by Johnson and Dugan | Sep 30, 2021 | Compliance, Group Benefit Plans, Medicare
Are you an employer that offers or provides group health coverage to your workers? Does your health plan cover outpatient prescription drugs — either as a medical claim or through a card system? If so, be sure to distribute your plan’s Medicare Part D notice before October 15.
Purpose
Medicare began offering “Part D” plans — optional prescription drug benefit plans sold by private insurance companies and HMOs — to Medicare beneficiaries many years ago. People may enroll in a Part D plan when they first become eligible for Medicare.
If they wait too long, a late enrollment penalty amount is permanently added to the Part D plan premium cost when they do enroll. There is an exception, though, for individuals who are covered under an employer’s group health plan that provides creditable coverage. (“Creditable” means that the group plan’s drug benefits are actuarially equivalent or better than the benefits required in a Part D plan.) In that case, the individual can delay enrolling for a Part D plan while he or she remains covered under the employer’s creditable plan. Medicare will waive the late enrollment premium penalty for individuals who enroll in a Part D plan after their initial eligibility date if they were covered by an employer’s creditable plan. To avoid the late enrollment penalty, there cannot be a gap longer than 62 days between the creditable group plan and the Part D plan.
To help Medicare-eligible plan participants make informed decisions about whether and when to enroll in a Part D drug plan, they need to know if their employer’s group health plan provides creditable or noncreditable prescription drug coverage. That is the purpose of the federal requirement for employers to provide an annual notice (Employer’s Medicare Part D Notice) to all Medicare-eligible employees and spouses.
Employer Requirements
Federal law requires all employers that offer group health coverage including any outpatient prescription drug benefits to provide an annual notice to plan participants.
The notice requirement applies regardless of the employer’s size or whether the group plan is insured or self-funded:
- Determine whether your group health plan’s prescription drug coverage is creditable or noncreditable for the upcoming year (2022). If your plan is insured, the carrier/HMO will confirm creditable or noncreditable status. Keep a copy of the written confirmation for your records. For self-funded plans, the plan actuary will determine the plan’s status using guidance provided by the Centers for Medicare and Medicaid Services (CMS).
- Distribute a Notice of Creditable Coverage or a Notice of Noncreditable Coverage, as applicable, to all group health plan participants who are or may become eligible for Medicare in the next year. “Participants” include covered employees and retirees (and spouses) and COBRA enrollees. Employers often do not know whether a particular participant may be eligible for Medicare due to age or disability. For convenience, many employers decide to distribute their notice to all participants regardless of Medicare status.
- Notices must be distributed at least annually before October 15. Medicare holds its Part D enrollment period each year from October 15 to December 7, which is why it is important for group health plan participants to receive their employer’s notice before October 15.
- Notices also may be required after October 15 for new enrollees and/or if the plan’s creditable versus noncreditable status changes.
Preparing the Notice(s)
Model notices are available on the CMS website. Start with the model notice and then fill in the blanks and variable items as needed for each group health plan. There are two versions: Notice of Creditable Coverage or Notice of Noncreditable Coverage and each is available in English and Spanish:
Employers who offer multiple group health plan options, such as PPOs, HDHPs, and HMOs, may use one notice if all options are creditable (or all are noncreditable). In this case, it is advisable to list the names of the various plan options so it is clear for the reader. Conversely, employers that offer a creditable plan and a noncreditable plan, such as a creditable HMO and a noncreditable HDHP, will need to prepare separate notices for the different plan participants.
Distributing the Notice(s)
You may distribute the notice by first-class mail to the employee’s home or work address. A separate notice for the employee’s spouse or family members is not required unless the employer has information that they live at different addresses.
