Legislative Brief: What is an ERISA Plan?

What is an ERISA Plan in the group health plan environment? ERISA has been amended many times over the years, expanding the protections available to welfare benefit plan participants and beneficiaries. ERISA violations can have serious and costly consequences for employers that sponsor welfare benefit plans, either through DOL enforcement actions and penalty assessments or through participant lawsuits.
ERISA applies to virtually all private-sector employers that maintain welfare benefit plans for their employees, regardless of the size of the employer. This includes corporations, partnerships, limited liability companies, sole proprietorships and nonprofit organizations. They exempt two types, those maintained by Governmental Employers and Church Plans.
ERISA generally applies to the following common employee benefits, regardless of whether they are insured or self funded:

  • Medical
  • Dental
  • Vision
  • RX
  • HRA’s
  • FSA’s
  • Group Life and AD&D Benefits
  • EAP’s
  • Short and Long Term Disability Benefits
  • Disease-specific Coverage (for example, cancer policies)

ALL Group health plans subject to ERISA are required to provide participants with a summary plan description (SPD). An SPD must be written in a manner calculated to be understood by the average plan participant and must be sufficiently comprehensive to inform the participant of his or her rights and obligations under the plan.

For additional information, please feel free to contact us at 214/739-5215.

Self-Funding: Points to Consider

Gaining popularity similar to it’s peak in the early 1980’s, self-funding is making a comeback. Many brokers / advisers are not well versed in this concept, and therefore are less likely to present the approach to clients. One point they will also likely not share with clients: commissions are paid on the stop loss premiums, not the entire premium amount.

There are reasons to consider self-funding that typically outweigh the reasons not to self-fund. Most importantly, you should be working with an experienced adviser. One who works with self-funded clients day-in and day-out. An adviser who has relationships with a number of Stop Loss Carriers, Third Party Administrators (TPAs) and Pharmacy Benefit Managers, just to name a few.

The first point to consider – self-funding is not a “one year” solution. I do not recommend self-funding to any of our clients if they are not willing to commit to an overall 3-5 year plan. Typically the concept is a win for the client on average four out of five years, but you must be prepared for the bad along with the good.

Additionally, the size of the group should not deter your group from exploring self-funding as an option for your plan. I hear many of my peers say a group has to be at least 200 or 100 employees to consider self-funding, and that is just not true. If a client is financially stable and the adviser understands and communicates all risks involved in the contract, self-funding can be offered successfully as an alternative for clients with as few as 20-25 employees. Some of our clients in the range of 25 employees have been self-funded for over ten years, and are very happy with the stability of the rates over that time period.

Many smaller to mid-size clients should consider a closer look at self-funding due to some distinct advantages under the Patient Protection and Affordable Care Act (PPACA).

This is the first in a series of posts that will focus on the concept of self-funding. With 30+ years experience in all things self-funded, we have a lot to share. We welcome questions and hope those who read will learn something. Continue to follow us for more information coming soon.

Price Transparency in Healthcare

As a business owner, one of the most appreciated benefit offerings to our own employees is a price transparency tool. As one of the first agencies in Dallas to deliver the valuable behavior modification tool, it is amazing to see the product now being offered across the entire nation in under a decade. With over 2,000,000 members now covered, from the Houston Rockets to the employees of Southwest Airlines and Michaels, your employees could also benefit from a true concierge program.

As we implement plans with increased deductibles and copays, we need to give employees the tools and skills to support their efforts to become good consumers of healthcare. All of us have tools to price a vehicle before we head to the car lot. Few of our employees have ever had a tool to price a surgery, the price of which could be comparable to purchasing a car. We do not stop to analyze how much the surgery, the surgeon, the surgery center or even an MRI or prescription drug will cost prior to the procedure being performed. Our transparency tool can compare many choices side by side, and will take it a step further and schedule the appointment, complete the follow up and review the bills after they have been processed if your employees have questions.

Think of the potential dollar savings to your plan, and just as important, the time saved by your employees and the increased satisfaction level as they truly have a patient advocate working for them, hired by you.

For more information, contact Sharon McReynolds: smcreynolds@medconbenefit.com or 214-739-5215.

What Should You Look for When Searching for an Employee Benefits Advisor?

When evaluating, expanding and maintaining your benefits, including self-funding, fully insured or voluntary benefits, look for these qualities in a broker:

1. Comfort and trust level: Do you feel comfortable working with your broker? Do you feel they have your best interests in mind? Do you trust their intentions – are they assisting you with meaningful benefits or merely “selling” benefits?

