Broker Edge

September 2010, Vol. 9, No. 3
A newsletter dedicated to informing brokers affiliated with Fallon Community Health Plan

In this issue


National health care reform update

Tax changes for HSAs

There are two tax changes being implemented on January 1, 2011, under the Patient Protection and Affordable Care Act:

  • The costs for over-the-counter drugs not prescribed by a doctor are no longer reimbursable through a health reimbursement account (HRA) or health flexible spending account (FSA) and also are excluded from being reimbursed on a tax-free basis through a health savings account. (FCHP partners with Benefit Strategies, LLC to offer HRA and high-deductible administration as well as stand-alone FSA administration.)

    Savings tip: FCHP commercial and Fallon Senior Plan™ members can take advantage of their CVS Caremark ExtraCare Health Card to receive a 20% discount on more than 1,500 CVS/pharmacy brand health-related products, such as pain and allergy-relief medication as well as cough and cold remedies at CVS stores or cvs.com.
  • The tax on distributions from a health savings account that are not used for qualified medical expenses will be increased to 20% of the disbursed amount.

♦ Grandfathered, or not, under national reform?

Under the Patient Protection and Affordable Care Act, health plans that existed on March 23, 2010, are exempt (grandfathered) from some new requirements. In June, the Department of Health and Human Services, the Department of Labor and the Internal Revenue Service jointly released their "grandfather rule." The rule clarifies what changes an insurer or plan sponsor may—and may not—make to health insurance coverage or a group health plan to retain its "grandfather" status.

Grandfathered plans may make certain changes—so long as they don’t dramatically reduce people’s benefits or increase their cost-sharing. Among other things, plans will be able to:

  • Raise premiums to reasonably keep pace with medical inflation;
  • Make some changes in the benefits that they offer;
  • Increase deductibles and other out-of-pocket costs within limits; and
  • Continue to enroll new employees and new family members.

However, plans will lose their grandfathered status if they choose to make “significant changes” that reduce benefits or increase costs to consumers. If a plan loses its grandfathered status, then additional new benefits, which are applicable to all new plans, are triggered:

  • Coverage of recommended prevention services with no cost sharing; and
  • Patient protections such as guaranteed access to OB/GYNs and pediatricians.

If existing plans choose to make the following changes, compared to their polices in effect on March 23, 2010, they would lose their grandfathered status: 

  • Significantly cut or reduce benefits, for example, if a plan decides to no longer cover care for people with diabetes.
  • Raise co insurance charges. 
  • Significantly raise copayment charges, that is, by no more than the greater of $5 (adjusted annually for medical inflation) or a percentage equal to medical inflation plus 15 percentage points.
  • Significantly raise deductibles, that is, no more than a percentage equal to medical inflation plus 15 percentage points.
  • Significantly lower employer contributions, that is, decrease the percent of premiums the employer pays by more than 5 percentage points.
  • Change insurance companies. If an employer decides to buy insurance for its workers from a different insurance company, this new insurer will not be considered a grandfathered plan. This does not apply to self-insured plans that switch plan administrators or to collective bargaining agreements.

The new rule requires the employer or insurer to provide employees/members notice of its decision to remain a grandfathered plan. When employers tell employees about their health plans, employers who believe their health plans are grandfathered must include information about their status and maintain records needed to verify it. To smooth the transition to the new system, the government will take into account a “good faith effort” by employers to comply. It exempts retiree-only and “excepted benefit plans” like dental insurance.

FCHP’s product portfolio is being evaluated to determine grandfathered status. More information will be forthcoming as it is made available. For an overview of grandfathered plans, see our National health care reform update on the topic at fchp.org/news.

For more information, go to www.healthcare.gov/law/features/rights/grandfathered-plans/index.html.

♦ Required notices under national health care reform

Several provisions of the Patient Protection and Affordable Care Act are going into effect and triggering requirements to notify health plan subscribers or members of the latest changes. In most cases, we believe that the employer has the responsibility to notify its employees of these health care changes.

