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2013

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RBS (REGULATORY BUDGET SENTINEL)

HEALTH SAVINGS ACCOUNTS GROW IN POPULARITY
By: Nicola Crean, CHS Marketing Coordinator

In the world of health care, cost is a big factor when it comes to deciding on insurance plans. Often, employees have limited choices, which can result in high out-of-pocket expenses. While it may be possible to predict annual costs for healthy individuals, it is difficult to anticipate bills for long-term illnesses and complications.

Mindful of the financial burden placed on millions of Americans, the federal government developed a plan in 2003 that allowed Americans to create a savings account solely for medical expenses. The most significant benefit of this program is that the public can contribute to these accounts without being taxed on the funds.

Some confusion lies around the savings plan, especially when it comes to the two types of accounts that are available. The Health Savings Account (HSA) is typically set-up to balance out high-deductible insurance plans, while the Flexible Savings Account (FSA) is created by and operates through the employer and is more commonly a part of the insurance package, as a whole.

Up front, the logic behind both accounts is the same, but they differ when it comes to the details.

In order to qualify for an HSA account, there are various criteria that must be met. The most essential factor is that the individual must be enrolled in an insurance plan that comes with a high-deductible. The money saved can be utilized for medical expenses, but not premiums, according to Benefits Pro’s website.

The money put into the HSA account is not subject to federal taxes when it is being deposited. In addition, the money can be saved and carried over to the following year if it is not used. As individuals move from company to company, their HSA account remains with them.

On the other hand, FSA accounts are owned by the employer. They adopt the policy of “use it or lose it”, which means that if funds are not utilized by the end of the year then individuals essentially forfeit their savings, according to a Forbes article. This makes it especially important to only save the amount that you will use throughout the year.

In both saving plans, there are maximum amounts that can be saved depending on your familial status. In addition, the funds come out prior to federal taxes being applied, so there is an even greater incentive to participate.

HSAs, in particular, have seen tremendous growth since they were established. In a survey sponsored by the Employee Benefit Research Institute and Matthew Greenwald & Associates,  it is estimates that approximately 11.6 million HSA accounts that hold approximately $17.8 billion in funds.

“Our HSA growth continues to reflect the trend we are seeing nationwide as more individuals and employers move toward consumer-directed health accounts,” said CEO of UMB Healthcare Services Dennis Triplett in an article published in EBN. “We are now challenged with educating the growing number of employers and account holders on all that these accounts can offer toward future financial stability, beyond day-to-day health care expenses.”

Part of the necessary education will require the public to become aware of the benefits these plans may have in comparison to traditional insurance plans. Experts predict that many companies will be turning to higher-deductible plans that qualify for these types of savings plan in the future.

“Where an employee used to have a choice of PPO and HMO, it’s now frequently just a choice of deductible,” said Roy Ramthun, president of HSA Consulting Services, in an article published in Bank Rate. “It’s the only way they can control their health care spending.”

It is evident that medical savings accounts can help the public save for the unexpected expenses of healthcare. The consumer-driven plans have allowed individuals to have more control over the financial aspect of healthcare.

ENERGY DRINK CONCERNS MAY OUTWEIGH BENEFITS

By: Nicola Crean, CHS Marketing Coordinator

Pressures to perform at work can lead to employees looking at alternative ways to help them perform and succeed at their job. In American society, it has long been the case that caffeine is utilized as a source of energy helping individuals stay alert and focused on the task at hand.  

Many professionals report that they require coffee to get through their work day, according to study performed by CareerBuilder. While coffee continues to be the primary choice for caffeine, energy drinks are becoming increasingly popular due to the amount of caffeine they provide in one serving.

A growing $40 billion industry, many energy drinks were originally advertised as dietary supplements, and thus, were subject to FDA regulations specific to that market. As popularity for the drinks have increased, many companies have opted to market their products as energy drinks, avoiding federal regulators, according to a New York Times’ article.

“[Unlike coffee] energy drinks are not regulated by the FDA, so you cannot be sure of the actual amount of caffeine or any other ingredient per serving,” said Semper Fit Health Promotion dietician Lauren King in an article published on Quantico Marines’ website.