The notice is intended to be a stand-alone document. It may be distributed at the same time as other plan materials, but it should be a separate document. If the notice is incorporated with other material (such as stapled items or in a booklet format), the notice must appear in 14-point font, be bolded, offset, or boxed, and placed on the first page. Alternatively, in this case, you can put a reference (in 14-point font, either bolded, offset, or boxed) on the first page telling the reader where to find the notice within the material. Here is suggested text from the CMS for the first page:
“If you (and/or your dependents) have Medicare or will become eligible for Medicare in the next 12 months, a federal law gives you more choices about your prescription drug coverage. Please see page XX for more details.”
Email distribution is allowed but only for employees who have regular access to email as an integral part of their job duties. Employees also must have access to a printer, be notified that a hard copy of the notice is available at no cost upon request, and be informed that they are responsible for sharing the notice with any Medicare-eligible family members who are enrolled in the employer’s group plan.
CMS Disclosure Requirement
Separate from the participant notice requirement, employers also must disclose to the CMS whether their group health plan provides creditable or noncreditable coverage. To submit your plan’s disclosure, use the CMS online tool and follow the prompts. The process usually takes only 5 or 10 minutes to complete. It is due with 60 days after the start of the plan year; for instance, for calendar year plans that will be March 1, 2022. If the plan’s prescription drug coverage ends or its status as creditable or noncreditable changes, submit a new disclosure within 30 days of the change.
By Kathleen A. Berger
Originally posted on Mineral
by admin | Jul 20, 2017 | Benefit Management, ERISA
UBA’s compliance team leverages the collective expertise of its independent partner firms to advise 36,000 employers and their 5 million employees. Lately, a common question from employers is: If a health and welfare benefit plan has fewer than 100 participants, then does it need to file a Form 5500?
If a plan is self-funded and uses a trust, then it is required to file a Form 5500, no matter how many participants it has.
Whether the plan must file a Form 5500 depends on whether or not the plan is “unfunded” (where the money comes from to pay for the self-funded claims).
Currently, group welfare plans generally must file Form 5500 if:
- The plan is fully insured and had 100 or more participants on the first day of the plan year (dependents are not considered “participants” for this purpose unless they are covered because of a qualified medical child support order).
- The plan is self-funded and it uses a trust, no matter how many participants it has.
- The plan is self-funded and it relies on the Section 125 plan exemption, if it had 100 or more participants on the first day of the plan year.
There are several exemptions to Form 5500 filing. The most notable are:
- Church plans defined under ERISA Section 3(33)
- Governmental plans, including tribal governmental plans
- Top hat plans which are unfunded or insured and benefit only a select group of management or highly compensated employees
- Small insured or unfunded welfare plans. A welfare plan with fewer than 100 participants at the beginning of the plan year is not required to file an annual report if the plan is fully insured, entirely unfunded, or a combination of both.
A plan is considered unfunded if the employer pays the entire cost of the plan from its general accounts. A plan with a trust is considered funded.
For smaller groups that are self-funded or partially self-funded, you’d need to ask them whether the plan is funded or unfunded.
If the employer pays the cost of the plan from general assets, then it is considered unfunded and essentially there is no trust.
If the employer pays the cost of the plan from a specific account (in which plan participant contributions are segregated from general assets), then the plan is considered funded. For example, under ERISA, pre-tax salary reductions under a cafeteria plan are participant contributions and are considered plan assets which must generally be held in trust based on ERISA’s exclusive benefit rule and other fiduciary duty rules.
By Danielle Capilla
Originally Posted By www.ubabenefits.com
by admin | Mar 7, 2017 | Benefit Plan Tips, Tricks and Traps, Human Resources
Last fall I had the pleasure of hosting a UBA WisdomWorkplace webinar called “Success in Voluntary through Strategic Benefits Communication.” I discussed recent Sun Life survey data regarding employee engagement and understanding of the value of voluntary benefits.
In the world of voluntary insurance carriers, success in voluntary benefits can be measured in various ways. A key metric is employee participation. For carriers, this is important because the greater the employee participation in a voluntary product, the better the spread of risk, which leads to appropriate margins and sustainable pricing.
