identified that you cannot service
them as promised, it will still take them nine to eighteen months to leave for
a new broker. You can sell a handful more groups in that time!”
Even though that was nearly 25 years ago, very early in my
career, I always remembered the message.
And I hated it increasingly each year I practiced.
As a brokerage office is purchased by a bank, merged with
another bank, and repacked to a private equity firm like every other financialized
product in our country, brokers are inevitably hounded with the mantra of
growth. New sales conquest lists are circulated monthly, sometimes weekly, to
prod already organically competitive salespeople to climb over each other to
push more premium dollars through their P&Ls. One company I worked with
even created a gameshow-like point system to maximize salesy behavior.
Referrals to decision-makers, cold calls made, meetings attended, and spam sent
all earned various forms of atta-boys from the official brass. Meanwhile, 20-plus-year
veterans who consistently renewed multi-million-dollar books of stable clients
were regarded as an annoying relic to a bygone era in American Business: a time
when steady service, professionalism, and integrity hindered the mantra of G-R-O-W-T-H.
Enter Voluntary Benefits
Voluntary benefits offer a quick fix for a stagnant book of
steady, satisfied clients. It is the cocaine bump from the countertop in the club
bathroom when a partier doesn’t have the energy or personality to peacock with
the amplified type-As. With voluntary benefits, an employer can roll out
additional life, disability, accident, cancer, critical illness, pet, home,
auto, gap, dental, vision, or hospital insurance at no cost to the employer and
only for those employees who want to purchase it. As the pitch goes, it rounds
out your offering, maximizes choice, and gives people more opportunity to cover
what is important to them. Who could be against that?
And I must admit, as a budding, libertarian-minded little
brokerita, I bought into the concept. Voluntary benefits were, after all, voluntary
and offered commission to the brokerage of an additional 15 percent to 55
percent, depending on the line of insurance offered. Employees win, the
employer wins, and the broker wins!
Alas, there is no free lunch. Imagine a product that is half
commission. How can an insurer afford to sell you something that is half
commission?
Hint: it is not by undercharging for the
product.
What’s the Real Message?
As much as every broker and I want them to be, your
employees are not benefit experts. Let’s be frank: your HR team probably isn’t
either – at least most aren’t. In fact, your employees hate dealing with
benefits, particularly the insurance side, so much that they spend an average
of eighteen
minutes making open enrollment decisions. By contrast, they will spend four
hours on the decision to buy a cell phone. Priorities.
No array of glossy brochures, automated video open
enrollment meetings, or highly entertaining broker personalities [ahem] will
drastically change that. A fantastic broker and presentation package might
get their attention for forty-five minutes. And I know because I regularly do
[smiling].
When we add V.D. (what I call voluntary dental) to your
plan, as an example, we will divert attention away from where eighty percent of
your benefits budget goes – toward medical. Why would we do that? Of course, if
all you offer is medical and V.D., that is not a problem. But most employers
offer employer-paid medical, life, dental, vision, employee assistance
programs, and disability. Communicating that to employees takes the entire
forty-five minutes. If we attempt to add the laundry list of other items from
earlier in the article, we confuse and frustrate your audience.
But what else are we effectively saying?
Our benefits are not good enough to cover you and your loved
ones should tragedy befall you or your family. Sure, we offer you a few
employer-sponsored items, but you probably need to buy all the other items this
pushy salesperson is here to deliver. There is a watering-down effect, and you
taint the vital quality plans like group disability and medical with the
lottery-esque nature of cancer or accident policies. It’s what my 20-year-old
daughter would call a “low-key dis.”
Pro Tip:Brokers don’t buy the
laundry list of benefits. Brokers buy medical, disability, and life if we have
dependents and are in a phase of life without enough assets to cover mortgages
and college tuition. Everything else is superfluous. One of the best things we
can do as insurance and human resources professionals is to help educate our
employees on the real need for insurance. Insurance is for the huge risks we
cannot plan for or save for: death, disability, and serious medical issues. We
can and should be able to save and plan for dental, vision, accidents, pet
issues, etc. If one can’t, then they just aren’t trying. If you set aside the
money you’d pay in premium toward your dental, vision, etc., you will have that
money when the need arises; and you will not have to hand over 15% to 50% in
commission and another 10% for carrier profit.
