Medicare Part D DIR: Direct and indirect remuneration explained

Direct and indirect remuneration (DIR) has grown to be an important provision that Medicare Part D plan sponsors use to reduce their claim liabilities and thus member premiums. As DIR continues to increase, it is important for Part D sponsors to consider the effect of potential regulatory changes on plans’ bottom lines and operations. Milliman actuaries Deana Bell and Tracy Margiott provides some perspective in this article.

Has fortune turned its back on MPL insurers?

In 2016, the medical professional liability (MPL) industry’s profitability was still strong, though income was derived from slightly improving investment income and still favorable prior year loss development. Current policy year underwriting results deteriorated by three points relative to 2015, likely owing to continued price competition. The 2016 operating ratio for MPL insurers stayed below the property/casualty industry average. The question abounds as to how much longer prior year reserve releases will be able to cushion MPL results. Milliman consultants Richard Lord and Stephen Koca provide some perspective in this article.

This article was published in the 2017 Fourth Quarter issue of Inside Medical Liability.

How can predictive analytics enhance group life and disability insurance?

The group life and disability insurance sector has been slower to adopt predictive analytics than other lines of insurance. One reason for the sector’s lag is because insurers often have limited information on who they are insuring. However, there are still many ways to incorporate predictive modeling technology to improve results. Milliman consultant Jennifer Fleck provides some perspective in her article “Group insurance ‘Project Insight’.”

Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

IRS publishes best practices for tax filings related to individual shared-responsibility provision
The IRS released a document offering best practices for practitioners to gather necessary information to use in preparing 2017 tax returns for their clients, including information that may be helpful to demonstrate compliance with the ACA’s health coverage requirements. General requirements on filing a complete and accurate tax return continue to apply. Preparers are expected to resolve conflicting or contradictory statements from their clients during the return preparation process.

Under the individual shared responsibility provision of the ACA, all individuals are required to have qualifying health care coverage (called minimum essential coverage), qualify for an exemption, or make an individual shared responsibility payment, or ISRP, with their Federal income tax returns. An individual is responsible for him or herself, his or her spouse (if filing a joint return), and any individuals who could be claimed as dependents (collectively, the tax household). Under the recently enacted Tax Cuts and Jobs Act, taxpayers must continue to report coverage, qualify for an exemption, or pay the individual shared responsibility payment for tax years 2017 and 2018.

For more information, click here.

Guidance on corrected, incorrect, or voided forms 1095-A
Individuals enrolled in health coverage through a healthcare marketplace must complete a Form 1095-A, Health Insurance Marketplace Statement, early in the year following the year of coverage. They should use the information on the form to claim the premium tax credit, to reconcile advance payments of the premium tax credit, or both, when filing their tax return. Some taxpayers may receive a second Form 1095-A because the information on the initial form was incorrect or incomplete. The IRS has published information related to corrected or voided Forms 1095-A for tax years 2014 through 2017.

For more information, click here.

Calculating LTC utilization assumptions

Utilization is a key aspect of long-term care (LTC) insurance assumptions that can impact insurers’ pricing, profitability, and reserves. Several nuances can make it challenging to develop and set appropriate utilization assumptions. In the article “Utilization: Long-term care’s ‘middle child’,” Milliman actuaries Mike Bergerson and Michael Emmert discuss some factors involved with calculating utilization and how they affect LTC reserves.

How may reinsurance and high-risk pools affect the individual market?

Milliman’s Paul Houchens and Fritz Busch will speak at this year’s National Conference on the Individual and Small-Group Markets hosted by America’s Health Insurance Plans (AHIP) on March 8 in Washington D.C. The consultants will talk about the role that reinsurance and high-risk pool programs may play in the individual market. The talk is based on their published paper “Reinsurance and high-risk pools: Past, present, and future role in the individual health insurance market.”

For more information about the conference, click here.