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The Health Insurance Challenges that Small Businesses in Western Washington Face in 2018
Thursday, July 27 2017

For small businesses with less than 5 employees in western Washington state, buying health insurance inside the more stable group insurance marketplace will be a challenge, but one which needs facing for 2018.

Specialty Pharmacy- How Can a Small Group Plan Manage this Monster?
Wednesday, July 19 2017

Back in the late eighties, for every dollar spent on medicine, roughly 12 cents went towards prescription drugs. Fast forward to the present, and you’ll find that number has increased to a whopping 38 cents, with pharmacy trend expected to continue rising at 15%-25% annually.

Consider this: there are 6 new Specialty maintenance drugs (not cures, maintenance drugs) slated for release before the end of 2016, each carrying a 6 figure price tag. How did Specialty Pharmacy become such a trend-inflating monster? Why is the use of these medication types skyrocketing? To find some of the answers, we need to look no further than our home TV.

We’ve all seen the Specialty medication commercials …you know, the ones that endlessly drone on between the nightly news segments. But, did you know only the U.S. and New Zealand allow DTC (Direct to Consumer) drug ads? It appears the FCC will continue to allow Big Pharma to use their sneaky commercials to solicit and entice us to run to our doctors and ask for these new, amazing medications by name. But these commercials and their drugs come at a price... a big one for group health plans! 

So what is feeding this pervasive Specialty drug trend? The top 3 specialty therapy classes include medications for multiple sclerosis, oncology and inflammatory conditions. Just these three 3 classes alone accounted for 56.3% of the entire specialty medication spend in 2015. Let’s take a look at the top 10 specialty therapy classes for 2015:

  1. Sleep Disorders – average cost per script about $9,000 fueled by an 18.5% increase in cost and 5.5% increase in utilization. This category of medications remains one of the most challenging classes to stop taking, yet one of the easiest to get a prescription for!
  2. Hemophilia – this medication went up in cost by 15.4% per unit.
  3. Pulmonary Hypertension – these drugs incurred a 13.4% increase in utilization and 4.8% increase in unit cost.
  4. Cystic Fibrosis – The trend for this class of medications reached 53.4% in 2015 with an average cost of $6,441.27 per prescription.
  5. Growth Deficiency – Some of the highest trend in 2015 (+140.6%) was attributable to treating rare condition growth deficiencies.
  6. HIV - 6 of the top drugs increasing in spend by double and triple digits in 2015 are from the HIV category, moving it up to fifth place in the most expensive specialty therapy class. Brand inflation and utilization will continue to drive the trend for HIV drugs.
  7. Hepatitis C – At $1,200 per pill and a multi-million dollar marketing campaign, Harvoni which was approved in 2014, accounted for more than 57% of market share for hepatitis therapy. No end in sight here.
  8. Oncology - The FDA approved 10 oncology therapies in 2015, which helped increase spend 23.7%, while the increase in utilization (9.3%) and unit cost (14.4%) helped drive the trend.
  9. Multiple Sclerosis - MS is ranked at number 2 in total trend for medications at 9.7%.
  10. Inflammatory Conditions – When ranked by per member per month spend, inflammatory conditions remained at the top of the specialty therapy classes for the 7th consecutive year in a row, trending at a whopping 25%. Yikes!

Source: American Journal of Pharmacy Benefits, Published online March 16, 2016.

Most large, self-insured employers (2,000+ employees) enjoy having the option to carve-out prescription drug costs away from their medical plan and contract directly with the PBM (Pharmacy Benefit Manager) itself, resulting in increased transparency and a potential for large cost savings. But, what if you are a smaller self-insured employer, say around 250 employees? I can’t help but wonder what price that health plan is currently paying for Specialty and other drugs. 

The truth is, the large PBMs won’t even pick up the phone and speak with a smaller employer, because the PBMs pricing and servicing bandwidth just isn’t cost favorable for this segment. That is until recently. 

At PNW Insurance Solutions, we approach pharmacy claims for smaller employers as something to be managed, as part of a multi-year strategy. If you are a smaller employer, you can have options too, you just need to know the right insurance advisor who can provide them. Faced with double-digit increases in health care costs and premiums, many driven by high cost specialty medications, smaller employers between 100-1,999 lives want and need solutions too! Fortunately, PNW Insurance Solutions has an established process to provide PBM carve out analysis to the underserved smaller, group employer segment.

You have options!

Washington State Enacts Paid Family and Medical Leave Law
Sunday, July 16 2017

Benefits Begin January 1, 2020

Washington has enacted a paid family and medical leave law. Highlights of the law are presented below.

