IRS Extends Deadline to Furnish 1095 Forms to Individuals

Michael BerwangerBy Michael Berwanger, JD, Director, Quality Management & Compliance

The IRS has announced good-faith transition relief for information reporting on Forms 1094 and 1095 for the 2017 tax year, mirroring guidance it provided for the 2016 tax year (see IRS Notice 2018-06 HERE).

Some notable highlights include:

Extension for Furnishing Statements to Individuals. 

The deadline for furnishing Forms 1095-B and 1095-C to individuals is extended by 30 days, from January 31 to March 2, 2018. There is no action necessary from self-funded health plans to take advantage of this extension, it is automatic.

Due to this extension, the discretionary 30-day extension is not available, and no further extensions may be obtained by application to the IRS.

No Extension for Filing Returns with the IRS.

The notice does not extend the due date for filing Forms 1094-B and 1094-C (and accompanying Forms 1095) with the IRS. Accordingly, the deadline remains February 28, 2018, for paper filings, and April 2, 2018, for electronic filings (see 2017 Forms 1094, 1095 B & C Released by IRS).

Please note, electronic filing is mandatory for entities required to file 250 or more Forms 1095. However, filers may obtain an automatic 30-day extension by filing Form 8809 on or before the regular due date.

2017 Forms 1094 1095Good Faith Penalty Relief.

The IRS will again provide penalty relief for entities that can show they have made good faith efforts at compliance.

The IRS reports that no penalties will be imposed on entities that report incorrect or incomplete information, either on statements furnished to individuals or returns filed with the IRS, if they can show they made good faith efforts to comply with the reporting requirements.

The notice specifies that the relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other required information.

Penalty relief is not available to entities that fail to furnish statements or file returns, miss an applicable deadline, or are otherwise not making good faith efforts to comply.

Evidence of good faith efforts may include gathering necessary data and transmitting it to a third-party to prepare the required reports, testing the ability to transmit data to the IRS, and taking steps to ensure compliance for the 2018 tax year.

ACA deadlinesThose unable to meet the due dates are still encouraged to furnish and file as soon as possible, as the IRS says it will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause.

Reasonable cause is distinct from good faith relief and requires, among other things, proof of significant mitigating factors or events beyond the reporting entity’s control.MedCost


MedCost is not a tax preparation company, and you may have additional tax obligations for other benefit plans that you offer to your employees. Please consult with your tax adviser for guidance.

This blog post should not be considered as legal advice.

GIVING BACK: 3 Reasons for Corporate Philanthropy

When Corporate Giving Becomes Personal
Giving Back

2017 Winston-Salem Heart & Stroke Walk (Photo by Patrick K. Smith)

By Debbie Pullen, Content Marketing Specialist

This year I had the privilege of participating in my company’s annual corporate sponsorship for the American Heart Association.

Our leadership felt passionate about supporting the annual Winston-Salem Heart & Stroke Walk, because of how local medical research is funded through national and area fundraising. Our nurses and support staff work daily with members recovering from heart attacks, strokes and other complex conditions.*

So we really had a “heart” for this issue.

The big surprise for me was how much my involvement would come to mean to me personally.

I discovered three wonderful reasons why companies give.

#1 REASON FOR GIVING BACK

Giving Back Aligns Company Actions with Company Values
Giving Back

Michelle at Soup Cook-Off

Our commitment to be major sponsors for the Heart & Stroke Walk originated with our executive leadership. They wanted every employee to have the chance to support company fundraisers and to walk the 1-, 2- or 4-mile route on November 11, 2017.

Fundraisers such as our Soup Cook-Off, Executive Embarrassment Challenge** and Basket Raffles progressively built excitement in the months leading up to the walk. Employees from every department signed posters, took photos shared on social media and contributed to our company total.

A spirit of anticipation grew as people talked in the break rooms about family or friends who had suffered heart disease or strokes. Employees shared their own stories about recovering from serious medical conditions (see “Heart Disease: Living Up to the Gift of Life“).

The MedCost principle of getting healthy and staying healthy was underscored over and over with social shares like this infographic from the Triad AHA.

