Yearly Archives: 2015

  • Will Health Insurance Soon Become Health Memberships? | California Employee Benefits

    February 12, 2015

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    By Elizabeth Kay, Compliance & Retention Analyst
    AEIS Advisors

    healthmoneyWith the passage of the Patient Protection and Affordable Care Act (PPACA), we saw a number of hospitals and provider groups being bought and merged with larger provider groups. This was done for two reasons. One, in part to make sure that they were able to establish more buying power, or bargaining chips to bring to the contract negotiating table. Two, with less competition, they have more control over how much they can charge for services.

    So now that we are into year five of PPACA, and going into year three of the medical loss ratio enforcement that was enacted as part of PPACA (small group and individual plans must use 80% of premiums collected to pay claims, leaving 20% for administration and re-investment, 85%/15% for large group plans) we are seeing the insurance carriers and provider groups have more and more contract disputes.

    We are seeing more and more contracts expire before a new contract can be agreed on between the two parties, and overnight the insured can no longer see their regular doctors and providers, causing major disruptions for patients.

    There have been many instances where the contract negotiations are successful and the new contract effective date is retroactive back to when the previous contract was terminated, but not before the insured population has had to scramble to find in-network care elsewhere, to get medical records transferred to new providers, deal with claims being re-submitted, and overall being left with a rather poor taste in their mouths.

    In recent months there have been times when these contract disputes have taken a nasty turn with one (or both) sides speaking poorly of the other publicly, trying to bully the other party into submission; when the reality is, they both need each other.

    But I find myself wondering, why would a large provider network want to make an insurance carrier look badly in the eyes of their members? What purpose does that serve the provider network? And why would one or two provider networks seem to repeatedly have contract disputes with multiple insurance carriers, when other provider networks don’t have the same experience?

    Well, my first thought is that this large provider network has a large market share, and is charging more for services than other providers, causing the insurance carriers to drive a harder bargain because their goal is to keep their plans affordable for their members. And as we all know, insurance premiums are not pulled out of thin air, they are based on the cost of medical care and services. If the cost for services goes up, so do insurance premiums.

    My second thought is, what if this is part of a bigger scheme, or plan? What would happen if one day down the road the provider network decided to let all of their insurance contracts lapse, and then invite all of their patients to purchase a ”membership” to their provider network that would enable them to use their providers for a simple copay for doctor visits and lab tests, for example, and then encourage their ”members” to purchase low cost, simple catastrophic insurance plans to cover the cost of the high ticket items such as hospital in-patient stays, surgeries, etc.?

    This would solve a couple of problems for the providers. One, they would have far less administrative work and costs if they did not have to submit claims to the insurance carriers for the small stuff (office visits, X-rays, lab tests). They would not have to concern themselves with contract negotiations year after year, and they could better control their prices (note I said prices, not costs) for services. We have seen more and more doctors move to a concierge medicine model for these very reasons. Why not the big guys, too?

    From a patient’s point of view, would they prefer to pay for a monthly membership if it meant they knew they could see the doctors they wanted to see, without being concerned that their contract may expire without warning? Would it be worth it not to have to call the insurance carrier to find out why they did not pay their provider correctly for services rendered?

    As a patient, if I can see my regular doctors without interruption, carry a catastrophic medical insurance plan to protect my families assets should something happen where I needed extensive or expensive medical treatment, and not be penalized on my taxes because my catastrophic plan meets the minimum essential coverage requirements under PPACA, would that be a win for me?

    Could the provider network take it one step further and promise to only charge me based on in-network costs for those times when they need to charge my catastrophic insurance plan, even if they are not a part of the network, and write off whatever costs my insurance plan does pay to them as a loss?

    As employers are looking for more innovative ways to curb the increasing costs of medical insurance for their employees, would they be able to offer a catastrophic group plan with high deductibles if they could then pay for employees to have a ”membership” to their favorite provider networks? Could it be that simple for an employer to never have to worry about some of their employees being dissatisfied because their provider is not in-network with the new health plan?

