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  11:40:37 am, by MedBen5   , 196 words,  
Categories: News, Health Plan Management

House Ways and Means Committee Releases COBRA FAQ

Capitol BuildingThe COBRA Premium Reduction provision of the recently passed Stimulus Bill has, not surprisingly, raised a number of questions. To address the most frequently asked questions, the U.S. House Ways and Means Committee has published a COBRA “How To” Manual to download and print.

Of special notice to employers is that the FAQ defines “involuntary termination", which, although pivotal to qualifying for COBRA coverage, has received little clarification as to its actual meaning:

“QUESTION: How do I know whether or not I have been involuntarily terminated from employment?

“A. Involuntary termination is a termination that is at the direction of the employer. Note that termination for gross misconduct will generally disqualify an employee and his/her family from COBRA coverage. For more information on whether your termination is involuntary please call the Department of Labor’s Employee Benefits Security Administration’s Benefits Advisors at 1-866-444-3272.”

In addition to the FAQ, we’ve provided revised code sections for Ohio and Kentucky, applicable to each state’s “mini-COBRA” laws. You can download and print these documents below.

Frequently Asked Questions on the COBRA Premium Reduction

Ohio Continuation of Coverage (ORC 3923 38)

Kentucky Continuation of Coverage (KRS 304 18-110)


  11:46:40 am, by MedBen5   , 130 words,  
Categories: News, Health Plan Management

COBRA Subsidy Employer 2009 IRS Tax Forms

Washington Monument

As we’ve noted on this blog recently, employers who must pay the 65% COBRA subsidy will be able to offset such amounts by receiving a payroll tax credit against federal income and FICA taxes. For the convenience of these employers, below we have provided a downloadable version of the IRS Form 941 (updated January 2009), which they can use to receive credit for COBRA premium assistance payments. We’ve also included instructions for completing the form.

Please note that this is a quarterly tax form. The employer must file a new form by the end of April, July and October of 2009 and January of 2010 to receive the payroll tax credit for that quarter.

UPDATE: The IRS has posted on its website an FAQ about COBRA Coverage and Form 941.

  10:59:03 am, by MedBen5   , 143 words,  
Categories: News, Health Plan Management

ARRA's COBRA Provision Language

MedBen has received a number of requests to provide the actual Congressional language for the COBRA premium subsidy provision from the recently passed American Recovery and Reinvestment Act (ARRA), aka the stimulus bill. Below, you will find a link to the complete provision language that you can download and print.

If you find this document to be a tough read (not surprisingly, it’s a bit heavy on the legalese!), we’ve covered many of the most important points elsewhere on the pages of this blog. Click below to read more on the details of the COBRA provision.


  10:54:26 am, by MedBen1   , 284 words,  
Categories: Announcements, News, Prescription, Health Plan Management

Value of "unique" MedBen services: over $19 per employee per month

Currency in Hand

If MedBen partially self-funded clients use MedBen’s proprietary prescription drug program and the AWAC claim cost control program they will save an average of $19 per employee per month over MedBen competitors. This is above and beyond network discounts and plan design ideas that MedBen brings to clients.

A recent study of several competitors turned up the following:

  • Surprisingly, many third party administrators withhold from clients significant portions – if not all – of pharmacy rebates paid by manufacturers as part of the pharmacy benefit plan operation. Rebates are commonly paid by pharmaceutical manufacturers to pharmacy plans that distribute a drug formulary to clients. MedBen returns 100% of paid rebates to clients, averaging approximately $4.75 per employee per month.
  • Many third party administrators use national pharmacy benefit managers (PBMs) that withhold portions of the manufacturers’ discounts as part of their service fee. It is common for PBMs to withhold a portion of the generic drug discount. MedBen delivers the entire manufacturer’s discount to clients. In a recent comparison this resulted in a potential savings of $6.72 per employee per month for a MedBen client simply for using MedBen’s pharmacy program, which delivers significant brand and generic savings for clients.
  • MedBen is one of a handful of third party administrators using the advanced cost containment program available from AWAC to help self-funded plans control claim costs. The result has been been net savings of approximately $8.00 per employee per month for MedBen clients.