2. Resources: Does your broker have resources to evaluate how your plans are working? Can they compare them to other plans in the marketplace; do they have benchmarking tools? Are they providing any level of HR services or tools?

3. Experience: Has your broker implemented both self-funded and fully insured plans? Have they worked with large groups, small groups? Do they have experience in traditional and voluntary plans? Short- and long-term disability? Long-term care? Do they have a working relationship with various carriers? Enough to know who requires what and who provides exceptional service?

4. Strategy: Is your broker experienced enough to actually think out of the box and provide innovative solutions? Do they have a long-term strategy for your future over a three- to five-year plan, or do they just bring you a spreadsheet with a “pick a rate” strategy for the year?

5. Compliance and Regulation: Is your broker well-versed in all things ACA (Affordable Care Act) as well as the DOL, ERISA, HIPAA and Plan Document requirements, just to name a few?

6. Compensation Disclosure: Do you know each and every year exactly how much your advisor is compensated on each product?

All of these questions should be answered with confidence in your relationship with your benefits partner. You know up front exactly what to expect from your CPA and your lawyer. They are strategic business partners and have responsibilities in the success of your firm. We submit that your benefits is every bit as important, should not your partner be chosen just as carefully?

NAPEO White Paper Released: “PEO’s – Keeping Turnover Low and Survival High”

The National Association of Professional Employer Organizations (NAPEO) has released its second white paper entitled “Professional Employer Organizations: Keeping Turnover Low and Survival High.” MedCon’s sister company, Employee Resource Administration (ERA) – a Professional Employer Organization, has been serving clients of all sizes throughout the country with the significant issues addressed in the white paper.

 

Key findings highlight the lower employee turnover rate for small businesses in PEO arrangements, faster growth and significantly decreased failure rate.

 

As small businesses continue to struggle in a professional world of ever-changing compliance issues, MedCon and ERA strive to provide greater professional services tailored to meet specific needs of our clients. MedCon aims to provide provide custom employee benefit solutions specific to each client’s needs. ERA provides services to give relief from administrative functions that inhibit clients from doing what they do best – promoting, managing and expanding business. With 4 principals who have all spent their careers working in the insurance and administrative fields, the experience level provided to clients of all industries is unmatched.

 

If you have considered partnering with professional consultants, now is a crucial time to do so. With many changes imposed by the Affordable Care Act, small employers must have a resource to assist with various legislation and compliance matters. Instead of taking time away from the business you have built, consider partnering with the experienced team at MedCon and ERA to provide your professional solution.

 

 

The National Association of Professional Employer Organizations (NAPEO) is the largest trade association for professional employer organizations (PEOs) nationwide.  NAPEO advocates for the interests of its PEO members at all levels of government.

Health Care Consumerism: 22 Ways to Cut Health Care Costs

The way we purchase health care is unlike most other purchases we make. Many Americans will search through a newspaper for a coupon that saves them 50 cents at the local supermarket. However, when it comes to health care—a far more complex and expensive service—we rarely ask questions or consider all the options that could save us time and money.

Learn to shop for value when it comes to health care. With little effort you can save thousands of dollars on your medical bills. Share these helpful tips with your employees regularly to promote educated decisions when choosing health care.

1.     Let’s make a deal. Ask your doctor, hospital or dentist if they will accept less. Studies show that the majority of individuals who bargain succeed.

2.     Know how much it costs. You will be better armed to negotiate discounts when you know the real costs of care. You can find rates on the websites of large insurers like UHC, Cigna and Aetna.

3.     Pay in cash. You can often save up to 10 percent on your bill by paying in cash up front. Doctors lose thousands of dollars each year on credit card processing fees, unpaid bills and collection fees.

4.     Look at your bill closely. You will often find mistakes. Keep track of your visits, tests and medications, and compare them against your bills. Request a corrected bill if you find an error and notify your insurance company.

5.     Follow instructions. Follow your health care provider’s instructions for medications. Most medications work most effectively when they are used according to doctor’s instructions. Ignoring instructions could result in additional prescription costs, extra trips to the doctor or even hospitalization.

6.     Visit a retail health clinic. Retail health clinics are growing in numbers. They are popping up in high-traffic retail outlets in metropolitan areas around the country. While these clinics lack the personal nature of seeing a family physician who knows your complete medical history, their appeal is the convenience and low prices advertised for all to see.