Administrative Hell
Much like third-party administrators and human resources
information systems, voluntary benefit providers systematically over-promise
and under-deliver. Here is a partial list of what every employer should expect when
installing new voluntary benefit plans:
The carrier will not enroll all of your
employees correctly. There will be some with misspelled names, incorrect dates
of birth, wrong benefit plans, and incorrect family tiers. Some may be dropped
from enrollment entirely for no good reason.
This will increase the HR department's workload
and hours will be spent on the transition. It will also cause disruptions to
the organization due to meetings, forms that need to be completed, and the inevitable
discontent from some employees.
If a company is going to add voluntaries, the
CEO or other high-ranking executive should announce the change - and the
business reason why - before the meetings.
Depending on the type of product you offer, you
may have to meet minimum participation levels. This means, for example, if 20%
of your employees don’t elect to buy additional life insurance, you will not be
able to offer it to any of them. And you may have just had 15% of them sign up.
Now you get to go back and tell those 15%, “nevermind.”
The first bill will not be accurate. The client must
audit the first bill immediately upon receiving it and notify the carrier of
changes. A binder check for the first month's premium is required with the
master group application and will be credited on the first or second billing
cycle. Therefore, your first few bills are not likely to be accurate.
And that list assumes you already boast a savvy and robust
HR team. If you have new or inexperienced folks on the team or if you
experience regular turnover in HR, these matters can grow unruly in a hurry.
One Midwestern company I worked with churned through three
different benefit managers in eighteen months. HR was responsible for sending
an evidence of insurability form to employees who applied for more than the
voluntary life’s $100,000 guaranteed issue amount. That crucial detail was lost
in the shuffle. So, tensions rose when the employer experienced the death of an
employee who thought he’d purchased $300,000 of life insurance, and the carrier
asked the employer where the evidence of insurability was. I’ll shortcut to the
answer: to make the deceased widow whole, the employer had to self-fund the
additional $200,000 in life benefits, and the Director of Human Resources lost
his job. A forgotten form from a benefit manager on a voluntary life plan ended
a career and cost this employer $200,000.
If you are reading this and unsure what an evidence of
insurability is, do not offer voluntary benefits. That risk is too significant
for you and your organization at this time. If you are going to provide
voluntary life or disability, make darn sure that your broker explains these
potential nightmares to you.
Compliance Nightmares
Beyond the previous chilling story, a whole other compliance
issue can arise with voluntaries. Suppose there happens to be a legal dispute
between one of your employees and your voluntary vendor. In that case, that
vendor will almost certainly argue that the plan is covered by Employee
Retirement Income Security Act (ERISA) and that the employee’s lawsuit should
be filed against the employer instead of the insurer. If the court agrees, the legal
burden shifts to the employer. And in case you were wondering, yes, this one
also gets HR folks fired. Courts regularly rule that a voluntary plan is an
ERISA plan, even if the employer never intended to sponsor the plan formally.
And if that happens, and the plaintiff’s attorney is worth
his salt, they’ll also file claims against the employer for all the ERISA
reporting, disclosure, and fiduciary requirements that weren’t followed. Two of those penalties would be:
$149 per day penalty for failing to provide Plan
Document and SPD; and
$2,097 per plan per day for failing to prepare
and file Form 5500.
Furthermore, the legal standard for what mandates that ERISA
covers a plan is not a bright-line test. It is akin to the federal employee vs.
independent contractor standard, if you are familiar with that. It is a “totality of circumstances” test that
requires the plan to:
be completely voluntary without any employer contributions;
not allow the employer to endorse or “take credit for” the plan;
not allow the employer to receive consideration for collecting and remitting premiums;
not use the employer’s name, or associate the voluntary plan with the employer-sponsored benefit plans;
not communicate the voluntary benefits at Open Enrollment with all of the employer-sponsored ERISA-covered plans;
not recommend the plan to employees;
never say ERISA applies;
not allow the use of the employer’s cafeteria plan; and
not assist employees with claims or disputes.
