New Executive Order Calls for Expanding Access to Association Health Plans

President Trump has signed an executive order calling upon the U.S. Department of Labor (DOL) to consider, among other things, expanding access to Association Health Plans, which could potentially allow employers to form groups across state lines. Until further guidance is issued or legislation is signed, however, all current ACA requirements remain in effect, including penalties for noncompliance.

Key Highlights

The following are key highlights of the order:

Association Health Plans (AHPs): The executive order directs the DOL to consider adopting a broader interpretation of the Employee Retirement Income Security Act (ERISA), which could potentially allow employers in the same line of business anywhere in the country to join together to offer health insurance coverage to their employees.

Short-Term, Limited Duration Insurance (STLDI): The executive order directs federal agencies to consider ways of expanding coverage through low-cost STLDI, which is not subject to certain ACA rules.

Health Reimbursement Arrangements (HRAs): The executive order directs federal agencies to consider changes to the rules regulating HRAs so that employers can make better use of these arrangements for their employees.

Note: In general, executive orders must be implemented in a manner consistent with applicable law, including the Administrative Procedure Act, which requires extended review of and public comment on any federal rules which may be proposed as a result of an executive order. Going forward, we will promptly report changes made to any ACA requirements.

To access your HR library, please visit www.pnwisol.com/hr360. Call with questions (425) 314-0988.

Too often, mistakes happen during Open Enrollment that can expose an employer to significant penalties. Be sure to avoid these costly mistakes with PNW Insurance Solutions' new Five Most Common Open Enrollment Mistakes guide. Click here to download.

PNW Insurance Solutions was interviewed this week in the Mill Creek and Mukilteo Beacon. In the article, owner Wendee Allen discussed how "one size fits all" health insurance rarely ever meets the needs of employers or their employees. Wendee also outlined how healthier employees leads to increased productivity and profits. Download the article.

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.

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. www.ajpb.com

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!

www.pnwisol.com

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.

There is a lot to keep track of and keeping your compliance up-to-date my seem unnecessary and even tedious.  At a minimum, be sure to do the following each year:

1. Give your poster wall a thorough check-up. Make sure all your workplace posters are up-to-date and the correct size. Check with us if you are not sure which industry-specific poster requirements apply to your business. PNW Insurance Solutions will provide you with help.  Just ask!
    
2. Stay on top of notice requirements. From summary plan descriptions (SPDs), to COBRA- and FMLA-related notices, employers are required under various laws to provide employees with certain information about their benefits and responsibilities. Confirm that your employee communications are accurate, consistent, and in compliance with applicable law.  PNW Insurance Solutions will provide you with help.  Just ask!
    
3. Keep up with recordkeeping. In addition to being a good business practice, employers are required to maintain certain types of employee records in order to comply with applicable law. Verify that your recordkeeping procedures address any requirements related to confidentiality and how long to keep records.
    
4. Review policies and procedures. Be sure your company policies and procedures comply with applicable labor laws related to employee leave, equal employment opportunity, sexual harassment, worker safety, and other requirements.
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5. Confirm that your workers are classified properly. Misclassifying employees as independent contractors can result in costly legal consequences. Also remember that an employee's exempt or nonexempt status is based on his or her compensation and specific job duties. It's a good idea to review job descriptions on a regular basis (at least annually) as well, as tasks and requirements may change.