All totaled, these two decisions - MedBen’s proprietary pharmacy program and MedBen claim cost containment - translated to savings averaging over $19 per employee per month over the competition.

If you aren’t using both of the these programs, ask your broker and/or Regional Sales Vice President how you can.


  09:33:10 am, by MedBen5   , 426 words,  
Categories: News, Health Plan Management

Staying in Compliance with the New COBRA Rules

White House

As we reported here previously, new legislation affecting the administration of COBRA Continuation Coverage became effective on February 17, 2009 with the passage of the American Recovery & Reinvestment Act of 2009 (“ARRA”), otherwise known as the Economic Stimulus Bill. Although the primary purpose of the new COBRA rules is simply to provide a federal subsidy of COBRA premiums for certain COBRA qualified beneficiaries, the requirements under the rules are complex. Plan administrators of group health plans must act quickly to implement the procedures necessary to comply with these requirements.

Over the past week, MedBen has spent a great deal of time reviewing and analyzing the new COBRA rules. Although the rules are temporary, it is clear that much work must be done immediately to keep our clients in compliance. And, because we know that acting promptly will make all the difference in keeping your plans and participants up to date, MedBen has already begun working on modifying its systems and revising notices and election forms to keep you in compliance.

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  09:32:15 am, by MedBen5   , 496 words,  
Categories: News, Health Plan Management

ARRA's Required COBRA Tasks

  • Determine which group health plans are affected by the new law.
  • Identify all confirmed AEIs. AEIs are “Assistance Eligible Individuals” – those individuals who were involuntarily terminated on or after September 1, 2008, including all dependents of such individuals.
  • Identify all potential AEIs. Confirm the status of each individual who was offered or elected COBRA on or after September 1, 2008 but who was no longer on COBRA as of February 17, 2009. Update system to track appropriate qualifying event dates of these individuals.
  • Prepare and send no later than April 19, 2009 revised or supplemental COBRA Notices to all qualified beneficiaries with qualifying events on or after September 1, 2008, explaining the temporary change in the COBRA rules, the availability of COBRA premium assistance and any option to enroll in alternative medical coverage (if permitted by the employer).

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  04:20:45 pm, by MedBen5   , 164 words,  
Categories: Announcements, Discounts, Health Plan Management

MedBen Cost Containment Saves Clients Over $7 Million

MedBen Cost Containment Sample Case Study

The savings keep on coming!

Since introducing new claims cost containment measures in September of 2007, MedBen has saved clients an additional $7.3 million as of February 2009 – over $2 million the past six months alone! This is savings produced before claims are paid, and beyond what MedBen provides through plan provisions, medical management and other cost controls.

MedBen is a member of the AWAC Alliance, a physician-driven organization that provides advanced systems for cost containment. After MedBen applies network discounts to medical and Rx claims, AWAC uses surveillance software to screen every MedBen claim regardless of size, at no cost to the client. 80,000 clinical and financial algorithms are used to identify savings opportunities.

When the software flags a claim, it can be negotiated physician-to-physician for further savings, or ongoing care can be coordinated through AWAC. On average, MedBen and AWAC save clients 43% per flagged claim.

To learn more about ways MedBen can save your business money, please contact the MedBen Sales & Marketing Department at (888) 627-8683.

  04:18:43 pm, by MedBen1   , 122 words,  
Categories: Announcements

Latest DOL Information on COBRA

The Department of Labor has released additional clarifications on the new COBRA Continuation Coverage Assistance portion of the American Recovery and Reinvestment Act of 2009. Go here for the additional information.

What remains troubling is the requirement to provide notice about the availability of the new premium reduction to all individuals who had a qualifying event from September 1, 2008 through December 31, 2009, not just individuals who would qualify for the subsidy. This will certainly cause confusion.

