“[Pharmacy benefit managers] cut private deals with drugmakers and then set maximum amounts they’ll reimburse drugstores for generic drugs and what they’ll charge companies, insurers or other clients for the drugs. The difference between these two numbers is often called ’spread pricing,’ and remains a murky but highly profitable area.”
So states a USA Today article regarding PBMs, which also notes that such companies are becoming “more profitable and powerful” in the era of health care reform. And indeed, it is true that some PBMs hold back a portion of those rebates – typically, to offset so-called “lower” administrative fees – and pocket the difference.
At MedBen, however, we partnered with a PBM which shares our belief that such tactics have no place in Rx benefits management. And that’s why 100% of discounts and paid pharmacy rebates go directly into your health plan.
MedBen offers a transparent, full pass-through Rx model that results in better savings for clients. We offer superior discount rates, including generic discounts that are among the best in the industry. And we support our pharmacy program with strong, useful reports and recommendations that drive groups toward good plan design decisions.
MedBen will work closely with your group to design a pharmacy plan that best meets member needs, with no hidden fees – instead, you get the maximum savings possible. To learn more, contact Vice President of Sales & Marketing Brian Fargus at email@example.com.
Earlier today, MedBen clients and non-clients turned out for the company’s 12th Annual Hospital Employer Roundtable at the Morrow Conference Center in Newark, Ohio. Members of the MedBen team offered their insights on the current state of health care benefits, with an emphasis on showing ways that hospitals are bringing down their group coverage costs.
MedBen Vice President of Sales and Marketing led off the roundtable with a review of hospital benchmarks for 2013. In prefacing his comments, Fargus observed that stop-loss carriers have seen a rise in large claims over the past several years, a trend that invariably affects employer benefit costs. One carrier reported a 79% jump in claims of a million dollars or more from 2011 to 2012 – a period that coincided with the elimination of lifetime maximums under Affordable Care Act rules.
Yet in spite of the uncertainty surrounding health care reform, Fargus noted that MedBen’s block of hospital clients have seen minimal increases of late – in fact, “average costs have gone up an average of only 2.4% since 2010,” he said.
Among the reasons Fargus cited for the slow growth is a greater emphasis on employee wellness. By reducing the “care gap” – a measure of what preventive exams and screenings a group’s plan members should be receiving compared to what they’re actually getting – MedBen’s hospital clients have seen overall improvements in employee health.
Also key to keeping costs low, he stressed, was promoting an advantage distinctive to health care facilities – in-house treatment. Hospitals can realize substantial savings by encouraging plan members to favor their own physicians, as well as buying their prescription drugs from the hospital’s own pharmacy.
As we recently noted on this blog, MedBen introduced its first reinsurance captive in January, and is developing a second to take effect July 1. A captive is an ideal solution for fully-insured employers that would like to make the switch to self-funding but are concerned about taking on the financial risk.
While a reinsurance captive may seem complicated to those unfamiliar with the concept, it’s actually pretty simple. On its face, a captive is similar to standard self-funded coverage. Employers within the captive still choose their own benefits and specific deductibles, and pay premiums as they normally would for their chosen deductible levels. The real difference resides in a separate pooled or “captive” layer.
A portion of the captive’s collective stop-loss premium is held in this layer, from which claims above the specific deductible are paid. Any funds remaining in the captive layer go back to the groups – and in a good claims year, that can represent a considerable return!
In the sample chart above, the employers pay claims up to their respective specific deductibles. Once reached, an employer’s claims are paid from its own captive layer – and if the maximum amount is reached there, the employer’s stop-loss insurance kicks in.
At the end of the plan year, all employers in the captive share remaining funds in their collective captive layers. Funds are distributed in proportion to an employer’s stop-loss premium – the higher the premium, the more money you get back!
At 2014 MedBen University events in Ohio and Indiana, MedBen will provide guests with a more detailed explanation of how the captive concept works. If you’d like to be notified of upcoming MBUs in your area, just email MedBen Sales Analyst Sally Wood at firstname.lastname@example.org. Or if you’d prefer to learn more about MedBen Reinsurance Captives now, contact Vice President of Sales and Marketing Brian Fargus at email@example.com.
