5 Reasons Employers Should Carve Out Prescription Drug Benefits

Category: Employee Benefits

5 Reasons Employers Should Carve Out Prescription Drug Benefits

Posted On: May 4, 2021 | Categorized as: Employee Benefits

5 Reasons Employers Should Carve Out Prescription Drug Benefits Prescription Drugs typically makes up 20% of an employer’s overall spend, and with the rise in specialty drugs, industry experts expect that number to encroach 50%. Employers have the ability to “carve-out” this coverage from their medical plan, resulting in significant savings. A Prescription Drug “Carve-Out” is when an employer separates, or “carves-out” their pharmacy plan, typically in a self-insured model and contracts directly with a Pharmacy Benefit Manager (PBM) vendor to administer and manage their prescription drug benefits. This opens the door for five areas of savings for employers: Transparency A bundled prescription drug plan with an employer’s medical plan has little to no transparency. When carved-out, employers get access to useful claims data and more control over costs. Flexibility and Control with Plan Design Employers can customize their plan design using utilization data and cost control management strategies to…


Innovative Launches New Online Health Plan Benchmarking Tool

Posted On: April 14, 2021 | Categorized as: Employee Benefits

Innovative Launches New Online Health Plan Benchmarking Tool Benchmarking is more important than ever. Knowing how your health plan compare to your peers allows you to be competitive in recruiting and retaining the best employees, assist with making data-driven decisions during renewal planning, and see how your health plan costs compare to other companies in your industry. Imagine going into your renewal armed with these facts! With that being said, Innovative is excited to launch our new, online, exclusive health plan benchmarking tool for mid-size employers. Often employers feel as if they are shooting in the dark when it comes to evaluating your health plan design, manage rising costs, and prepare for the future of healthcare. Innovative, in conjunction with United Benefit Advisors, conducts annually the nation’s largest and most comprehensive benchmarking survey of plan design and cost. To help employers see the target, we have taking this data and…


Innovative Launches New Digital Employee Benefit Guide Technology

Posted On: April 12, 2021 | Categorized as: Company News, Employee Benefits

Innovative Launches New Digital Employee Benefit Guide Technology As technology continues to transform the workplace, HR professionals are seeking new and improved ways to deliver their health plan benefits, while gaining rich backend intelligence to improve the utilization of the plan. We have the solution! Innovative Benefit Planning is excited to launch a new, digital technology platform for our client’s employee benefit guides. This new, cutting-edge technology allows employees to view their health plan guides through a dynamic, video rich, interactive experience. Our new, easy to navigate digital guide, provides employers with: Increased Employee Retention- The platform allows for video education and an interactive experience, which has been shown to increase messaging retention by 73% when compared to static content. Engaging Experience- Engage your employees with a fresh, highly visual content experience for maximum impact. Mobile Friendly- Regardless of the device or location of your employees, their guide will automatically…


Innovative’s 2020 Consulting Highlights

Posted On: April 6, 2021 | Categorized as: Employee Benefits, HR Consulting

Innovative's 2020 Consulting Highlights 2020 was a challenging year for many, but here at Innovative, we were dedicated to delivering the best value and results for our clients. Not only were we successful in reducing costs for our clients, but we were able to provide them with a number of resources to help them navigate through the year. Contact us at info@ibpllc.com.


Is Level Funding a Good Fit for Your Employee Benefits Plan?

Posted On: March 10, 2021 | Categorized as: Employee Benefits

Is Level Funding a Good Fit for Your Employee Benefits Plan? Level funding is a great strategy for employers that are interested in self-funding, but like a plan that looks and feels like it is fully insured. Level funding acts just like a fully insured plan, except it provides the opportunity for a surplus in a good claims year, enhanced claims reporting and limited administrative burden. Advantages of Level Funding There are many advantages to considering level funding. Without going straight to stop-loss carriers and third-party administrators, groups can work with the carriers that they're probably already working with on a fully insured basis. It provides the opportunity to receive reporting they may not be receiving today. The opportunity for a surplus that in good years when you're fully insured, you would not receive. Not to mention, you don't have the administrative burdens and potential risk of going fully self-insured…


