IN CALIFORNIA
Blue Shield Of California Under Pressure
Blue Shield of California has been in the news lately and not in a good way. The Los Angeles Times originally broke the story that the company has been stripped of its tax-exempt status. Also in the news, the company’s former chief technology officer is suing after being dismissed before collecting on his $450,000 bonus.
Tax authorities stripped Blue Shield of California of its tax-exempt status in California and ordered the company to file returns dating to 2013, potentially costing the company tens of millions of dollars. Insurance commissioner Dave Jones said, “The Franchise Tax Board decision to terminate Blue Shield’s tax-exempt status confirms what I have said for years – that Blue Shield charges excessive rates and acts like a for-profit health insurer. Blue Shield is also dodging the payment of premium taxes by taking advantage of a legal loophole that allows Blue Shield to move its health insurance products from Department of Insurance regulation to Department of Managed Health Care regulation.”
The Department of Insurance collects premium taxes from all for-profit and non-profit health insurers. Jones said that Blue Shield has moved most of its health insurance policies over to the Department of Managed Health Care. “We need to pass AB 1434 by Assembly member Kevin McCarty to close the loophole that allows Blue Shield to move its health insurance products to the Department of Managed Health Care to avoid the strong consumer protection oversight of the Department of Insurance and avoid paying premium taxes,” he said. The Blue Shield loophole costs the state $100 million in premium taxes annually. As a tax-exempt company with surplus of $4.2 billion Blue Shield was able to accumulate an enormous amount of money on which it did not pay state taxes by evading the tax on the premiums it collects, he added.
Blue Shield of California issued the following statement in response: Blue Shield of California is a mission-driven not-for-profit health plan with a demonstrated commitment to the community. A longtime supporter of healthcare reform, we limit our net income to 2% of revenue and have contributed $325 million to our foundation’s efforts to improve the health safety net and address domestic violence. We pay federal income taxes, state gross premium tax and Affordable Care Act taxes and fees. We believe we meet the requirements for a state income tax exemption and have challenged the California Franchise Tax Board’s finding to revoke our tax exempt status. We filed California state income tax returns beginning in the 2013 tax year. The FTB decision has no bearing on our ability to continue to meet the needs of our members and community and we remain in strong financial health. Regardless of whether we prevail in our tax dispute, we will remain a not-for-profit.
Former Roseville Insurance Agent Convicted of Stealing School District Employees’ Identities
Magaly Morales, 51, was sentenced to three years and four months in state prison after pleading guilty to forgery, identity theft, and aggravated white collar crime enhancement for losses over $100,000. Morales was arrested in December 2014 on multiple felony counts for submitting 299 fraudulent annuity applications and collecting more than $230,000 in advanced commissions.
As a licensed insurance agent for Great American Life Insurance Company, Morales gained access to policyholders’ data from 2009 to 2011. Morales used her authority as an agent to steal information from school district employees in 13 counties across the state, from Shasta to San Luis Obispo. The largest numbers of victims were in San Joaquin County. Using stolen identities, Morales submitted annuity applications to Life Insurance Company of the Southwest and got advanced commissions on annuity policies for people who had no idea they owned such policies. Due to Morales’ illegal activity, identity theft victims did not have to pay any premiums on the fraudulent policies. As of January 15, 2015 Morales is no longer licensed to transact insurance in California.
HEALTHCARE
Health Plan Leaders Reveal Challenges in Managing Vulnerable Populations
Health Integrated and the Assn. for Community Affiliated Plans (ACAP) surveyed health plan executives on the challenges they face serving people who are enrolled in Medicaid, Medicare Advantage, and Children’s Health Insurance Programs (CHIP). For the second straight year, having access to data was a primary concern for plans of all sizes. “Data is playing a bigger role in how health plans manage their populations. With multiple data sources available from claims feeds to electronic medical records to information from patients themselves, isolating and analyzing the most useful data points is critical,” said Sam Toney, MD, Chief Medical Officer and EVP of Clinical Integrity of Health Integrated.
The cost and appropriate management of specialty drugs is another major concern. Certain costly medical conditions, such as hepatitis C and pulmonary hypertension, are more commonly seen in vulnerable populations. Pricey specialty drugs accounted for more than 31 cents of every dollar spent on prescriptions last year even though they represented only 1% of all U.S. prescriptions filled, according to Express Scripts. This creates a growing challenge for health plans to manage costs while delivering quality care.
