In 2018, Massachusetts established the Paid Family and Medical Leave Act, a statewide paid family and medical leave program financed by employer and employee contributions. In 2019, leadership agreed to delay the required contributions for three months, from July 1 to Oct. 1, 2019. The paid family and medical leave program is funded by a mandatory payroll tax of 0.75% (adjusted from .63%) on the first $132,900 of an employee’s wages, to be adjusted annually. The payroll tax will be split between employers and employees. However, for employers with fewer than 25 employees, no employer contribution is required for family or medical leave premiums.

An employer is considered a Massachusetts employer with respect to services performed by a covered individual for the employer if the service is:

Localized in Massachusetts. Service is localized in Massachusetts if the service is performed:
(1) Entirely within Massachusetts; or
(2) Both within and outside of Massachusetts, but the service performed outside of Massachusetts is incidental to the individual’s service within Massachusetts (for example, is temporary or transitory in nature, or consists of isolated transactions); or

Not localized in any state, but some part of the service is performed in Massachusetts and:
(1) The individual’s base of operations is in Massachusetts or, if there is no base of operations, then the place from which the service is directed or controlled is within Massachusetts; or
(2) The individual’s base of operations or place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual’s residence is in Massachusetts.

Effective September 30, 2019, employers must:
1) conspicuously post a workplace notice that informs employees of benefits provided under the paid family and medical leave program. The DFML provides a model poster for employers to use.
2) provide each new hire with written notice detailing the new family and medical leave program within 30 days from the employee’s start date. The employer must obtain each new hire’s written acknowledgement of receipt of the information above, or have the employee sign a statement that he or she refused to sign the acknowledgement. The DFML provides a model notice for employers to use.

Effective October 1, 2019, employers must begin remitting contributions to the trust.

Refer to the below bulletin for details and contact your NEEBCo representative with questions.

Massachusetts Paid Family and Medical Leave Contributions Delayed Until Oct 1 2019

Massachusetts PFML Employer FAQ’s

Wednesday, August 14th, Harvard Pilgrim Health Care and Tufts Health Plan announced an agreement to merge, consolidating Massachusetts’ 2nd and 3rd largest insurers. The board of directors will comprise equal representation from both directors.

“Through the combination of two strong organizations with a commitment to non-profit health care in New England, we will be able to provide even greater value to consumers, as well as improve access to care throughout the region,” said Joyce Murphy, chair of the board for Harvard Pilgrim Health Care.

“Building upon our collective synergies and strengths – which includes being among the top-rated health plans in the country for quality – will unlock value that can be immediately reinvested in our members and the communities we have the privilege of serving,” said Greg Tranter, chair of the board for Tufts Health Plan. “I am excited about the future.”

The new organization, not yet named, will serve 2.4 million members in Massachusetts, Maine, Connecticut, New Hampshire and Rhode Island. The merger will require review on both the state and federal level, including the assessment of consumer impact. During this time, both organizations will continue to operate as independent entities.

Considerations of a Harvard/Tufts merger date back to 2011.

Consolidation on the health insurer side is mirroring similar consolidation on the provider side in Massachusetts, with the Beth Israel Deaconess Medical Center and Lahey Health Hospital networks combining earlier this year.

NEEBCo will continue to monitor this consolidation and inform clients as further developments occur.

Harvard Pilgrim Press Release

Tufts Health Plan Press Release

While still in it’s development stage, HHS and the FDA are releasing the below Safe Importation Action Plan to describe steps that will be taken to allow the importation of certain drugs from Canada, as well as allow manufacturers to import versions of drugs they sell in foreign countries that are the same as US versions, potentially allowing them to offer a lower price that what current distribution contracts allow.

There are outlines specific to eligible and non-eligible drugs on page 2. This is not the final proposal, and future adjustments may occur.

It is a promising development in the continued struggle for affordable RX therapies in the US. Contact your NEEBCo representative with questions.

NEEBCo – RX importation action plan

To prepare for open enrollment, group health plan sponsors should be aware of the legal changes affecting the design and administration of their plans for plan years beginning on or after Jan. 1, 2020. Items to consider include:

• ACA Affordability Rate changes – employers may consider reducing their employee contributions for 2020 to avoid a penalty under the pay or play rules
• Out-of-pocket maximum changes
• HSA minimum deductible, maximum out-of-pocket and contribution limit changes
• New HRA designs – Individual Coverage HRA (ICHRA) and Excepted Benefit HRA (EBHRA)

Refer to the attached 2020 Open Enrollment Checklist for detail on the above and other reminders, and contact your NEEBCo representative with questions.

2020 Open Enrollment Checklist

Enacted on May 28, 2019, Maine’s Earned Employee Leave Law is the first legislation in the United States to allow private employees to earn paid leave that may be used for any reason. Effective Jan. 1, 2021, this law allows eligible employees to earn one hour of paid leave for every 40 hours worked, up to 40 hours per year.

The paid leave requirements only apply to employers with more than 10 employees. Employers with 10 or fewer employees and employers in seasonal industries are exempt. The law does not provide any carryover, employer notice or posting requirements. However, the Maine Department of Labor is expected to adopt regulations that may contain additional requirements.

Maine employers with more than 10 employees should review existing leave policies to ensure that they will comply with the new paid leave requirements, beginning Jan. 1, 2021. Once regulations for these paid leave requirements are issued, employers should review them for additional information.