In some cases, judges ruled that employers endorsed plans
because they announced the programs in memos written on company stationery. I’m
reminded of the old Jeff Foxworthy routine, ya might be a redneck ERISA
if …
Failing any of the above bullets might make your plan an
ERISA plan, depending on the court’s assessment of the action's severity and/or
frequency. Of course, failing to abide
by more than one further tips the scale in the direction of ERISA.
Benefit attorneys who litigate these types of cases regularly
report that 80% to 90% of voluntary benefit plans are, in fact, ERISA plans
once litigation commences and the voluntary provider makes this reflexive
initial motion.
And With All of That, There Are Some Places for Them
With all that said, is there ever a time when voluntary
benefits are a good idea? Yes, they can be appropriate and even desirable in a handful
of circumstances.
Voluntary home and/or auto
insurance is often just a link to a carrier that employees can quote
themselves. It is done at any time of the year and regularly gets employees an
additional 5% to 10% off, in addition to any other discounts for which they may
qualify. Employers regularly can and do stay out of these offerings.
Pet Insurance. As
with home and auto, it is typically just a link to a vendor that can and will
offer your employee a modest discount because they work for you. Like with home
and auto, I’ve never seen a pet plan morph into an ERISA plan.
Voluntary Group Life and
Disability. These are often no-brainers. Notice that I said group
coverage here. I do not like the idea of individual, 1099’d, 100% commissioned
enrollers sitting across from your employees and asking them what momma and the
baby will do when they die. No, this is
the option to buy additional life and disability above and beyond the core
employer offering. We communicate it in a group setting, and then treat it like
an ERISA plan as it is linked to your underlying life and disability. But know,
all my caveats in this piece's “Administrative Hell” section apply. If you
don’t have a seasoned, stable, savvy HR staff, you may want to consider holding
off on these lines for a bit.
Union Demanded Plans.Other than what I’ve mentioned here, I’d pass on
the voluntary stuff. But I do know that there are times when a workforce
demands it. I have seen that from time to time in union environments. In that
case, partner with an exceptional broker to find a voluntary provider with a
long, stable track record. Believe it or not, I have encountered those in my
career. They aren’t totally fictitious unicorns but are exceedingly rare,
glorious beasts to behold in the wild.
Dagny Taggartis a retired and recovering broker and attorney who spends most of her days in a walled compound in Galt’s Gulch, Colorado, walking
her Labrador and watching the squirrels cavort. After a 30-year career in
benefits, she retired in her early 50s and now consults with large employers
and brokerages on healthcare, benefits, and ERISA.
California Expands Who an Employee Can Care for Under the CFRA and California Paid Sick Leave Law - "Beginning January 1, 2023, employees throughout California will be able to use sick leave or take leave under the California Family Rights Act (CFRA) to care for a 'designated person' ... defined as any individual related by blood or whose association with the employee is equivalent to a family relationship. An employee can designate this person at the time they request leave."
California Unleashes Last-Minute Onslaught of New Employment Legislation - California Governor Newsom recently signed several pieces of employment-related legislation into law including: Supplemental Paid Sick Leave Extension, an expansion of the California Family Rights Act and California Paid Sick Leave, Unpaid Bereavement Leave, Emergency Working Conditions, Reproductive Health Decisionmaking, and Cal/WARN Act Enforcement for Call Centers.
In 2021, the U.S. health care system spent $603 billion on prescription drugs, before accounting for rebates, of which $421 billion was on retail drugs.
Spending growth on drugs was largely due to growth in spending per prescription, and to a lesser extent by increased utilization (i.e., more prescriptions).
Expenditure growth was larger for non-retail drug expenditures (25%) than for retail expenditures (13%).
Between 2016 and 2021, the location where people received their drugs changed. Americans increasingly received their drugs from mail order pharmacies (35% increase), clinics (45% increase), and home health care (95% increase). During the same time period, there were decreases in drugs received through independent pharmacies (5% decrease), long term care facilities (17% decrease), and federal facilities (9% decrease).
Drug spending is heavily driven by a relatively small number of high-cost products. The cost of specialty drugs has continued to grow, totaling $301 billion in 2021, an increase of 43% since 2016. Specialty drugs represented 50% of total drug spending in 2021. While the majority (80%) of prescriptions that Americans fill are for generic drugs, brand name drugs accounted for 80% of prescription drug spending in both retail and non-retail settings, with little change over time. The top 10% of drugs by price make up fewer than 1% of all prescriptions but account for 15% of retail spending and 20%-25% of non-retail spending.