The switch in categories has led to criticism over the lack of regulation of these products, which some believe are unhealthy when consumed. The question of energy drink safety has been raised as more lawsuits are filed related to injuries or deaths involving the beverages.

In addition, the Substance Abuse and Mental Health Services Administration reported that emergency room visits attributed to energy drink consumption has doubled between 2007 and 2011. Many studies have been performed to take a deeper look into the health risks of energy drinks, in order to determine if more laws should be put in place to monitor these beverages.  

Specially, researchers have looked at how energy drinks can affect heart functions in individuals age 18 to 45. By examining a specific part of the heart rhythm called the QT interval, the study was able to determine that when an energy drink is consumed the interval is prolonged, which can sometimes lead to heart complications such as life-threatening arrhythmias.

Other results concerning blood pressure was also found to be affected by the beverage.

“The correlation between energy drinks and increased systolic blood pressure is convincing and concerning, and more studies are needed to access the impact on the heart rhythm,” said the study’s lead author Sanchin A. Shah, assistant professor at the University of the Pacific in a press release. “Since energy drinks also contain caffeine, people who do not normally drink much caffeine might have an exaggerated increase in blood pressure.”

The study claims that although every person will respond differently to energy drinks, there is still some expectation that everyone will have a reaction to the beverage. While gaining the additional boost from energy drinks may seem beneficial to professionals, experts urge people to use these beverages with caution.

“As Americans, we love our coffee, but everything in moderation,” said Dr. Michael Jones, Centra-State Medical Center chairman, in an APP article. “You don’t know what underlying condition you might have that could be exacerbated by the high caffeine and sugar levels in energy drinks.”

THERE ARE SOME BEHAVIORS YOU JUST CAN'T REGULATE.

By: Chacko Kurian

Regulations depend on carrots and sticks. If you don’t pay your taxes, there will be serious consequences – the stick. If you buy a home with a home loan, we’ll let you take the interest payment deduction on your taxes – the carrot. The HITECH Act has a number of sticks associated with the security of Protected Health Information (PHI). We at CHS will be addressing the issue of security of PHI in forthcoming articles. There is, under some circumstances, one link in the security chain that no regulation can affect -the uninformed behavior of the user. This article addresses one method where cyber criminals make unwitting users partners in a security breach.

Prior to founding Apple Computers, the Steves (Wozniak and Jobs) could be found ripping off Ma Bell using a blue box to make long distance phone calls (domestic and international) for free. The subculture that reveled in this activity called “phreaking” was probably the progenitor of the subculture of hackers who, today, like to hack computer systems just because they’re there. There is the story of Steve Woz(niak) actually making a “phreak” phone call to the Vatican and asking to speak to the Pope while pretending to be Henry Kissinger with a think German accent. These are the guys who later found legal ways to take your money.

Before the age of digital telephone switching systems, telephone switches reset trunk (long distance) lines with a tone at a specific frequency – 2600Hz. This meant that the trunk line was disconnected at one end and available for dialing at the other end. The dialing was also accomplished by tones at preset multiple frequencies. How did one get those frequencies? Legend has it that the 2600Hz frequency was discovered by accident by Joe Engressia, known among phreakers as ‘Joybubbles’, at the age of 7! He was apparently able to whistle at that frequency and so attach himself to the dialing end of an available long distance line.

But how does one progress from knowing that you could get a trunk line to using it to make free long distance calls. In 1954, the then undivided Bell System published an article in the Bell System Technical Journal about the basics of signaling using multi-frequency tones. This piece of information by itself was of little use. The second and final piece of the puzzle was published, again courtesy of Ma Bell, in the November 1960. Bell System Technical Journal in an article called “Signaling systems for control of telephone switching”. This article published the actual multi-frequency tones used to control the switches. From that information to the creation of the reputed “Blue Box” that became a clandestine product was a short step. With one of these boxes, anybody was able pick up a phone and make free long distance calls.

