UnitedHealth Group to Pass Drug Maker Rebates to Employer Customers

UnitedHealth Group and its pharmacy benefit manager, OptumRx, are expanding a new program that passes along pharmacy discounts they get from drug manufacturer rebates to all new employer customers.

The program will be for "all new employer-sponsored plans," taking effect Jan. 1, 2020, UnitedHealth and OptumRx said Tuesday. The effort builds on a program that began Jan. 1 of this year for people enrolled in UnitedHealthcare “fully insured commercial group benefit plans" who now have discounts applied when they fill their prescriptions at the retail pharmacy or through home delivery.

It’s the latest effort by health insurers and pharmacy benefit managers (PBMs) to pass along more prescription drug savings to customers in the face of intense criticism from employers, Congress and the Trump administration. The PBM’s share of rebates, which is the portion of the drug returned by the seller to the buyer, has turned into a nationwide controversy.

Rivals of UnitedHealth Group and OptumRx are also changing their business practices. Last year, for example, CVS Health, which owns the Caremark PBM and the health insurer Aetna, launched a “guaranteed net cost” pricing model that the company says returns 100% of drug rebates to its clients for better “predictability and pricing simplicity,” CVS executives said in December. And other PBMs like Cigna's Express Scripts subsidiary, have introduced programs with point-of-sale rebates for their clients.  

UnitedHealthcare and OptumRx said they “will only support new employer clients that incorporate point-of-sale discounts to consumers as part of their plan design” for new business proposals they receive for 2020. They expect the effort to save employers and health plan customers money, saying the “existing program has already lowered prescription drug costs for consumers by an average of $130 per eligible prescription.”

Excerpt from Forbes, Bruce Japsen 3-12-19

New HRA rules could allow businesses to circumvent ACA's employer mandate

Currently it is a violation of the ACA for large employers to allow health reimbursement arrangements to be used to help pay workers’ premiums instead of providing group health insurance. Under the ACA, large employers must offer affordable minimum essential coverage to 95 percent of employees in order to avoid penalties.

“Under current ACA rules there is a blanket prohibition, which a lot of employers in the under-200 employee market were bummed about. They would rather have a defined-contribution approach,” Welle said. 

The Trump administration under Executive Order 13813, issued in October 2017, proposed expanding the defined-contribution approach to employer health insurance coverage as part of an overall plan to repeal and/or replace the ACA and promote competition in U.S. health care. The proposals also included allowing association health plans and limited-duration, limited-benefit health plans. While legislation overturning the ACA seems dead, some rule-making continues.

Under the proposed HRA rules, employers generally would have to contribute a fixed amount into each individual HRA sufficient that any remaining premiums the employee would have to pay wouldn’t exceed a percentage of his or her household income to be considered affordable under the employer mandate, in order to avoid penalties, Welle said.

If finalized, the new rules wouldn’t take effect until Jan. 1, 2020, at the earliest. Welle said he believes that most large employers in the interim would probably continue to offer group health plans because they provide employers with a valuable recruitment incentive. In the latest statistics from Kaiser Family Foundation, roughly 16 million Americans were enrolled in the ACA marketplace or a Basic Health Program.

“But in the future, I see employers in the range of 50 to 200 employees who are burdened by the administrative responsibilities and the cost of administering health plans say this is a way they can do something for their employees but off-load some of the responsibilities. It is still developing and there is nothing to hang their hats on yet, but in 2021 or 2022 I can see the [smaller ones] saying this might be a good solution for us,” Welle said.

Pressly said the employers who right now are most interested in this are those with 50 to 100 workers and those who employ lots of part-time workers, as this could be a solution for providing coverage for them.  

But for larger employers, he said, “it looks really appealing but the way the rules are written if you roll it out for one class of employees, you will have to push it to all employees in that class and the benefits vary wildly from state to state.”

Employers and employees might not fully grasp all the differences between the individual health insurance marketplaces in the states and its limitations, and employer-sponsored group health insurance coverage, Pressly said. Resistance could arise when top executives accustomed to group health plans’ flexibility and coverage for expensive procedures such as in vitro fertilization encounter the limitations of many individual health insurance plans, including differences in what states require them to provide, he said.

