Update - Deciphering potential changes to AWP: How drug pricing works today and how it might change

25 October 2007

Employers sponsoring pharmacy benefits could see significant changes in the way prescription drug prices are determined as a result of ongoing litigation over the setting of Average Wholesale Price (AWP), a well-established industry pricing benchmark. The AWP litigation involving First DataBank and Medi-Span has reached the preliminary settlement stage. If approved, the settlement not only will affect how prescription drugs are priced, but ultimately will alter how plan sponsors contract with pharmacy benefit providers. This Update reviews current pharmaceutical pricing, discusses the advantages and disadvantages of alternatives to AWP, and answers several questions that plan sponsors of pharmacy benefits may have.

Update - Latest Rx coverage notices - What's new, what's the same

20 June 2007

Employers providing prescription drug coverage to Medicare Part D-eligible individuals should review their creditable coverage notices in light of the latest guidance from the Centers for Medicare and Medicaid Services (CMS). The guidance simplifies rules for electronic distribution and makes other changes. CMS has updated its model notices for these changes and now offers Spanish translations of the models. Use of the CMS models is optional, but plan sponsors should make sure their own notices reflect current guidance.

Update - Don't need to offer domestic partner benefits? Are you sure?

7 June 2007

A growing number of states are expanding rights for committed but unmarried couples by legally recognizing certain statutorily defined relationships. The terms for these nontraditional relationships may vary from state to state - from "domestic partnership" to "civil union to "reciprocal beneficiary." This article uses "domestic partner" for all these terms.

Back to top

Update - Survey on US Department of Health & Human Services transparency initiative

25 May 2007

This Update provides a summary of findings of a joint National Business Group on Health (NBGH) and Mercer Health &Benefits LLC survey on a transparency initiative put forth by the Bush Administration.

Back to top

Update - Getting ready for Massachusetts health care reform

27 April 2007

A new Massachusetts law requires almost all state residents to obtain health coverage between July 1 and December 31, 2007, or pay a penalty. Key parts of this law affect employers with 11 or more employees working in Massachusetts - regardless of where the employer is headquartered and whether its health plans are insured or self-insured. This Update outlines the requirements of the new law and explains that affected companies should begin preparing now.

Update - Checking group health plans for HIPAA security compliance

13 April 2007

April 21 marks the anniversary for all group health plans subject to the Health Information Portability and Accountability Act (HIPAA) to meet the law's security standards for electronic protected health information (e-PHI). As those standards require ongoing assessments of security compliance and updates to procedures, now is a good time to check how well your plans safeguard e-PHI.

This Update gives refresher tips on HIPAA's security standards for employer-sponsored group health plans and answers common questions about what employers must do to comply. Shaded boxes in this issue list HIPAA's key administrative, physical, and technical security safeguards and remind small health plans about the HIPAA privacy reminder notices due this year.

Back to top

Update - Health reform, leave benefits may see state action in 2007

21 March 2007

Health coverage expansion, insurance mandates, and new or expanded leave laws top the 2007 list of state legislative initiatives that could affect employers' health plans and other benefit policies. While it's too soon to predict how these proposals will fare, states are debating a host of new benefit-related bills that would mean broader administrative and reporting burdens for employers. This Update identifies several state legislative trends and their possible implications for employee benefits.

Update - Wellness program incentives - What's allowed, what's not

7 March 2007

Wellness programs featuring financial or other incentives are popular among employers looking for ways to control costs and improve employee health, morale and productivity. But employers interested in adopting such programs face many legal hurdles. This Update describes some of the major legal requirements and restrictions to bear in mind when designing these programs.

Back to top

Update - What health care reforms top the new Congress's agenda?

21 February 2007

Since Congress began work last month with a new Democratic majority setting the agenda, dozens of health care proposals have come up for discussion - including ones that would directly or indirectly affect employers. Certain measures have enough bipartisan support to stand a good chance of passage; others, while too controversial or expensive to enact, will still shape the national health care debate. This Update looks at health reform proposals of interest to employers and the prospects for congressional action this year.

Update - ABCs of HIPAA business associate agreements

7 February 2007

Under the Health Insurance Portability and Accountability Act (HIPAA), sponsors of self-insured group health plans must have written agreements with the plan's business associates to safeguard the privacy and security of participants' health information. This Update gives basic answers to common questions about HIPAA business associate agreements (BAAs).