Prescription drug spending trends have been less affected by the COVID-19 pandemic than health care services.
Several provisions in the Inflation Reduction Act address drug pricing, including allowing the Secretary of HHS to negotiate prices in Medicare Parts B and D for selected medications and introducing Medicare rebates for drug prices that rise faster than inflation. These provisions may impact future drug spending trends.
Telemedicine was made easy during COVID-19. Not any more- "Over the past year, nearly 40 states and Washington, D.C., have ended emergency declarations that made it easier for doctors to use video visits to see patients in another state, according to the Alliance for Connected Care, which advocates for telemedicine use. Some, like Virginia, have created exceptions for people who have an existing relationship with a physician. A few, like Arizona and Florida, have made it easier for out-of-state doctors to practice telemedicine. Doctors say the resulting patchwork of regulations creates confusion and has led some practices to shut down out-of-state telemedicine entirely. That leaves follow-up visits, consultations or other care only to patients who have the means to travel for in-person meetings."
Health and Wellness
Sore Throat, Now the Most Common Sign of COVID - "where once a fever and loss of taste or smell were early warning signs of the bug, the symptom tracking app has revealed the most common symptoms have changed."
People who sleep 5 hours or less a night face a higher risk of multiple health problems as they age - "The study, published Tuesday in the journal PLOS Medicine, took a closer look at a group of nearly 8,000 civil servants in the United Kingdom who had no chronic disease at age 50. Scientists asked the participants to report on how much sleep they got during clinic examinations every four to five years for the next 25 years. For those whose sleep was tracked at age 50, people who slept five hours or less a night faced a 30% higher risk that they would develop multiple chronic diseases over time than those who slept at least seven hours a night. At 60, it was a 32% increased risk, and at 70, it was a 40% greater risk."
CA Legislature Expands Pay Transparency and Data Reporting Requirements; Extends COVID Supplemental Paid Sick Leave - "If signed into law by Governor Newsom, the current amended version of SB 1162 would increase employers’ pay transparency obligations as follows: 1) upon request, all employers will be required to provide the pay scale (i.e., hourly rate or salary range) for the position in which the employee is currently employed; 2) employers will be required to maintain records of job title and wage rate history for all employees for the duration of employment plus three years; and 3) all employers with 15 or more employees will be required to disclose pay scales in all job postings.
SB 1162 also expands California employers’ current pay data reporting requirements, which were initially passed into law in 2020 as part of the nation’s first such state-imposed obligations. The current requirements mandate that private employers with 100 or more employees report annually the number of their employees by race, ethnicity, and sex in specified job categories to the Department of Fair Employment and Housing (recently renamed the Civil Rights Department (CRD))."
California Slated to Usher in New Era of Pay Transparency in 2023: What California Employers Need to Know - "The Act expands pay data reporting to all California employers with 100 or more employees regardless of whether or not they are exempted from the EEO-1 filing requirement. The Act also significantly expands the types of pay information employers must report each year. The first deadline to report is the second Wednesday of May 2023 (May 10, 2023). Covered employers must now also provide the “median and mean hourly rate” within each job category (discussed above), for each combination of race, ethnicity, and sex."
Benefit News
The Cost Of Long COVID To Employers Is Skyrocketing -"two types of claims were sorted out: those labeled long COVID, and those attributed to diabetes. When the numbers were crunched, here’s what came up: Per-member employer spend on long COVID was on average $2,654.67, more than 26% higher than the average diabetic spend....The study also finds that long COVID patients reported a 3.6 times greater likelihood of missing work for medical reasons than plan members without the symptoms. ... [T]he average predicted cost of long COVID to patients is nearly $9,500 within the first six months following a diagnosis."
Segal Trend Survey, 7.4% Plan Increases in 2023 - "The projected annual cost trend for outpatient prescription drugs is expected to be approaching double-digit levels, the highest rate observed since 2015. Double-digit specialty Rx cost trend, mostly driven by price increases and new-to-market specialty drugs, continues to be a major driver of Rx cost trends. Survey respondents project per-person cost trends for open-access PPO/POS plans to be 7.4 percent."