In 2017, only 7 percent of the total U.S. population were in non group health insurance and 49 percent received employer-provided insurance. A combined 35 percent were on Medicaid or Medicare; 1 percent were on some other public plan and 9 percent were uninsured, according to the Kaiser.

Pressly said, “This goes hand-in-hand with state insurance markets and you really need to understand what that is, the cost and the coverage that is available to know what the ultimate employee experience is going to look like.”

Excerpt By:By MP McQueen | January 28, 2019 at 10:58 AM 

Trump Administration releases final rule on Association Health plans

This afternoon the Trump Administration released a final rule regarding Association Health Plans as well as a fact sheet on the new rule. The rule was in response to an executive order issued by President Trump on October 12 directing federal agencies to expand the availability of AHPs, short-term limited duration insurance policies and Health Reimbursement Arrangements. The proposal calls for a revision to ERISA in order to redefine "employer" to allow more groups to qualify as associations and treating health coverage sponsored by an employer association as a single group health plan that would not be subject to the ACA's essential health benefits.
 

The final rule does not differ much from the proposed rule that came out in January, and the Congressional Budget Office now estimates that 4 million Americans, including 400,000 who otherwise would lack insurance, will join an AHP by 2023.
 

The goal of the rule is to provide small-business owners, employees of small businesses and family members of working owners/employees more coverage options, more affordable pricing, enhanced ability to self-insure, less regulatory burden and complexity, and reduced administrative costs.
 

The rule does this by eliminating the requirement that an association exist for a bona fide purpose other than offering health coverage. To qualify under the rule, employers would need to be either in the same trade, industry, line of business or profession, or have a principal place of business within a region that does not exceed the boundaries of the same state or the same metropolitan area. Therefore, AHPs could cross state lines if the metropolitan area includes more than one state. These plans would be subject to state regulation of insurance and plans across multiple states could be subject to varying rules. The Department of Labor has committed to continuing to partner with states to protect consumers and enforce state regulations.
 

Under the final rule, self-employed individuals, sole proprietors and common-law employees would be permitted to join an AHP. These individuals would be treated as an employee of the trade or business for purposes of being covered by the AHP. The proposal includes non-discrimination protections to avoid potential of adverse selection. It would require that the association not restrict membership based on any health factor, as defined in the HIPAA/ACA health nondiscrimination rules. These include health status, medical condition (including both physical and mental illnesses), claims experience, receipt of healthcare, medical history, genetic information, evidence of insurability, and disability.
 

The final rule has staggered dates for implementation:
 

· All associations (new or existing) may establish a fully insured AHP on September 1, 2018.
· Existing associations that sponsored an AHP on or before the date the final rule was published may establish a self-funded AHP on January 1, 2019.
· All other associations (new or existing) may establish a self-funded AHP on April 1, 2019.
 

From NAHU(National Association of Health Underwriters)

Executive Action on Health Care

October 13, 2017

On Oct. 12, 2017, President Trump signed an Executive Order (EO) directing various departments to consider easing some health insurance rules related to small businesses, short-term health insurance policies and Health Reimbursement Accounts (HRAs). Through the EO, the Administration aims to provide Americans with more affordable choices and allow greater control over their health care decisions. This EO, along with the Oct. 12 White House announcement that it will stop making Cost-Sharing Reduction (CSR) payments and Interim Final Rules issued by the tri-agencies (Departments of Health and Human Services [HHS], Treasury, and Labor) last week on contraceptive coverage, are part of the Administration’s ongoing efforts to modify or eliminate certain parts of the Affordable Care Act (ACA).

The EO provides guidance to various agencies, but does not make any immediate changes. Any details about potential changes will only be available once new or updated rules and guidance are released in response to the EO.

Executive Order
Association health plans
Under the EO, the Administration is directing the Department of Labor to consider proposing regulations or revising guidance to expand access to Association Health Plans (AHPs) that will allow small businesses to purchase insurance collectively across state lines. The Administration believes a “broader consumer-friendly interpretation” of ERISA could allow for AHP expansions. By joining an AHP, small employers within the same line of business could purchase plans collectively that would follow large group ACA mandates. Such health plans would not fall under small group market rules. 