    And would the U.S. Department of Labor allow an employer to pay for an employee’s individual ”membership” to a provider network since it would not qualify as an insurance policy? Some employers pay for, or subsidize, gym memberships for their employees. Would this be considered any different?

    Could this be the plan, and the reason why a large provider network is looking to drive a wedge between their patients and their insurance carriers?

    Are health memberships the next evolutionary step in health care reform?

    Read More …

  • PCORI fee increase – annual update

    February 10, 2015

    The Patient Centered Outcomes Research Institute “tax” (which is not a tax) runs from 2012 through 2019.  The tax amount per covered member per year is $2.08 for policy and plan years ending on or after October 1, 2014 and before October 1, 2015

  • The President is in the Act – of Paid Leave Proposals

    February 9, 2015

    The states are moving ahead, so just in time to be behind President Obama announced in his State of the Union address and then proposed the Healthy Families Act which would allow working Americans to earn up to seven days per year of paid sick time.  Key elements:

    1)    Applies to groups of 15 or more employees
    2)    Provides accrual of one hour of sick time for every 30 hours worked – up to 56 hours
    3)    Provide employees with the ability to use leave after 60 days of employment
    4)    Carry over leave from year to year
    5)    Allow the use of sick leave for employee illness as well as sick family member
    6)    Allow use to deal with domestic violence (e.g. medical treatment or going to court)
    7)    Require reinstatement of unused sick leave if the employee is rehired within a year

    Unfortunately, the final law will not pre empt state or local laws, so administration will be tricky.

  • Weight Loss Retreats in Northern California | Arrow Benefits Group

    February 9, 2015

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    By Erin Harty

    ripe red apple with green leaf isolated on whiteWeight loss retreats have become a popular way to lose weight and get healthy, all while staying in luxury accommodations and getting personalized care. Northern California, with its healthy lifestyle mindset, is the perfect place to learn about nutrition, meditate, exercise and relax in beautiful rolling hills, hot springs and valley vineyards. Retreats vary in price and length, offering single day to up to a month packages that cost anywhere from $250 to more than $10,000.


    Weight loss retreats usually offer full meals in their packages and all of them are a little different. In some areas, the local restaurants cater to you by offering special menu items specific to their programs. Some Northern California retreats focus on specific kinds of diets, like vegetarian, organic, raw-food or popular low-carbohydrate diet plans. Cooking classes supplement the diet information and as a guest you leave with books, recordings and journals to help you record what you eat, get motivation and maintain weight loss after you leave the facility. Retreats often have their own chefs and pride themselves on the quality and nutritional value of their food.


    Weight loss retreats would not be successful if not for the exercise. Retreat packages vary from relaxing yoga to intense hiking and cardio. Many Northern California retreats are located in beautiful wine country and near hot springs where you can enjoy the outdoors while raising your heart rate and burning calories. On-site fitness centers provide you with round-the-clock access to equipment, and many retreats include salsa and other dance lessons in their programs.

    Overall Health

    Whole-body weight loss retreats have the advantage of focusing on overall health as well as weight loss. Many of these retreats, like Transformation Weight Loss Retreat at St. Helena’s Center for Health in Napa Valley, are physician-assisted programs that offer medical assessments before the program begins. These retreats will help with weight loss as well as reducing cholesterol and triglyceride readings. The focus is on teaching you how to maintain weight loss and health after you leave. Workshops covering nutrition, fitness and mental health are often a big part of the programs.

    Personalized Programs

    Pre-organized retreats aren’t for everyone, and you may prefer an experience that is specific to you. Many weight loss retreats offer personalized programs that target your needs in more specialized ways. Detoxification diets, clinical psychological counseling, and intense fitness routines are among some of the ways you can get what you need out of a retreat. Personalized retreats are helpful if you have specific nutrition requirements, for example if you’re diabetic, and if you have physical limitations or issues.