  • Special enrollment notice for dependent coverage of children up to age 26.
    Children under 26 are allowed to stay on their parent’s family policy, or be added to it. Employer should notify all employees of a “one-time only” special election period. The regulations allow the notice to be included with open enrollment materials. FCHP is reflecting the new requirements in its EOCs. [Model notice]
  • Notice regarding plan’s grandfathered status.
    Employer notice is sent to subscribers if its particular plan is grandfathered under the Affordable Care Act and exempt from certain provisions. The employer ultimately controls the decision to maintain grandfathered status. Few employers are likely to maintain this status, so this notice is not likely to apply to many groups. [Model notice]
  • Special enrollment notice for individuals who have reached lifetime limit.
    Employer notifies individuals, who have previously lost coverage due to reaching a lifetime maximum, about a one-time only special election period. FCHP’s fully-insured HMO plans do not have lifetime limitations, and most of our self-insured clients do not, so there will be few cases of notification being required. [Model notice]
  • Notice of rescission of coverage.
    Under the health care reform law, rescission (retroactive termination) is not permitted except in cases of fraud or intentional misrepresentation of material fact. FCHP’s current policy is in compliance with this provision. Any notice of rescission would be sent to a member at least 30 days in advance by whichever entity initiates it—in many cases, this will be the insurer. Regardless, for most employers in Massachusetts, the volume of rescissions will probably be low. 
  • Patient protection disclosures (applicable to non-grandfathered plans).
    This notice informs members of their right to choose as their provider any available participating primary care provider, and that they do not need a referral for OB-GYN care. Notice is required anytime an employer or insurer “provides a participant with a summary plan description or other similar description of benefits.” FCHP will be sure its EOCs provide such notice. However, employers may want to consider independently sending a notice to members, or adding the notice to their own summary plan description. [Model notice]

More information is available at dol.gov/ebsa/healthreform and HealthCare.gov.


FCHP’s core business system moving towards maximization

As you know, early this year Fallon Community Health Plan launched its new core business system (called QNXT), which will keep us in step with the latest technology as business processes and health care regulatory requirements become ever more complex. We continue to diligently work on moving our QNXT system from implementation to maximization. The new system, once running at full capacity, will allow us to be more efficient, cost effective and flexible in providing services to all of our customers as well as improve data accuracy and security.

Nonetheless, our business system conversion has been a significant undertaking and, despite careful planning, we have experienced unexpected issues. We have identified and prioritized remaining concerns and are making significant progress in resolving them. For example, we are happy to have secure online enrollment through Employer Tools up and running again. Also, we have processed more than 1 million claims in QNXT.

We continue to put our full effort behind finding solutions that will meet and exceed your customer service expectations. We thank you for your patience and understanding, and know you will eventually come to appreciate all the positives this new system has to offer.


Early childhood interventions mandated

All fully insured health plans are now required to cover early intervention services in full, with no copayment, coinsurance or deductible* for patients’ families, according to an amendment to the Massachusetts budget bill for fiscal year 2011, effective July 1, 2010.

Early Intervention is a statewide, integrated, developmental service available to families of children between birth and three years of age. The program includes specialized health, educational and therapeutic services for eligible children who have a developmental delay or disability. The services are provided by certified early intervention specialists.

If you have questions regarding this change, please call your FCHP sales executive through our dedicated broker line, 1-888-746-4823.

* Does not apply to qualified high-deductible plans. Also, self-funded plans may choose not to implement this benefit.


Dental coverage for entire family no longer offered in 2011

Fallon Community Health Plan will no longer offer dental benefits and discounts for the entire family as part of our standard benefits package with most products, effective upon anniversary dates beginning January 1, 2011.

We found that the dental package was not widely offered among our employer groups, and it was not cost effective to maintain a wide network of participating dentists for a limited number of members.

If you have questions or particular concerns regarding this change, please call your FCHP sales executive through our dedicated broker line, 1-888-746-4823.


Prevailing charges now applied to out-of-network PPO costs

To aid in containing costs for our PPO product, Fallon Community Health Plan recently reviewed its PPO payment policy for out-of-network (nonparticipating) providers and implemented the industry standard of calculating claims and cost-sharing on allowed, or prevailing, charges as described in our member materials.