Update - Does your wellness program meet the final HIPAA rules?

24 January 2007

Employee wellness programs may help improve health and control the cost of health care, but they must meet legal requirements, including the Health Insurance Portability and Accountability Act (HIPAA). Final HIPAA nondiscrimination rules issued last month offer employers additional guidance on wellness program designs that raise HIPAA concerns and how best to avoid violations. The regulations also clarify HIPAA implications for a number of other health plan features. This Update discusses the final HIPAA nondiscrimination rules, focusing especially on how they affect wellness programs.

Update - Are you ready for this year's HSA changes?

10 January 2007

Employers that sponsor health savings accounts (HSAs) as part of a consumer-directed health care program should be aware of changes to the law governing such accounts. As a result of these changes, many employers may want to take advantage of newly available enhancements to HSAs or to reconsider the role that HSAs might play in their benefit packages. This Update outlines the major new changes and suggests steps that employers may want to consider.

2006 Health & Benefit Updates

Update - Nevada ties minimum wage to employee health benefits

8 December 2007

Effective November 28, 2006, employers that have Nevada employees and do not provide a certain level of health benefits must pay a higher minimum-wage rate. A constitutional amendment enacted by state voters sets up this dual system, extends minimum-wage protection to more employees and requires annual adjustments to both wage rates. Employers with Nevada workers must quickly decide which wage rate to use, update their payroll systems and address any lapses since the effective date. This Update summarizes the new law and considerations for employers.

Update - Year-end reminders for health and welfare plans

6 December 2007

As 2006 draws to a close and 2007 approaches, this is a good time to highlight recent legal developments affecting health and welfare plans and to review some key notice obligations. This Update gives an overview of various changes that health and welfare plan sponsors should keep in mind. Remember, not all of these matters affect every plan. For fully insured plans, the insurance carrier may handle certain changes to meet new rules or some required filings. For self-funded group health plans, the named plan administrator - usually the employer - has primary responsibility for compliance.

Update - Dependent health coverage - Which benefits are taxable?

8 November 2007

Employers can open their health plans to a wide array of employees' family members. However, if covered family members don't meet certain tax-code requirements, the employee must pay tax on the value of the coverage. This Update highlights the health plans affected, the dependents whose employer-provided health benefits are often taxable and the general rules for taxing those benefits.

Update - Handling COBRA elections, payments, and termination

11 October 2007

Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), employees, spouses, and dependent children - so-called "qualified beneficiaries" - can elect continuation coverage if they would otherwise lose employer-sponsored group health plan benefits because of certain "qualifying events" (see sidebar on page 2). This Update, the third of a series on COBRA, describes how to elect and pay for COBRA coverage and how long the coverage can last.

Update - United HealthCare, Pacificare and Definity/HealthONE (Special Colorado Edition)

22 September 2007

This Update covers developments regarding the ongoing contractual situation between United HealthCare and HealthONE in Colorado.

Update - Meeting COBRA’s notice duties: Who, what, when and how

20 September 2007

Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), employees and their family members can elect continuation coverage when certain events would otherwise cause loss of employer-sponsored group health benefits. To ensure employees know their rights and to facilitate benefits administration, the US Department of Labor requires six different COBRA notices. This Update, the second of a series to help employers understand COBRA, describes these notice duties - who must provide and receive the notices, what the notices must say, plus when and how they must be sent.

Update - Dependent eligibility - Time for a review?

23 August 2006

Employers looking for ways to control health care costs are increasingly turning to dependent eligibility verification programs. These programs, which attempt to weed out ineligible people covered by an employer's health plan, are a prudent fiduciary and fiscal plan management tool. This Update discusses the options for designing a program to verify dependent eligibility, the cost savings and other advantages for employers that regularly audit dependent eligibility, and basic steps for setting up a program.

Update - What you need to know to tap into generic prescription savings opportunities

16 August 2007

Over the next five years, more than $50 billion in brand-name drugs will become available as lower-cost generics. Some of these drugs are the most highly utilized medications for chronic conditions. Mercer prepared this Update to assist clients in participating in this unprecedented opportunity to tap into the savings these generic alternatives present.