    Boot Camp

    For a more intense weight loss and fitness experience, Northern California has a few weight loss retreats that are billed as boot camps. These programs, which are usually not as long as the average one to two week retreats, are meant to get you in shape quickly and rigorously. Retreats include fitness regimes like power yoga, intense hikes and body sculpting exercises. Some of these retreats are for women only and most of them have fewer than a dozen participants at one time.

    Read More …

  • Not all that well with wellness – EEOC actions and the consequences

    February 6, 2015

    There are three actions currently under review in one district of the Equal Employment Opportunity Commission, though their focus is mostly on ADA and GINA and not the ACA (yes it helps to know all the acronyms, but the bottom line is they have concerns).  While no final action has been taken, nor is it certain what action, if any, may be taken, there are warnings signaled by the fact that these actions took place, and employers should consider:

    1)    Offering a penalty as opposed to a reward – the reverse will be viewed more favorably
    2)    Offering rewards or penalties equal to 100% of the premium for failure – too much?
    3)    Dropping employees from coverage if participant does not meet requirements – too harsh?
    4)    Omitting an option for appeal or an alternative for those on leave – that’s a mistake

  • IRS Provides 2015 Mileage Rates and Guidance on Retroactive Transit Benefit Increase | Petaluma Benefits Broker

    February 5, 2015

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    By Bill Olson

    mileageOn December 10, 2014 the IRS released the optional standard mileage rates for 2015. Beginning on January 1, 2015, the standard rates for the use of a car, van, pickup or panel truck are:

    • 57.5 cents per mile for business miles, up from 56 cents in 2014
    • 23 cents per mile for medical or moving purposes, down half a cent from 2014

    Taxpayers may instead claim deductions based on the actual costs of using a vehicle rather than the standard mileage rates if they prefer.

    The Tax Increase Prevention Act of 2014 (TIPA) retroactively increases the 2014 combined limit for transit passes and vanpooling benefits provided under a qualified transportation plan to equal the $250 per month limit for qualified parking benefits. This increase only applies to 2014 – for 2015 the limits for transit passes and vanpooling benefits will again reduce to the pre-TIPA levels of $130 per month for transit passes and $25 per month for qualified parking unless Congress passes another extension bill.

    Because this increase occurred so late in the year, it is of limited value to most employers and employees. Employers able to take advantage of the increased limit have raised questions about how to handle and report it. On January 9, 2015 the IRS issued Notice 2015-2. This notice provides a special process for employers that provide additional tax-exempt benefits to make corresponding adjustments to Federal Insurance Contributions Act (FICA) withholding and reporting. Any excess withholding of federal income tax will not be adjusted by the employer, but may be claimed by the employee when the Form 1040 is filed. The Notice states that employers may not simply contribute or allow employees to contribute amounts above the monthly limit to recoup the 2014 amounts. Employers may use the normal refund process that applies when FICA is withheld in error if they prefer.

    For more information on this Notice, download UBA’s PPACA Advisor, “IRS Provides Process to Address Retroactive Increase in Excludable Transit Benefits”.

    Read More …

  • Reimbursement Changes – How medical insurance may work in the future

    February 3, 2015

    Carriers paid according to Reasonable and Customary fees.  Then they negotiated discounts and called them Preferred Provider Organizations.  Now they are taking advantage of a new trend toward value based reimbursement.  UnitedHealth, the largest medical insurance carrier in the country, has announced that they will increase value based payments to doctors and hospitals by 20% – which translates to more than $43 billion.  Value based payments include pay for performance, patient centered medical homes and Accountable Care Organizations, all of which have been gaining favor on their own – now UnitedHealth can use all of them.  The changes keep on coming…along with provider pressure.

  • Top 5 Questions About The “Cadillac” Tax | Petaluma Employee Benefits

    February 2, 2015

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    By Linda Rowings
    cadillacThe excise tax on high cost plans (also referred to as the Cadillac tax and the 4980I tax) is scheduled to take effect in 2018. To date, regulations have not been issued, so many of the details about how the tax will operate are unclear. (The regulatory agencies are responsible for interpreting the law, adding needed details, and reconciling any parts of the law that may be inconsistent.) Based upon how the law itself is written, this is what is known and expected.