Plans serving dual-eligible members are facing concerns, such as improving Star ratings while managing costs. Dual eligible beneficiaries are among the sickest and poorest people covered by Medicare or Medicaid and account for a significant portion of costs for programs. Health plans are also considering the importance of addressing the social determinants of health, such as housing, food, and nutrition. ACAP plans have developed special programs, such as the “UPMC for You,” which provides stable housing to homeless members with a history of avoidable visits to ERs and inpatient, and skilled nursing facilities. Another example includes CareOregon’s Food Rx pilot project, which provides vouchers to members who don’t get enough food or don’t have access to healthy food items. John Lovelace, President of UPMC for You said, “As plans are being held more accountable for outcomes, we need to take the lead in bringing all services together to fully support our members. You can’t have healthier members without addressing all of their medical, social, economic and behavioral needs.” For more information, visit healthintegrated.com.
Drug Costs for Rare Hereditary Angioedema Disorder Tripled in Two Years
Hereditary angioedema (HAE) only affects about 20 in 1 million Americans. It’s a rare genetic disorder that results in potentially life-threatening edema or swelling of limbs, abdomen, face, tongue or larynx. People with the condition are accumulating specialty drug treatment costs of more than $300,000 annually on average, according to a study by pharmacy benefit manager Prime Therapeutics LLC. Those costs tripled in the past two years.
The specialty drugs carry a significant price tag, ranging from about $5,000 to more than $11,000 per dose (wholesale acquisition cost). During the two-year study, Prime identified 17 in 1 million commercially insured members as having an HAE diagnosis. Further analysis revealed 212 members had used an HAE drug, with more than $69 million in HAE drug costs, averaging $325,675 per member. Furthermore, 23 people out of 12.5 million commercially insured members had more than $1 million in HAE drug costs. In total, $45,385,602 (66%) of HAE drug costs were paid through the medical benefit and $23,657,387 (34%) were paid through the pharmacy benefit.
Quarterly HAE drug costs nearly tripled in two years. Per member/per month (PMPM) cost of HAE drugs increased 191%, from $0.11 in the first quarter of 2012 to $0.32 PMPM in the first quarter of 2014. Higher costs were partially driven by the number of members taking these specialty drugs increasing substantially. In the first quarter of 2012, 45 members got a HAE drug, compared to 118 members in the first quarter of 2014, a 162% increase. For more information, visit primetherapeutics.com.
Patients Denied Mental Health Care in Non-Medicaid Expansion States
Nearly 570,000 people diagnosed with a serious mental health condition were denied affordable mental health treatments because several states have refused to participate in the new Medicaid Expansion Program, according to a study from the American Mental Health Counselors Association (AMHCA). The federal government would have paid 100% of the treatment costs for these patients. Also, 458,000 fewer people would have avoided a depressive disorder by securing health insurance through the Medicaid Expansion Program.
Many of the eligible people in the 24 non-Medicaid Expansion states had severe mental health conditions and did not have any health insurance coverage through public or private health plans. But they were denied the opportunity to get affordable coverage and treatments in those states due to ideological differences with the Obama Administration. The 26 states (and DC) that did participate in the expansion in 2014 helped 351,000 people with mental illness get affordable, needed services, and another 348,000 people did not develop a depressive disorder due to securing health insurance coverage. “If several states continue to opt out of the new Medicaid Expansion Program, thousands of state residents with a mental illness will see their hopes of a healthier and better life denied since they cannot get affordable health insurance and needed treatments due to political ideology. That is a very high price that seriously ill and vulnerable people have to pay for political differences,” said Dr. Steve Giunta, President of AMHCA. For more information, visit amhca.org.
Calling All Book Authors
Have you written an amazing book and now want to share your story with the world? Now is your chance to present in front of 2,500 Global Leaders. The Medical Tourism Assn. issued a call for authors for a speaking session at its annual conference this September in Orlando. For more information, visit medicaltourismcongress.com.
NEW PRODUCTS
Prescription Discount Card
Watertree Health is offering a free prescription discount card. Simply entering a zip code and a drug name yields a list of discounted prices and the names and locations of the pharmacies. The search results also provide the percentage saved when purchasing the drug with the card. It also reveals the best discounted pricing for common over-the-counter medications, like ibuprofen or aspirin. Drug prices are updated daily. For more information, visit watertreehealthcard.com.
Life Insurance Promotes Healthy Living
John Hancock teamed up with Vitality to integrate life insurance with a comprehensive healthy living program. New products offer potential for savings on annual premiums. They also offer discounts and rewards from leading retailers. New policyholders get a free Fitbit to help track their progress. After identifying a need for life insurance and completing the application process, new policyholders take an online Vitality Health Review to determine their Vitality Age. This indicator of health may be higher or lower than their actual age, and can improve over time as they work toward living a healthier life. Vitality has concluded that, on average, most Americans are five years older than their actual age, based on various health and wellness factors. Policyholders begin accumulating Vitality Points after their policy is issued and when they complete health-related activities like exercising, getting an annual health screening or even a flu shot. The healthier their lifestyle, the more points they can accumulate to earn valuable travel, shopping and entertainment-related rewards and discounts from leading retailers. Depending on the type of product they purchase, a policyholder could save as much as 15% off their annual premium. As part of the new offering, John Hancock unveiled two products: Protection UL with Vitality, a universal life product, and John Hancock Term with Vitality, a term life product. For more information, visit thevitalitygroup.com.