Update - Pension reform bill targets a few health and welfare benefits

10 August 2007

The just-passed pension reform bill (HR 4) features a few items targeting health and welfare benefits. The measure makes it easier to fund retiree health benefits using excess pension assets and to offer long-term care (LTC) benefits through life insurance or annuity contracts. The bill also allows tax-free transfers of life insurance cash values to pay LTC premiums and tax-free distributions from public safety officers' pensions to pay for health or LTC insurance. Other provisions grant a deduction for bona fide association medical reserves and make permanent certain rules for tuition programs.

Update - Is your dependent care assistance plan up to date?

9 August 2007

The IRS recently proposed changes in its rules for dependent care assistance plans, which allow employees to pay up to $5,000 in employment-related dependent care expenses a year using pretax dollars or tax-free employer contributions. The rules address what expenses are eligible for favorable tax treatment, who can receive it, and other operational matters. While the changes only formalize earlier guidance, employers should confirm that they are administering their plans in accord with the new rules and that plan documents and employee communications reflect the changes.

Update - Using e-mail and the Internet to distribute plan materials

26 July 2006

Widespread Web, intranet and e-mail access has made the paperless office a virtual reality ­- and for health and welfare plan sponsors who must comply with ERISA, that's a dream come true. But while employers now can send many ERISA-required plan communications by electronic means, some conditions and restrictions apply. This Update outlines how and when ERISA-covered health and welfare plans can send electronic disclosures to plan participants, focusing mainly on the U.S. Department of Labor's "safe harbor" guidelines for electronic communications under ERISA.

Update - United HealthCare and PacifiCare/HealthONE contract negotiations

28 June 2007

By now, you may be aware of the ongoing contract dispute over reimbursement rates between United Healthcare (UHC) and HealthONE in Colorado and the possible network disruption that could result from this dispute. If the parties cannot agree to new contract terms by August 31, 2006, HealthONE facilities will no longer be part of the UHC and PacifiCare networks. That change to "out of network" status will affect the Denver-Metro HealthONE facilities noted below. Because of UHC's acquisition of PacifiCare, this dispute affects PacifiCare plans too.

Update - Companies turn thumbs down on FASB pension proposals

21 June 2006

In more than 230 comment letters, a vast majority of companies expressed significant displeasure with the Financial Accounting Standards Board (FASB)'s recent exposure draft on Employer's Accounting for Defined Benefit Pension and Other Postretirement Plans, with unfavorable comments outpacing favorable comments 4 to 1 on three key issues.

Update - Open enrollment - a focus on compliance

20 June 2006

For employers that offer group health plans, open enrollment season marks one of the busiest times of the year, with a wealth of plan communications to prepare and distribute. But open enrollment also offers a golden opportunity to highlight new or changed benefit offerings, review enrollment procedures, remind participants to check their dependents' eligibility and take other actions, and meet the latest legal mandates for plan documents and notices. This Update gives tips on how employers can make the most of open enrollment to meet their health plan's strategic goals and legal obligations.

Update - Health mandate to affect nearly all Massachusetts employers

7 June 2006

Massachusetts' sweeping new Health Care Access and Affordability Act has broad implications for employers. Aimed at reducing the number of uninsured individuals in the state and reforming the health insurance market, the new law requires all state residents to have affordable health coverage by July 1, 2007, or pay a penalty. This Update describes the features of the law that are key for employers.

Update - Creditable coverage notices - CMS revises for Rx benefits

24 May 2006

Employers providing prescription drug coverage to Medicare Part-D-eligible individuals should review their creditable coverage notices in light of new guidance that took effect May 15. In publishing the revised guidance, the Centers for Medicare and Medicaid Services (CMS) also updated two model notices of creditable or non-creditable coverage and issued a new personalized model notice. Although use of the CMS models is not mandatory, plan sponsors should make sure their own notices reflect the latest guidance. This Update highlights key changes in the latest CMS guidance.

Update - Mercer submits comment letter to FASB

15 May 2006

After an in-depth review of the exposure draft, Mercer sent comments to FASB outlining specific issues including, but not limited to, the use of PBO instead of ABO and practical difficulties with implementing the proposed measurement date changes.

Update - Understanding COBRA's scope: Covered rights, plans, people

12 May 2006

his Update is the first of a COBRA Basics series designed to help employers understand the COBRA rules. This initial article sketches COBRA's general scope; later issues will examine specific COBRA topics, including: notice requirements; election, payment, duration and termination of COBRA benefits; and special considerations in mergers and acquisitions.