Giving Back

American Heart Association

Facts such as “Heart disease is the #1 cause of death in the United States” were sobering. Even more sobering was this one:

80% of deaths from coronary artery disease are PREVENTABLE, due to obesity, lack of physical activity, heavy drinking, unhealthy diets and other factors.

Centers for Disease Control and Prevention

.

Our company found perfect symmetry with the American Heart Association’s missionto build healthier lives, free of heart diseases and stroke. As the saying goes, we put our money where our mouth is.

Beginning in 2016, MedCost became a major sponsor of Triad AHA’s annual Heart and Stroke Walk.

#2 REASON FOR GIVING BACK

Giving Back Defines What Community Is
Giving Back

(L-R, Sarah Fedele, Heath Combs, Kati Tsiolkas, Taylor Logeman, Kaitlin Hemric, Debbie Pullen at Wake Forest Innovation Quarter)

 

 

 

 

 

 

 

 

 

I collaborated with Sarah Fedele, Triad AHA Director of Communications and Marketing, to lead a monthly group of social media colleagues. We brainstormed promotions and event activities, while getting to know each other better.

Our group represented over 100 companies sponsoring the annual walk. These talented professionals from banking, health care, medical device manufacturing and other industries contributed a larger vision for corporate giving.

“AHA Heart and Stroke Walk is something very near and dear to us as a company. Working together with other local companies really defines what community is all about.”

  • Kati Tsiolkas, Brand Marketing Specialist, Endoscopy
    Cook Medical
Giving Back

(L-R, Sarah Diamont, Debbie Pullen, Edee Wilcox, Sarah Fedele, Kati Tsiolkas, Taylor Logeman)

Edee Wilcox, another key member of the social media team, said that working together for a common cause developed our understanding of community.

“Getting to know other social media admins in the area and supporting each other has helped increase appreciation for what we do collectively and individually in our community.”

We were seeing that all of us together could build a healthier community.

#3 REASON FOR GIVING BACK

Giving Back Benefits Our Health, Too

Something happened to me as I worked on promotions with our internal teams and sponsors from other industries in our area. The Heart and Stroke Walk became more than just a social responsibility.

It became more than a PR effort that would position MedCost’s reputation favorably.

The numbers began to talk to me.

Giving Back

  • About 60% of stroke deaths occur in females
  • 80% of strokes CAN BE PREVENTED.
  • Lowering your top number (systolic) by 20 mm Hg and your diastolic blood pressure by 10 mm Hg may decrease your risk of stroke and ischemic heart disease by about 50%.

I began to focus on improving my own health, along with conducting a successful charitable campaign.

I knew that MedCost helps employers avoid many unnecessary health costs through wise benefits administration. I knew that preserving employee health through regular screenings and annual physicals would keep medical conditions from escalating.

Giving BackBut I didn’t know how 100 companies working together could achieve AHA grants for $1.2 million for local heart and stroke research in our local medical schools and universities in 2016.

Sarah and Kelly in our social media group expressed it well.

“We are helping people to be aware of the warning signs of heart disease and stroke and  to make healthy lifestyle changes to prevent heart disease and stroke. We are building a true culture of health in Winston-Salem, Forsyth County and across North Carolina.”

Giving Back

Over 5,000 brave the cold for 2017 Winston-Salem Heart & Stroke Walk

 “Together we are so much more powerful and effective than we could ever be apart.”  – Kelly Minor, Marketing Communication Specialist at Piedmont Federal Savings Bank

Is it really more blessed to give than to receive?

Something happens when we think of others first. Extend our gifts, our time. A little bit of ourselves.

I’m thinking of my social media friends, who labored on behalf of their companies to raise much-needed funds for local and national research.

I’m thinking of heart and stroke victims affected by these top killers in America.

I’m thinking of 5,000 walkers who got out of bed on a freezing November morning to come downtown and bring hope for our community.

Giving back. Isn’t this the best way to celebrate the life we’ve been given? MedCost


*MedCost, which administers self-funded health plans for employers in NC, SC and VA, has long embraced a culture of generosity, both to employees and as a corporate citizen.

Giving Back

Greg Bray, MedCost CFO with Allison Brashear, MD, Walk Co-Chairs

**Employees donated to the manager they wanted to see wear an embarrassing costume on the day of the walk. Michael Berwanger (below) was one of the “winners.”