But in the world of HR, this has not been a key metric. While good participation can reflect employee acceptance (and low participation might raise the question about whether the product is worth the time it takes to administer payroll deductions and facilitate billing), employee engagement has become more important.
This concept of knowing what you’re participating in makes me think about a good friend of mine who, a few years ago, reached out to me in a panic. He works for a large corporation with employees spread across the country. His employer was dropping all medical plan PPO options for the coming year and switching to a high- and higher-deductible option. He was sent an e-mail that provided few details but explained the action was due to high health care costs. There was no indication that more information was forthcoming, and the communication as a whole was insufficient because he couldn’t find answers to the questions he needed, the most important being, “what does this mean to me and my family?” I explained recent trends and how a high-deductible health plan (HDHP) with a health savings account (HSA) could be advantageous to him, but as we all know, not everyone is knowledgeable about their benefits or has friends in the business to explain their options.
When employees aren’t engaged in good benefits decision making, they can misunderstand or underuse their plans. Our recent survey showed that while employees are becoming more aware of changes in their medical plans, 54 percent still don’t know their out-of-pocket maximum, and 33 percent don’t know their deductible.
Employees are, however, concerned about their financial risks, and most do not have emergency savings or a cash flow to handle unexpected medical expenses. Moreover, research from the Federal Reserve shows that some people actually choose to forgo needed medical care simply because they cannot afford it.1
While these data point out employee challenges, our research does provide some encouraging feedback that shows how we might be able to help employees become knowledgeable about their benefits choices.
For example, though employees understand the benefits gap, 62 percent of those surveyed say they need additional coverage. We also learned that 70 percent were not familiar with the term “voluntary benefits,” but once they understood what voluntary products are, 63 percent agreed that these benefits are helpful in filling the gaps in health care coverage, even if they have to pay for these benefits themselves.
The real kicker is that 87 percent say more customized benefits choices that fit their specific lifestyles would help them make the right health plan choices.
This is where strategic benefits communication can play a vital role. In addition to ensuring that employees really understand the value of all of their benefits, including true total compensation, a well-planned communication effort engages employees by empowering them with information so they are confident in their open enrollment decisions.
How will you know whether you have been a successful communicator? In subsequent posts, we will talk about gathering employee feedback.
Over the next few months, this blog series will examine the ways HR benefits professionals can achieve success—not just in offering voluntary products to employees, but more important, in their overall benefits communications.
By Kevin D. Seeker
Originally published by www.ubabenefits.com
by admin | Feb 28, 2017 | Benefit Management, Employee Benefits, Health Plan Benchmarking, Human Resources
Employer-sponsored health insurance is greatly affected by geographic region, industry, and employer size. While some cost trends have been fairly consistent since the Patient Protection and Affordable Care Act (ACA) was put in place, UBA finds several surprises in its latest Health Plan Survey. Based on responses from more than 11,000 employers, UBA recently announced the top five best and worst states for group health care monthly premiums.
The top five best (least expensive) states are:
1) Hawaii
2) Idaho
3) Utah
4) Arkansas
5) Mississippi
Hawaii, a perennial low-cost leader, actually experienced a nearly seven percent decrease in its single coverage in 2016. New Mexico, a state that was a low-cost winner in 2015, saw a 22 percent increase in monthly premiums for singles and nearly a 30 percent increase in monthly family premiums, dropping it from the “best” list.
The top five worst (most expensive) states are:
1) Alaska
2) Wyoming
3) New York
4) Vermont
5) New Jersey
The UBA Health Plan Survey also enables state ranking based on the average annual cost per employee. The average annual cost per employee looks at all tiers of a plan and places an average cost on that plan based on a weighted average metric. While the resulting rankings are slightly different, they also show some interesting findings.