Update - GASB accounting requirements for OPEB - What you need to know to implement

26 April 2006

Having issued accounting standards and implementation guidelines, the Government Accounting Standards Board (GASB) will soon issue a technical bulletin related to Medicare reform. This may well be the last formal guidance from GASB that governmental employers will need to consider as they implement these new accounting standards.

Update - Form 5500 - You can't love it and you can't leave it

26 April 2006

Filing annual Form 5500s with the Department of Labor is a burdensome task for many health and welfare plan administrators. This Update presents an overview of the requirements, focusing on areas of most confusion - what plans have to file, when, for what period and how. It also describes the penalties for noncompliance and the summary annual report of Form 5500 information that must be provided to plan participants.

Update - Clearing the air: Stop-smoking incentives

12 April 2006

To control skyrocketing health care costs, many employers are using incentives to discourage risky behaviors and encourage healthy lifestyles among employees. One prime target for these wellness initiatives is tobacco use, which tops the list of unhealthy habits leading to higher medical costs.

Update - Comply now or pay later: HIPAA civil enforcement

22 March 2006

New final HIPAA enforcement regulations, now in effect, underscore the importance of compliance with HIPAA's administrative simplification provisions. The regulations detail how the Department of Health and Human Services will enforce HIPAA's privacy and security rules and its standards for electronic transactions, code sets, and unique health identifiers. The rules confirm that HHS will continue to use a complaint-driven enforcement approach, and valid business associate contracts can help shield covered entities from business associates' misdeeds.

Update - Is 'Fair Share Health Care' coming to your state?

9 March 2006

Many states are considering laws that would require employers with a certain number of employees in the state to spend a set percentage of payroll on employee health care or pay a penalty into a state fund. Fueled by a campaign in more than 30 states, some of these "Share Health Care" bills so far would apply to employers with as few as 1,000 employees and require expenditures of as much as 11% of payroll. This Update reviews common provisions of proposals pending before state legislatures. Employers concerned about this trend should express their views to state legislators.

Update - Hot Topics: Pharmacy Benefits

6 March 2006

Growth in spending on prescription drugs is one of the forces driving up the cost of employer-sponsored health insurance. While the component cost for prescription drugs again rose faster than overall health benefit costs in 2005, the rate of increase has slowed as employers have redesigned drug benefits to increase employees' share of the total expense. Now, employers that have achieved what they believe is the maximum level of acceptable cost sharing are exploring alternative ways to manage pharmacy expenses. Mercer's 2005 Hot Topics survey on pharmacy benefits solicited input on a wide range of topics, including plan design options, vendor selection and management, satisfaction with pharmacy benefit managers, interest in price transparency, and other cost-management strategies. This report highlights Mercer's survey findings on trends in employer-sponsored pharmacy benefits.

Update - 2006 deadline nears for HIPAA privacy reminders

22 February 2006

Under HIPAA's privacy rules, a covered group health plan must give participants a notice describing their rights and the plan's legal duties with respect to protected health information (PHI), including how the plan may use and disclose PHI. Health plans also must send reminders at least once every three years informing participants about the privacy notice and how to obtain it. Since most plans had to send initial privacy notices to all enrollees by April 14, 2003 (2004 for small plans), this reminder is due in 2006 (or 2007). This Update answers common questions about HIPAA reminder notices.

Update - Aftermath of Hurricanes: Far-reaching Benefits Duties

25 January 2006

Acknowledging the devastating impact of Hurricanes Katrina, Rita, and Wilma, US government agencies have granted a broad array of relief, including extensions of certain health and welfare plan deadlines. Employers directly affected by the hurricanes should familiarize themselves with this relief - their plans may gain extra time to perform certain activities, such as filing Form 5500s or issuing COBRA notices. But the relief also can affect the many employers throughout the US that have hired hurricane victims - these employees have the right to numerous extensions, wherever they now work.

Update - Two New Federal Notices Need Prompt Action in 2006

11 January 2006

By January 18, employers must update their notice to all employees of the USERRA rights, benefits, and obligations of employees who go on military leave. And by March 31, employers providing prescription drug coverage to Medicare-covered individuals must disclose their plans' creditable coverage status to the Centers for Medicare and Medicaid Services.