Giving Back

(L-R, Michael Berwanger, Greg Bray)

Telemedicine: Yes, There’s a Doctor in the House

telehealth A sick child might have a fever at 3:00 am. Or the family might be visiting grandparents a long way from home. But if an employer-sponsored health plan includes telemedicine services, a board-certified doctor’s consultation is only a phone call away.

Employers Are Choosing Telemedicine

An overwhelming 96% of US employers plan to offer telemedicine services in applicable states* in 2018, the National Business Group on Health reports. The reasons for this rapidly growing health benefit are obvious:

  1. Quick ResponseTeladoc, the nation’s largest provider of telemedicine consultations, averages 22 minutes for a call-back from a licensed, board-certified doctor who practices in the caller’s state.
  2. Convenience. This consultation can be held by phone or online. Teladoc requests some medical information before having the doctor return the call.
  3. Appropriate Care for Less. Almost 80% of adult Emergency Room visits are due to lack of access to other providers.** Access to telemedicine visits can limit hours spent away from work, as well as more expensive care at any hour, day or night.

Telemedicine Offers Treatment Alternatives

Telemedicine consultations are not meant to replace primary care providers. But if an employee has one of the minor ailments listed below, 24/7 access is convenient, and reduces spiraling costs for the employer and the employee.

Treatment Alternatives to the Emergency Room

Telemedicine

Common conditions treated through a telemedicine phone call or online visit are:

  • Infections
  • Allergies
  • Pain
  • Minor joint trauma
  • Gastroenteritis (stomach flu)

Telemedicine Services Are Expanding

Teladoc has expanded optional services for employer health plans to include behavioral health. If an employer chooses to add this option, experienced psychiatrists, therapists and counselors would be available at a flat, per-encounter fee. Members can choose to see the same provider throughout the course of care.

Behavioral health conditions*** range from:

  • Stress/anxiety
  • Depression
  • Addiction
  • Domestic abuse
  • Grief counseling

Just a Phone Call Away

Need a better prescription for your health care expenses? Expert care from area doctors may be available with a phone call, whether on vacation at Disney World or in pajamas at 3:00 a.m.

With telemedicine services, there is a doctor in the house.MedCost

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*Teladoc operates subject to state regulation and may not be available in certain states.

**“Emergency Room Use Among Adults Aged 18-64: Early Release of Estimates from the National Health Interview Survey, January-June 2011.” National Center for Health Statistics. May 2012. https://www.cdc.gov/nchs/nhis/releases.htm (accessed October 31, 2017).

***Consult your employer’s summary plan description for complete coverage details.

2017 Forms 1094, 1095 (B & C) Released by IRS

2017 Forms 1094 1095

Michael BerwangerBy Michael Berwanger, JD, Director, Quality Management & Compliance

The IRS has released the final Forms 1094-B, 1095-B, 1094-C, and 1095-C for calendar year 2017 reporting. Employers are required to report in early 2018 for calendar year 2017. You can find the forms for calendar year 2017 reporting here:

 

What Changed?

For calendar year 2017, the 6055 and 6056 reporting process seems to have stabilized. One notable difference, please note the removal of the “Section 4980H Transition Relief” box from line 22 of Form 1094-C, as this transition relief is no longer available to employers.

There are no substantive changes to the B Forms for 2017, and the instructions are also mostly unchanged.

For purposes of determining affordability of employer-sponsored coverage when using the Qualified Offer method, the instructions note inflation adjustments to the 9.5% threshold, increasing the percentage to 9.66% for plan years beginning in 2016 and 9.69% for plan years beginning in 2017. (This percentage will drop to 9.56% for plan years beginning in 2018. See IRS Publication for details.)

Who Is Required to Report?

2017 Forms 1094-B and 1095-B:

These forms are used by insurers, self-insuring employers, and other parties that provide minimum essential health coverage (regardless of size, except for large self-insuring employers) to report information on this coverage to the IRS and to covered individuals.

Note: Self-insuring employers with less than 50 full-time or full-time equivalent employees will use these forms to report information on coverage to the IRS and to covered individuals. Self-insuring employers with 50 or more full-time or full-time equivalent employees will use the C forms—see below.