    1. How much is the tax?

    The tax is 40% of the cost of health coverage that exceeds a threshold.

    2. What is the threshold?

    For 2018 the base threshold is $10,200 per year ($850 per month) for self-only coverage and $27,500 per year ($2,291.67 per month) for all other levels of coverage. Plans that cover “qualified retirees” or which primarily cover those in a “high-risk profession” are allowed an additional $1,650 per year for single coverage in 2018 and $3,450 per year for all other levels of coverage.

    “High-risk profession” means law enforcement officers, firefighters, emergency medical technicians, paramedics, first-responders, longshoremen; individuals in the construction, mining, agriculture (but not food-processing), forestry, and fishing industries; those who install or repair electrical or telecommunications lines, and employees who retired from a high-risk profession if the employee was in a high-risk profession for at least 20 years.

    It appears that the additional allowance will apply to each qualified retiree (but not to any active employees) in the plan. The additional allowance for high-risk professions will be available only if the plan primarily covers those in a high-risk profession; in that case, the additional allowance will be available to all plan participants.

    3. Are there cost of living increases in the thresholds?

    A3: Yes. Starting in 2019, the base thresholds and the adjustments for qualified retirees and those in high-risk professions will be increased by the Consumer Price Index for all Urban Consumers (CPI-U) – not medical inflation. In addition, if health inflation is higher than expected between now and 2018 (based on the cost of standard BlueCross/Blue Shield coverage under the federal employees’ health plan), the 2018 base amounts will be increased.

    4. Are there adjustments for high cost areas of the country or for employers with a higher risk workforce?

    There are no adjustments based on the part of the country in which the employer or employees are located.

    There will be an adjustment allowed for age and gender for plans that are higher than the national average. Details on how that will work are not yet available.

    Multiemployer plans may use the family threshold with all employees, even if the employee actually has single coverage.

    5. What types of plans are subject to the tax?

    The tax applies to “applicable employer-sponsored coverage,” which includes both insured and self-funded plans. The tax applies to grandfathered plans. It applies to all types of employers – private, government, church, and not-for profit. Retiree plans – even retiree-only plans – are subject to the tax. Multiemployer plans are subject to the tax. The tax applies to coverage provided to active employees, self-employed individuals covered by the group health plan, former employees (presumably including COBRA participants) and surviving spouses.

    For more information about inclusions/exclusions, cost of coverage calculations, changes in coverage and more, download UBA’s PPACA Advisor: Highlights of the Excise Tax on High-Cost Plans (the “Cadillac Tax”).

    Read More …

  • Local Business First to Partner with Petaluma Health Care District to Provide CPR/AED Training

    January 31, 2015


    For Immediate Release
    Contact: Jenny Kaplan, JKC

    Petaluma, CA – Arrow Benefits Group, the 3rd largest HR/benefits Company in the North Bay, announces it will be the first local business to partner with the Petaluma Health Care District’s (PHCD) Healthquest Training Center to provide CPR/AED training and certification. Launched in collaboration with many of PHCD’s community partners, the HeartSafe Community Program (HSC) seeks to strengthen Southern Sonoma County’s response to cardiac emergencies through CPR/AED training, strategic installation and maintenance of equipment and by providing heart health education. Arrow has committed to facilitate the classes quarterly in order to help the city of Petaluma and as part of its mission to support the well-being of its clients and community. The first class is Wednesday, February 11, 2015 at 2PM in the new Arrow Benefits training room. Space is limited and first come first serve – please contact Andrew McNeil at 707-992-3789 or ASAP for details and to reserve seats.

