The independent actuary for the city of Brockton recently reported that KTP’s structural recommendations and competitive process reduced the city’s Annual Required Contribution (ARC) by $10 million and its OPEB liability by about $160 million.
Actuary’s letter details reductions in retiree benefits costs and liability before and after KTP
Click here to read in Benefits Magazine what KTP’s very own Barry Eyre and Mark Whitcher have to say about how municipalities and Taft-Hartley Funds can reduce the annual cost of retiree health benefits and cut millions from their OPEB liability, without cutting benefits or increasing costs to retirees.
Walgreens, the largest drug store chain in United States, AmerisourceBergen, the country’s second largest drug wholesaler, and Alliance Boots, one of the largest pharmacy chains and drug wholesalers in Europe, announced a 10-year distribution deal that creates a global, vertically-integrated partnership with total revenue of approximately $180 billion. See related blog post here.
Walgreens’s main purpose for partnering with the others is to increase its purchasing clout for generic drugs in order to extract price concessions from pharmaceutical manufacturers and lower its cost of goods sold. The company will be able to leverage the size and buying scale of AmerisourceBergen and Alliance Boots to buy generic drugs at cheaper prices. This could give Walgreens a significant advantage over its rivals.
In a game changing move, three of the major players in the prescription drug marketplace recently announced a partnership to create the largest drug purchaser in the world. The move that could transform the way medications are bought and sold globally.
Walgreens, the largest drug store chain in United States, AmerisourceBergen, the country’s second largest drug wholesaler, and Alliance Boots, one of the largest pharmacy chains and drug wholesalers in Europe, announced a 10-year distribution deal that creates a global, vertically-integrated partnership with total revenue of approximately $180 billion.
There are several market forces driving the deal, including razor-thin margins for drug wholesalers, the explosion of generic drugs due to the expiration of brand drug patents, high margins on generic drugs for PBMs and retail drugstore chains, and slow growth in the absolute number of prescriptions written per year.
Walgreens’s main purpose for partnering with the others is to increase its purchasing clout for generic drugs in order to extract price concessions from pharmaceutical manufacturers and lower its cost of goods sold. The company will be able to leverage the size and buying scale of AmerisourceBergen and Alliance Boots to buy generics at cheaper prices. This could give Walgreens a significant advantage over its rivals. Today, generic drugs make up the majority of all prescription drug fills and they are expected to total 90% of all fills within five years.
Continue reading “Walgreens Strikes Drug Distribution and Minority Equity Deal – Transforms Global Drug Market”
The cost of specialty drugs, injectable or tablet form used to treat complex medical conditions, is growing at an annual rate of over 20 percent. At current utilization rates, the cost of new and existing specialty drugs is predicted to total 40 percent of the cost of providing pharmacy benefits to employees and their dependents by 2016. These statistics are a composite of data from ESI, Caremark, Optum, and Medco reports.
In addition to market factors driving overall cost increases, the absence of generic substitutes and brand-name competition gives drug manufacturers near-monopoly pricing power and makes conventional benefit design and utilization management less effective than when applied to traditional brands and generics.
As plan sponsors explore options to better manage the cost of specialty drugs as part of employee health benefits, beware of nuances that only health care professionals are apt to understand.
Continue reading “Containing Future Drug Spend Hinges on One Word: Specialty”
There is no reason, whatsoever, to not repeal COBRA, effective January 1, 2014. The Consolidated Omnibus Budget Reconciliation Act of 1985, more commonly known as COBRA, is a federal law that provides workers and their families the right to remain on a former employer’s health plan should they lose their job for any reason, experience a transition period between changing jobs, have their working hours reduced to part-time or experience other specified life events. Individuals exercising this right must pay up to 102 percent of the cost of the health plan and can remain on the plan for 18 months. The purpose of this law was to prevent individuals from having a coverage gap of 63 days. This is important, because before the passage of The Affordable Care Act (ACA) health insurers could only deny coverage for a pre-existing condition if the individual experienced a gap in health insurance coverage.
For plan years beginning on or after January 1, 2014, the ACA mandates that no individual can be denied health care coverage due to a pre-existing condition. Elimination of the pre-existing condition exclusion for children took effect September 1, 2010.
COBRA applies to any employer with 20 or more workers. Human resources directors and administrators at employers subject to COBRA will often complain about the costs and complexity of administering COBRA benefits. In fact, many hire outside firms that specialize as COBRA administrators because managing this requirement with internal resources is often impossible.
Now that the Supreme Court has affirmed the constitutionality of the ACA (with one exception related to Medicaid) and President Obama has retained the White House, Congress should enact legislation to repeal COBRA effective January 1, 2014.
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Contact:
Mark Whitcher at mwhitcher@ktpadvisors.com or (401) 490-9351
Barry Eyre at beyre@ktpadvisors.com or (401) 490-9365
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Health Reimbursement Arrangements (HRAs) have become more popular with employers in recent years. HRAs are Internal Revenue Service-sanctioned employer-funded and tax- advantaged accounts, established by employers, to pay the health insurance premiums or out-of-pocket medical expenses of employees. The accounts enable employers to cap their expenses and liabilities with a defined contribution approach to health benefits.
On January 24, 2013, the federal government released guidance on whether or not employers would be allowed to offer HRAs, tied to individual health insurance policies, to avoid penalties imposed by the Affordable Care Act (ACA) for not offering qualified, affordable health coverage. Under the ACA, employers who do not meet the requirements of the law face a penalty of up to $3,000 per employee per year.
The Departments of Labor, Health and Human Services, and the Treasury collectively issued a set of FAQs that clearly outlines the rules regarding HRAs. Section 2711 of the Public Health Service Act (PHS Act), as added by the Affordable Care Act, distinguishes between HRAs that are “integrated” with a group health plan from those that are not integrated, so-called “stand-alone” HRAs. Employers cannot replace group plans with HRAs, tied to individual plans, without facing stiff penalties for violating the ACA.
Continue reading “Employers Can’t Avoid ACA Mandates and Penalties by Offering HRAs to Pay for Individual Policies”
Health insurance plans purchased on one of the health care exchanges, created by The Affordable Care Act of 2010 (ACA), will be effective January 1, 2014, which is also when federal subsidies to aid in buying health insurance will start and penalties for not purchasing it will be assessed.
The revenue from new taxes and fees will help pay for broadening insurance coverage to about 30 million uninsured Americans in 2014.
However, in many ways the biggest changes brought about by the ACA are happening this year. These include: a wide range of tax increases, payment increases for Medicaid doctors, simplified plan language in Summary of Benefit Coverage documents, expanded coverage of Medicare prescription drug plans, and the opening of health care exchanges October 1, 2013.
Continue reading “Be Ready – Major Changes to Healthcare and Related Taxes in 2013”
Anyone who’s taken an interest in the finances of their local city or town in recent years is aware of the challenges posed by retiree health care obligations.
Now KTP Advisors of Newport, which has managed health care benefits for corporations and nonprofits since 2002, wants to help.
KTP Advisors has begun offering its Medicare experience to
communities in need of benefit guidance.
Read more to hear what Barry Eyre, Vice President of Product Development, has to say…
NEWS RELEASE
Contact: Mark Whitcher, 401 490-9351
mwhitcher@ktpadvisors.com
For Immediate Release
Health Benefits Firm Chooses Newport for National Headquarters
NEWPORT, R.I. – July 10, 2012 – Retiree Benefit Solutions©, a health benefits advisory firm, has relocated from South Kingstown, R.I., to Newport and, along with the move, has changed its name to KTP Advisors™. Continue reading “We’ve Moved!”
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