To be able to win this questionable prize, the phreaker required two pieces of information and they were found in two locations, but once they were combined, the information became quite powerful. Today – cybercriminals put two pieces of information discovered from different locations together to achieve their nefarious goals..

Spear Phishing is the technique by which pieces of information stolen from different locations are put together, by cybercriminals, to steal your identity, your money and anything of value. How does this work? Unlike the shot gun approach taken by those Nigerian scam artists who send out millions of emails, the Spear Phisher is looking for prey with a small email blast to very targeted prospects. All they need to start the process is one piece of information – your email address and sometimes your name. They don’t need anything like a credit card number, the password to your on-line bank account or your social security number– well, not yet. The attack is quick and over in less than a day, before security and software companies have an opportunity to react.

A typical Spear Phishing attack starts with an email that comes to you and looks something like this, courtesy of the Microsoft Safety and Security center

Remember they already have your email address and sometimes your name so the “Hello” salutation is not so innocuous. It looks very familiar but the highlighted items should make you suspicious. If you examine the links you will find that they link to unsecured and unfamiliar sites as shown below:

Once you click on the link and enter the information they’re asking for, they’ve got you.

Another variation of this technique is to send you an email making you an offer that sounds reasonable on the surface, but requires you to open an attachment with the details of the offer. Again, once you open that attachment, they’ve got you. What happens behind the scenes is that the attachment has a robot program that can do almost anything that they want it to do. It can install a keystroke logger and send your internet banking or credit card passwords to the cybercriminal. It can give control of your computer over to the cybercriminal and so enable more of these schemes to be run from your computer. The possibilities are endless.

Sometimes the Spear Phisher makes the email look like its coming from your boss – again remember he has email addresses and names. The email may require you to give up password and other authentication information in order to perform a “security audit” or an “account verification”.

Key to making this criminal endeavor work is that it requires your participation to either provide the missing information or open the attachment. So the best defense it to verify the email by contacting the sender by phone or alternate method if the email looks suspicious. A good antivirus program installed on your computer can help too.Remember for the scheme to work it requires your participation.

We might as well brace for a number of these email attacks. Recently Epsilon, a division of Alliance Data suffered an illegal entry on its client’s email databases. This is the company that processes marketing communications for loyalty programs like Marriott Rewards, Citibank Advantage and many other large organizations. Imagine the rich information for cybercriminals that email addresses, names and loyalty program associations can provide. If you belong to the Marriott Rewards program like I do, expect an incredibly valuable offer to come to you via email. Do not open the attachment even though the logo looks almost right and the text has only one or two spelling mistakes.

There’s lots of regulations coming from Washington DC these days, but I don’t think they can think one up for this.

CHS SOFTWARE UPDATE

CHS Software you may want to use

Often, we at CHS, are guilty of not informing you of products or features that we have implemented over the past year that you may want to use. This year we have rounded out our individual enrollment, billing and administration offering with a full cycle product. If you sell individual policies or sell voluntary products in addition to your regular employer sponsored group health offerings, this may interest you.

"Full Cycle" in this context means the following:
i) taking the application for enrollment of the individual/family on the web, after getting their responses to qualifying/underwriting questions,
ii) enrolling them in the plan of choice,,
iii) billing their credit card or bank account at the appropriate frequency, i.e. monthly, quarterly, semi-annually or annually,
iv) applying the payments received against the appropriate invoices
v) disbursing premium/commission and other payments to carriers, brokers/agents and other suppliers
vi) updates to Accounts Receivable, Accounts Payable and General Ledger without manual intervention after set-up.

We would like to say that all of the above happens "automatically" (a grossly over-used word) but it doesn't. It happens with minimal, but appropriate, human intervention. For example, there are checks and balances in place to make sure that premium billing adjustments owing to changes in family composition or product choices are made accurately. The web enrollment product, CHS iCoverNow, has to be customized with your logo, color palette, questions and response logic. Users of our product like it. It has allowed them to grow into areas where they couldn't before. We believe that this will interest administrators of individual health plans who sell to the public at large and may become a valuable tool in the context of health care reform.