Author Archives: Reeve Conover

Cigna closes $54 billion purchase of Express Scripts

NEW YORK (Reuters) – Cigna Corp (CI.N) on Thursday closed its $54-billion deal to buy Express Scripts Holding Co, creating one of the biggest providers of pharmacy benefits and insurance plans in the United States, a combination it says will help it improve healthcare coordination and cut costs.

Cigna’s deal puts it in direct competition with two other healthcare companies set up the same way – Aetna with CVS Health Corp (CVS.N) and UnitedHealth Group Inc (UNH.N) with Optum. Cigna’s deal has already passed antitrust scrutiny.

Cigna will start offering new products next year to its corporate health insurance customers, including access to Express Scripts’ specialty pharmacy, which has cost savings programs in treatment areas such as cancer, its top executive said in an interview on Thursday.

Prescription drugs that require special handling and are delivered to a doctor’s office or patient home by specialty pharmacies are a growing part of employer healthcare spending and rising U.S. drug costs. Many new drugs costs tens of thousands of dollars when they are launched and drugmakers raise the price of older drugs once or twice a year.

The company will also try to improve products and services by integrating healthcare data, he said.

“There’s a lot of data available today but it’s either not aggregated in a singular place or coalesced in a way that’s intuitive,” Cigna Chief Executive Officer David Cordani said in an interview.

Oxford/United health agrees with CityMD

Highlights

We are pleased to announce that UnitedHealthcare has reached a new agreement with CityMD.

Members may continue to use CityMD on an in-network basis, with no disruption in care. We are sending letters to impacted members who got our earlier notice about the potential network disruption to let them know about this good news. Sample letters are enclosed for your reference.

Attachments

  • Broker eBulletin
  • Sample UnitedHealthcare fully insured member letter
  • Sample Oxford member letter
  • Sample UnitedHealthcare employer letter template
  • Sample Oxford employer letter template

 

New Hardship Rules…

From Associated Pension Consultants:

On November 14, 2018, the IRS released the proposed regulations on hardship distributions.  These proposed regulations provided us with insight into how the hardship distribution rules will be changing in 2019. These changes will impact 401(k) and 403(b) plans that offer hardship distributions.

  1. What are the main changes to the hardship distribution rules?
  • Elimination of the 6 month suspension of deferrals when a participant takes a hardship distribution.
  • Participant no longer has to take out a loan before applying for a hardship distribution effective 1/1/19.
  • Ability to include earnings in the hardship distribution calculations for 401(k) plans, but not in 403(b) plans.
  • Ability to include Safe Harbor Non Elective contributions, Safe Harbor Matching contributions, Qualified Automatic Contribution Arrangement (QACA), Qualified Non Elective Contribution (QNEC), Qualified Matching Contributions (QMACs) as available sources.
  • Added “primary beneficiary under the plan” as an individual for whom qualifying medical, educational, and funeral expenses may be provided (regulations had previously referenced only a spouse or dependent).
  • Added a new safe harbor expense reason of allowing participants impacted by losses to their principal residence to obtain a hardship if their residence happens to be in a federally declared disaster area.
  • Hardship distributions on account of damage to the principal residence that would qualify for a casualty deduction would continue to be allowed and not restricted to a federally declared disaster area. This was clarified in the proposed regulations.
  • The general standard for determining whether a hardship is necessary to satisfy a financial need has been simplified and this standard will apply effective 1/1/2020. The general standard is that:
  • The hardship may not exceed amount of need, adjusted for anticipated taxes and penalties.
  • The participant must have obtained all other available distributions under the plan.
  • The participant must represent that he or she has insufficient cash or liquid assets to satisfy that financial need.
  • The plan administrator may rely on this representation made by the participant.
  1. When does the 6 month suspension of deferrals go away?

The proposed regulation prohibits the use of the 6 month suspension of deferrals for hardship distributions occurring on or after January 1, 2020. However, in 2019 special rules apply.

  1. How should the 6 month suspension be handled on January 1, 2019?

The proposed regulations allow the plan sponsor to decide on any hardship distributions processed in the second half of 2018, as well as any hardships taken in 2019, whether they want to enforce the 6 month suspension.

APC recommends the following procedures to allow participants to continue to save for their retirement:

Hardship distributions processed in second half of 2018 – Should allow participants to restart deferrals on 1/1/19 and not continue the restriction until their 6 month suspension was originally set to end.  This is also subject to the rules of the fund company.  

New Hardship distributions processed in 2019 – Should not suspend deferrals of the participant for 6 months.

  1. When do the plan documents have to be amended for the new hardship changes taking into effect?

APC will notify you sometime in 2019 when we receive more guidance from the Internal Revenue Service (IRS) regarding the timeline of adopting the amendment to incorporate the new hardship provisions. Currently, we have no further information pertaining to the plan amendment.  However, the IRS will allow plans to start using the more relaxed hardship provisions on 1/1/19 in “good faith” prior to the formal amendment.

  1. Does the plan have to allow additional sources for hardship distributions?

The plan sponsor does not have to allow additional sources such as Safe Harbor contributions, Qualified Automatic Contribution Arrangement (QACA), Qualified Non Elective Contribution (QNEC), Qualified Matching Contributions (QMACs) in the calculation of the hardship distribution.

Why health care costs continue to rise?

HHS recently released an extensive report that summarized:

“The report highlights several problems that make health insurance less affordable, including:

  • Hospital and physician consolidation.
  • State “any willing provider” laws and other practices preventing health plans from establishing Centers of Excellence and encouraging enrollees to use high-performing providers.
  • States’ scope of practice laws that require a physician to perform procedures that could be delivered by other health care professionals.”

I have ObamaCare and still can afford medical care

While for those receiving a substantial subsidy, ObamaCare can be pretty good – A recent Harvard University shows the failure of ObamaCare for the masses:

“Despite the Affordable Care Act’s much-touted expansion of health coverage in the U.S., a first-ever poll of America’s seriously ill demonstrates that insurance alone isn’t enough to protect against the high cost of care.

The poll showed that though 91 percent of respondents had , 53 percent of those with insurance had trouble paying their .

“These are not stories about the uninsured, these are stories about people with an insurance card,” said Professor Robert Blendon, who discussed the poll Wednesday at the Harvard Chan School, which cooperated on the effort with The Commonwealth Fund and The New York Times.

 

For the full story click here.

 

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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA.
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