Definitions of 'Family' and 'Medical' Leave and Maximum Duration
"Family leave" means any leave taken by an employee from work:

  • To participate in providing care, including physical or psychological care, for a family member of the employee made necessary by a serious health condition of the family member;
  • To bond with the employee's child during the first 12 months after the child's birth, or the first 12 months after the placement of a child under the age of 18 with the employee; or
  • Because of any qualifying exigency as permitted under the federal Family and Medical Leave Act for family members.

"Medical leave" means any leave taken by an employee from work made necessary by the employee's own serious health condition.

The maximum duration of paid family leave may not exceed 12 times the typical workweek hours during a period of 52 consecutive calendar weeks. The maximum duration of paid medical leave may not exceed 12 times the typical workweek hours during a period of 52 consecutive calendar weeks. Paid medical leave may also be extended an additional 2 times the typical workweek hours if the employee experiences a serious health condition with a pregnancy that results in incapacity.

Coverage, Eligibility, and Benefit Start Date
The law generally applies to employers of all sizes. Employees are eligible for family and medical leave benefits after working for at least 820 hours during the qualifying period.

Beginning January 1, 2020, family and medical leave are available and benefits are payable to a qualified employee. Following a waiting period consisting of the first 7 calendar days of leave, benefits are payable when family or medical leave is required. However, no waiting period is required for leave for the birth or placement of a child.

Benefit Amounts
The weekly benefit for family and medical leave will be determined as follows. If the employee's average weekly wage is:

  • 50% or less of the state average weekly wage, the employee's weekly benefit is 90% of the employee's average weekly wage; or
  • Greater than 50% of the state average weekly wage, the employee's weekly benefit is the sum of: 90% of the employee's average weekly wage up to 50% of the state average weekly wage; and 50% of the employee's average weekly wage that is greater than 50% of the state average weekly wage.

The maximum weekly benefit for state family and medical leave that occurs on or after January 1, 2020 is expected to be $1,000. By September 30, 2020 (and by each subsequent September 30th), the state is expected to adjust the maximum weekly benefit amount to 90% of the state average weekly wage. The adjusted maximum weekly benefit amount is expected to take effect on the following January 1st.

The minimum weekly benefit is not expected to be less than $100 per week, except that if the employee's average weekly wage at the time of family and medical leave is less than $100 per week, the weekly benefit will be the employee's full wage.

Notice, Posting, and Recordkeeping Requirements
Whenever an employee is absent from work to provide family leave, or take medical leave for more than 7 consecutive days, the employer must provide the employee with a written statement of the employee's rights under the law (in a form to be prescribed by the commissioner of the state Employment Security Department).

Each employer must also post and keep posted—in conspicuous places on the employer's premises where notices to employees and applicants are customarily posted—a notice (to be prepared or approved by the commissioner) setting forth excerpts from, or summaries of, the pertinent provisions of the law and information pertaining to the filing of a complaint.

Additionally, an employer must keep at the employer's place of business a record of employment, for a period of 6 years.

Additional Information
The family and medical leave law repeals several laws, including the Washington Family Leave Act and the Washington Family Leave Insurance Law. The law also contains additional information on employer and employee premiums, including waiver and how much employers may deduct from employee wages for premiums.

Beginning January 1, 2020, family and medical leave are available and benefits are payable to a qualified employee; however, the law contains various effective and applicability dates. Affected employers with questions about the law's impact on workplace policies and practices should contact a knowledgeable employment law attorney.

Click here to read the text of the law.

Are Summer Interns Subject to Minimum Wage and Overtime Pay?
Wednesday, July 05 2017

Are Summer Interns Subject to Minimum Wage and Overtime Pay?

Employers who have hired summer interns should keep in mind that the U.S. Department of Labor (DOL) has stated that private sector internships are most often considered "employment" subject to the federal Fair Labor Standards Act's (FLSA) minimum wage and overtime rules.

The Test for Unpaid Interns
There are some circumstances under which individuals who participate in for-profit private sector internships or training programs may do so without compensation. The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances. The DOL uses the following six criteria that must be applied when making this determination:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all of the factors listed above are met, an employment relationship likely does not exist under federal law, and the FLSA's minimum wage and overtime provisions do not apply to the intern. This exclusion is narrow, because the FLSA's definition of "employ" is very broad.

Note: Be sure to check your state wage and hour laws for applicable requirements. When both the FLSA and a state law apply, the employee is entitled to the most favorable provisions of each law.

Contact me at or (425) 314-0988 if you'd like any help.  



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