Tag Archives: multiemployer

Managing autism treatment in self-funded plans

Self-funded plans frequently deal with issues at the intersection of physical health, behavioral health, medical science, and government regulation. One emerging issue that relates to each of these areas is Applied Behavior Analysis (ABA) treatment for autism spectrum disorders (ASD).

ABA is one of the fastest growing state benefit mandates. Today, 46 states mandate some form of autism coverage with varying degrees of benefit coverage and limits. ABA is a prime example of the type of coverage required by state mandates.

The prevalence of ASD has risen precipitously. In the early 1980s, population prevalence was estimated at 0.05% (five of 10,000 children). The most recent studies estimate prevalence to be 1.5% (one in 68 children). Traditionally, commercial insurers excluded or minimally covered treatment for ASD. However, more recent federal mental health parity laws and essential health benefit requirements (EHBs) of the Patient Protection and Affordable Care Act (ACA) have served to increase access to ASD treatments.

ABA is a behavioral strategy to improve socially significant behaviors to a meaningful degree. Targeted behaviors include adaptive living skills such as gross/fine motor skills, social skills, communication, reading, eating, and dressing. The ABA treatment regimen typically involves highly structured, intensive interventions for up to 30 or 40 hours per week. The course of treatment can last many years, from diagnosis at early ages (e.g., ages 3 to 4) through adolescence (and sometimes beyond).

While self-funded employer-sponsored plans are not required to comply with state mandates under federal law (ERISA), they are not immune from the trend toward greater ABA coverage driven by state mandates for insured plans.

Challenges for self-insured plan sponsors include:

Medical necessity. Medical carriers will often advise that ABA is not medically necessary for its self-insured customers but will cover it for its insured business to meet state mandate requirements. This makes it difficult for plan sponsors to explain to members why it is not covered under their plan.
Cost. Assuming conservatively the average age of diagnosis is 4 years and average age of completion is 15 years, adding this benefit can be a long-term expense to the plan. Cost estimates range between $25,000 and $50,000 per case per year.
Utilization management. If plan sponsors decide to cover ABA, then it is important to make sure members access school-/community-based services, which play a significant and progressive role in offsetting plan costs.
Network management and provider credentialing. As demand for ABA services grows, plan sponsors may want to review credentialing and network utilization to assure ongoing access to qualified providers for these services.
Compliance. Plan sponsors must not run afoul of the Mental Health Parity and Addiction Equity Act (MHPAEA), which prohibits plans from restricting mental health benefits more so than physical health benefits.
Related benefits. Even if a plan specifically excludes coverage for ASD treatment and diagnosis, members with autism are most likely already receiving related functional health benefits such as physical therapy and speech therapy (habilitative and rehabilitative). It is important to understand the interconnectedness of benefit administration and the underlying equities.

The increasing prevalence of ASD, the growth in state ASD benefit mandates, and the widespread treatment of ASD through ABA can affect self-funded plan sponsors, requiring them to think comprehensively about balancing member needs and access with care cost and care management.

This article first appeared on LaborPress.org.

Effectively communicating plan design

As multiemployer plans focus on delivering health benefits to their members in a cost-effective and efficient way, a key component is clearly and concisely communicating the thought process behind plan design and plan design changes.

Given the limited amount of money available to spend on benefits, multiemployer plans must avoid unnecessary services and reduce waste in an effort to contain costs. As a result, increased member cost sharing, restrictions on certain services, and more tightly managed benefits are often implemented to manage the plans’ spending.

However, despite these changes mainly being made for the “greater good of the plan,” they will be interpreted in different ways (generally negatively) by the membership. For example, a plan with high emergency room use (for nonemergencies) may increase the emergency room copayment (and perhaps lower the primary care physician copayment as an offset). For a member who legitimately needs to use the emergency room, an increased copayment will feel like a punishment. But if the change is communicated effectively, along with the reason(s) for the change, members may be more likely to be amenable to the change.

Effective communication to members includes delivering the message via email, pamphlets, mailings, bulletin board postings, or meetings—any mode of communication that reaches the membership. The message should be concise—the fewer the words, the more likely members will listen—and it should be repeated often. For example, if the plan wishes to emphasize preventive care to avoid higher-cost services in the future, the headline could be “The Importance of Preventive Services,” and members should have multiple opportunities—at least once every three to six months—to receive the message until the plan is sure that the message has been heard. If the membership understands the plan’s goals in administering benefits, the plan is more likely to achieve or even surpass these goals.

This article first appeared on LaborPress.org.