The head of the Centers for Medicare & Medicaid Services promises that there will be no further delays in the nationwide conversion to ICD-10, Modern Healthcare reports.
At an industry convention today, Marilyn Tavenner said that the changeover to the new system of diagnostic and procedural codes “will go live on October 1.” She noted that there have already been several delays “and it’s time to move on.”
Such news may cause concern among benefits managers that were hoping a little extra time – but at MedBen, it’s a non-story. We’re well on our way to completing the conversion in time to meet the federal deadline. As we make clear in a Readiness Statement posted on MedBen.com:
“MedBen will be fully compliant with the upcoming ICD-10 mandate by the deadline of October 1, 2014. We are diligently working to ensure that all of our system components are able to accept and process ICD-10 codes without interruption to our day-to-day processes.
“Our current implementation timeline will allow us to begin internal system testing of the ICD-10 modifications early in 2014. This will enable us to begin testing with vendor partners several months prior to the October 2014 deadline.”
MedBen clients with questions regarding ICD-10 readiness may contact Vice President of Information Systems Rose McEntire at firstname.lastname@example.org.
A new report by the Centers for Medicare & Medicaid Services estimates that the Affordable Care Act may lower rates for 6 million small business employees… but raise rates for 11 million others.
According to The Washington Post, the report attributes the higher rates in part to community rating, in which everyone in a given region pays the same for insurance coverage regardless of their health status (though rates can be somewhat greater for smokers). That results in higher premiums for younger individuals, and lower rates for older ones.
Columnist Asik Roy says the report isn’t telling the whole story, however:
“[T]here are other costly requirements that CMS didn’t directly address. For example, Obamacare includes a silly excise tax on health insurance premiums that will get passed onto consumers in the form of higher prices. Same for its taxes on pharmaceuticals and medical devices. The law also requires that all plans cover a broad range of ‘essential’ benefits, some of which they may not already. The law requires that employers cover ‘adult children’ under the age of 26, which is a good deal for those with adult children, but an added cost for everyone else.
“Then, there’s the likelihood that some of the small employers facing steep premium hikes under the law will drop coverage altogether, and rely on Obamacare-subsidized exchanges instead. That form of adverse selection will increase the average cost of small-group health insurance. The companies most likely to do this? Those with a disproportionate number of younger and healthier employees.”
Read more of Roy’s thoughts at Forbes.com.
MedBen’s cost containment tools continue to pay dividends! In 2013, our innovative claims surveillance system saved clients an average of $12.56 per employee per month (PEPM) – and that’s savings in addition to plan provisions, network discounts, medical management and other cost controls.
MedBen’s surveillance system, powered by InVentiv Medical Management, provides clients with an unprecedented level of analysis. It thoroughly reviews claims to determine an employer’s potential for large loss, risk of inappropriate billing or fraud, and opportunity for further cost reduction. This extensive screening, which uses over 80,000 financial and clinical algorithms, is performed at no additional charge to our clients.
When the surveillance system flags a claim, the InVentiv medical team further evaluates it (with the client’s approval) to determine the appropriateness of charges and whether the treatment met established clinical guidelines. On average, this physician-driven process saves 43% per selected claim.
The surveillance system complement MedBen’s in-house claims processes, which detect billing errors and ensure network discounts have been properly applied. Of course, these technolgies are overseen and complemented by our team of dedicated claims examiners and the cost containment efforts of our URAC-accredited medical management program.
To learn more about advanced claims surveillance and other methods MedBen uses to save clients money, contact Vice President of Sales & Marketing Brian Fargus at email@example.com.
MedBen Worksite Wellness provides a range of services to plan members, from customized recommendations for personal health screenings to one-on-one counseling for chronic conditions. But often, individuals who participate in the program are just thankful for the knowledge that someone is looking out for them.
A worksite wellness nurse coach recently shared with MedBen several instances where a seemingly simple gesture made a favorable impression on the recipient (all plan member’s names were kept confidential):
As these examples demonstrate, just a few moments of conversation can result in a small lifestyle change that can make a big difference down the road, or simply put a plan member in a more positive state of mind. And naturally, our team of wellness coaches also provide open-ended help for patients who are experiencing an ongoing medical issue.
