Category Archives: Uncategorized

Blue Cross Blue Shield SC Formulary Changes

Exclusions for many certain high-cost brand drugs that are no more effective than medications already available are among the latest updates to BlueCross BlueShield of South Carolina’s drug formulary, with most of the changes taking effect July 1, 2018.

We work with an independent panel of BlueCross network physicians and pharmacists, the Pharmacy and Therapeutics Committee, to develop and maintain our drug lists and policies. Clinical decisions are based on drugs’ efficacy, safety and value, with the goal of providing the greatest clinical effectiveness for the lowest cost.

The particular brand-name drugs affected by this update are usually launched a couple of years after a new brand-name drug is introduced. “Structurally, they are very similar to drugs already on the market,” said Joshua Arrington, who is pharmacy sales director for BlueCross as well as a licensed pharmacist.

The newer versions aim to capture their own share of the market as manufacturers promote them as providing additional value. But because they are so similar to the original drugs, they offer no clinical benefit to patients — and after initial discounts wear off, they don’t offer additional cost savings, either.

The new Update Bulletin from our Pharmacy Management department includes an A-to-Z (Aczone to Zofran) list of drugs that will be excluded as of July 1, as well as alternative medications that are covered. Arrington mentioned some examples of the savings involved:

  • Doryx averages $1,000 per prescription. Its generic alternative doxycycline is $18.
  • Amrix averages $1,000 per prescription. Its generic alternative cyclobenzaprine is $10.
  • Gralise averages $660 per prescription. Its generic alternative gabapentin is $15.

Please note that the Pharmacy Management bulletin also includes other drug formulary updates that have taken effect or will take effect soon. They apply to specialty drugs, topical corticosteroids, and some requirements for prior authorization, step therapy and quantity limits.

Will Congress vote away pre-existing exclusions?

From AP 6/14/18, click here for full story

The media  has grasped onto recent Trump administration statements as being aimed at pre-existing conditions.  At issue is Attorney General Jeff Sessions’ recent decision that the Justice Department will no longer defend key parts of the Obama-era Affordable Care Act in court. That includes the law’s unpopular requirement to carry health insurance, but also widely supported provisions that protect people with pre-existing medical conditions and limit what insurers can charge older, sicker customers.”

The truth here is that it is unlikely that anyone would want to go back to being stuck in a job because of medical coverage.  The truth here is that the law has many interlocking parts, so allowing one piece to be abolished may have other consequences (Kind of lick all decisions we make as humans!).

It appears that the administration is refusing to defend parts of the law related to mandated employer coverages.  While large employers would have no problem, it could affect employers with less than 50 employees IF such a change was ever made.  IF such a change was made – the courts threw out a section that affected it, it would be a simple thing for Congress to fix it.  Based on track record on other simple issues, however, this writer IMHO doubts they could get over their partisan paralysis and get much of anything done.

 

Tax credit on paid leave

From Employee Benefit Advisor 6/14/18.  For full story, click here:

 

The Family and Medical Leave Act already requires covered employers to allow eligible employees to take up to 12 weeks of unpaid leave. In an effort to encourage employers to offer paid leave, the recent Tax Cuts and Jobs Act of 2018 sweetened the deal by promising a tax credit to employers, starting in 2018, on the wages that they pay to eligible employees during family and medical leave. However, there are certain restrictions in the law which minimizes its benefit to employers.

The types of leave which qualify for the tax credit are taken from the FMLA include:

· Birth of the employee’s child
· Placement of a child with the employee for adoption or foster care
· Care of a spouse, child, or parent with a serious health condition
· A serious health condition which prevents the employee from performing the functions of their position
· A spouse, child, or parent on covered, active duty in the Armed Forces
· Care for a service member who is the employee’s spouse, child, or next-of-kin

The paid leave, for tax credit purposes, must be due to taking an FMLA leave. In other words, pay during the leave due to vacation, personal leave, or a medical leave is not considered for credit purposes.

U.S. House Speaker Paul Ryan, a Republican from Wisconsin, holds up a Simple, Fair “Postcard” Tax Filing card while speaking during a news conference on tax reform in Washington, D.C.Bloomberg

If an employer provides a self-funded short-term disability benefit, for example, that wage replacement is disregarded. Similarly, any paid leave required under state or local law is disregarded for purposes of the federal tax credit.

