The recent landmark 5-4 decision by the Supreme Court to uphold the provisions of the Patient Protection and Affordable Care Act (PPACA) has caused a flurry of response from various media outlets. It’s been interesting to follow the myriad of opinions – the good, the bad, and the ugly. Many were shocked to see the individual mandate, a law that will extend healthcare coverage to more than 30 million uninsured, be ruled constitutional, claiming that it meddled too aggressively in state affairs and the lives of private citizens. One thing became certain though much to the dismay of 26 states who opposed the law, beginning in 2014 most Americans will now be required to obtain health insurance or pay a penalty. Employers must also offer full-time employees and their dependents affordable coverage with a minimum value or be subject to the same fate.
Exciting Changes
We Moved to Newport!
KTP Advisors, formerly Retiree Benefit Solutions, has relocated to Newport, RI. This week is an eventful one for the City of Newport which, in conjunction with Sail Newport, is hosting an America’s Cup World Series event this week.
Towers Watson and Extend Health
The news that Towers Watson is going to purchase Extend Health is a very interesting development in the retiree health benefit landscape. Previously, it appeared Extend Health was planning to go public via an IPO process, the S-1 filing for which can be found here on the SEC’s Edgar database. At 6.5 times forecast FY 2012 revenue, who can fault Extend Health for selling at that valuation?
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A judge’s misunderstanding of Medicare
The following article appeared in the Providence Journal on February 6, 2012:
A judge’s misunderstanding of Medicare
February 6, 2012
STEVE KIRKPATRICK
Judge Sarah Taft-Carter’s decision to freeze the City of Providence’s plan to move retired police and firefighters into Medicare is counter to the interest of both taxpayers and retired police and firefighters.
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Alternative to pushing Medicare eligible retirees on to the individual market
There is a significant movement among private sector employers to shed retiree health care obligations by moving retirees to the market for individual policies. Employers may or may not provide funds for them to purchase insurance policies on their own. This approach is labeled the “Medicare Exchange” model and there are several companies that specialize in facilitating this process.
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Pharmacy Carve-Out: 7 Advantages Employers Need to Know
Why Carve Out Your Pharmacy Benefits?
The first step is the process is to define the difference between a pharmacy “carve-out” and a pharmacy “carve-in”.
A Pharmacy Carve-Out
A pharmacy “carve-out” is when a plan sponsor chooses a Pharmacy Benefit Manager (PBM) to administer and manage prescription drug benefits that is separate from the PBM contracted with the health plan administering their medical claims. The carved-out Rx plan can be fully insured or self-funded.
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Why EGWP “whips” the Retiree Drug Subsidy (RDS)
Extend Health and the Medicare Exchange Model
After the recent S-1 filing for Extend Health’s IPO this seems like an appropriate time to comment on some of the drawbacks to the so called “Medicare Exchange” model (sometimes referred to as a “Medicare Coordinator” or “Medicare Marketplace”) of which Extend Health is the largest provider. AON Hewitt Navigators, a result of AON Hewitt’s acquisition of Senior Educators, is another major provider. The purpose of a Medicare Exchange, like Extend Health, is to help a large employer move from a group benefit plan for Medicate eligible retirees to individual insurance policies.
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5 ways you can save a million dollars on your organization’s healthcare cost next year.
1. Carve out your pharmacy benefit from your health plan. Health Plans are not set up to control the cost of prescription drugs. They don’t aggressively negotiate the cost of drugs or effective cost containment strategies. If the pharmacy costs are not separated they can’t be monitored or controlled.
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How big is your OPEB Liability?
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