As a means to reduce rising health care costs, innovative solutions are rising to the surface. One such solution is known as direct primary care (DPC).
What is DPC?
In this model, physicians, pediatricians and internists charge a monthly membership fee that covers most of what the average patient needs, including visits and drugs at lower prices, instead of accepting insurance for routine visits. As a result, DPC can provide substantial savings to patients. Consider the following:
- Cost of visit—Free with monthly membership
- Copay cost—No copays
- Length of visit—Typically 30-60 minutes (traditional doctor’s office visits are less than 20 minutes)
Because they don’t operate under the typical fee-for-service model, many DPC providers are able to spend more time with their patients. Research shows that patients who have a good relationship with their doctor receive better care and are happier with the care they receive.
Does DPC replace the need for health insurance?
No, in fact, DPC providers recommend that their patients have some form of insurance to protect themselves in the event of an emergency. Remember, DPC is for primary care. It will not take care of catastrophic injuries, surgeries or trips to the emergency room.
How popular is DPC?
DPC is emerging as a way to combat rising health care costs and maintain a high quality of care. Those who partner with the right providers may find great success with this type of health care model. While DPC has grown steadily in the past few years, the market is still slow. Despite this, DPC providers and supporters are optimistic about its future.
As health care costs continue to climb and the prevalence of expensive chronic conditions increases, the importance of choosing the right doctor and type of care is exemplified. DPC presents a way for employees to receive more personalized health care while containing their health care costs. Moreover, DPC can be an attractive option for employees with high deductible health plans and health savings accounts, as it would provide them with the option of receiving care without paying high out-of-pocket costs.
It may be worth it for you to further investigate this model and evaluate if it’s right for your organization. For more information on DPC, please contact your NEEBCo rep today.
In March 2018 the IRS issued Notice 2018-12 to address whether individuals are eligible for health savings account (HSA) contributions if they are covered under health plans that provide benefits for male sterilization or male contraceptives without a deductible. At least four states—Illinois, Maryland, Oregon and Vermont—have laws requiring health insurance policies to cover these benefits without a deductible.
According to the IRS, because these benefits are not for preventive care, individuals who are covered under these health plans are ineligible for HSA contributions. However, the IRS provided transition relief for periods before 2020. During this time, individuals will not be ineligible for HSA contributions merely because their health plan covers male sterilization or male contraceptives without a deductible.
State insurance laws may require health insurance policies to provide certain health care benefits without a deductible or subject to a deductible that is lower than the HDHP-required minimum deductible. State law may even characterize the benefits as preventive care. However, for HSA purposes, only the IRS determines whether a type of benefit qualifies as preventive care. If a health plan covers a non-preventive care service before the deductible is satisfied, it will not qualify as an HDHP under the HSA rules.
The preventive care guidelines under the ACA include contraceptive methods, sterilization procedures and patient education for women. The guidelines, however, do not include benefits or services relating to a man’s reproductive capacity, such as sterilization or contraceptives.
Refer to the attached bulletin for additional information and contact your NEEBCo representative with questions.
IRS Addresses Impact of Male Sterilization Coverage on HSA Eligibility
Health insurer Cigna announced that it would purchase Express Scripts, a pharmacy benefits manager (PBM), for $67 billion in cash and stock, including $15 billion assumed for Express Scripts’ debt.
This announcement is the latest in a trend of merging health care companies and follows the December 2017 announcement of the Aetna -CVS Health merger.
The companies stated that the deal will save $600 million in administrative efficiencies, allow them to cut costs as they better coordinate pharmacy and medical claims, and could also increase their leverage in price negotiations with drugmakers.
Refer to the attached news brief for additional information, and contact your NEEBCo representative with questions.
News Brief – Cigna-Express Scripts Merger
The IRS has announced changes to certain tax limits for 2018, including a reduced family contribution limit for health savings accounts (HSAs).
The new tax law enacted late last year—the Tax Cuts and Jobs Act—changed the consumer price index for making annual adjustments to the HSA limits. Based on this new index, the IRS lowered the HSA contribution limit for individuals with family coverage under a high deductible health plan (HDHP) from $6,900 to $6,850. This change is effective for the 2018 calendar year. Other HSA and HDHP limits for 2018 remain the same.
Employers with HDHPs should inform employees about the reduced HSA contribution limit for family HDHP coverage. Employees may need to change their HSA elections going forward to comply with the new limit. Also, any individuals with family HDHP coverage who have already contributed $6,900 for 2018 must receive a refund of the excess contribution in order to avoid an excise tax.
Refer to the attached compliance bulletin for additional information and contact your NEEBCo representative with questions.
IRS Reduces HSA Limit for Family Coverage for 2018
The EEO-1 Online Filing System is now open for employers to submit 2017 EEO-1 Reports, the Equal Employment Opportunity Commission (EEOC) announced on Jan. 24, 2018.
Employers with 100 or more employees and certain federal contractors must use the online system to report 2017 employment data. EEO-1 Reports are due by March 31, 2018.
The EEO-1 Report is an annual survey required by the federal government under Title VII of the Civil Rights Act (Title VII).