Only paid leave amounts solely due to the taking of an FMLA leave will qualify. An example of paid leave eligible for the credit would be paid parental leave in the event of a new child — as long as the paid leave wasn’t paid due to the new mom’s disability or mandated under state or local law.

How an employer qualifies for the tax credit

The following requirements must be satisfied to claim the credit:

· The employer must have a written policy, allowing for at least two weeks of annual paid family and medical leave for full-time employees, or a prorated amount for part-time employees
· The employee must have been employed by the business for at least one year
· The employer must pay at least 50% of an employee’s normal wages while the employee is on leave
· For the prior year, the employee must not have earned more than 60% of the dollar threshold for being considered a highly compensated employee for 401(k) purposes.

Even employers not subject to FMLA may still qualify for the tax credit. In order to do so, these employers must provide paid family and medical leave in compliance with a written policy which includes assurances that the employer will not interfere with an employee’s right to claim paid leave under the policy or discriminate against an employee in­­­­­ connection with the employer’s paid leave policy.

How the tax credit works

The tax credit is calculated as a percentage of the wages paid to an employee while on family or medical leave. If the criteria are met, the employer may claim 12.5% of those wages paid as a federal tax credit for up to 12 weeks of paid leave per year.

Additionally, for every percentage-point increase in pay rate over 50% of the employee’s normal wages, the tax credit increases by 0.25%, with a maximum credit of 25% of wages paid during the leave.

Take a simplified example: Say an employee normally earns a wage of $1,000/week and the employer pays the employee $600/week for four weeks while on leave to care for a spouse with a serious health condition: 60% of normal wages would yield a 15% tax credit on those wages, which is a $360 credit for $2,400 in wages.

It is worth noting that employers must reduce their deduction for wages by the amount of the credit. Plus, any wages that are used in calculating another business tax credit cannot be used when calculating this credit.

Employers who already provide paid FMLA leave for their employees, or have already been considering it, may take advantage of this tax benefit with little added difficulty. On the other hand, employers may find the incentive to be too small to offset the expense of paid leave.

In any case, the provision is set to expire at the end of 2019. Unless Congress extends it, employers will only be able to take advantage of this benefit for two years.

The IRS has said that it will likely give more specific guidance on how the credit will work in the near future.

New Jersey mandates individual health insurance

Governor Phil Murphy has signed into law The New Jersey Health Insurance Market Preservation Act (the “Act”) making it the second state, after Massachusetts, requiring resident individuals to maintain health insurance coverage or face an individual shared responsibility payment.

This law comes on the heels of The Tax Cuts and Jobs Act, signed by President Trump on December 22, 2017, which repealed the individual shared responsibility payment enacted under the Affordable Care Act (or commonly referred to as Obamacare).

The individual shared responsibility, under the Affordable Care Act, requires individuals to maintain minimum essential health coverage or face an individual shared responsibility payment. The Tax Cuts and Jobs Act repealed, or eliminated, the individual shared responsibility payment effective January 1, 2019. In an effort to help to control recent premium price increases, Governor Murphy signed the Act into law May 31st

The State’s shared responsibility payment is based on the Affordable Care Act calculation which, for 2017, was the greater of 2.5% of a taxpayer’s income over the applicable filing threshold or $695 ($347.50 for those under 18 years of age). The maximum shared responsibility payment for a family for 2017 was $2,085. The shared responsibility payment increases annually but cannot be more than average cost of a bronze level plan on the New Jersey health insurance marketplace.

It is important to note that there exists a religious and hardship exception to the shared responsibility payment.

Rate Increases in New York

Rate Increases have started to come out for NY Small group and individuals for January 1, 2019.  Note that these are requests, not approvals.  That won’t happen until sometime in the fall.  Also note that these are averages across all that companies products.

With the elimination of the individual mandate under ObamaCare, the individual market is getting very large increases.  The baseline average increase was 12.1%, but an 11.9% additional increase has been applied for to cover the effects of the individual mandate being repealed.

SMALL GROUP

Aetna                                         16.2%

Emblem                                     12%

Empire                                         6%

Healthfirst                                 21%

MVP                                              7%

Oscar                                            3%

Oxford                                        8.3%

United                                        7.2%

 

INDIVIDUAL

Emblem                                    31.5%

Empire Healthchoice            24.0%

Fidelis                                       38.6%

Healthfirst                                15.0%

MVP HealthPlan                       6.5%

Oscar                                          25.2%

United                                        23.6%

 

 

 

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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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