Refer to the attached compliance bulletin for additional detail and contact your NEEBCo representative with questions.

Maine Passes Expansive Paid Employee Leave Law 6-7-19

Workplace investigations are crucial when it comes to establishing a safe and welcoming work environment. However, these investigations are often complex and can involve navigating sensitive topics and disputes. More than ever before, companies face irreversible reputational damage and negative publicity if they mishandle workplace investigations.

Employers are expected to take investigations and employee concerns seriously in order to foster a supportive workplace culture. In fact, organizations that fail to conduct proper investigations may face legal action if they mishandle a workplace investigation. In recent cases, companies that did not respond properly to investigation requests faced legal action and six-figure settlements.

Refer to the below review of best practices for workplace investigations and contact your NEEBCo representative with questions.

Best Practices for Conducting Workplace Investigations

As a result of a recent Georgia court order, the New Hampshire Insurance Department is advising consumers that Aliera, a company that markets itself as a health care sharing ministry, may be operating illegally in New Hampshire.

In the past, Aliera acted as a plan administrator to Unity Healthshare, which is a qualified health care sharing ministry.

The Georgia court found that “the evidence shows that Aliera has taken actions to misappropriate [Unity’s] assets; namely by unilaterally attempting to transition the Unity HCSM plans to Trinity.” The court also found that the company misrepresented itself to state insurance regulators, and that “Timothy Moses, who exercises substantial control over Aliera, was convicted of felony securities fraud and perjury in federal court.”

Refer to the attached press release for details and contact your NEEBCo representative with any questions you may have.

NH DOI Press Release Aliera Health Care Sharing Ministry

Beginning in May of last year, the Trump administration began searching for ways to curb out-of-control prescription drug costs—referring to the initiative as American Patients First. This effort is finally seeing some traction, with the administration publishing its first final rule on the matter.

Drug companies will now be “… required to disclose to patients the list price for prescription drugs in TV ads,” according to the Department of Health and Human Services (HHS).

This rule won’t take effect until 60 days after its publication, so employers should expect to see action starting in July.

Refer to the attached new brief for detail and contact your NEEBCo representative with questions.

News Brief – HHS Drug Transparency

The Affordable Care Act (ACA) requires health insurance issuers and sponsors of self-insured health plans (including qualified Health Reimbursement Arrangements/HRA) to pay Patient-Centered Outcomes Research Institute fees (PCORI fees).

The PCORI fees generally apply to insurance policies providing accident and health coverage and self-insured group health plans. The fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return).

The entity that is responsible for paying the PCORI fees depends on whether the plan is insured or self-insured.

• For insured health plans, the issuer (insurance carrier) of the health insurance policy is required to pay the research fees.
• For self-insured health plans (including HRAs) the research fees are to be paid by the plan sponsor (employer).

PCORI fees will be due by July 31, 2019, for plan years ending in 2018. IRS instructions for filing form 720 include information on reporting and paying the PCORI fees.

Using Part II, Number 133 of Form 720, issuers and plan sponsors will be required to report the average number of lives covered under the plan separately for specified health insurance policies and applicable self-insured health plans. That number is then multiplied by the applicable rate for that tax year, as follows:

• $2.39 for plan years ending on or after Oct. 1, 2017, and before Oct. 1, 2018
• $2.45 for plan years ending on or after Oct. 1, 2018, and before Oct. 1, 2019

As the fee applies to plan years ending before Oct. 1, 2019, 2018 is the final assessed year for employers with calendar year plans, and the July 2019 payment will be the final payment. For non-calendar year plans, 2020 will be the final payment.

Health insurance issuers have the following options for determining the average number of covered lives:

• The Actual Count Method—This method involves calculating the sum of lives covered for each day of the plan year and dividing that sum by the number of days in the plan year.
• The Snapshot Method—This method involves adding the total number of lives covered on a date in each quarter of the plan year, or an equal number of dates for each quarter, and dividing the total by the number of dates on which a count was made.
• The Form Method—As an alternative to determining the average number of lives covered under each individual policy for its respective plan year, this method involves determining the average number of lives covered under all policies in effect for a calendar year based on the data included in the National Association of Insurance Commissioners Supplemental Health Care Exhibit (Exhibit) that some issuers are required to file (called the member months method). For issuers that are not required to file an Exhibit, there is a similar available method that uses data from equivalent state insurance filings (called the state form method).

Sponsors of self-insured plans (including HRAs) may determine the average number of covered lives by using the actual count method or the snapshot method.

For additional information please refer to the attached compliance bulletin and contact your NEEBCo representative.

FAQs on the PCORI Fee

On May 9, 2019, President Donald Trump delivered a speech criticizing the practice of surprise medical billing. The president’s speech aligned with this administration’s American Patients First initiative—a blueprint for lowering consumer health costs. Here are the four main regulatory aspects called out by the president, suggesting that they might be tackled first:

1) In emergency situations, patients shouldn’t have to “bear the burden” of out-of-network costs.

2) Balanced billing should be prohibited for emergency care.

3) For scheduled non-emergency care, patients should receive an “honest” bill up front—including an itemized list of out-of-pocket expenses the patient must cover.

4) Patients should not receive a surprise bill from out-of-network providers they did not choose themselves.

Refer to the attached news brief for specific information and contact your NEEBCo representative with questions.

News Brief – Surprise Medical Billing