1094-C and 1095-C:

Applicable large employers (generally those with 50 or more full-time employees, including full-time equivalents or FTEs) will use Forms 1094-C and 1095-C to report information to the IRS and to their employees about their compliance with the employer-shared responsibility provisions (“pay or play”) and the health care coverage they have offered. Employers subject to both reporting provisions (generally self-insured employers with 50 or more full-time employees, including FTEs) will satisfy their reporting obligations using the C Forms.

Information Reporting Deadlines

The upcoming deadlines for submitting Forms 1094 and 1095 B or C are as follows:

To the IRS:

If filing on paper – February 28, 2018

If filing electronically – April 2, 2018

Any employer who would like to file electronically should refer to the IRS for more information on the AIR Program, which requires at least 30 days for testing for first-time users. Please note that employers submitting more than 250 forms must file electronically.

To Individuals:

Both Form 1095-B and 1095-C are due to the person identified as the “responsible individual” by January 31, 2018.MedCost

MedCost is not a tax preparation company, and you may have additional tax obligations for other benefit plans that you offer to your employees. Please consult with your tax advisor for guidance.This blog post should not be considered as legal advice.

Heart Disease: Living Up to the Gift of Life

Denying my symptoms almost resulted in a very negative outcome.

Heart Disease

Don Holmes

By Don Holmes, Personal Care Management Specialist, MedCost

December 9th is a date that holds special meaning for me. Ten years ago, I wasn’t sure I would see December 10th.

In the fall of 2007, I began to notice some occasional, uncomfortable heaviness in my chest, especially during periods of exertion. I initially attributed it to pushing a little too hard, or soreness from a previous workout.

I worked out between three to four times weekly at the YMCA. My routine usually included a 35-minute vigorous jog on the treadmill. On alternate days I lifted weights.

One afternoon after work, I went to the Y to get in an additional workout. Within 5 minutes on the treadmill, I knew something was different. Something was very wrong.

Denying the Symptoms

The heaviness in my chest began much more quickly. It was so painful that I had to stop. As a precaution, I asked the weight room attendants to check my blood pressure. The blood pressure reading was off the charts!

We waited several minutes and took my blood pressure again. It was still in the danger zone.

The attendants said I needed an ambulance, but I insisted on driving home. I told them I would see my doctor the next day. That night the pain lingered as I tried to fall asleep.

The next morning when I arrived at work, I called my doctor’s office and told the nurse what had happened. I gave her the blood pressure readings. She calmly but firmly said: “I want you to hang up immediately and dial 911. You must go to the hospital now.”

It Was Heart Disease

How could I be fit enough to work out frequently and still have this happen? I immediately went to the hospital. A heart catheterization revealed major blockages in the front and back of my heart. Doctors performed a quintuple bypass operation on me.

Heart DiseaseI didn’t realize it, but I had been in denial. In the hospital before surgery, I stared at the legal documents I was about to sign. I had to face reality.

Open heart surgery. I might not come through the operation.

I was extremely fortunate. I didn’t experience a heart attack, but it was imminent. Thankfully, the heart muscle was fine and there was no damage. But I had to make some significant lifestyle changes.

I Had to Face Reality

I gave up soft drinks, desserts and fried foods. Every day was a battle. I cut back on the carbs that were elevating my triglycerides and blocking my arteries. Potatoes, rice, breads—these were the foods I loved.

Heart DiseaseBut I had to face reality. I wanted to be around for more than one tomorrow.

I studied a lot of articles at the American Heart Association website, on how to improve my overall health and make better food choices. Their suggested workout routines were helpful, too.

These past 10 years, working at a health care administration company has reinforced my desire to live healthier. I’ve lost 20 pounds. I still work out 5 days a week, doing weights and cardio.

Living Up to the Gift of Life

Heart Disease

“Pooches on Parade” at Heart Walk

This November 11, my company is partnering with Wake Forest Baptist HealthNovant Health, Cook Medical and many others* to sponsor the Winston-Salem Heart & Stroke Walk. The “Pooches on Parade,” special honoring of heart disease survivors and veterans, live band and healthy food trucks make this a really fun morning.

Best of all, every person has a chance to walk one, two or four miles to strengthen your heart.

Activities begin at 8:30 am at Bailey Park downtown in Wake Forest Innovation Quarter.