The 2016 average annual health plan cost per employee for all plan types is $9,727, which is a slight decrease form the average cost of $9,736 in 2015. When you start to look at the average annual cost by region and by state, there is not much change among the top from last year. The Northeast region continues to have the highest average annual cost even with the continued shift to consumer-driven health plans (CDHP). In 2016, enrollment in CDHPs in the Northeast was 34.9 percent, surpassing those enrolled in preferred provider organization (PPO) plans at 33 percent. Even with the continued shift to CDHPs, the average annual costs were $12,202 for New York, which remained the second-highest cost state, followed by $12,064 for New Jersey, and rounding out the top five, Massachusetts and Vermont flip-flopped from 2015 with Massachusetts at $11,956 and Vermont at $11,762.
As was the case in 2015, Alaska continues to lead all states in average health plan costs, topping New York by more than $1,000 per employee, with an average cost of $13,251. While year-over-year the average cost for Alaska only increased 3.35 percent, the gap increased to 36.2 percent above the national average of $9,727.
Keeping close to the national average increase, the top five states all saw a year-over-year increase of less than 4.5 percent. Unfortunately, even at a modest increase, the one thing that the top five have in common is that they all are more than 20 percent above the national average for health plan costs per employee.
By Matt Weimer, Originally Published By United Benefit Advisors
by admin | Feb 22, 2017 | Hot Topics, Human Resources
In January 2017, an NBC news investigation found that an “epidemic” of opioid abuse had helped turn the once-prosperous city of Wilkes Barre, Pennsylvania, into “the most unhappy place in America.” Working in the epicenter of the “scourge” that had resulted in 137 fatal overdoses in a county of only 318,000 people in 2016, the coroner reported that opioid addiction was “eating away at the core of society.”1 Although an extreme example, Wilkes Barre’s unhappy experience is being repeated in communities throughout the United States, resulting in problems that you probably recognize—and a few that you may not be aware of.
One widely recognized effect of the opioid use epidemic is its cost. Nationwide, the total economic burden of opioid abuse is estimated at approximately $78.5 billion annually, of which approximately $29 billion represent increased health care costs and substance abuse treatment.2 On average, commercial insurers spend more than $40 per member per year (PMPY) on narcotic painkillers today, compared with $22 PMPY about a decade ago.3 Medical costs are affected as well. Among opioid-treated employees on workers’ compensation or short-term disability for a work-related injury, health care costs for addicts exceed those of non-addicts by about $10,000 annually.4 And costs may creep up in unforeseen ways. For example, the cost of one auto-injector that “talks” users through the process of administering life-saving naloxone, an emergency treatment for opioid overdose, has increased six-fold in the past two years, from $690 to $4,500 for a pack of two.5
A related effect is threat to safety. From 1993 to 2010, the number of emergency department visits for drug overdose approximately tripled, from seven to 27 per 100,000 population.6 Although less commonly discussed, combining opioids and benzodiazepines (e.g., alprazolam, clonazepam) is particularly dangerous and increasingly common. From 2004 to 2011, emergency department visits and deaths involving this combination approximately tripled in volume.7 Less commonly discussed among benefits managers, but well known to law enforcement, is use of drugs by persons to whom they were not prescribed, known as “diversion,” often by theft.8-10 Additionally, people who use prescription opioids that become addicted, and can no longer afford them, commonly turn to heroin.9 All of these problems diminish both the well-being and productivity of employees, as well as quality of life in surrounding communities.
How can an employer address these critically important problems? Here are some tips to help you get started.
Measure, intervene, monitor. As with any benefits issue, the critically important first step is to determine the extent of the problem. Employers may analyze their own data or may choose to request the necessary reports from a pharmacy benefits manager (PBM) or vendor. In addition to standard measures, such as PMPY claims and expenditures, morphine-milligram equivalents (MMEs) are an important metric. MMEs translate the dosages for all opioid products into a morphine-equivalent value, making it easy to identify abusing enrollees using cut-offs provided by the U.S. Centers for Disease Control and Prevention (CDC).11 For example, 40 milligrams of oxycodone daily, times the MME multiplier of 1.5 for that drug, translates to 60 MMEs per day, which exceeds the 50 MME per day standard at which the risk of overdose is more than doubled.11 To obtain the MME calculators, visit the CDC website.