App Manages Disability Claims
The Hartford launched a mobile app that allows group disability plan members to manage their claims. With the app, consumers can start a short-term disability claim, update personal data, and check on the status of a claim, including payment information. The app also features definitions and benefits details to help customers navigate through the claims process. For more information, visit thehartford.com.
Guide to Employee Leave Laws
XpertHR has created an online employee handbook tool to help employers struggling to stay compliant with employment law throughout the United States and especially in California. It features national handbook policy templates and guidance, a stand-alone California handbook, and supplements for the other 49 states and the District of Columbia.
California employment law in 2015 includes new leave laws and equal protections for domestic violence victims, veterans, interns, volunteers and immigrants. California offers protections to more classes and employee leave mandates than any other state. “State and local lawmakers in California are continuing the aggressive trend to pass legislation providing additional employment protections and this will have a substantial impact on workplace policies and employee handbooks. Employers there must take steps to ensure compliance with the complex and ever-changing state and municipal laws in California, including numerous new laws that came into effect Jan. 1, 2015 and more coming into effect throughout the year,” says Peggy Carter-Ward, head of content, XpertHR.
California recently passed the Healthy Workplaces, Healthy Families Act, which requires private employers to provide paid sick time to eligible employees. Starting on July 1, 2015, employees who work in California for 30 or more days a year are entitled to take up to 24 hours or three days of paid sick leave. Most employees are covered, including part-time and temporary workers. Leaves of absence in California can be extremely complicated due to the interplay between federal and state laws. New laws cover the following:
- Domestic violence victims adopted as a protected class (effective 1/1/15)
- Veterans and those in military service adopted as protected classes (effective 1/1/14)
- Discrimination against immigrants holding lawful driver’s licenses prohibited (effective 1/1/15)
- Interns and volunteers protected from discrimination (effective 1/1/15)
- Training on abusive conduct required as part of supervisor harassment training (effective 1/1/15)
For more information visit XpertHR.com.
EVENTS
Med Supp Webinar
The American Association for Medicare Supplement Insurance is holding a Webinar Tuesday, April 14th starting at 7:45 AM and broadcasting continuously until 1:00 PM (Pacific time). It will cover the latest legislative changes affecting the Med Supp world and what CEOs see as the greatest opportunities. For more information, visit aaltci.org or insuranceexpos.com.
Retirement Planning Webinar
The401kCoach.com or PaychecksforLife.org are sponsoring a Webinar tomorrow April 9th 12:00 (Pacific
Time).
EMPLOYEE BENEFITS
Making the Most of Employee Benefits
If you’re a full-time employee, your benefits likely contribute an additional one-third to your total compensation, according to new research from the U.S. Bureau of Labor and Statistics. Arag is encouraging employees to evaluate all the extras that their employers offer. Arag chief human resources officer Erin Barfels said, “If you’re not aware of everything your company offers, including voluntary benefits and discounts, you may be leaving money on the table.” Arag offers the following tips:
- Are you using the 401(k) match, if offered? When it comes to investing in your retirement, it’s hard to find a better option than an employer offering a full or partial match to your own savings. In most programs, your employer will offer to match your contributions up to a certain percentage of your salary. This could be a full or partial match, and could vary depending on the amount of time you’ve been with the company. Talk to your financial advisor to find out how much difference using your match can make for you.
- Do you have access to a legal plan, identity theft protection, care giving services or any other voluntary benefits? In order to attract and retain the best employees, many leading companies offer additional types of voluntary benefits beyond health insurance – like a legal plan. Enrolling in voluntary benefits such as legal insurance and identity theft protection and recovery can help you solve personal problems more efficiently to minimize the impact on your work, and increase your physical and financial wellness.
- Does your healthcare plan still make sense for your situation? Many of us chose a healthcare plan when we started with the company, but haven’t reconsidered if it still makes sense for the ways our lives have changed. For families, choosing the right health insurance plan requires a thorough review process. Keep track of your medical expenses throughout the year so you can review to ensure you are using the plan that works best for you. Take into account any life changes like having a child or new health issues you’ve developed since you last enrolled in benefits.
- Are you taking advantage of wellness discounts and reimbursements? Most employers recognize the importance of exercise as part of a healthier lifestyle and provide reimbursements for health club memberships and the purchase of exercise equipment. Many companies also have discounts in place with organizations such as gyms and nutritionists. Take a look at the wellness section of your company intranet to make sure you are taking full advantage of these healthy offers.
For more information, visit ARAGgroup.com.