Yet Another Reason to Look at Reference-Based-Pricing (another hidden cost shift against employers) - Employer plans pay an average of 224% of what Medicare pays for the same hospitalizations. This cost shift away from Medicare and onto employers has led to growth in employers moving away from traditional insurance and reverence-base-pricing their plans. I spoke about it with Armstrong and Getty in September here. And I wrote about it becoming a growing trend in the 2020s here. A new study now shows that the same hidden tax/cost shift is happing with Obamacare Exchange plans.
‘Gaming’ Of U.S. Patent System Is Keeping Drug Prices Sky High, Report Says - Four pharmaceutical companies have filed hundreds of patents to keep their drugs out of the hands of generic competition and prolong their “unprecedented profits,” according to a report published Thursday. The excessive use of the patent system — by drugmakers Bristol-Myers Squibb, AbbVie, Regeneron and Bayer — keeps the prices of the medications at exorbitant levels, often at the expense of American consumers, according to the report from the Initiative for Medicines, Access & Knowledge, or I-MAK, a nonprofit organization that advocates drug patent reform. ... The U.S. patent system is meant to reward innovation by permitting drug companies to sell new medications on the market and barring other manufacturers from making generic versions for a set period of time — usually 20 years. Once the patent expires, generics are allowed on the market, often at a lower list price than the brand-name drug. But drugmakers often extend their patents by making small tweaks to the drugs, sustaining their monopolies for several years. Legal experts refer to this tactic as “evergreening...”
Overall spending on mental health services increased from 6.8% to 8.2% between 2013 and 2020, according to a new study published by the Employee Benefit Research Institute (EBRI).
The percentage of the population under the age of 65 with employment-based health coverage diagnosed with a mental health disorder increased from 14.2% in 2013 to 18.5% in 2020.
Among enrollees with a mental health diagnosis, average annual spending on mental health care services increased from $1,987 to $2,380 between 2013 and 2020 — an average of 3% per year.
Physician Burnout Has Reached Distressing Levels, New Research Finds - "Results released this month and published in Mayo Clinic Proceedings, a peer-reviewed journal, show that 63 percent of physicians surveyed reported at least one symptom of burnout at the end of 2021 and the beginning of 2022, an increase from 44 percent in 2017 and 46 percent in 2011. Only 30 percent felt satisfied with their work-life balance, compared with 43 percent five years earlier."
The perks that work to retain employees now - "Among employed adults, 56% say that the work schedule attracts them most in their current role — a factor valued more by women (61%) than men (51%). Almost half of the workers surveyed say that colleagues (48%), fair pay (46%), and work-life balance (43%) are most appealing, with 34% also appreciating their health benefits. In fact, 58% of Gen Z are attracted to their job because of colleagues and work friends, while men (52%) are more likely than women (39%) to be drawn to their job because they are paid fairly."
Health and Wellness
Antidepressants Work Better Than Sugar Pills Only 15 Percent of the Time - "Five years ago Mark Horowitz seemed an unlikely skeptic of psycho-pharmaceuticals. He had been taking the popular antidepressant Lexapro virtually every day for 15 years. He was so fascinated by the drugs that he spent three years hunched over a dish of human brain cells in a laboratory at King's College London, measuring the effect of human stress hormones and drugs like Prozac and Zoloft. Then, when he tried to wean himself off the medication, he suffered panic attacks, sleep disruptions, and depression so debilitating that he had to move back to his parents' house in Australia—symptoms that he says were far worse than anything he experienced prior to going on the drugs. He went online and found thousands of others in a similar pickle. They had been unable to kick one of the psychiatric drugs known as Selective Serotonin Reuptake Inhibitors, or SSRIs, which include Lexapro, Zoloft, and Prozac, among others. Since withdrawal symptoms were thought to be mild and temporary, many of them, like him, had been told by doctors that they were experiencing a relapse of their depression. ..."
Simple, right? Let’s break down each factor a bit further. ..."
CDC no longer recommends universal masking in health facilities - "The Centers for Disease Control and Prevention no longer recommends universal masking in health care settings, unless the facilities are in areas of high COVID-19 transmission. The agency quietly issued the updates as part of an overhaul to its infection control guidance for health workers published late Friday afternoon [Sept. 23rd]. It marks a major departure from the agency’s previous recommendation for universal masking."