I’ve lost several friends to heart issues. So it’s always on my mind to make good choices.

God has blessed me this past 10 years. I want to live up to the gift of life.

 

*Allegacy Federal Credit Union, BB&T, Corning, Dixon Hughes, Hanesbrands Inc., Inmar, Kimpton, Piedmont Federal Savings Bank, Stimmel, Truliant Federal Credit Union, Wake Forest Innovation Quarter, Winston-Salem Journal, 99.5 WMAG, WXII-12 and other sponsors.

 

2017 Employer-based Premiums Contrast with ACA Increases

By Phil Galewitz, Kaiser Health News

2017 employer-based premiums

Family health insurance premiums rose an average 3% this year for people getting coverage through the workplace, the sixth consecutive year of small increases, according to a study released Tuesday.

Average 2017 Family Premiums: $18,764

The average total cost of family premiums was $18,764 for 2017, according to a survey of employers by the Kaiser Family Foundation and the Health Research & Educational Trust. That cost is generally divided between the employer and workers. (Kaiser Health News is an editorially independent program of the foundation.)

2017 employer-based premiumsWhile overall premium increases remain modest, workers are picking up a greater portion of the tab — this year $5,714 for family coverage, about a third of total cost.

Employer-provided coverage for a single person rose on average 4%, to $6,690. Those individuals pay $1,213 on average.

Still, the employer market looks remarkably stable compared to the price increases seen in the Affordable Care Act’s insurance marketplaces for people who buy their own coverage. Premiums on those plans spiked on average about 20% this year, and many insurers dropped out because of financial concerns.

Average ACA Premiums Up 20% in 2017

For all the media attention and political wrangling over the Obamacare exchanges, their share of the market is relatively small. They provide coverage to 10 million Americans while 151 million Americans get health insurance through their employer.

The continued slow rise of employer health premiums identified in the Kaiser survey surprised some analysts who have expected the trend to end as the economy picked up steam, leading to a jump in use of health services and health costs.

Drew Altman, CEO of the Kaiser Family Foundation, said it’s “health care’s greatest mystery” why health insurance costs have continued their slow pace even as the economy has picked up the past few years. “We can’t explain it.”

2017 employer-based premiums

Employee Deductibles Have Nearly Doubled Since 2010

Another unexpected result was that workers’ deductibles — the health bills that workers must pay before their insurance coverage kicks in — remained stable this year at $1,221. Since 2010, as companies sought to keep premiums in check, deductibles have nearly doubled. Higher deductibles can limit premium increases because costs are shifted to workers and it gives them greater incentive to cut spending.

“Increasing deductibles has been a main strategy of employers to keep premiums down and we will have to watch if this plateauing is a one time thing … or if this portends a sharper increase in premiums in future years,” said Altman. “It could be deductibles are reaching their natural limit or could be the tighter l2017 employer-based premiumsabor market” that’s causing employers to back off, he added.

Meanwhile, a second employer survey released Monday by Mercer, a benefits consulting firm, suggests a modest increase in health costs coming next year, too. Employers said they expect their health costs to increase by an average 4.3% in 2018, according to the survey.

To deal with higher medical costs — notably big increases in the prices of prescription drugs — employers are using multiple strategies, including continuing to shift more costs to workers and paying doctors and hospitals based on the value of the services rather than just quantity of services.

Jeff Levin-Scherz, a health policy expert with benefits consultant Willis Towers Watson, said there is a limit on how much employers can shift costs to their workers, particularly in a tight labor market. “Single-digit increases doesn’t mean health care costs are no longer a concern for employers,” he said.

Trend: Employer-Based Coverage Has Dropped

The 19th annual Kaiser survey also found that the proportion of employers offering health coverage remained stable last year at 53%. But the numbers have fallen over the past t2017 employer-based premiumswo decades.

The survey highlights that the amount workers pay can vary dramatically by employer size. Workers in small firms — those with fewer than 200 employees — pay on average $1,550 more annually for family premiums than those at large firms. The gap occurs because small firms are much more likely than large ones to contribute the same dollar amount toward a worker’s health benefits whether they’re enrolled in individual or family coverage.

More than one-third of workers at small employers pay at least half the total premium, compared with 8% at large employers.