MedBen is preparing our materials for current COBRA clients and will be following up in the next week. Current MedBen COBRA clients will receive assistance on this new requirement under your existing COBRA services agreement and at no additional charge. We’ll continue to update you as we receive information.


  05:25:52 pm, by MedBen5   , 223 words,  
Categories: News, Health Plan Management

COBRA Subsidies May Increase Health Care Costs

What health care costs

A recent article from USA Today regarding the COBRA provisions in the stimulus package touches on a potential consequence of the measure: the generous employer subsidy will appeal most to less healthy individuals.

As Tom Billet, senior benefits consultant of Watson Wyatt, points out, the high costs associated with COBRA – which typically exceed $400 a month for individuals, and over $1,000 a month for families – means that its greatest attraction has been to those who anticipate needing costly care during the coverage period. Offering a 65% employer subsidy, he says, will only serve to increase the appeal of COBRA to people with health problems. Without a corresponding opt-in by healthy individuals, overall health care costs will likely see an increase.

Kathryn Bakich, senior vice president and head of the health care compliance practice at Segal Co., believes that the COBRA provision will have just the opposite effect: The employer subsidy will attract healthy individuals who file fewer claims, thereby reducing insurance costs.

The article also notes that employers must notify former employees who are eligible for the COBRA subsidy by March 1. This includes all workers who were involuntarily terminated on or after September 1, 2008.

You can read the complete article here. Additionally, we’ve reproduced a chart included in the print version of USA Today, that highlights average employee and employer contributions to health insurance premiums.


  01:50:09 pm, by MedBen5   , 97 words,  
Categories: News, Health Plan Management

American Recovery and Reinvestment Act: Benefit and Employment Provisions

On February 17, President Obama signed into law The American Recovery and Reinvestment Act of 2009 (ARRA). Among the many conditions contained in the $787 billion economic stimulus package are three specific provisions related to employee health benefit plans, in addition to two relating to employment practices. In the five articles below, we provide a brief summary of each of the provisions and links to language from the bill pertaining to a specific provision.

To review the full text of the stimulus bill, visit the Library of Congress website and click on the American Recovery and Reinvestment Act (HR1) link.

  01:36:42 pm, by MedBen5   , 376 words,  
Categories: News, Health Plan Management

ARRA Employee Health Benefit Plan Provisions: COBRA

White House

The ARRA amends COBRA in several ways. First, eligible qualified beneficiaries (called “assistance eligible individuals” in the ARRA) can satisfy the payment of their COBRA continuation premium by paying 35% of the COBRA premium due. The ARRA requires employers to subsidize the remaining 65% of the premium for a period certain, generally not longer than 9 months. Employers paying the 65% will be able to offset such amounts by receiving a payroll tax credit against federal income and FICA taxes.

An “assistance eligible individual” is a person who: 1) is involuntarily terminated from employment and is eligible for COBRA any time between September 1, 2008 and December 31 2009; and 2) elects such COBRA coverage. Employees who were involuntarily terminated but have an adjusted gross income of more than $125,000 (single taxpayer) or $250,000 (joint tax return) must be given the option to continue to pay the full COBRA premium or will be required to repay the 65% subsidy as an additional tax due on the affected individual’s tax return.

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  01:32:06 pm, by MedBen5   , 368 words,  
Categories: News, Health Plan Management

ARRA Employee Health Benefit Plan Provisions: HIPAA Privacy

The ARRA amends multiple provisions of the HIPAA Privacy and Security Rules, including, but not limited to, the following:

Business Associate Liability and Contracting – The new rules apply the responsibility to, and liability for, appropriately securing protected health information (administrative, physical and electronic safeguards) to business associates in the same manner as they do to covered entities. This includes the application of civil and criminal penalties. Business Associate Agreements must also be updated to include all changes required by these new rules.

