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Wednesday, 15 August 2018

Oscar Health the startup health insurance who uses high tech and high touch to differentiate themselves from traditional health insurance companies is bringing on a huge partner. Here in Nashville, Oscar Health had partnered with Humana to offer individual and small group medical plans. They agreed to part ways for 2019 but it seems we have only seen the beginning of what Oscar can do. 

Oscar plans to use the money to enter into the lucrative market for private Medicare Advantage plans for seniors. These are a type of Medicare Supplement. 

As for small group health plans we can only hope they continue to expand in Tennessee to give consumers more options and hopefully at a competitive price. 

Read more here

Posted on 08/15/2018 9:57 AM by Benefit Brokers, LLC
Monday, 13 August 2018

More great news for Tennesseans who are covered under the health insurance marketplace. It was just announced that BlueCross BlueShield of TN will be reducing rates by an average of 15% in 2019. Cigna, the second largest carrier in Tennessee will be dropping rates by nearly 13%. 

We were expecting lower health insurance costs next year but with the announcement from the Trump Administration that they will allow the "risk adjustment payments" the carriers risk level was reduced. 

What will this mean for small groups have are covered under group Essential Health Benefit "EHB" plans? We can only hope we see similar decreases. 

Read more here

Posted on 08/13/2018 1:52 PM by David Moore
Monday, 16 July 2018

It's been a long time since we could say "your rates are going down" rather than "rates are going up and so is your deductible". We have wondered where the tipping point will be for affordability for consumers and profitability for the insurance companies, maybe we have finally reached it. This morning as I watched the news which is full of commercials promoting $5,000 per month medications that are "free" to consumers if you have commercial insurance, I scratch my head and wonder when the madness will stop. Well it's not stopping but at least it may not cost as much next year. 

In August, 2018 BCBST reduced their base rates in the middle market for Tennessee group insurance customers by around 15%. This was HUGE and a tremendous relief to hard hit businesses and employees. Now it looks like the small group EHB plans and individuals will see some rate relief for 2019. Those rates are filed annually and can't be changed until January 1st. BCBST is proposing an average decrease of 10.9% and Cigna will reduce costs by an average of 4.8%. We should know what small groups are getting by early August, my fingers are crossed. 

Obamacare changed the rules when it forced insurance companies to offer coverage with no exclusions, limitations or pre-existing conditions. The carriers did not really know how to price a policy like this and BlueCross BlueShield of Tennessee came out with some really attractive rates. After loosing hundreds of millions of dollars the incremental increases trippled the premiums. In 2015 rates increased by 19%, 36.3% in 2016, 62% in 2017 and 21% in 2018. Cumulatively, that is a 318% increasing taking a $100 monthly premium in 2014 and costing nearly $318 today. 

For the small business owner the increases have not been that extreme but it's still been very painful. I had a group who recently tried to offer a group medical plan to their employees only to have all 10  employees say they could not afford or did not want the plans. The company was going to pay 50% of the cost but still it was unattractive to the employees, that is not a good thing. 

Read more here

Posted on 07/16/2018 7:36 AM by David Moore
Friday, 06 July 2018

The ongoing battle over high prescription costs is taking another turn. With many specialty prescriptions costing $5,000 per month or more, drug companies figured out by offering pricing assistance until an employee hits the deductible, they could sell a lot of drugs. This created a tremendous challenge for insurers trying to control costs in light of all the direct to consumer advertising. 

The latest move by insurers - effectively forces drug companies to pay more to assist patients with their copays - is causing a decline in real US drug prices this year for those companies adopting the strategy and is expected to become more widely adopted in 2019 and beyond. 

The good news is this can slow the ever increasing cost of healthcare. The bad news is employees and patients who really need these expensive drugs can find themselves unable to afford them. 

Essentially what the "copay accumulator" does is prevents the copay card funds from counting toward a patients out of pocket maximum. Once the out of pocket maximum is reached the insurer pays 100% of the costs and the employee / patient has 100% coverage for all medical and pharmacy costs the rest of the year. 

Drugmakers are not taking this in stride and are trying new methods to avoid detection. 

Read more here

Posted on 07/06/2018 7:41 AM by David Moore
Friday, 22 June 2018

President Trump signed a new rule making it easier for small businesses to join forces and set up health plans that avoid many of the expensive ObamaCare rules. The new plans will be called "Association Health Plans" and they could be available as soon as September, 2018. 

What do these news plans look like? No telling since they are not able to deny coverage or charge higher rates for pre-existing conditions. These are two of the things that drive up costs in the small group market, so what's different about the new plans? That is a big question and based on what I am reading I don't see the attraction for the insurance carriers who are risk averse to begin with. 