In short, MedBen Worksite Wellness can offer a degree of help to every one of your plan members, resulting in a healthier and more productive workforce. To learn more about the program’s advantages, contact Vice President of Sales & Marketing Brian Fargus at firstname.lastname@example.org.
On Monday, the Obama administration announced that midsize employers would receive another reprieve from the employer mandate under the health care reform law.
Originally scheduled to take effect last month, the requirement that employers with 50 or more full-time workers provide health insurance had already been delayed until 2015. This latest postponement will push the compliance date to 2016 – but only for employers with 50 to 99 employees.
While employers with 100 or more workers still must “pay or play” in 2015, the administration did ease requirements on those groups as well. These groups need only cover 70% of full-time workers in 2015 and 95% in 2016 and after.
The changes were made in the Treasury Department’s release of the Final Shared Responsibility regulations, which also clarified requirements for seasonal employees, volunteer firefighters, teachers, adjunct faculty members, and other specific employment circumstances. Employers with less than 50 employees will continue to be exempt from the employer mandate.
Whether or not these revised rules portend a permanent change to the employer mandate is unclear, but a caveat by the Treasury – “As these limited transition rules take effect, we will consider whether it is necessary to further extend any of them beyond 2015″ – suggests that further delays are a possibility.
MedBen’s compliance team is currently reviewing the final regulations (all 200+ pages in the pre-Federal Register version of them) and will provide additional guidance to clients soon. In the meantime, clients with questions regarding the employer mandate are welcome to contact Vice President of Compliance Caroline Fraker at email@example.com.
Worldwide cancer incidents continue to rise as the overall population increases, according to new World Health Organization (WHO) report.
USA Today reports that new cancer cases will jump globally from an estimated 14 million in 2012 to 22 million new cases a year within the next two decades. During that same period, cancer deaths are predicted to rise from an estimated 8.2 million annually to 13 million a year.
The situation in the Western world is better, relatively speaking. While cancers deaths continue to go up proportionate with population increases, the risk of cancer has dropped 20% in the past two decades – a trend the American Cancer Society attributes to a greater focus on preventive care.
“Tobacco cessation is the big driver,” said Otis Brawley, ACA chief medical officer. “Many people don’t realize that bad diet and obesity causes 12 different cancers. Indeed it’s the second leading cause of cancer in the United States. Tobacco accounts for 33% of all cancers in the U.S. And bad diet, obesity and physical inactivity account for 28%.”
Western Europe and the United States are exporting obesity and other bad lifestyle habits to the third world, Brawley added. But by promoting current knowledge to other countries, WHO estimates that half of all cancers globally could be prevented.
As the report suggests, a focus on wellness not only improves health close to home – it can have a powerful impact on a much larger scale. If you’d like to learn more about how MedBen Worksite Wellness can benefit your own little corner of the world, contact Vice President of Sales & Marketing Brian Fargus at firstname.lastname@example.org.
The Departments of Labor, Health and Human Services, and Treasury have issued proposals designed to clarify the regulation of “excepted benefits” under the Affordable Care Act. Writing for Employee Benefit News, Alden J. Bianchi notes that the new rules pertain to employee assistance plans (EAPs), stand-alone vision and dental plans, and a new “wrap-around” employee benefit that can supplement public exchange coverage.
The vision and dental rules will be of particular interest to employers that self-fund these ancillary benefits. As Bianchi explains:
“Under prior regulations governing excepted benefits, vision and dental benefits are excepted if they are limited in scope (described as benefits, substantially all of which are for treatment of the eyes or mouth, respectively) and are either:
“While only insured coverage may qualify under the first test, both insured and self-insured coverage may qualify under the second test. Also under prior regulations, benefits are deemed to be not an integral part of a plan if participants have the right to elect not to receive coverage for the benefits, and if participants elect to receive coverage for such benefits, they pay an additional premium or contribution for it. This approach puts self-funded plans at a comparative disadvantage. Where employers’ self-fund their limited scope dental or vision benefits, they must charge participants a nominal contribution for the benefits to qualify as excepted benefits.