7.     Stay in-network. Your medical costs can increase greatly when you visit a provider not in your plan’s network. Make sure your primary care doctor and any specialists you may need to see are in your network whenever possible.

8.     It doesn’t hurt to ask. If you must see a specialist who isn’t within your network, call your insurance company’s pre-certification department and explain why you must use an out-of-network specialist. Often times you can get your insurance company to agree to pay at in-network rates in order to avoid the expensive appeal process. If that doesn’t work, ask your specialist to accept the in-network rate.

9.     Fight back. If your claim has been denied, start with a phone call to customer service. If that doesn’t work, follow your plan’s appeal process. Remember to document everything and keep copies.

10.     Choose your health plan wisely. Sticking with the same plan year to year may not be the smartest option. Anticipate your family’s medical expenses and look closely at each plan option to find the most appropriate and cost-effective one for you.

11.     Consider an HSA. Health Savings Accounts (HSAs) are growing in popularity. They are combined with a high-deductible health plan. The high-deductible policy protects you from the cost of a catastrophic illness or prolonged hospitalization. You control the savings account and use it for small and routine health care expenses. You will save about $1,500 in taxes for every $5,000 you put into an HSA. Funds you don’t use grow tax-free and can be rolled over from year to year.

12.     Take advantage of flexible spending accounts. A flexible spending account, or FSA, is an employee benefit program that allows you to set aside money on a pretax basis for certain health care and dependent care expenses. That means you keep more of your money. For every $1,000 you put in, you’ll save approximately $300 in taxes.

13.     Don’t skimp on preventive care. Be sure your child gets routine checkups and vaccines as needed, both of which can prevent medical problems (and bills) down the road. Also, adults should get preventive screenings recommended for their age to detect health conditions early. Many of these services are now provided at no cost through employer-sponsored health plans.

14.      Visit a dental school. Look into local dental schools where you will be treated by dental students, who perform the dental treatment closely supervised by their instructors. Expect to pay about 20 to 60 percent of what you’d pay for the same treatment by a private dentist.

15.     Don’t forget to floss. Studies have demonstrated that those who floss regularly have a decrease in periodontal disease, bad breath and cavity incidence. The cost of periodontal disease treatment can range from $200 to $2,000 per procedure.

16.   Discount contacts. Discount websites and stores can provide the exact contact lenses prescribed by your eye doctor, in factory-sealed packaging, at savings of up to 70 percent off what you would pay at the retail level.

17.   Chill out. Over 60 percent of doctor visits are for stress-related conditions. Studies show that relaxation techniques are effective in controlling anxiety, enhancing the immune system and reducing conditions such as high blood pressure, substance abuse and chronic pain.

18.   Quit smoking. On average, health care costs are $1,600 per year for a smoker. Plus, if you quit smoking you can expect to save approximately $1,800 a year on the cost of cigarettes alone.

19.   Live a healthy lifestyle. Focus on eating nutritiously, cutting down on fast food and getting more physical exercise. Striving toward a healthier lifestyle and maintaining a healthy weight can drastically reduce future medical conditions and diseases.

20.   Wash your hands. According to the Centers for Disease Control and Prevention, hand hygiene is the most important factor in preventing the spread of germs. In fact, health experts estimate that 80 percent of common infections are spread through hand contact. Save hundreds of dollars a year on cold and flu treatments.

21.   Get a second opinion. Save thousands of dollars a year on cutting-edge medical tests, which usually are not covered by insurance by following the guidelines recommended by the U.S. Preventive Services Task Force – www.ahrq.gov/clinic/uspstfix.htm.

22.   Think twice about the emergency room. Don’t ever go to the emergency room (ER) when your regular doctor or an urgent care visit would suffice. If you or your child is feeling ill on Friday, get into the doctor that day to avoid overpaying at the ER during the weekend.

Providing your employees with resources to help them understand the complex health care system and pricing can benefit your employer-sponsored health plan tremendously. The more educated we are, the smarter decisions we can make when it comes to health care. Wise health care consumerism not only leads to more money in your employee’s pocket, but also more savings for you, the employer. If you are looking for innovative ways to manage your group health costs, please contact us. We have several clients of all sizes who have experienced exceptional success in educating employees and managing costs through a health care price transparency tool we offer. We welcome the opportunity to discuss if this tool woud be right for you employees as well.