Senate Report Examines Exploding Drug Prices

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Recent headlines on the exploding cost of prescription drugs have not gone unnoticed by Washington D.C. lawmakers.  The United States Senate Special Committee on Aging has issued a 130 page report examining the cost increases to previously affordable drugs that were acquired by pharmaceutical companies off patent.

Traditionally, the prescription drug industry recouped the cost of research and development by holding a new drug’s patent and being the sole manufacturer for a period of years before generic production was allowed ...

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SPD v. SBC

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First things first, summary plan descriptions (SPD) and a summary of benefits and coverage (SBC) are NOT the same.  They serve a similar function, but are separate compliance obligations for an employer.

Summary of Benefits and Coverage (SBC)

As of September 23, 2012, a SBC, which is a written summary that describes the health plan’s benefits and coverages, must be given to each participant, spouse, dependent, and prospective enrollee in a group health plan.  The insurer and employer are responsible for distributing ...

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Local Carrier to Stop Paying Commission on New Business

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Assurant Health, headquartered in Milwaukee, WI, will no longer be paying agent commission on individual health insurance policies sold in Florida, Nevada, Georgia, Indiana, Michigan, Texas, and Pennsylvania.

Assurant claims this change is not related to the medical loss ratio requirements within the Affordable Care Act which requires insurance companies to spend 80-85% of premiums collected on claims.  This ratio includes agent compensation making it more difficult for insurance carriers to continue payments to agents with a defined profit margin.

75% of brokers ...

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EEOC Encouraged to Clarify Wellness Rules

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During a U.S. Senate meeting January 29, 2015, Senators chastised the EEOC for its unclear and inconsistent actions recently taken on employer-sponsored wellness programs.  This year, the EEOC has filed suit against Honeywell, Orion Energy Systems, and Flambeau Inc., claiming violations of the ADA and GINA.  This conflicts with messages from the Government and within the Affordable Care Act that allow employers new freedom to design wellness programs to improve employee health.

Testimony from employers and disability organizations expressed their concerns. ...

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Nominate a Human Resources Leader!

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Attention company leaders and human resource departments: nominations for the Milwaukee Business Journal’s first ever awards program for Human Resource professionals are now being accepted!

This new HR Awards program seeks to recognize the best human resources programs or practices that have had a positive impact on employees and the overall organization. Individual winners are eligible for a $1,000 cash prize, while company or departmental team winners can receive up to $2,000. Winners will be featured in a special ...

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Large Employer Market Consolidates Again

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The Business Health Care Group (BHCG) will terminate it’s long term partnership with Humana early this year and will now offer members health insurance with United Healthcare effective January 1, 2016. BHCG has 107,000 members, including some large employers in southeastern Wisconsin.  United Healthcare was awarded the contract after Humana began moving away from providing its services in the large group market.

United Healthcare will be providing a premium designation plan to BHCG members.  This plan gives members a financial incentive to get care from physicians that ...

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More Employers Covering Maintenance Meds at 100%

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More employers are treating maintenance medications, like those treating cholesterol or blood pressure, as a preventative prescription which is eligible for 100% coverage in high deductible health plans.  Typically, these prescriptions would be subject to the individual or family deductible, and the consumer would pay the entire cost of the medications until the deductible is met.  However, IRS 223(c), exempts preventative health care and prescriptions from the deductible in a high deductible health plan.  This lack of clarity regarding the definition of a ...

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Employees in Cafeteria Plan Can Move to Exchanges Mid-Year

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Until recently an employee participant in a cafeteria plan could only make mid-year changes to their elections within the plan if it fell within specific exception.  Previously, there was no exception allowing an employee to drop employer-sponsored health insurance coverage to purchase health insurance on a public exchange as part of the Affordable Care Act mid-year.

IRS Notice 2014-55 now includes language specific to employee participation in public exchanges.  An employee participant in a cafeteria plan can change their cafeteria plan election mid-year if the ...

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Status Quo Health Plans Put Employers at Cadillac Tax Risk

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More than half of employers with 5,000 or more employees could be liable for the Cadillac Tax in 2018 if no plan design changes are made to lower the cost of health benefits according to a recent study by Towers Watson. The study projects 48% of those employers will be liable in 2018 and 82% in 2023.  This analysis assumes a medical trend of 7% annually.

The Cadillac Tax is a 40% excise tax on health benefits costing more than $10,200 ...

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