“The proposed regulations level the playing field between insured and self-insured coverage by eliminating the requirement that participants pay an additional premium or contribution for limited-scope vision or dental benefits to qualify as benefits that are not an integral part of a plan (and therefore qualify as excepted benefits) [Our emphasis].”
Again, this is just proposed guidance for employers, so final regulations are subject to change. But should MedBen clients have questions regarding these rules or other ACA regulations, they are welcome to contact Vice President of Compliance Caroline Fraker at email@example.com.
February is all about hearts… and not just the chocolate-filled variety. This month is also dedicated to raising awareness about heart disease and increasing your knowledge about prevention.
According to the Centers for Disease Control, heart disease is the nation’s leading cause of death for both men and women. It’s estimated that 715,000 heart attacks occur in the U.S. every year, and approximately 600,000 Americans die from heart disease.
The first step to better heart health is to get your blood pressure and cholesterol checked. High blood pressure can cause hardening of the arteries and weakening of the heart muscles, leading to a stroke. Likewise, high cholesterol can cause plaque to build up in the arteries and starve the heart for oxygen – and that’s when a heart attack occurs.
If you have been diagnosed with hypertension and/or high cholesterol, MedBen Worksite Wellness can help you reduce the risk of heart disease. Through our specialty care program, an RN Health Consultant will contact you for disease-specific education and customized counseling. Our service supports the care you receive from your family physician, who can help you devise a sensible lifestyle plan… and keep your heart healthy for many years to come!
We’ve been telling you a lot about MedBen’s new captive reinsurance program in recent days, and with good reason – we think it’s an ideal way for midsize and smaller employees to realize the advantages of self-funding while still reducing the inherent risk.
But the captive program is hardly the only self-funded option MedBen has to offer. We’ve been administering self-funded plans since 1989, and along the way we’ve learned a lot about how to help employers control their costs. We’ve also learned that each type and size of business has unique self-funding needs.
Larger employers benefit most from a total self-funded plan, which provides ultimate flexibility and maximum savings opportunities. MedBen enables employers to be as hands-on as they want to be, helping them to build their benefits from the ground up or putting a plan together for them.
Once a group’s plan is in place MedBen will handle its daily operations, from claims processing to customer service. Money stays with the employer until claims are paid, so it can continue to earn interest. And of course, the employer keeps any money it doesn’t spend!
In addition to the captive program, MedBen offers split self-funding for smaller groups. Split Solution is a great choice for employers with 25 employees or more who still want budgetary predictability.
Split self-funding works much like a regular health plan, with an important difference: The employer gets to keep any savings, rather than an insurance company. Plus, Split Solution’s plan design options allow employers to make benefit decisions based on their own claims history, rather than regulatory mandates.
If you’ve been thinking about making the switch to self-funding your health plan, MedBen would be happy to review your needs and share more savings advantages with you. Simply contact Vice President of Sales & Marketing Brian Fargus at firstname.lastname@example.org.
MedBen is the subject of a Columbus Business First article about the company’s new captive reinsurance program. Health care reporter Carrie Ghose spoke to MedBen President & COO Kurt Harden about the thinking behind captives, and how smaller self-funded employers can benefit from them:
“’One of the biggest frustrations employers have is that feeling of helplessness of sending their money to the insurance company, and they’re not feeling they can manage their costs,’ said [Harden].
”Smaller groups are more likely to be partially self-funded, Harden said. Their claims pool is smaller and they lean more heavily on reinsurance. With MedBen’s captive product, several clients pool their stop-loss risk and own that pool of funds as well. That means they can get rebates if there’s money left at year’s end.
”Going self-funded can help cushion some of the impacts of the Affordable Care Act, Harden said. The law’s new requirements that even out rate-setting mean that historically young and healthy groups are seeing premiums rise. Self-funded plans still reap the rewards of a favorable claims history.”
Employers interested in learning more about the MedBen captive reinsurance program can contact their agent or broker, or call Vice President of Sales & Marketing Brian Fargus at (888) 627-8683.