Final Rule on the Extension of Certain Timeframes For Employee Benefit Plans, Participants, and Beneficiaries Due to COVID-19

Posted On: March 5, 2021 | Categorized as: Compliance, Employee Benefits

Final Rule on the Extension of Certain Timeframes For Employee Benefit Plans, Participants, and Beneficiaries Due to COVID-19 The DOL issued EBSA Disaster Relief Notice 2021-01 providing that the outbreak period relief noted below ends on the earlier of one year from the date an individual or plan was first eligible for relief (extension period) or the original outbreak period of 60 days after the announced end of the COVID-19 National Emergency. As of the date of this writing, the COVID-19 National Emergency has not ended. If a deadline noted below fell on March 1, 2020, it would be extended until February 28, 2021 (one year from March 1, 2020). However, if a deadline fell after March 1, 2020,the deadline would be extended to a date after February 28, 2021 because the extensions up to one year following the deadline or 60 days after the announced end of the COVID-19…


Incorporating Wellness into Your Employee Benefits Strategy

Posted On: March 4, 2021 | Categorized as: Employee Benefits, Workplace Wellness

Incorporating Wellness into Your Employee Benefits Strategy Wellness is a strategy that continues to gain in popularity as employers are looking for ways to help their employees become healthier, more engaged, and happier at work. Wellness is typically broken into three categories. The first category is educational wellness. With an educational program, employers are providing educational guidance on how to be healthier through newsletters, seminars, and webinars, and maybe even a health fair onsite at the employer's office. The second type of wellness program is a participatory wellness program. Under this arrangement, the employer would provide a reward for participation by employees in an event such as a walking challenge, attending a health fair, or maybe a weight loss challenge. The third type of wellness is a results-based or outcomes-based plan design. Under this plan, the employer would provide a reward to employees that satisfy a standard set in the…


Reference Based Pricing

Posted On: February 26, 2021 | Categorized as: Employee Benefits

Reference Based Pricing With healthcare costs skyrocketing at unsustainable levels, employers are considering nontraditional methods of funding their medical plans. One nontraditional method that employers are starting to consider is called reference based pricing, or RBR. This method has proven to reduce overall benefit spend 20 to 30%, when compared to the traditional discount healthcare delivery model. What is Reference Based Pricing? The reference in RBR refers to Medicare. In a typical, traditional PPO carrier discount model, the claim after discount ends up being 250 to 450% of what Medicare reimburses for that claim. That's two and a half to four and a half times what providers accept for Medicare patients. Employers that want to bridge that gap can partner with an RBR vendor to skirt the traditional carrier discount system. Instead of the claim passing through and have the typical carrier discount applied to the gross claim, the RBR,…


What is Bundled Pricing?

Posted On: February 15, 2021 | Categorized as: Employee Benefits

What is Bundled Pricing? Many employers are frustrated with a lack of financial and quality transparency in the healthcare marketplace. As such, many employers have considered offering a bundled pricing solution to their employees. Bundled pricing is a unique solution that provides employees the opportunity to shop for a procedure with an all-in price upfront. How Does Bundled Pricing Work? A bundled pricing vendor will negotiate directly with providers for non-emergent healthcare services. In other words, an employee can go on and choose when and where they'd like to have the procedure at an all-in cost. These prices are often a fraction of the typical cost of those services and there's no surprise when an invoice comes in the mail. Bundled pricing provides employers and employees alike the opportunity to have a transparent healthcare environment. Some pitfalls to consider are the fact that bundled pricing is relatively new to the…


Understanding Captives and Consortiums

Posted On: February 3, 2021 | Categorized as: Employee Benefits

Understanding Captives and Consortiums As health insurance costs continue to rise, many small and mid-size employers have looked for ways to alternatively fund their plans and potentially save costs. Self-funding can be daunting and unmanageable for many small to mid-size employers, but there are many self-funding options to consider. Captives and consortiums provide the ability to self-fund your plan while offsetting risk and having some cash flow efficiencies. They allow employers to band together with other employers, to get enhanced pricing, bundled services, and to offset risk in bad years. Captives A captive provides more direct risk sharing as the group is in a pool of other employers where they'll have their own stop-loss, but also a captive layer that will kick in for high cost claimants. Consortiums A consortium provides the ability to band together with other groups for purchasing power, to purchase things such as stop-loss and administrative…


