Author Archives: Reeve Conover

House repeals ACA’s cadillac tax

Finally, this poorly conceived rules seems to be going away. Now for the senate. Click here for the full article.

Federal Judge Upholds Trump Short-term medical plans

A federal judge on Friday upheld the Trump administration’s expansion of health insurance plans that don’t meet ObamaCare’s coverage requirements. 

U.S. District Judge Richard Leon in Washington ruled against the insurance companies that sued the administration in an attempt to block the rules. 

“Not only is any potential negative impact from the 2018 rule minimal, but its benefits are undeniable,” Leon wrote about the regulations. 

The plans aims to “minimize the harm and expense” for individuals who might otherwise decide not to purchase insurance because of high premiums, Leon added. 

The Trump administration issued a regulation last year allowing short-term health care plans to last up to 12 months instead of three. These plans were originally intended as an option for individuals who need to bridge a gap in health insurance coverage. 

Reference Based pricing in action

When Pacific Steel & Recycling CFO Tim Culliton realized his 750 employees were paying too much for healthcare, he knew the company needed a new plan.

So instead of renewing their current fully funded insurance plan, the Great Falls, Montana-based company, fired their third party administrator and switched to a self-funded plan with a PPO network. They also decided to try reference-based pricing — a highly debated method among benefits advisers for curbing employer healthcare costs.

Working side-by-side with their adviser, Scott Haas of USI Insurance Services, the employer instituted a reference-based pricing strategy in January 2014. So far, the program has led to a reduction in the cost basis of medical claims, Haas says. The pair were able to lower the company’s annual health spend to $3.5 million from $8 million, a savings of about $5 million.

“We saw a significant increase in hospital charges,” Culliton says. “We saw a 400% increase in those costs … that caused us to begin to investigate a different payment process. That ultimately was the beginning of us moving to a reference-based pricing program.”

Reference-based pricing refers to pricing outside what is set by traditional insurance carriers. Provider reimbursement is based on a percentage of what Medicare would typically pay the provider which often ranges from 120% to 170% of Medicare reimbursement, according to Business Benefits Group.

Some employers have been using reference based pricing as a way to curb high healthcare costs. But not everyone is entirely convinced. In an interview with Employee Benefit News, Jake Frenz, CEO of the PBM SmithRx says implementing a reference-based pricing model may be easier said than done.

Washington Targetting Drugmakers?

NEW YORK/WASHINGTON — The Trump administration on Thursday scrapped one of its most ambitious proposals for lowering prescription medicine prices, backing down from a policy aimed at health insurers and raising the possibility of new measures focused on drugmakers.

The abandoned proposal would have required health insurers to pass on billions of dollars in rebates they receive from drugmakers to Medicare patients.

The decision represents a new setback to U.S. President Donald Trump’s efforts to deliver on a pledge to lower drug prices for consumers before the November, 2020 elections, when Republicans want to capitalize on voter concern over high healthcare costs.

It allows companies like Cigna Corp and CVS Health Corp, which negotiate rebates with drugmakers on behalf of the government’s Medicare program, to continue to benefit from those discounts.

Paying for your employees private plan…

Under the Obama administration, this was legislated to be a violation of the ACA. Until January 1,2020 ” employers are still prohibited from reimbursing premiums for individual coverage. .” Recently President Trump sing an executive order, and Health and Human Services, Labor and Treasury have announced the following changes:

Beginning on January 1, 2020, two new Health Reimbursement Arrangements are created.

The first, the individual Coverage HRA, allows any size employer to give employees cash for major medical coverage in lieu of group coverage. Brokers can help provide shopping assistance to your employees to assist in this process.

The second, the Excepted Benefit HRA, allows employers to pay for copays, deductibles, etc even if the employee is not on your health insurance plan.

More to follow on these as the regulations are fleshed out.

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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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