AHPs, as currently defined, cannot exclude any employee from participating, cannot determine premium prices based on health status, and must follow community rating rules. AHPs must also comply with other ACA patient protections, such as offering coverage to dependent children up to the age of 26, prohibiting annual or lifetime limits, and having zero cost-share for preventive services. These limitations could change as a result of the EO.

Short-term health plans
The tri-agencies are being asked to consider updating rules on short-term limited duration insurance to allow plans to last as long as 12 months and be renewable. These policies are not required to follow several of the ACA mandates, including covering Essential Health Benefits (EHBs), prohibiting annual limits, offering coverage for pre-existing conditions or ensuring Medical Loss Ratios (MLRs) are met. Currently, these policies can only be sold for periods of three months or less and cannot be renewed after a total of three months.

Health Reimbursement Accounts (HRAs)
The tri-agencies are also directed to consider ways to expand the flexibility of HRAs. The Administration specifically focused on three HRA rules it wants the agencies to consider modifying: making employer HRA contributions tax deductible, allowing HRA funds to be used for premium reimbursement, and allowing HRAs to be used in conjunction with non-group coverage.

Cost-Sharing Reduction (CSR) payments discontinued
Also on Oct. 12, 2017, the White House announced it would discontinue CSR payments to insurers immediately. The ACA requires insurers to reduce cost-sharing for eligible, low-income individuals enrolled in silver plans through their local Marketplaces. This financial assistance is in addition to the Advance Premium Tax Credit. The Administration said because Congress has not appropriated funds for the CSRs, “the government cannot lawfully make the [CSR] payment.” This decision primarily affects insurers who will no longer be reimbursed for the CSRs but are required by law to offer them to eligible customers. As a result, customers who have reduced cost-sharing through the Marketplace should not see an immediate impact.

Expanded exemption for covering contraceptive services
Interim final rules (IFRs) issued Oct. 6, 2017 expanded the current exemption for employers to not cover contraceptive services under their sponsored group health plans. Effective immediately, employers may exclude coverage for contraceptive services based on moral or religious objections. This is in addition to the exemptions already outlined under the ACA for “closely-held” for-profit corporations, religious non-profit organizations and religious employers (e.g., churches).

In addition, employers with religious or moral objections are no longer required to submit a self-certification of their objections to their insurance carrier or file a notice with the HHS – a process that enabled cost-sharing responsibility to be passed to the plan’s issuer or third-party administrator (TPA). Because this accommodation is now optional, it is possible that costs for contraceptive services may not be covered, passing the full financial responsibility of contraceptive services to the customer. Employers who choose to exercise the accommodation process will pass responsibility for covering contraceptive services to the carrier or TPA, alleviating the financial responsibility from their employees and their dependents. 

Excerpt from Cigna Healthcare Informed on Reform

IRS will continue to accept 'silent' individual tax returns

FEB 17, 2017 | BY JESSICA LEDONNE

Becoming the first agency to take action in response to President Trump’s executive order directing federal agencies “minimize...the economic and regulatory burdens of the Act”, the IRS has told tax preparers that it will not automatically reject individual returns that do not state whether or not the filer had health coverage.

Although at first blush, accepting such “silent” returns would appear to be a loosening of the enforcement of the ACA’s individual mandate, this is not actually a change in policy, as the agency accepted and processed over 4 million silent returns last year.

The information, coming in an email correspondence rather than a formal rule or release, stated that the IRS would “continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.” The email went on to confirm that this did not impact taxpayers’ responsibility to obtain health insurance or to pay a penalty, even reiterating that the ACA is “still in force” and that “taxpayers remain required to follow the law and pay what they may owe‎.” Therefore, although these silent returns won’t be automatically rejected, they may eventually lead to questions, audits, or eventual penalties.

Ultimately, experts seem to agree that the decision to continue to accept returns with no health coverage information will not have much of an impact on the ACA’s individual mandate requirements, but rather, is the IRS confirming that they will continue to do what they’ve previously done.