Mandatory Coverage of COVID-19 Vaccines under Group Health Plans

Posted On: December 23, 2020 | Categorized as: Compliance, Employee Benefits

Mandatory Coverage of COVID-19 Vaccines Under Group Health Plans On December 11, 2020, the Food and Drug Administration (FDA) issued an Emergency Use Authorization for the Pfizer-BioNTech COVID-19 vaccine (Pfizer vaccine). The following day, December 12, 2020, the Centers for Disease Control Advisory Committee on Immunization Practices (ACIP) issued an interim recommendation for use of the Pfizer vaccine in persons age 16 years or older for the prevention of COVID-19. Alternative COVID-19 vaccines are likely to be approved by the FDA under emergency authority in the coming weeks. Group health plans are encouraged to prepare to cover the cost of the Pfizer and other approved COVID-19 vaccines. Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), non-grandfathered individual and employer-sponsored group health plans are required to cover the entire cost of preventative services by not imposing cost-sharing in the form of deductibles, copays, coinsurance or other amounts on…


Partially Self-Funded Plans with an HRA

Posted On: December 3, 2020 | Categorized as: Employee Benefits

Partially Self-Funded Plans with an HRA As health insurance costs continue to rise, more and more small and mid-size employers are looking for ways to take control of their healthcare costs. A health reimbursement account, or an HRA, is a way in which employers can step into self-funding and start to take some control. A health reimbursement account is an opportunity for the employer to self-fund a portion of the health insurance plan. Typically, employers will choose a plan with a higher deductible, higher co-pays, and potentially higher co-insurance, and will decide to self-fund that portion of the plan to take on some risk. Companies that have considered self-funding, but are wary of some of the risks, might want to take a step towards self-funding with a health reimbursement account. By utilizing increased deductibles, co-pays and co-insurance and putting an HRA into place, an employer is taking the risk that…


Understanding Key Health Insurance Terms

Posted On: November 23, 2020 | Categorized as: Employee Benefits

Understanding Key Health Insurance Terms The language of health insurance can be confusing but understanding some key terms will help your employees comprehend the basics of your organization’s plan, allowing them to make smart decisions that will benefit their family. Rather than feeling confused, encourage them to review the following key terms and ask questions when necessary. Premium - sometimes referred to as contributions, payroll deductions, or per pay costs, are the amount employees pay each month for covered health insurance. Copay - the fixed amount the employee pays for health care services, such as $25 for a doctor's visit. After your copay, the insurance pays the balance of the bill. Deductible - a fixed dollar amount the employees pay each plan year for health care services before their health insurance begins to pay. Coinsurance - the percentage of costs the employee will pay. If your organization’s plan has a…


Final Rules on Coverage Transparency

Posted On: November 16, 2020 | Categorized as: Compliance, Employee Benefits

Final Rules on Coverage Transparency On October 29, 2020, the Internal Revenue Service (IRS), Department of Labor (DOL), and the Department of Health and Human Services (HHS) (collectively, Departments), released final rules on coverage transparency, in order to provide health coverage recipients with an estimate of their potential cost-sharing liability for health related services prior to the receipt of care. The final rules require group health plans and insurance issuers in the individual and group markets to disclose cost-sharing information and negotiated rates in electronic or paper form. The final rules also allow issuers to reward plan enrollees with “shared savings payments,” without running afoul of medical loss ratio (MLR) requirements. Issuers are permitted to provide employees who use lower-priced providers with a percentage of the savings relative to a benchmark. Effective Dates Public Disclosure of Negotiated Rates and Historical Allowed Amounts: January 1, 2022 Disclosure of Cost Information: January…