At the MedBen home office in Newark, Ohio, temperatures outside the building reached double-digit negatives this morning, and continued sub-freezing weather is expected for the rest of the week. When the thermometer dips this low, it’s not uncommon for local power outages to occur. Fortunately, MedBen prepared for such an eventuality… and recently, our safeguards got put to the test.
Last year, MedBen replaced its old generator with a bigger and better model. Boasting 250 kilowatts of power – over twice the capacity of our previous unit – the new natural gas generator allows us to keep all internal processes operational in the event of a power disruption. Plus, all websites housed on our computer systems, including MedBen.com and MedBen Access, will remain online, so clients continue to receive around-the-clock customer service.
On January 10, we experienced a power outage in our area that lasted the better part of the day… and when the loss of power was detected, our building’s systems automatically switched over to the generator, thereby providing uninterrupted service to our clients. When power was restored, the transition was, again, seamless.
Bottom line: Regardless of how cold it gets outside, the MedBen home office will remain up and running (and warm)!
While health insurance exchanges have gotten the lion’s share of the media coverage lately, several other new regulations have been introduced under the Affordable Care Act – and among the most significant for employers are the rules regarding group wellness programs.
According to Employee Benefits News, the Obama administration has made worksite wellness programs a priority in the battle against chronic diseases, which are predicted to cost the U.S. health care system an estimated $4.2 trillion annually by 2023. But unlike some of the more questionable decisions the government has made in hopes of fixing the system, a focus on wellness is a financially sound one – and one that MedBen has championed for years.
As EBN notes, “Evidence suggests that worksite wellness programs are cost-beneficial, saving companies money in health care expenditures and producing a positive return on investment. Researchers have calculated an average return of $3.27 in medical costs for every dollar spent on worksite wellness programs.”
The new wellness rules are meant to encourage appropriately designed, consumer-protective wellness programs. Such programs must be reasonably designed to promote health or prevent disease, and to be available to all similarly situated individuals. Additionally, individuals must be given notice of the opportunity to qualify for the same reward through other means.
As you are probably aware, employers who employ at least 50 employees as of their first plan year on or after January 1st of this year must cover all employees who work at least 30 hours per week under their health coverage. Starting January 1st of 2015, failure to do so will subject such employer to the “Pay or Play” penalties imposed under the Patient Protection and Affordable Care Act (ACA).
The methods of counting the number of hours an employee works are set forth in rules issued by the federal government, which include specific rules for counting the hours of employees who either are not expected to regularly work 30 or more hours per week as of their date of hire, or for whom it cannot be determined on their date of hire how many hours such employees will work on average. These types of employees are considered Variable Hour Employees, and applicable large employers are required to determine the average number of hours worked by these employees so they know to whom to offer coverage if they wish to avoid the penalty.
During the next few weeks, all MedBen self-funded clients and their agents/brokers will be contacted by the MedBen Compliance Department with information about how to set up the counting method to be used by such employer for this purpose. There are variables allowed under the federal rules that an employer may want use in setting up their counting system that will be explained in this information.
Because the “Pay or Play” penalty may hit a particular employer mid-plan year, we are attempting to have these issues resolved by the beginning of the plan’s 2014 plan year to avoid any issues with the plan’s stop-loss carrier, or as soon as possible for those groups with a January plan year. It is also important that the counting method elected by the employer group be included in the plan to avoid any issues with a stop-loss carrier as to whether a particular employee is eligible for the health coverage in the event that such employee meets the plan’s specific deductible level.
MedBen clients with questions regarding this service may contact MedBen Director of Compliance and Medical Management Annette McNair at email@example.com.
To learn more about “Pay or Play” penalties, watch MedBen’s Shared Responsibility Penalties & Affordability Strategies presentation on YouTube.
During the lead-up to the introduction of health insurance exchanges under the Affordable Care Act, speculation ran rampant as to whether large employers would continue to self-fund their group health plans, or drop their coverage altogether in favor of the public marketplaces. At this point, most employers have chosen to keep their plans intact… and are already seeing the wisdom of that decision.