IRS final rule for employers to “pay or play” under the ACA

The Internal Revenue Service (IRS) recently issued a final rule for large employers (50 or more full-time employees) to “pay or play” under the Patient Protection and Affordable Care Act (ACA), providing them more time to comply with the ACA’s requirement to offer affordable, qualifying healthcare coverage or pay a penalty under certain circumstances. For employers with 50 to 99 employees, the final rule delays the mandate until the 2016 plan year, while for employers with at least 100 employees, the requirement applies on a phased-in basis so that in the 2015 plan year, 70%—rather than 95%—of the workers must be offered coverage. Large employers must meet the 95% threshold in 2016 and later plan years. The final rule provides guidance on the delay and phase-in, and also address a broad range of related employer “shared responsibility” requirements considered in previous pronouncements.

For employers contributing to multiemployer plans, the final rule extends, indefinitely, the proposed rule’s relief from penalties for employers contributing to a multiemployer plan if the contributions are made pursuant to a collective bargaining agreement, coverage is offered to full-time employees and their dependents, and coverage is affordable and provides minimum value.

For more information about the IRS ruling, please contact your Milliman consultant.

Guidance released on 90-day waiting period for health coverage

On March 21, 2013, the U.S. Departments of Health and Human Services, Labor, and Treasury published proposed regulations to implement the 90-day waiting period limitation required by the Patient Protection and Affordable Care Act (ACA) for grandfathered and non-grandfathered group health plans and insurance. The proposed rule, which when published in final form would be effective for plan years beginning in 2014, is generally consistent with the agencies’ guidance (IRS Notice 2012-59) published in August 2012 and modifies existing requirements such as preexisting condition limitations.

The agencies indicate that group health plans and health insurance issuers may rely on the proposed rule at least through the end of 2014, just as they may on the August 2012 guidance.

The ACA prohibits a group health plan or health insurance issuer offering group health coverage from applying any waiting period longer than 90 days for an individual to be covered for benefits. One plan eligibility requirement that multiemployer health plans frequently apply is the cumulative hours-of-service requirement. The newly published proposed rule includes several clarifications regarding this:

• If a group health plan conditions eligibility on any employee’s (part-time or full-time) having completed a number of “cumulative hours of service,” the plan will not be deemed as designed to avoid compliance with the 90-day waiting period limitation if the cumulative hours of service does not exceed 1,200 hours
• A plan’s waiting period must begin once the employee satisfies the cumulative service requirement and cannot exceed 90 days
• The same individual must not be subject to multiple eligibility requirements annually (i.e., this provision is designed to be a one-time eligibility requirement)
• Other conditions for eligibility (i.e., those that are not based solely on the lapse of a time period, such as compensation) are generally permissible unless the condition is designed to avoid compliance with the 90-day waiting period limitation

The proposed rule does not include a “three month” replacement for the 90-day requirement nor grant plan sponsors the ability to provide coverage effective the first of the month after 90 days. The regulators stated that because the ACA specifies 90 days, they did not have the flexibility to modify the waiting period, and all calendar days—including weekends and holidays—are counted beginning on the individual’s enrollment date.

The proposed rule also provides another clarification of interest to multiemployer plan sponsors: Plans with “hour banks” or eligibility provisions that allow workers to bank excess hours from one measurement period and draw down those hours in another to prevent lapses in coverage are permitted to allow participants to make a “self-payment” or “buy in” to satisfy any otherwise permissible hours-of-service requirement.

The proposed rule also would amend ACA regulations already in effect, as well as those that will become effective beginning in 2014. For example, it makes conforming amendments to the preexisting condition limitations and other portability provisions under HIPAA, as well as to some implementing regulations because they have become moot or need revisions because of the ACA’s new market reform protections. Under the proposed rule, a technical amendment eliminates the need for plan sponsors to provide HIPAA certificates of creditable coverage beginning on December 31, 2014.

For more information about the federal agencies’ announcement, please contact your Milliman consultant.

What are the implications of reform on multiemployer plans?

The latest issue of Multiemployer Review examines how healthcare reform will affect multiemployer plans, with particular focus on the timeline of changes, the extension of dependent coverage through age 26, and the early retiree reinsurance program—which begins today. Here’s an excerpt on the early retiree reinsurance program:

The Department of Health and Human Services (DHHS) has issued guidance on how sponsors of multiemployer health plans covering early retirees may apply for $5 billion in federal subsidies available under the reinsurance program created by the Patient Protection and Affordable Care Act (PPACA). The PPACA allows multiemployer plan sponsors to receive a portion of the cost of health benefits provided to retirees who are aged 55 or older and not yet eligible for Medicare.

The DHHS’s interim final rule sets forth most of the requirements that will apply to the new temporary program, effective June 1, 2010 (and making 2010 calendar-year plans eligible). The reimbursement extends to the benefit costs of the early retiree’s spouse, surviving spouse, and dependents, and applies to insured and self-insured plans sponsored by multiemployer trusts, voluntary employees’ beneficiary associations (VEBAs), nonprofit and employee organizations, state and local governments, private employers, and religious entities.