As medical treatments evolve, itis expected that the plan design may not be in absolute sync withthe latest science.

As the season transitions from summer to fall in the Northeast,we find ourselves reaching for jackets and boots to protect againstthe crisper autumn temperatures. This time of year, however, shouldnot be limited to looking for ways to defend ourselves against theupcoming harsh conditions, but also the time we must use to protect(and prepare) our self-funded plans to avoid an unforgiving 2020renewal. Often, the path to change starts by listening toemployees about their concerns or suggestions forthe upcoming year.

Related: How self-funded employers can shrink health carecosts–instead of benefits–in 2020

For 2020, it seems that one of the most commonly asked abouttopics is gene and stem cell therapy. Whether thequestion is what this is, what does our plan cover, or what doesthis cost, this is something that employers should be mindful of asthey develop their renewal design to avoid a 2020 surprise.

Basic overview of gene therapy and stem cell therapy

While each approach is unique, both gene therapy and stem celltherapy could treat certain genetic or other diseases. Thetechniques are relatively new and exciting to explore.Understanding the differences, however, is important.

Generally, gene therapy is an experimental procedure whichutilizes genes to treat diseases. Scientists are investigatingvarious methods to apply gene therapy. For example, future genetherapy may be an option to replace a mutated gene with a healthygene, inactivate a dysfunctional gene, or even introduce a new geneto fight against a disease.

Stem cell therapy techniques, however, repair dysfunctionaltissue using stem cells. Using stem cells, scientists can createspecialized cells which, when implanted, could repair the diseasedcells. Generally, stem cell therapy involves moving cells with aspecific function to an individual while gene therapy involvesmoving genetic information into cells.

Implications for self-funded plans

Therapies that could potentially repair or correct genetic orother rare diseases where no current treatment is available is veryencouraging for those impacted personally. A self-funded plan,however, must contemplate the impact inclusion (or exclusion) mayhave for the plan.

These new technologies could have a large impact on employerswho have self-funded plans. After understanding what thesetherapies may offer to individuals, employers should then ensurethat the health plan design and any other plan materials fullycommunicate their intentions. For example, the plan mustcontemplate the plan language changes, costs, and other relatedagreements.

Plan language

Whether the employer wants the plan to cover (or exclude) thesetherapies, the documentation and communication to plan participantsshould not be confusing. As medical treatments evolve, it isexpected that the plan design may not be in absolute sync with thelatest science. For example, years ago a robotic arm assistedsurgery was considered a medical breakthrough and only over timedid they become more common. This newer surgery created a newmethod to overcome certain surgical limitations, however, this typeof surgery had not been contemplated in many self-funded plandesigns.

As a result, when participants were undergoing this type ofsurgery -and the underlying self-funded plan was silent on theissue- plan fiduciaries were unsure of how to address the surgery.Instead of being aware of potential trending medical advancements,these plan sponsors waited for the issue to arise and were caughtby surprise. The same should not be the case for these newertherapies. While the plan design may not need to be modified, theemployer should understand the potentially relevant planprovisions.

For example, since these therapies are newer, the impact oreffectiveness measures may not be entirely clear. It is possiblethat a gene therapy suggested by a plan participant's physician isexperimental, investigational or not medically necessary. Thiswould mean that the therapy would not qualify as an eligibleexpense under the current terms of the plan and should beexcluded.

The key to understanding with respect to plan language is thatemployers should be aware of the therapy and be aware of thecurrent plan provisions. For example, some questions for employersto consider may be:

• Does the plan contain an experimental and/or investigationalprovision? If so, would that operate to exclude the procedure?
• Does the plan contain a medical necessity provision that wouldoperate to exclude the procedure?
• Does the plan contain a specific exclusion that would operateto exclude the procedure?

Employers can be prepared for 2020 by understanding what theplan design currently contemplates, then adjusting accordingly.After knowing the employer's position on the new therapies, theplan should adjust to ensure those intentions are captured.

Costs

It should not be a surprise that medical advancements,particularly those involving genes and cells, are expensive.Stories of gene therapy treatments costing more than a milliondollars can easily be found in the news.

With a potential cost this high, it re-iterates the need for aclear action plan for employers. While the pool of individualsbenefiting from such therapies may not be large, the cost forcoverage could still be very high if the employer does not properlyprepare. Further, these therapies could eliminate the need forfuture treatment of symptoms or care by addressing the root causeof a disease, which could be more cost effective.

Companies aware of the benefits (and costs) of such therapiesare developing targeted programs. For example, entities such as CVSand Cigna are offering options for employers looking to cover somegene therapies by offering stop loss programs and per month feeoptions.

Employers can prepare for costs by planning in advance and beingaware of options that might suit their demands for flexibility andbudget.

Related agreements

Prior to implementing a program or benefit, however, employersshould ensure coverage (or exclusion) would not create a gap withany current agreements or plan materials. For example, if anemployer opted to modify the plan document to cover "gene therapy"could that create a gap with the stop loss policy if the stop losscarrier had a varying definition of experimental and/orinvestigational?

Next steps

Do what is right for the employer and communicate this actionplan accordingly. Employers should understand what these therapiesare, and what advantages or disadvantages may exist. Plans shouldthen be adjusted to address the specific desires of the employer.It is highly recommended that employers work with their benefitadvisors and consultants to make changes for their plans to ensuresuch modifications are done in a correct and compliant fashion.

Jennifer M. McCormick, Esq., is senior vicepresident of Phia Group Consulting, McCormick concentrates on avariety of health care and regulatory issues facing employeebenefit plans and their administrators, including health benefitplan regulatory compliance services, including but not limited toself funded health plan consulting, health plan exclusions, healthplan limitations, health plan revisions, defining key items such asusual and customary fees, and the entire health plan summary plandescription and summary of benefits andcoverage. 

Read more: 

• How much will gene therapy costemployers?
• Why you should know what 'pharmacogenetics'is
• Genetic testing, precision medicine and benefitsdesign