On Thursday, July 19, 2012, Express Scripts and Walgreens announced a multi-year agreement: as of September 15, 2012, Walgreens will begin to participate in the broadest Express Scripts retail pharmacy network for new and existing clients.
Here is a brief overview of how the agreement will impact your clients:
- Legacy Express Scripts clients with broad networks: As of September 15, 2012 Walgreens will begin to participate in the broadest Express Scripts retail pharmacy network for your new and existing clients.
- Legacy Medco clients with broad networks: The broad network for legacy Medco clients includes Walgreens. This agreement does not affect your clients’ current network and has no impact on their members.
- Clients with narrow networks: The agreement does not apply to our narrow networks. Clients in these networks will not be affected as Walgreens continues to not participate.
- Express Scripts is developing an internal communication package to help your clients convey this information within their organizations and anticipates making these materials available soon.
- Express Scripts members can log in to www.express-scripts.com to see pharmacies that are currently in their network. By September 15, 2012 Walgreens pharmacies will be visible on the Express Scripts pharmacy locator for members who are in the broadest network.
For more information or questions, please contact PharmacyAnalytics@Lockton.com
A 401(k) plan is one of the most popular benefits offered by a firm to its employees. Unfortunately, due to government regulations and hard-dollar contribution limits imposed, instances frequently develop where a firm’s highly compensated employees (HCEs) and key employees (Keys) are severely limited in their relative benefit from a qualified 401(k) plan.
The current 2011 definition states that an HCE is defined as any employee with compensation in excess of $110,000, and the group broadens even further with the definition of a key employee.
Employers in industries with high turnover, a high percentage of hourly workers, or relatively low wages may find that a 401(k) plan may not meet the needs of its higher-paid and longer-term employees. Low participation rates of hourly and transitional employees in some cases dictate that HCEs and Keys can only contribute 40 to 50 percent of the maximum allowable flat-dollar amount of $16,500. This leaves a serious “retirement gap” that HCEs and Keys have to account for.
Section 1-410(b) of the Treasury Regulations addresses minimum coverage and nondiscrimination rules for qualified plans. A common misconception is that when a 401(k) plan is established, it has to cover all employees at the sponsoring firm to meet the coverage standards and test imposed on qualified plans; however, this is not necessarily the case. The issue can be addressed by partnering with a qualified and nonqualified retirement plan consultant who understands the nuances of the code and how to optimize employer contributions and employee classifications. This will allow the firm to do what it is supposed to do: deploy capital efficiently to maximize shareholder value.
Here is how it works. If no HCEs are covered under the
The state health insurance exchanges are a central tenet of the health reform law’s goals to expand coverage and lower costs for health insurance. Individuals and small businesses will be able to purchase health insurance through the exchanges beginning in 2014. Exchanges will certify standardized health plans that provide different levels of coverage for “essential health benefits” based on the following actuarial values of coverage of benefits provided under the particular plan:
Why the Exchanges Are Important
Beginning in 2014, people who do not have access to qualifying and affordable coverage through their employer may qualify for federal subsidies for coverage purchased through an exchange. The subsidies, which are only available for coverage purchased through the state-operated exchange, include premium tax credits and cost-sharing reductions. However, to qualify, the person’s household income must be under four times the federal poverty level (generally, $92,200 for a family of four in 2012 dollars).
January 1, 2013, Deadline
Each state exchange must be ready to accept enrollees on October 1, 2013. Under the law, each state must demonstrate progress toward operational readiness by no later than January 1, 2013, although the Department of Health and Human Services (HHS) will grant conditional approvals for states that are moving forward. If a state fails to meet HHS’s deadline, then the federal government is tasked with operating the exchange within the state (federally facilitated exchange).
The feds are getting concerned that all 50 states’ exchanges might not be operational by the October 2013 deadline, potentially limiting the ability of consumers to access health insurance coverage. Although HHS has grant money available to the states to help plan and establish the exchanges, many states have yet to apply for funding. According to the Obama Administration, 28 states are “on their way” toward establishing an exchange.
Why the inaction at the state level? Some state legislatures are ideologically opposed to the health reform law, while others are waiting for the Supreme Court’s decision on whether the law is constitutional. Consequently, many states will fail to meet next year’s January 1 readiness deadline. Although HHS has issued final regulations on the establishment and operation of the exchanges, it has issued no guidance to date on how a federally facilitated exchange would operate.
The Feds Are Scrambling
In early January, the White House reiterated that HHS “has the capacity to ensure all Americans will be able to purchase insurance in an exchange on January 1, 2014.” HHS continues to encourage states to move forward with their exchanges. Late last year, HHS began touting a federal-state partnership to operate an exchange. Under this model, the state performs some exchange functions, but leaves other functions to the federal government.
If the health reform law withstands judicial scrutiny, many states will be scrambling to have their exchanges up and running by October 1, 2013.
State Exchange Status at This Time
Get the full report here.