6 Self-Funding Strategies to Suit Your Needs

Posted On: November 12, 2020 | Categorized as: Employee Benefits

Self Funded Plan printed on keyboarded key

6 Self-Funding Strategies Self-funding is nothing new as it has been a common form of health plan financing since 1974. Self-funding provides great flexibility with plan designs and provides freedom from most state laws. In fact, over 60% of US employees are covered under a self-insured medical plan. Under self-funded arrangements, the employer assumes all the risk of claims with backup protection from stop-loss coverage and retains the savings over fully insured. Employers partner with TPA and other vendors to provide claims administration, case management and network access. Employers with as many as 50 employees can consider self-funding, however we see employers with 100 or more participating in this funding arrangement. Advantages and Benefits The employer, which is also known as the plan sponsor in a self-funded arrangement, can determine the plan design that best suits the needs of their employees. Regulatory is defined at federal only, not state. The…


3 ACA Reporting Errors and The Pandemic’s Impact

Posted On: October 22, 2020 | Categorized as: Compliance, Employee Benefits

3 ACA Reporting Errors and The Pandemic’s Impact As we approach the end of 2020, we must consider how the various enrollment fluctuations due to the COVID-19 Pandemic will impact the ACA Employer Mandate and the already tedious 1095/1094 ACA Reporting. The IRS recently granted a March 2nd deadline extension for the 1095 reporting and this extra time will likely be needed for employers to accurately audit their data as we are expecting to see additional errors due to furloughs, layoffs and coverage extensions. Prior to filing, employers should audit their reporting for the following common errors to avoid an unnecessary penalty letter. Enrollment Changes and Code Errors For each month an employee is offered coverage and one of codes 1B through 1E is entered in line 14, an employee should have a dollar amount indicated in line 15. If there are blank entries this could trigger a penalty for…


Have You Received an MLR Rebate Check? What To Do Next?

Posted On: October 9, 2020 | Categorized as: Compliance, Employee Benefits

Have You Received an MLR Rebate Check? What To Do Next? The Affordable Care Act requires health insurance carriers to spend at least 80-85 percent of premium dollars on medical care and healthcare quality improvement. If the carrier does not meet this medical loss ratio (MLR) obligation, it must give affected customers a rebate.  Rebates must be distributed by the carriers each year by September 30. Any employer that receives a refund then needs process and distribute within 90 days to avoid triggering ERISA trust requirements. For your convenience we have included more information regarding this topic in our compliance bulletin, including: How should the rebate be divided? Are former plan participants entitled to a share in the rebate? How may the employer use the rebate? How should the rebate be provided? Additional Q&As on how the rebate should be used If you have any questions about distribution or how…


Judge Rules for HHS in Price Transparency Case

Posted On: June 25, 2020 | Categorized as: Employee Benefits

Judge Rules for HHS in Price Transparency Case

Judge Rules for HHS in Price Transparency Case A federal judge ruled against the American Hospital Association (AHA) on Tuesday in its lawsuit attempting to block an HHS rule pushing for price transparency. The judge ruled in favor of the department, which requires hospitals to reveal private, negotiated rates with insurers beginning Jan. 1.  The AHA stated they are requesting an expedited review as they are concerned with the significant burden this will place on hospitals when resources are already stretched thin as a result of the pandemic and increased patient care needed.  Click here to read the full brief.  



IRS Releases Two New COVID-19 Notices

Posted On: May 13, 2020 | Categorized as: Employee Benefits, HR Consulting

IRS Releases Two New COVID-19 Notices To provide additional relief to Americans during these challenging times, the IRS released Notice 2020-29 and 2020-33. These notices provided new relaxed rules for 2020 for making elections under Cafeteria plans, using amounts during a grace period or carryover period changes to the method determining the carryover amounts under Health Flexible Spending Accounts (FSAs)  and clarifying which premiums can be reimbursed under Individual Coverage Health Reimbursement Arrangements (ICHRAs). Notice 2020-29 In Notice 2020-29, the IRS provides for increased flexibility with respect to mid-year elections under a cafeteria plan during calendar year 2020 related to employer sponsored health coverage, Health FSAs and Dependent Care Assistance Plans (DCAPs). This notice also provides increased flexibility with respect to grace periods and carryover periods to apply unused amounts in health FSAs to medical care expenses incurred through December 31, 2020, and unused amounts in dependent care assistance programs…


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