For many small groups "Limited Funding" a type of self-insurance can accomplish what we think the Association plans are trying to do. "Limited Funding" plans allow you to underwrite your group medically and if you are healthy, you can qualify for much lower rates than the ACA pricing. This strategy has worked very well for many of our groups but you have to be healthy for it to work. 

More to come, at least they are trying different ideas to see what might work bring costs back down. 

Posted on 06/22/2018 4:28 PM by David A Moore
Tuesday, 19 June 2018

Under the ACA, all medical plans are responsible for paying the Patient-Centered Outcomes Research fee to the IRS, based on the number of plan participants. If the plan is insured, the insurance carrier pays the fee on behalf of the policyholder. If the plan is self-insured, the employer/plan sponsor must file the Form 720 and pay the fee to the IRS directly.

Which self-insured plans must pay the fee directly to the IRS?

All self-insured medical plans, including health FSAs and HRAs, must pay the fee unless the plan is either primarily for employees working/residing outside of the U.S., or is considered an excepted-benefit.

  • A health FSA is an excepted-benefit as long as the employer does not contribute more than $500/year to the accounts and offers another medical plan with non-excepted benefits.
  • An HRA is an excepted-benefit if it only reimburses for excepted-benefits (e.g., limited-scope dental and vision expenses or long-term care coverage) and is not integrated with the group medical plan.

How much is the PCORI fee?

For plan years:

  • Ending on or after Oct 1, 2016 and before Oct 1, 2017: $2.26 per covered life
  • Ending on or after Oct 1, 2017 and before Oct 1, 2018: $2.39 per covered life

Plan Years Ending in 2017


Feb 2016 – Jan 2017


Mar 2016 – Feb 2017


Apr 2016 – Mar 2017


May 2016 – Apr 2017


Jun 2016 – May 2017


July 2016 – Jun 2017


Aug 2016 – July 2017


Sept 2016 – Aug 2017


Oct 2016 – Sept 2017


Nov 2016 – Oct 2017


Dec 2016 – Nov 2017


Jan 2017 – Dec 2017


The fee is indexed for future years, and ends in 2019.

Participating employees and dependents are counted as covered lives. For HRA and health FSA plans, just count each participating employee as a covered life.

How does the employer/plan sponsor pay the fee to the IRS?

Employers complete and file the Form 720 for the second quarter. The Form 720 and fees are due on July 31 of the calendar year following the last day of the plan year. If your medical plan year ended in 2017, your Form 720 is due by July 31, 2018.

The Form 720 and instructions are available on the IRS website:


Employers/plan sponsors need to complete:

  • Company information and quarter ending “June 2018”
  • Part II, IRS No. 133
    • Column (a) – under “Applicable self-insured health plans”, enter “Avg. number of lives covered” in row (c) or (d), depending on end of plan year
    • Column (c) – enter total Fee (lives x $)
    • Tax column – enter the amount of the fee (from Column (c))
  • Part II, Line 2 – enter Total Tax (from Tax column on No. 133)
  • Part III, Line 3 – enter Total Tax (from Part II, Line 2)
  • Part III, Line 10 – enter Balance Due (from Part III, Line 3)
  • Signature section
  • Pay electronically or complete the payment voucher (last page) with “2nd Quarter” checked to pay by check
  • Send the form, along with check and payment voucher, to:
    Department of the Treasury
    Internal Revenue Service
    Cincinnati, OH 45999-0009

To calculate the “Avg. number of lives covered”, use one of the three methods listed on pages 8 and 9 of the instructions:

Actual count method – The total number of lives covered (employees and their covered family members or only employees if HRA or FSA) on each day of the plan year, divided by the total number of days in the plan year.

Snapshot method – At least one date during each month of each quarter. Dates in each quarter must be within 3 days of the dates for corresponding quarters.

Snapshot actual method – Total number of lives covered (employees and their covered family members or only employees if HRA or FSA) on each selected date, divided by the number of dates used.

Snapshot factor method – Number of participants with self-only coverage plus 2.35 times the number of participants with other than self-only coverage. (Do not use this method for HRA or FSA plans.)

Form 5500 method – Use participant counts from the 5500 for that plan for that year.

Plan with only self-only coverage – Add the total number of participants at the beginning and end of the plan year, and divide by 2 to get the average for the year.

Plan with self-only and dependent coverage – Add the total number of participants at the beginning and end of the plan year. (Do not use this method for HRA or FSA plans.)