    “Through the American Heart Association, we know that more than 300,000 Americans will be victims of Sudden Cardiac Arrest this year and that it is the number one cause of death in the workplace,” said PHCD CEO Ramona Faith. “We launched HeartSafe Community because we also know that if CPR is administered and an AED deployed within three to five minutes of a collapse, Sudden Cardiac Arrest survival rates increase by as much as 70 percent. These statistics are powerful and we hope that other businesses join in Arrow Benefit Groups’ footsteps toward creating a healthier community. The benefits of this training extend well beyond the workplace and can truly help save lives.”

    HSC attendees will learn how to respond to cardiac and breathing emergencies until more advanced medical personnel can arrive to the scene. Upon successful completion of the course, participants will receive the American Heart Association 2-year Certification card and a copy of the AHA Heartsaver CPR/AED course manual.

    About Petaluma Health Care District

    The Petaluma Health Care District (PHCD) is dedicated to improving the health and well-being of the Southern Sonoma County community through leadership, advocacy, support, partnerships and education. Its vision is to foster a healthier community, a thriving hospital and local access to comprehensive health and wellness services. PHCD has served the health and wellness needs of the community for more than 65 years and is a public agency managed by the community for the community. For more information, please visit

    About HeartSafe Community Program

    Launched in 2013, the Petaluma Health Care District (PHCD) collaborated with local police and fire, Coastal Valleys Emergency Medical Services, Petaluma Valley Hospital, St. Joseph Health Systems, Rancho Adobe Fire District, Petaluma City Schools and local non-profits and the American Heart Association to develop the HeartSafe Community Program (HSC). HSC utilizes a national framework to develop a unique community-based program that provides residents, local businesses and organizations with CPR/AED certification, hands-only CPR training, heart health education and access to life-saving equipment to best respond to cardiac emergencies. HSC is a program of PHCD and is managed by Healthquest CPR, an authorized training center of the American Heart Association. For more information, please call 707-766-9226 or email

    About Arrow Benefits Group

    Committed to the community and elevating the industry – Arrow Benefits Group is the North Bay office of United Benefit Advisors (UBA), just north of San Francisco. UBA is one of the largest benefits consulting and brokerage firms in the country, with over 200 offices throughout North America and the United Kingdom. We provide a global reach with local support.

    We work very personally as advisors determining specific needs, prioritizing goals, and providing technology tools that will streamline costs and improve overall benefits packages. The Arrow Benefits Group employs a formal and sophisticated process, supported by data and HR analytics that save time and money while building a blueprint and living benefit model, continually adaptable to changing needs. Known as the Human Resource – for more information on unique solutions to Benefit/HR queries please visit or call 707.992.3780.


  • Proposed Changes to Summary of Benefits and Coverage (SBC) | CA Employee Benefits

    January 29, 2015

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    By Linda Rowings

    buildingThe Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Internal Revenue Service (IRS) have issued proposed regulations that would update the summary of benefits and coverage (SBC) requirement, including the SBC template, instructions, example calculator, and uniform glossary. If adopted, the revised form would be used for open enrollments beginning on or after September 1, 2015, and for plan years beginning on or after September 1, 2015, for plans that do not have an open enrollment.

    The basic SBC distribution requirements would remain in effect, and a plan administrator that has multiple service providers, such as a major medical provider and a prescription drug provider, would still be allowed to provide multiple SBCs if it notified participants that the SBCs need to be considered together.

    Under the proposal, information about the plan’s status as providing minimum essential and minimum value coverage would need to be included on the SBC itself and could no longer be provided separately. The SBC also would be required to state whether elective abortion is covered.

    The SBC template itself would be shorter (about five pages compared to the current eight) to allow additional space for plans that need more room to adequately explain their benefits. A new example, involving emergency department care for a foot fracture, would be required, in addition to the current examples of a normal birth and diabetes management. The examples would still be based on figures supplied by HHS, and not actual plan data, although the figures in the HHS calculator have been updated. Most of the deletions from the SBC template involve text, not benefit information. The uniform glossary would be expanded, however.

    Comments on the proposed changes are due March 2, 2015, which means that the final version of the template to be used starting this fall likely will not be available until early this summer.

    Read More …

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