Being unhappy or lonely speeds up aging — even more than smoking - "Being unhappy or experiencing loneliness accelerates the aging process more than smoking, according to new research. An international team says unhappiness damages the body’s biological clock, increasing the risk for Alzheimer’s, diabetes, heart disease, and other illnesses. The team reports that they detected aging acceleration among people with a history of stroke, liver and lung diseases, smoking, and in people with a vulnerable mental state. Interestingly, feeling hopeless, unhappy, and lonely displayed a connection to increasing a patient’s biological age more than the harmful impact of smoking."
How Employers Should Handle MLR Rebates- The Affordable Care Act (ACA) established medical loss ratio (MLR) rules to help control health care coverage costs and ensure that enrollees receive value for their premium dollars. The MLR rules require health insurance issuers to spend 80-85% of premium dollars on medical care and health care quality improvement rather than administrative costs. Issuers that do not meet these requirements must provide rebates to consumers. Rebates must be provided by September 30 following the end of the MLR reporting year. For the 2021 reporting year, issuers are required to pay rebates by Sept. 30, 2022. Employers that expect to receive rebates should review the MLR rebate rules and decide how they will administer the rebates. For assistance with rebates, please contact your Fantastic McGriff representative.
California Set to Extend COVID-19 Supplemental Paid Sick Leave Until End of Year - California is expected to extend COVID-19 Supplemental Paid Sick Leave (SPSL) through the end of 2022, but the leave-extending bill does not require employers to provide a new bucket of leave and establishes a relief grant for small businesses and non-profits who incur costs for SPSL.
Court Allows GINA Claims to Proceed Against Wellness Program Sponsor - A recent case should remind employer plan sponsors that the Genetic Information Nondiscrimination Act may limit the information they are allowed to request from employees as part of a wellness program.
How A Facebook Messenger Chat Can Become a “Usual and Customary” FMLA Notice Procedure For a Company - A Fourth Circuit case highlights the importance of abiding by the company’s written absence policies and call-in procedures. "Because the terminated employee’s manager accepted previous messages regarding absences via Facebook Messenger, the Company’s position that using Facebook Messenger was not its “usual and customary” notice practice for reporting FMLA absences was called into question. The Court found that previous utilization of Facebook Messenger to communicate absences raised a question of material fact for a jury to determine if a Facebook Messenger Chat satisfied the FMLA’s notice requirements."
California Passes Bill Protecting Employees’ Off-Duty Marijuana Use - California’s legislature recently passed AB 2188, a bill that would “make it unlawful for . . . employer[s] to discriminate against a person in hiring, termination, or any term or condition of employment . . .” for cannabis use while off the job and away from the workplace.
Benefit News
Employers Project 7.5% Rise in Health Care Costs for 2023 - "As industry experts predict that organizations should brace for increased health care costs in 2023, the International Foundation of Employee Benefit Plans launched a survey of U.S employers to identify the considerations they are contemplating for the coming year. Results show that corporate employers project a median increase of 7.5% for medical plan costs."
Healthcare Pricing Protected So Far From Inflation, BLS Data Shows - "In July 2022, overall prices grew by 8.5% from the previous year, while prices for medical care increased by only 4.8%. While that’s a reversal from the typical trend, the relatively high rate of inflation seen in the rest of the economy may eventually translate to higher prices for medical care, the analysis found. This may lead to steeper premium increases in the coming years.... Since 2000, the price of medical care, including that of services provided, insurance, drugs and medical equipment, has risen faster than prices in the overall economy. Medical prices have grown 110.3% since 2000, while prices for all consumer goods and services rose by 71% in the same period."
The FDA Is Helping Millions Of Americans Hear Better. Finally - "The FDA finalized a rule that would allow people with mild to moderate hearing loss to buy hearing aids over the counter — no prescription, no haggling with insurance, which usually does not cover the devices, and no audiologist visit. This move will also allow people to bypass complex and unnecessary state-level restrictions, which often limit who can sell hearing aids and when, inhibiting patients from shopping around for the best products and discouraging manufacturers from competing on cost and quality."