Notification of Breach of Security – The new rules require that written notification be made directly to any individual whose unsecured PHI has been, or is reasonably believed to have been, accessed, acquired or disclosed during a breach of security. The notice must be made within 60 days of the discovery of the breach. In the event that the individual’s location is unknown, an alternative notification must be made, including posting information regarding the breach on the covered entity’s website if information of more than 10 individuals was compromised. If information of more than 500 individuals was compromised, the covered entity is required to provide such notice of breach to a prominent media outlet and separately notify the Secretary of Health and Human Services (HHS). HHS will post all such notices on its website. The law provides a list of specific information which must be included in any notice provided.

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  01:27:58 pm, by MedBen5   , 633 words,  
Categories: News, Health Plan Management

ARRA Employee Health Benefit Plan Provisions: Trade Act

The Trade Act of 2002 provides certain rights to individuals who had been determined to have lost their jobs due to foreign imports or competition (TAA Eligible Individuals). Among these rights were a credit against their federal taxes of 65% of amounts paid for eligible health coverage, an additional COBRA enrollment period to begin upon their determination to be a TAA Eligible Individual, and a suspension of the 62-day period allowed in determining whether prior coverage is creditable against a plan’s pre-existing conditions limitations period from the time the person loses health coverage to the date he or she is determined to be a TAA Eligible Individual.

The American Recovery and Reinvestment Act of 2009 (ARRA) has expanded on these provisions in the following ways:

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  01:02:51 pm, by MedBen5   , 104 words,  
Categories: News, Health Plan Management

ARRA Employment Provisions: Work Opportunity Tax Credit (WOTC)

Currently, tax credit is available to employers who electively hire individuals from one or more of nine targeted groups. The amount of credit available to the employer is dependent upon the amount of qualified wages paid by the employer. If you are an employer currently taking advantage of this credit, you should know that two new categories of employees have been added for credit: unemployed veterans and disconnected youth who begin work for the employer in 2009 or 2010, provided the job starts after December 31, 2008. (“Disconnected youth” is generally defined as individuals between the ages of 16 and 24 who are not in school and not legitimately employed.)

  01:00:45 pm, by MedBen5   , 49 words,  
Categories: News, Health Plan Management

ARRA Employment Provisions: H-1B Visas

ARRA prohibits any employer receiving Troubled Assets Relief Program (TARP) funds or certain federal loans from obtaining H-1B Visas for two years unless they have made a good faith effort to recruit and employ United States citizens for the job for which the H-1B Visa is sought.


  03:49:02 pm, by MedBen1   , 38 words,  
Categories: Announcements, News

Dean to head HHS? Don't count on it

The Wall Street Journal Health Blog discounts rumours that former Governor and Democratic National Committee Chairman, Howard Dean will be tapped to run Health and Human Services. Kansas Governor, Kathleen Sebelius remains the front-runner. Read the article here.

  02:01:46 pm, by MedBen1   , 48 words,  
Categories: Announcements

MedBen Blog Upgrade

MedBen Blog will be down on Thursday morning between 7:00 a.m. and 9:00 a.m. EST for an upgrade that will allow us greater flexibility in providing useful, actionable information to clients. Keep coming back to MedBen Blog for the latest in plan design, industry, regulatory and benefit news.


  04:01:55 pm, by MedBen1   , 185 words,  
Categories: Prescription, Discounts, Health Plan Management

Generic Drug Use Hits New High - MedBen Clients Beat Average

Generic drug use in pharmacy benefit plans reached an average of 60.4% in 2008 according to the Takeda Prescription Drug Benefit Cost and Plan Design Report, 2008-2009 edition. MedBen clients experienced generic drug use averaging nearly 10% greater than this benchmark for the same time period.
Generic drug use is a significant factor in prescription plan cost because generic drugs regularly cost a fraction of the cost of brand name drugs. Greater use of generic drugs translates to lower plan costs.
The report charts a number of drug trends and marked another year of lower pharmacy reimbursements. In 2008, according to the report the average retail brand reimbursement was 16.1% off of AWP (Average Wholesale Price - a standard mark for brand drugs). MedBen clients experienced average discounts on retail brand drugs that were 10% better than this mark.
The report marked average retail generic reimbursements at 41.8% off of AWP while MedBen clients averaged generic discounts over 1.75 times that number.
MedBen has acheived these results through its unique prescription plan that delivers the entire discount on retail and generic drugs to clients.
You can download a copy of the report here.