That the exchanges have had a rough rollout is hardly headline news at this point, but underlying all the website drama was the question of just who would enroll. Specifically, would enough younger and healthier people sign up to subsidize the higher health care costs of older enrollees?
Based on the age breakdown of the 2.2 million Americans who have enrolled so far, the numbers don’t look promising. As reported by Avik Roy on Forbes.com:
“Here are the key figures. 59% of non-elderly adults who selected an exchange plan were older than 45, compared to just 32% of the uninsured population: a skew of 27%. On the other hand, 25% of non-elderly adults who selected an exchange plan were younger than 35, compared to 47% of the uninsured: a skew of 22%, for a total skew of 49% (27 plus 22).”
(Roy also notes that West Virginia has the biggest skew toward older exchange participants at 66%, with Ohio in fifth at 60%. Conversely, Kentucky has one of the lowest skews, at 39%.)
If you’re expecting a new MedBen debit card for use with your flexible spending account but have yet to receive it, chances are good you’ll getting it any day now. We’ve been notified that the mailing of some cards was slightly delayed, due primarily to the Target store data breach last month.
As explained in the update we received from Evolution1, the company that embosses and distributes our FSA cards:
“The Target store card breach has resulted in an inordinate volume of card reissues across numerous banks and financial institutions. This is heavily impacting card fulfillment processors.
“As we were trying to clear through the backlog at the fulfillment facility there was a 2 day blizzard shutdown of Indiana roads impacting productivity.”
Evolution1 adds that during normal business times, cards typically take 3-5 business days from the date the card is embossed to when the cards are placed in the US postal system. During the recent holiday season, when open enrollment increases card demand, the turnaround expands to 7-10 business days. Currently, the fulfillment is running at approximately a 10 business day timetable, and “working 24/7 to process volume as quickly as possible,” the update notes.
Should you not receive your new MedBen FSA debit card within the next week, please feel free to contact our FSA service team at (800) 297-1829.
Better prevention, screening and treatment are primary factors for a multi-decade drop in cancer deaths, finds new research from the American Cancer Society.
According to HealthDay News, the overall risk of dying from cancer has fallen 20% over the past 20 years. During the years 2006 to 2010 (the most recent years for which data is available), death rates from cancer declined by 1.8% per year among men and 1.4% per year among women, researchers found.
Ahmedin Jemal, ACS vice president for surveillance and health services research and co-author of the report, noted that most of the progress has been made in colon, breast and prostate cancer. These cancers can be screened for and, when caught early, have better outcomes, he said.
As this study indicates, timely preventive care has been shown to improve the chance that a cancer or other disease can be detected and treated. That’s why MedBen promotes regular colon and breast cancer screenings, as well as prostate cancer screenings folowing a doctor’s consultation, through the MedBen Worksite Wellness program.
In addition to cancer screenings, our program encourages annual wellness exams and other appropriate testing to increase plan members’ awareness of personal health, and to help prevent long-term complications from unmanaged health conditions. By educating their employees about prevention and positive lifestyle changes, employers can reduce medical costs as measured through health care utilization and claims – as well as potentially saving a life.
To learn more about the healthful and financial benefits of promoting wellness in your business, contact MedBen Vice President of Sales & Marketing Brian Fargus at firstname.lastname@example.org.
Benefits management company MedBen has introduced its first reinsurance captive program for businesses that self-fund their health plans, according to its President and COO Kurt Harden. Offered in partnership with HCC Life, this unique coverage option gives employers the opportunity to receive a significant portion of their annual reinsurance premiums back by spreading risk among multiple groups.
“Businesses and organizations of all sizes that self-fund their health plan already save money by not paying large premiums to insurance companies,” said Harden. “This captive program offers employers all the advantages of self-funding plus the opportunity to get a significant portion of reinsurance premium back at the end of the year.”
The initial captive offering was marketed in the 4th Quarter of 2013 and consists of 24 small- to medium-sized employers representing over 1,000 employee lives. The program started on January 1, 2014.
MedBen Vice President of Sales & Marketing Brian Fargus said that another captive is being developed for July 1 groups. “We marketed the January one to a fairly targeted group of employers. For the July captive program, we plan on broadening our efforts.”