Tag Archives: National

Are Fiduciary Warranties worthless?

Ary Rosenbaum published an article recently titled “The Complete and Total Worthlessness of the 401k Fiduciary Warranty.”  He makes a great case that not only is your “fiduciary warranty” worthless, it is actually dangerous as it lulls Plan Sponsors into a false sense of security.

He reminds you that the fine print matters, and that you don’t always have the protection you were lead to believe.  A great example is my FEMA flood insurance.  When the river flooded into our yard last year (the 1000 year flood) our pool pump died.  Turns out FEMA only covers things inside your house, and regular insurance doesn’t cover things outside the house – so we had to pay.

If you have a 401k plan that you are responsible for I strongly advise you to read this.  Click here.

ACA covers tobacco cessation programs

Alot of people don’t realize that Smoking Cessation programs are required under PPACA.  Here are some details from Blue Cross Blue Shield of SC. Each company is slightly different but it gives you and idea of how it works.

Who it Covers:

The Affordable Care Act (ACA) mandates coverage of tobacco cessation products for members participating in non-grandfathered plans purchased after March 23, 2010. This coverage is already in effect for members with grandfathered plans purchased before March 23, 2010 and ACA plans.

Please note: Product coverage applies to Individual and Group plan holders.

How it Works:

We cover certain tobacco cessation products at zero ($0) member cost share . We developed our program based on accepted national smoking cessation treatment guidelines. Members participating in non-Marketplace plans will need to request prior authorization for coverage of these drugs in order to promote the safe and cost-effective use of the available therapies.

The tobacco cessation drugs we cover at zero member cost share ($0) are:

  • Prescription-only bupropion 150mg (generic Zyban)
  • Prescription-only Chantix
  • Prescription-only nicotine nasal spray or inhalers (ex: Nicotrol NS and Nictorol inhaler)
  • Over-the-counter (OTC) nicotine patches/transdermal systems (ex.: Habitrol OTC and Nicoderm CQ OTC)
  • OTC nicotine gum (ex.: Nicorette gum OTC)
  • OTC nicotine lozenges (ex.: Nicorette lozenge OTC and Nicorette mini lozenge OTC

Requirements for Coverage

  1. Member must be 18 years old
  2. Coverage for Chantix, prescription-only nicotine nasal spray or nicotine inhaler  require members complete unsuccessful trial or experience an adverse reaction during the trial of both of the following products:
    • Bupropion 150mg
    • One of the available OTC nicotine replacement products (note: OTC nicotine trial must be documented in prescription history)

Length of Treatment
We will limit prescription fills for any of these products to a 30-day/one-month supply at a time. The maximum is 90 days/three months per approval. When appropriate, members can request reauthorization to continue treatment for an additional 90 days/three months of therapy. This cannot exceed two 90-day/three-month periods of smoking cessation therapy per 365 days/12 months.

Tobacco Cessation Counseling
Quit rates are highest when you pair tobacco cessation counseling and nicotine replacement therapies together. Our health coaches use motivational interviewing to help members decide when and how to quit. They will provide ongoing support to help members become tobacco free. Members with non-grandfathered plans can enroll by calling 855-838-5897, option 2. Members with ACA plans can enroll by calling 800-327-3183, ext. 25805.


Changes to Summary of Benefits Rules coming

Proposed New Summary of Benefits and Coverage Template Available for Final Comment and Review

On February 26, the Department of Labor (DOL) issued a formal notice along with the proposed new Summary of Benefits and Coverage (SBC) template, instructions and related documents for final comment and review. Comments are due by March 28, 2016.

The Affordable Care Act requires SBCs as a means to provide individuals with standard information so they can better understand and compare medical plan offerings. Final regulations implementing SBC requirements were issued in June 2015, but release of final documents and forms was delayed to a later date.

In this latest development, the DOL has released revised versions of the SBC template and other materials, based on input from the National Association of Insurance Commissioners (NAIC) and other stakeholders.

The general format of the SBC template is similar to the current version. Proposed changes to the template include:

  • Streamlined content, e.g., removal of Q&A about coverage examples, which reduced the template to 5 pages (SBC limit remains 8 pages/4 double-sided pages)
  • An additional cost example for a foot fracture treated in an emergency room
  • Updated claims/pricing data for the coverage example calculator
  • New minimum essential coverage and minimum value language, as well as new continuation and appeals/grievance rights language
  • Revised language for some sections of the template
  • An updated Uniform Glossary

While the effective date for using the new template has not been announced, the DOL indicated in a phone call that the new SBC template will take effect for plan years beginning on or after April 1, 2017. In this scenario, calendar year plans with 1/1 effective or renewal dates would not need to use the new template until the fall 2017 enrollment period for 2018 coverage.

No Impact on Expatriate Plans

Both U.S. issued fully insured and self-funded expatriate plans are exempt from the SBC requirements. This new template does not impact expatriate plans.

Blue Cross loses more money on exchange than other carriers

The nation’s Blue Cross and Blue Shield plans have fared worse than publicly traded health insurance companies on the new health insurance exchanges, with many of these plans losing hundreds of millions of dollars last year on individual policies sold under the Affordable Care Act.

A new report from Fitch Ratings, which looked at earnings ofnearly three dozen Blue Cross and Blue Shield companies, showed 23 had a decline in earnings and 16 had a net loss , largely related to losses from policies sold to newly insured Americans who bought subsidized individual policies on public exchanges. There were 23 Blue Cross companies that reported a “collective $1.9 billion decline in earnings” for the first nine months of 2015, and 16 of those companies had net losses.

It’s a significant development because these insurers are raising prices for this year to recover the losses and taking additional steps like slashing broker commissions and narrowing doctor and hospital choices to rebound in 2016.

Blue Cross plans also tend to be the dominant providers of individual policies in their states. In Illinois, for example, the Blue Cross plan owned by Health Care Service Corp. has about 80% of the customers who purchase coverage on the public exchanges.

New documentation required for SEP enrollees

The New York Times reported on 2/24 that “People who want to buy health insurance in the federal marketplace outside the annual open enrollment period will now have to provide documents to show they are eligible, the Obama administration announced on Wednesday.

In the last two years, insurers say, many people went without coverage and then signed up under the Affordable Care Act when they became sick and needed care. Insurers say that people who sign up after the deadline tend to generate more claims and more costs, raising premiums.”

This is a functional change from current procedure, where individuals signing up under the special enrollment period merely attested to it on the computer by answering a few questions.  Now, for example, you would have to provide a marriage or birth certificate, or a letter documenting your loss of coverage.

This applies only to the 38 states using the Federal Exchange (healthcare.gov) and it is unknown what the individual state exchanges will do.

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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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