  01:26:12 pm, by MedBen5   , 384 words,  
Categories: News, Health Plan Management

Combined Stimulus Bill Calls for Substantial Employer COBRA Subsidies

Capitol Building at Night

A follow-up to our earlier article on COBRA provisions in the “American Recovery and Reinvestment Act", aka the stimulus plan: The negotiated House and Senate bill keeps the House’s proposed premium subsidy but reduces the length of eligibility. Among the plan’s COBRA provisions:

  • The combined stimulus bill will require group health plans with 20 or more employees to subsidize 65% of COBRA coverage for terminated workers – equal to the House bill’s amount and greater than the 50% proposed by the Senate.
  • The provision applies to individuals who would have been COBRA eligible due to termination of employment from September 1, 2008 through December 31, 2009.This would also include individuals whose COBRA qualifying event date (the termination of employment) is before 9/1/08, as long as their 18 month period of continuation of coverage had not expired.

    Additionally, the law allows individuals who are eligible, but did not elect COBRA within their initial election period, to have a new 60-day election period to elect the subsidized COBRA to begin with the effective date of the act.

  • Qualifying individuals will be eligible for 9 months of employer subsidies. This is a reduction from 12 months on both the House and Senate bills.
  • Terminated workers with annual incomes greater than $125,000 for singles or $250,000 for couples would not be eligible for employer subsidies.
  • As noted previously, employers will receive a credit against payroll taxes, which includes both employee withholding and FICA taxes. If COBRA payments exceed the employer’s payroll tax liability, they will be treated as an overpayments and credited on the payroll tax as such.

A “55/10″ provision in the House bill would have required employers to offer COBRA benefits to individuals 55 and over for 10 years or until they are eligible for Medicare, whichever comes first. This provision was not mentioned in the Senate bill and is, as of this writing, not included in the final plan.

To read a Legislative Update from the Employers Council on Flexible Compensation (ECFC) on the combined bill, click here. Please note that the 60% employer subsidy indicated in the release has since been increased to 65%.

The combined stimulus bill is currently undergoing final Congressional review and, pending its approval, could be signed into law by President Obama as early as this weekend. Please check The MedBen Blog for updates on COBRA subsidies as well as other stimulus provisions that will affect employers.


  04:34:45 pm, by MedBen5   , 265 words,  
Categories: News, Health Plan Management

Stimulus Bill May Adversely Affect Employer COBRA Costs

Capitol Building

Stimulus bills approved by the Senate and House of Representatives are currently winding their way through final Congressional negotiations en route to President Obama’s desk for approval. While many of the bills’ features have been discussed and debated in the media, gone comparatively unmentioned is a series of provisions that could have an adverse effect on employer health care costs.

Both House and Senate bills would require employers to subsidize a portion of COBRA costs for individuals who have been involuntarily terminated. The House bill calls for a 65% employer subsidy of COBRA for up to 12 months with up to an additional six months of unsubsidized coverage, while the Senate bill reduces the subsidy to 50%. Those employees terminated on or after 9/1/08 through 12/31/09 will be eligible for the subsidy.

In addition, the House bill would grant extended COBRA benefits to individuals age 55 and older who have 10 or more years of service with an employer. Such individuals could remain on COBRA until becoming Medicare-eligible or obtaining coverage through a different group health plan. The Senate bill does not contain a similar provision.

One potential bright spot to COBRA premium cost-sharing: Affected employers may be able to take a credit against payroll taxes for the rest of the premiums.

To read a Legislative Update from the Employers Council on Flexible Compensation (ECFC) regarding these COBRA provisions, click here.

As of this writing, House and Senate negotiators have reached an agreement on a final version of the stimulus plan. When we have had a chance to review the compromise bill’s COBRA provisions, we will pass updated information on to you.

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