As of September 1, 2010, FCHP began applying a prevailing charges fee schedule (aka, the usual, customary and reasonable charge) to calculate claim payments and cost sharing for Fallon Preferred Care (PPO) members when they use out-of-network providers. The prevailing charge reflects the normal range of charges for the same or similar services within the designated geographical area.

This approach applies to existing PPO clients and new sales. Please note that prevailing charges apply to the costs of professional and outpatient services, but not to inpatient or emergency room services.

Our PPO members may choose where they receive medical services. If members choose to receive covered services out of network, they may need to submit a claim and in most cases will pay 20% of the prevailing charge after their deductible is met. In addition, if the provider’s billed charge is more than the prevailing charge, the member will be responsible for the difference.

Example
Previous approach
Billed $1,000
80% paid plan - $800
20% paid member $200

Current “prevailing charges” approach
Billed $1,000
Prevailing charge $800
80% paid plan - $640
20% paid member $160
Member balance bill $200 ($1,000-$800)
Total member liability $360 ($200 + $160)

Our application of a prevailing charges fee schedule will affect only a small percentage of Fallon Preferred Care members. Most members choose the Fallon Preferred Care network, which gives them access to more than 600,000 participating (in-network) providers.

If you have questions, please feel free to call your sales executive, or our dedicated Broker line, 1-888-746-4823.


Commission schedule reminder – merged market

We’d like to remind you that FCHP’s commission schedule for the merged market—accounts with 1 to 50 subscribers—is based on a unit cost per subscriber, rather than on percentage of premium.

Effective July 1, 2010, the commission schedule for all fully insured HMO and PPO accounts with 10 to 50 subscribers was modified as follows for all existing and new business, regardless of anniversary date:

  • For accounts with 10 to 25 subscribers, FCHP will pay $23 per subscriber per month.
  • For accounts with 26 to 50 subscribers, FCHP will pay $28 per subscriber per month.

If you have questions, please feel free to call your sales executive through our dedicated broker line, 1-888-746-4823.


Peace of Mind ProgramTM offers more choice

Our FCHP Direct Care and FCHP Select Care members* have access to a unique benefit, which we call the Peace of Mind Program. It provides these members with access to receive a second opinion and treatment for specialty services at one of five medical centers in Boston: Brigham and Women’s Hospital, Dana-Farber Cancer Institute, Massachusetts General Hospital, Tufts Medical Center and Children’s Hospital.

FCHP Select Care members already do have access to both Children’s Hospital and Tufts Medical Center, which are in the Select Care network, if they receive a referral from their PCP. However, if they do not get a referral, they can use their Peace of Mind Program benefit to access a second opinion and specialty care at these medical centers, as well any of the other three facilities.

To use the program, an eligible member must have seen a specialist, in his/her network, for the same condition within the past three months; the specialty services must be FCHP-covered services; and the PCP must request a prior authorization from FCHP. There are no extra out-of-pocket costs for services received through the Peace of Mind Program.

For more details about this program and how its works, see updated information on our Web site, fchp.org, or request our new Peace of Mind Program flyer from your FCHP sales executive by calling our dedicated broker line, 1-888-746-4823.

* The Peace of Mind Program is not available for all FCHP members. Program eligibility and benefits may vary by employer, plan and product.


UltraBenefits offers funding and administrative options

FCHP’s subsidiary, UltraBenefits, Inc., is a third-party administrator that provides employers with innovative solutions in managing their employee benefit plan costs. Through their experience and commitment to service, FCHP is able to accommodate the full spectrum of alternative funding.

HRA and high-deductible administration

  • Available with all FCHP plan design options
  • Automatic claims transfers to UltraBenefits
  • Payment made directly to providers
  • Flexible plan design options

Partial self funding

  • Medical, dental and short-term disability administration
  • Access to the FCHP network options
  • Access to national carriers
  • Favorable reinsurance rating
  • Full Web capabilities
  • Stand-alone FSA administration

For more information about FCHP’s UltraBenefits partnership, contact your sales executive through our dedicated broker line, 1-888-746-4823.