If you have a BlueCross BlueShield of Tennessee Health Reimbursement Arrangement

How are participants counted when covered under more than one medical plan by the same employer?

HRA and insured plan: Not treated as a single plan, so the employer/plan sponsor pays the fees for the HRA and the carrier pays the fees for the insured plan. However, the employer/plan sponsor may count just employees as covered lives in the HRA, and disregard covered dependents.

HRA and other self-insured plan: Treated as a single plan for purposes of calculating the fee, so each participant (including dependents) is only counted once.

Multiple HRAs and an insured plan: The carrier still pays the fees for the insured plan. The HRAs may be treated as a single plan for purposes of calculating the fee, so each participant (disregarding covered dependents) is only counted once.

Posted on 06/19/2018 11:15 AM by David Moore
Friday, 08 June 2018

On Thursday June 7th, the Justice Department agreed with the state of Texas's lawsuit claiming the individual mandate is unconstitutional. This deals a huge blow to the Affordable Care Act and could vastly change how individual and small group health insurance policies work in the future. 

The individual mandate requires every American to have health insurance or pay a penalty. This was a provision the insurance companies required in order to offer policies with guarantee issue and no pre-existing conditions for everyone. Additionally, carriers would use community rating structures so everyone paid the same premium regardless of their health and smoker status and if they were a man or woman. This of course raised the cost of coverage for millions of healthy Americans who helped to reduce the cost for those who could not previously get coverage due to their health. 

This ruling could be the change the republican administration is looking for to dismantle the ACA and start the process of building a better plan to provide health insurance to those who cannot qualify or afford coverage on their own. 

We don't see major changes coming for 2019 but going forward the landscape may look much different. The concern we have for our clients with the loss of the individual mandate is young and healthy employees can now drop their insurance with no penalty which reduces the overall premium to protect loss ratios and increases the average age of employees. Both of these are major reasons for health insurance rate increases. 

Read more here. 


Posted on 06/08/2018 10:10 AM by David Moore
Wednesday, 30 May 2018

Senator Bill Cassidy, R-La shared a number of proposals to lower healthcare costs by requiring providers to provide pricing transparency for many common medical procedures. In what seems common sense, the Government and healthcare industry have continually made it difficult or impossible to pass legislation that requires price transparency for common medical procedures and testing. 

Additionally, Senator Cassidy is pushing for legislation to banning "gag clauses" that prevent pharmacists from informing patients when they could save money on a drug by paying cash instead of using their insurance. This is legislation President Trump is also supporting so hopefully it will gain traction and help reduce the cost of prescriptions. 

Will these important, cost saving changes happen? There is a very large healthcare lobby in Washington that is spending a lot of money to stop it. If history prevails, we will be talking about this for years to come. 

Read more here

Posted on 05/30/2018 9:13 AM by David Moore
Friday, 27 April 2018

After a confusing series of IRS actions, they have decided to increase the family HSA contribution limit to the original $6,900 for 2018. In March 2018, the IRS announced that a change in the inflation adjustment calculators for 2018 lowered the maximum deductible HSA contributions by $50 to $6,850. This is after they had announced in 2017 the limits would be $6,900. 

Now, the IRS has granted relief or affected taxpayers by allowing the originally announced $6,900 family HSA limit to remain in effect. The IRS cited "numerous unanticipated administrative and financial burdens" in response to the $50 reduction. 

Read more here

Posted on 04/27/2018 9:07 AM by David Moore
Thursday, 26 April 2018

A recent article in Newsweek "Medication keeps getting more expensive - and big pharma won't explain why" shows the continuing problem of prescription pricing. Between 2012 and 2017, prices for the top 20 drugs prescribed to older Americans increased by an average of 12% per year. Seven of the top drugs more than doubled in price, and it's legal. 

New prescriptions entering the market are generally priced higher then their competitors. What's strange is when a new drug hits the market, companies with similar medications reprice their similar approved drugs to match the higher price, even if the drug has been on the market for years. 

The maker of Restasis which cost $167 in 2012 and $321 in 2017 vowed to avoid predatory pricing practices. "We will take price increases no more than one per year," Brent Saunders the CEO of Allergan said. 

Because Medicare is unable to negotiate with drug manufactures over their pricing practices there is little we can do to stop this. Political pressure to change this has been weak (Rx has the largest lobbying in Washington). All politicians rally around lower drug costs but the reality is nothing is happening. 

With all the new high tech, high cost medications about to hit the market it's time our leaders in Washington find a way to bring costs under control before we are all priced out of owning health insurance. 


Posted on 04/26/2018 7:46 AM by David Moore