In Focus

News & Insight from Chelko Consulting

Dependent Care FSA: Is Your Plan in Compliance?

Mar 27, 2019 | Commentary

Many employers offer a Flexible Spending Account (FSA) for Dependent Care, but did you know that this benefit is the most likely to fail non-discrimination testing under the IRC Section 129(d)? read more…

Keeping Score: Discount Off AWP for Prescription Drugs

Mar 27, 2019 | Keeping Score

Prescription drug discounts are calculated by looking at the Average Wholesale Price (AWP) and the actual drug cost (sometimes called the “ingredient cost”). In looking at our employer data set, it is interesting to note very little correlation between higher discounts and lower per employee per year drug costs. This indicates the mix of drugs being dispensed, and other pricing games, are offsetting proposed and reported discounts. read more…

Maintaining Active Health Coverage for Disabled Employees

Feb 27, 2019 | Commentary

The Family and Medical Leave Act (FMLA) requires employers to continue coverage for certain employees as if they are still actively at work. But disability leaves outside the FMLA’s purview are a completely different story. There are no laws requiring employers to provide group health benefits in these other situations. So how do employers address this? read more…

Employers and the Future of Healthcare Data

Jan 31, 2019 | Commentary

Everybody seems to agree that “big data” holds much promise (or potential) for better healthcare. To this end, the Affordable Care Act made it a priority to create more, and presumably, better health care data. However, with the rapid development of devices, tracking systems and data tools, who will benefit from this data: Patients? Plan sponsors (or payers)? Insurance companies? Healthcare providers? PBMs? Pharmaceutical and device manufacturers? Other enterprising service providers? read more…

Keeping Score: Combined PEPY Trend

Jan 30, 2019 | Keeping Score

Overall trend looks at medical and prescription drug costs (claims and administration expenses) combined on a per employee basis year-over-year. While the average is somewhat expected, the 27% difference from highest to lowest illustrates that trend is not as linear as we might often think. Knowing your trend rate is essential, but more importantly, knowing if you are trending to the mean of per employee per year cost benchmarks or further away is critical to managing your plan.

How does your plan compare? Let us know if you would like to gain more insight into how to measure and manage your plan trend.

Spousal Coverage Audits Make Sense

Oct 19, 2018 | Commentary

With spousal exclusions or surcharges gaining popularity as a best practice to help organizations control the cost of benefits for everyone, the growing interest in spousal coverage audits (SCAs) makes sense. read more…

No Joke: Money Back from the Insurance Company

Oct 19, 2018 | Commentary

Individual stop loss insurance is an important way that many employers with self-funded health plans manage the financial risk associated with their large claimants. If you fall into this category, you’re probably no stranger to large stop loss rate increases following years of poor large claim experience. read more…

Keeping Score: Net Cost per Script

Oct 19, 2018 | Keeping Score

While it might not appear to be a telling indicator, net cost per script can quickly reveal a great deal about your current prescription drug plan performance.

The number can range substantially based on plan design, drug mix, and your current PBM deal. A high cost in this area could be an indication of excess prescription drug spend or issues with your current PBM arrangement.

How does your plan compare? Let us know if you would like to gain more insight into this spend and ways to manage costs.

Do Your Employees Understand their Health Insurance Choices?

Sep 4, 2018 | Commentary

Whether we admit it or not, this question has crossed the mind of many a benefits professional — especially as most of us head into open enrollment season. After all, if employees don’t understand their health plan options and appropriate factors to consider in the selection, they could end up making a costly mistake.

Ensuring employees are well educated will not only help them make the right choice, but ultimately lead to increased engagement and productivity. read more…

Only PBMs Benefit from Rebate-driven System [UPDATE]

Jul 31, 2018 | Commentary, Specialty Drug Management

UPDATE: The following piece was originally posted to Linked In by Rick Chelko on June 28, 2018. Shortly thereafter, Rick met with a senior Health & Human Services (HHS) official working on drug pricing reform to discuss this and related issues. Ironically, the official expressed concern that the marketplace might view the removal of safe harbor protection for rebates to be “a windfall for Big Pharma.”

Nonetheless, we were pleased to see the Office of Inspector General (OIG) and HHS submit a proposed rule change on July 18 to the Office of Management and Budget (OMB). This proposed rule appears to remove the safe harbor protection for prescription drug rebates under the Federal Anti-Kickback Statute. If and when the rule will be finalized is unclear, as is the effective date. Here’s hoping that it will be soon.