Procedural updates

  • Fallon Community Health Plan is required to have your current Commonwealth of Massachusetts broker’s license on file. If you’ve renewed your producer’s license in the recent past and haven’t sent us a copy, please do so now. We need your most current Massachusetts license to do business with you. Please send a copy of the license via fax at 1-508-831-0912, attention Ursula Arello, Manager of Sales Operations, or e-mail your account manager/coordinator.
  • Have you had a change of address? Name change or merger? If so, please be sure to send FCHP an updated W-9 form (Request for Taxpayer Identification Number and Certification). We require this form so that we can report correct information to the IRS. Also, the address you report on the W-9 is the same address where commission checks are sent. Please fax updated forms at 1-508-831-0912, attention Ursula Arello, Manager of Sales Operations.
  • Need to reach us?—Save these important numbers:
    • Sales fax: 1-508-831-0912
    • Sales phone: 1-800-333-2535
    • Enrollment & Billing fax: 1-508-831-1136
    • Enrollment & Billing phone: 1-800-333-2535, ext. 69322. Press option 1 for Billing, option 2 for Enrollment
    • FCHP’s dedicated broker line: 1-888-746-4823
    • New brokers—remember that we require: current Commonwealth of Massachusetts broker’s license; a completed and signed brokerage agreement; a W-9 (Request for Taxpayer Identification Number and Certification); and a copy of the declaration page of your Errors and Omissions insurance policy. FCHP requires that affiliated brokers maintain $1 million in E and O coverage. For more information, call FCHP’s dedicated broker line, 1-888-746-4823.

    Tips for hosting a successful health fair

    A busy open enrollment season is upon us. Help your clients move through enrollment more effectively by providing them with the guidance below for holding a successful health fair. More importantly, FCHP can help your clients maximize their time and be responsive to their employees. The first step is to give us a call. We’re here to help you in any way we can. Need a presence at health fairs? Member information? Wellness programs? Problem-solving help? Just ask—call your FCHP sales executive through our dedicated broker line, 1-888-746-4823.

    Here are a few tips to prepare for the fair:

    • Provide accurate and detailed directions to participating representatives.
    • Prepare comparison charts for benefits and rates. Clearly explain your clients’ plan options (e.g., copayment versus deductible).
    • Make arrangements to have a health educator present.
    • Give everyone plenty of notice with flyers, payroll stuffers or intranet notices. Simplify enrollment materials.
    • Provide a benefits hotline if possible.

    And a few tips to follow during the fair:

    • Offer healthy snacks and drinks.
    • Present each employee with a prepackaged folder with their name on it that includes a list of current benefits and forms.
    • Make it fun. Have a theme and enter employees in a drawing for participating.

    As a follow-up, survey the employees and representatives to see if they thought the health fair was a success and if they have any suggestions for future improvements.

    To avoid enrollment delays, be certain that enrollment forms are completed in full. Remind your clients to provide all necessary information for each member—including date of hire, effective date, dependent information and employee signature.


    FCHP Annual Report online

    Fallon Community Health Plan’s 2009 Annual Report, “Measuring Up,” is available online. It was published in June. To view or download the report, go to fchp.org/about-fchp.aspx.


    A race for fitness

    On September 11, we are proud to sponsor the 4th annual Fallon Community Health Plan Canal Diggers 5km Road Race and one-mile fitness walk—one of the premier fitness events in the region. The race helps to launch Worcester’s Blackstone Canalfest, a daylong celebration of the city’s revitalized Canal District. Thank you to all of you who are participating in the event, either running, walking or cheerleading.


    FCHP Family Fun 2010 continues

    Fallon Community Health Plan this year partnered with local family-fun spots throughout its service area to offer FCHP members savings on admissions and other discounts at local attractions, such as museums, zoos and other family-oriented places. Our partners graciously donated these discounts to our members, and they continue to be valid as long as these attractions are open in 2010. Discount coupons are available on fchp.org by clicking on the FCHP Family Fun 2010 link, or by calling Customer Service at 1-800-868-5200 to receive the coupons by mail.


    FCHP’s dedicated broker line: 1-888-746-4823

    Broker Edge is published quarterly to provide the broker community with the latest  Fallon Community Health Plan news and product facts, health care trends and  marketplace information. E-mail your comments on Broker Edge to broker.services@fchp.org.
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