Employers may wish to consider interventions, such as those that have been employed successfully by some payers and PBMs, with enrollees exceeding CDC MME standards.12-14 If possible, use of integrated medical-pharmacy data in making these assessments is highly recommended to avoid applying MME standards to patients for whom high daily doses of opioids may be medically necessary, such as those in hospice care.
After implementing any initiatives, monitor results and, when necessary, make adjustments to metrics and algorithms so that the intended objectives are achieved.
Consider quantity education and limits. Although the causes of opioid abuse are multifaceted, experts agree that a key factor is opioid oversupply, often because excessive quantities are prescribed for minor surgeries.15-17 Unused medication often sits for long periods of time in medicine cabinets, becoming a prime target for theft.16 Employers may wish to educate prescribers about prudent quantity limits for relief of pain that is expected to be short-term (e.g., wisdom tooth removal for older adolescents). Additionally, limits on quantity dispensed per claim, especially for a first opioid prescription, are a common-sense step.
Tell employees about “take-back” initiatives. Many communities offer “take-back” programs, which allow for the return of unused controlled substances on a “no-questions asked” basis. Monitoring and publishing the dates of these programs may help employees safely dispose of drug supply that may put them and others at risk.
Don’t forget other controlled substances, especially benzodiazepines and stimulants. These drugs also pose risks and are subject to abuse.
References
1 Siemaszko C. Wilkes Barre faces heroin scourge turning it into “the most unhappy place in America.” NBC News. January 9, 2017.
2 Florence CS, Zhou C, Luo F, Xu L. The economic burden of prescription opioid overdose, abuse, and dependence in the United States, 2013. Med Care. 2016;54(10):901-906.
3 Express Scripts drug trend reports: 2015 and 2006.
4 Johnston SS, Alexander AH, Masters ET, et al. Costs and work loss burden of diagnosed opioid abuse among employees on workers compensation or short-term disability. J Occup Environ Med. 2016;58(11):1087-1097.
5 Luthra S. Getting patients hooked on an opioid overdose antidote, then raising the price. Kaiser Health News. January 30, 2017.
6 Hasegawa K, Espinola JA, Brown DF, Camargo CA Jr. Trends in U.S. emergency department visits for opioid overdose, 1993-2010. Pain Med. 2014;15(10):1765-1770.
7 Jones CM, McAninch JK. Emergency department visits and overdose deaths from combined use of opioids and benzodiazepines. Am J Prev Med. 2015;49(4):493-501.
8 Lawrence J. Opioid abuse fuels Capital Region thefts. Times Union. March 19, 2016.
9 Goslee K. Faces of the opioid crisis: police say increased heroin use impacts the entire community. Fox 61. November 17, 2016.
10 Canham M. Feds probe massive theft of opioids from Salt Lake City’s VA hospital. Salt Lake Tribune. March 8, 2016.
12 Aetna. Aetna study shows decrease in prescription drug misuse, waste and abuse through increased monitoring. March 8, 2013.
13 Prime Therapeutics. Prime Therapeutics releases studies on efforts to reduce opioid abuse, misuse. April 19, 2016.
14 Kelly LF. PBMs use new CMS opioid overutilization initiative to strengthen DUR programs. Drug Benefit News. October 11, 2013.
15 Dryden J. Doctors recommend prescribing fewer opioids after surgery. theSource. April 27, 2016.
16 Bates C, Laciak R, Southwick A, Bishoff J. Overprescription of postoperative narcotics: a look at postoperative pain medication delivery, consumption and disposal in urological practice. J Urol. 2011;185:551-555.
17 Kirschner N, Ginsburg J, Sulmasy LS, et al. Prescription drug abuse: executive summary of a policy position paper from the American College of Physicians. Ann Intern Med. 2014;160(3):198.
By Corey Belken, Originally Published By United Benefit Advisors