That’s the case at Gale Nurseries in Gwynedd Valley, Pa., where health insurance costs rose 7.5% this year. Its 25 workers are paying nearly half the cost of the premium — at least $45 a week for those who choose the base coverage plan. Employees also have deductibles ranging from $1,000 to $2,500.

A decade ago, the nursery paid the full cost of the premium.

“It’s crazy — we keep paying more and getting less,” said comptroller Candy Koons.

At the Westport (Conn.) Weston Family YMCA, health insurance premiums rose about 7% this year, leaving its 50 full-time employees to pay a $156 premium for individual coverage.

“It’s not problematic, but it’s one of our bigger costs associated with payroll,” said Joe Query, the human resources director.

 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Too Few Patients Follow The Adage: You Better Shop Around

By Michelle Andrews, Kaiser Health News

shop medical costs

Despite having more financial “skin in the game” than ever, many consumers don’t make any attempt to compare prices for health care services, a newly released study found.

In a survey of nearly 3,000 adults younger than 65, about half of the roughly 1,900 who said they spent money on medical care in the previous year reported that they knew in advance what their costs would be. Of those who didn’t anticipate how much they would owe before receiving care, only 13 percent said they tried to predict their out-of-pocket expenses. An even smaller proportion, 3 percent, compared prices from multiple providers ahead of time.

It wasn’t that survey respondents were ignorant of price differences or didn’t care about them. More than 90 percent said they believed that prices vary greatly among providers, and 71 percent said that the amount they spent out-of-pocket was important or very important when choosing a doctor.

Yet most respondents said they didn’t comparison shop or even ask how much they would owe in copayments or other cost-sharing expenses before they turned up for an appointment.

Researchers conducted the online survey in February and March of 2015, dividing respondents into three groups: uninsured, insured in a plan with an annual deductible higher than $1,250 for single coverage or $2,500 for family coverage, or insured in a plan with a lower deductible or no deductible. The results were published in the August issue of Health Affairs.

Three-quarters of the study participants said they did not know of any resource that would allow them to compare costs, while half said that if a website showing such information were available, they would use it.

“If price shopping is an important policy goal, it will be necessary to increase the availability of information on price and decrease the complexity of accessing the information,” the researchers wrote. They noted that patients trying to figure out pricing information and their share of the cost must often know specific procedures’ billing codes, the difference between professional fees and facility fees, and the details of how their insurance plan is structured.

“Our results emphasize that simply passing price transparency laws or regulations (as over half of states have done) appears insufficient to facilitate price shopping,” they added.

Most respondents said they did not think there was a relationship between lower cost and lower quality.

shop medical costsOne reason for the lack of shopping activity may be that consumers value the ongoing relationship they have with an existing doctor and don’t want to disrupt that, said Neeraj Sood, professor of public policy at the University of Southern California in Los Angeles and one of the study’s authors.

Another possible explanation is that despite efforts by states, employers and insurers to make price information readily available, shopping for health care services is nowhere near as user-friendly and intuitive as buying something on Amazon or Expedia.

“Maybe right now these tools are so primitive that even though there is a financial incentive to shop, people aren’t doing it,” Sood said.

People surveyed were most likely to search out prices before going to a retail or urgent care clinic compared with other care facilities. Consumers who received physical therapy or lab and imaging services were more likely than others to comparison shop for providers, the survey found.

 

Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column. Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.

How Employer Plans Cover Prescription Drugs (Infographic)

An estimated 150 million Americans have employer-sponsored health insurance.[i] What is the complex system under which employer health plans cover the rocketing costs of prescription drugs?

employer prescription drugs

Members

Individuals covered by employer’s health plan. May pay premiums or copays for drug coverage.

Employer or Insurer

Employer or insurer pays PBM to develop preferred drug pricing & process prescription claims. PBM returns some or all rebates to employer or insurer.

Pharmacy Benefit Manager (PBM)

Negotiates discounts and rebates from manufacturer. Contracts with pharmacy.

Manufacturer

Negotiates rebates with PBM.
Sells discounted drugs to wholesaler from core price.

Wholesaler

Negotiates price with pharmacy.

Pharmacy

Pharmacy dispenses to members & collects copays.