- Employers that previously filed EEO-1 Reports should receive an EEOC notification letter in the mail by Jan. 29, 2018, and should follow the accompanying instructions for 2017 filing.
- Employers that expect to, but do not receive a notification letter should contact the EEOC.
- Employers filing EEO-1 Reports for the first time must register to receive a company login, password and further instructions for filing from the EEOC.
Refer to the below Compliance Bulletin for additional detail and contact your NEEBCo representative with questions.
EEOC Opens EEO-1 Filing System for 2017 Reports
Group health plan sponsors who offer prescription drug benefits to any Medicare-eligible individual are required to disclose to CMS whether their prescription drug coverage is creditable or non-creditable. This disclosure is required whether the health plan’s coverage is primary or secondary to Medicare.
The plan sponsor must complete the online disclosure within 60 days after the beginning of the plan year. For calendar year health plans, the deadline for the annual online disclosure is March 1, 2018.
Plan sponsors are required to use the online disclosure form on the CMS Creditable Coverage webpage. This is the sole method for compliance with the disclosure requirement, unless the entity does not have Internet access. CMS has also provided instructions for detailed descriptions of these data fields and guidance on how to complete the form.
If a group health plan does not offer outpatient prescription drug benefits to any Medicare-eligible individuals as of the beginning of the plan year, the group health plan is not required to submit the online disclosure form to CMS for that plan year.
For questions about your health plan’s Medicare D creditable status or other required disclosures, contact your NEEBCo representative.
The Fair Labor Standards Act (FLSA) requires that covered nonexempt employees in the private sector and in federal, state and local governments receive overtime pay for any hours they work over 40 during a workweek. Overtime pay must be at least one and one-half times the employee’s regular rate of pay.
Bonuses can play a big role in determining an employee’s wages for the work week. However, whether the bonus is discretionary or nondiscretionary determines how it affects the employee’s regular rate of pay.
Discretionary bonuses are not considered part of an employee’s regular rate. A bonus is discretionary if:
- The employee has no expectation of payment
- The employer retains discretion regarding the amount and timing of payment
- The payment of the bonus is not tied to meeting specific standards or goals
- The payment has no effect on overtime rate calculations
Nondiscretionary bonuses are considered part of an employee’s total wages. A bonus is nondiscretionary if:
- There is an expectation of payment
- The employer has no discretion regarding the amount and timing of payment
- Payment is tied to employee performance or other specific standards or goals
The below compliance overview covers the details between discretionary and nondiscretionary bonuses, as well as whether bonuses should be included in overtime pay rate calculations. Contact your NEEBCo representative with additional questions.
Discretionary versus Nondiscretionary Bonuses
On Jan. 22, 2018, President Donald Trump signed into law a short-term continuing spending resolution to end the government shutdown and continue funding through Feb. 8, 2018. The continuing resolution impacts three taxes and fees under the Affordable Care Act (ACA).
Specifically, the continuing resolution:
- Delays implementation of the Cadillac tax on high-cost group health coverage until 2022;
- Provides an additional one-year moratorium on the health insurance providers fee for 2019 (although the fee continues to apply for 2018); and
- Extends the moratorium on the medical device excise tax for an additional two years, through 2019.
Refer to the attached compliance bulletin for additional detail and contact your NEEBCo representative with questions.
Spending Resolution Affects ACA Taxes
Currently, Massachusetts law prohibits all employers in the state from:
- Discriminating in the payment of wages as between the sexes;
- Paying any person a salary or wage rate less than the rates paid to employees of the opposite sex for work of like or comparable character, or work on like or comparable operations; and
- Retaliating against an employee for making a complaint or participating in any proceeding relating to a claim that the employer violated the state’s equal pay laws.
Effective July 1, 2018, the amended Massachusetts Pay Equity Act modifies these requirements and also prohibits employers from:
- Requiring employees to refrain from discussing their own or other employees’ wages;
- Screening job applicants based on wage or salary history; and
- Requesting information about applicants’ prior wages.
The MPEA is administered and enforced by the Massachusetts Commission Against Discrimination (MCAD). Effective July 1, 2018, individuals who believe their rights under the amended MPEA have been violated may either file a complaint with the MCAD or sue the employer in court.
Review the attached bulletin for details on the requirements of this act and contact your NEEBCo representative with any questions you may have.
Massachusetts Fair Employment Laws – Pay Equity Act
ERISA plans that include disability benefits must comply with new procedural protections for claims that are submitted after April 1, 2018. The final rule includes the following requirements for the processing of claims and appeals for disability benefits:
- Improvement to Basic Disclosure Requirements
- Right to Claim File and Internal Protocols
- Right to Review and Respond to New Information Before Final Decision
- Avoiding Conflicts of Interest
- Deemed Exhaustion of Claims and Appeal Processes
- Certain Coverage Rescissions Are Adverse Benefit Determinations Subject to the Claims Procedure Protections
- Notices Written in a Culturally and Linguistically Appropriate Manner
Entities that administer disability benefit claims, including issuers and third-party administrators, will need to revise their claims procedures to comply with the final rule. Refer to the below compliance bulletin for details and contact your NEEBCo representative with questions.
New Rules for Disability Claims Will Take Effect on April 1, 2018