For more resources, view: ”10 Pharmacy Terms Employers Need to Know” and “5 Factors in Employer Prescription Drug Costs” from Pharmacist Zafeira Sarrimanolis.MedCost

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[i Robert Galvin and Troyen Brennan, “Can Employers Take a Bigger Role in Controlling Drug Costs?” Health Affairs blog, February 17, 2017, http://healthaffairs.org/blog/2017/02/17/can-employers-take-a-bigger-role-in-controlling-drug-costs/ (accessed April 6, 2017).

 

IRS Reposts Revised Form 720 for PCORI Fee: Deadline 7/30/17

Michael BerwangerBy Michael Berwanger, JD, Director, Quality Management & Compliance

The IRS recently reposted the April 2017 version of Form 720 (Quarterly Federal Excise Tax Return) on its website.* While the form’s primary purpose is to serve as the quarterly return for various federal excise taxes, it also is used to report PCORI fees imposed under health care reform. (For more information on PCORI, see  “PCORI Fee for Self-Funded Employers”.)

Please note, the portion of the form related to the PCORI fees is unaffected. While Form 720 is filed quarterly for other federal excise taxes, the PCORI fee reporting and payment are only required annually, by July 31 of the year following the calendar year in which the applicable policy or plan year ended. The change noted at the beginning of the form is related to the excise taxes.

IRS form 720As background, PCORI fees, used to fund research on patient-centered outcomes, apply to plan and policy years ending before October 1, 2019. They are payable by insurers and sponsors of self-insured health plans, and are calculated by multiplying the applicable dollar amount for the year by the average number of covered lives. As announced in IRS Notice 2016-64, the fees owed in 2017 are as follows:

  • For plan years** ending on or after October 1, 2015, and before October 1, 2016: $2.17 per covered life
  • For plan years** ending on or after October 1, 2016, and before October 1, 2017: $2.26 per covered life

If you have already filed and used the form posted prior to the most recent update, please contact a tax professional on whether refiling is necessary.MedCost

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*If you downloaded the Form 720 (Rev. April 2017) before July 3, 2017, please note that
on page 2, under IRS No. 33, the rate is corrected to 12% of the sales price, not 12%
of the sales tax.)

*’*Plan year’ is generally the 12-month period stated in the Summary Plan Description, or for plans filing a Form 5500, the plan year stated in that filing. NOTE: The plan year may be different from the benefit year or the renewal period.

______________________________________________________________________________

This blog post should not be considered as legal advice.

Controlling Specialty Drug Costs (Video)

Specialty Drug Costs Can Be Managed with These Strategies
specialty drug costs

WATCH VIDEO NOW

“It’s interesting that a lot of these specialty drugs are designed for a very small percentage of the population that have a certain disease state,” said Michael Cornwell, MedCost Director of Sales and Underwriting.

“There may be less than 200,000-300,000 people in the country that need that particular drug. That’s one of the reasons specialty drugs are so expensive.”

MedCost Pharmacist Zafeira Sarrimanolis agrees. “It’s an exciting time in the drug manufacturing world, because all of these new medications have been coming out over the past ten years or so for medical conditions that really weren’t treatable before.

“For example, hepatitis C medications previously were not very effective and really hard for patients to tolerate. Now we have new medications on the market that are practically a 100% cure rate for patients.

specialty drug costsThese drugs are also a lot easier for them to take and tolerate. Part of the problem with that is the price tag on some of those new medications.”

“One of the largest reasons people are readmitted to the hospital is because they don’t adhere to the medication,” said Michael Cornwell. “Programs like step therapy ask you to try a clinically appropriate drug before you try a similar but more expensive one.

Prior authorizations probe a physician’s reasoning behind prescription choices. A lot of these specialty drugs are really for a pretty small percentage of the population. So when you look at a population as a whole, the people taking those drugs are usually between 1%-1½% of your population. That’s the good news.

“The bad news is they’re very expensive. Probably the biggest growth area in the specialty arenas are the cancer drugs. There’s a whole pipeline of new cancer treatments hitting the marketplace. But in that pipeline, member education and aid in helping and consulting is a good thing too. It allows us to have some personal outreach try to help these people manage their disease state.MedCost

(This post is a transcript from the video, CONTROLLING SPECIALTY DRUG COSTS.”)