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Medical

This is the Medical category of the Broad REach Benefits blog. At Broad Reach Benefits, we focus on employers that have between 30 and 500 benefit eligible employees. We’re employee benefit specialists, not a big box brokerage firm or payroll company with a sales force peddling policies.

Legal Alert: COVID-19 Plan Design

As the U.S. continues to battle the COVID-19 pandemic, vaccinations of Americans age 12 and older are underway with approximately half of the eligible population vaccinated against the virus. In the States, there are currently three vaccines—one from Moderna, Pfizer and Johnson & Johnson—that are available, with distribution being handled at the state and local level.

To help combat the pandemic, many employers are implementing some level of a vaccine mandate at work, with some employers requiring all employees who return to the office to be vaccinated (ex: Google, Facebook and Anthem), requiring all new hires to show proof of vaccination (Disney) or merely requiring all their U.S.-based employee population to be vaccinated by a certain date (United Airlines). Members of the U.S. military will also be required to be vaccinated as a matter of national security to maintain military readiness.

As businesses are eager to return to the office and bring customers back on-site as applicable, many employers are wondering if they can modify their group health plan design to provide richer benefits for employees who are vaccinated.

Specifically, employers are wondering if:

  • They can limit eligibility for their group health plan to only employees who have received the vaccine (or who have a medical or religious waiver);
  • They can charge vaccinated employees lower premiums, co-pays or deductible limits (or, conversely, charge non-vaccinated employees higher premiums, co-pays or deductibles);
  • Exclude all COVID-19 treatment from group health plan coverage for employees who are not vaccinated (example: the plan would deny all claims for out-patient, in-patient or prescription drug treatment of COVID-19 for individuals who are not vaccinated;
  • Provide larger HSA, HRA, or FSA contributions to individuals who are vaccinated.

At …

By |September 7th, 2021|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, Medical|Comments Off on Legal Alert: COVID-19 Plan Design
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Summary of Mental Health Parity and Transparency Provisions Under the Consolidated Appropriations Act, 2021

The Consolidated Appropriations Act, 2021 (the “CAA”), which was signed into law on December 27, 2020, included several provisions impacting group health plans and health insurance issuers.  Below is a summary of the provisions focused on mental health parity and health plan transparency (specifically, broker/consultant commissions and pharmacy benefits and drug costs).

Mental Health Parity

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), prohibits a group health plan from applying financial requirements (e.g., deductibles, co-payments, coinsurance, and out-of-pocket maximums), quantitative treatment limitations (e.g., number of treatments, visits, or days of coverage), or non-quantitative treatment limitations (such as restrictions based on facility type) to its mental health and substance use disorder benefits that are more restrictive than those applied to the plan’s medical and surgical benefits.

MHPAEA compliance has been a focus in DOL audits in recent years.  As part of the action plan for enhanced enforcement in 2018, the DOL, HHS and IRS released a self-compliance tool plans and issuers can use to evaluate their plan.  However, Section 203 of the CAA took this a step further, requiring more active engagement by group health plans.

Beginning on February 10, 2021, group health plans were required to perform and document comparative analyses of the design and application of non-quantitative treatment limitations (NQTLs).  Specifically, the NQTL analyses must include certain information specified in the CAA, such as, among other things, specific plan terms or other relevant terms regarding NQTLs and the specific substance abuse, mental health, medical and surgical benefits to which they apply, and the factors used to determine that NQTLs will apply to mental health or substance use disorder benefits and medical or surgical benefits.

Per the CAA, the DOL, IRS (Treasury) and HHS are required …

By |August 23rd, 2021|Affordable Care Act, Compliance, Employee Benefits, Employee Communications, Health Care Reform, Human Resources, IRS, Legislation, Medical, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on Summary of Mental Health Parity and Transparency Provisions Under the Consolidated Appropriations Act, 2021
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Legal Alert: COVID-19 Plan Design

As the United States continues to battle the COVID-19 pandemic, vaccinations of Americans age 12 and older is underway with approximately half of the eligible population vaccinated against the virus. In the United States, there are currently three vaccines — one from Moderna, one from Pfizer and one from Johnson & Johnson—that are available, with distribution being handled at the state and local level.

To help combat the pandemic, many employers are implementing some level of a vaccine mandate at work, with some employers requiring all employees who return to the office to be vaccinated (e.g., Google, Facebook), requiring all new hires to show proof of vaccination (Delta Airlines) or merely requiring all their U.S.-based employee population to be vaccinated by a certain date (United Airlines). Members of the United States military will also be required to be vaccinated as a matter of national security to maintain military readiness.

As businesses are eager to return to the office and bring customers back on-site as applicable, many employers are wondering if they can modify their group health plan design to provide richer benefits for employees who are vaccinated.

Specifically, employers are wondering if:

  • They can limit eligibility for their group health plan to only employees who have received the vaccine (or who have a medical or religious waiver);
  • They can charge vaccinated employees lower premiums, co-pays, or deductible limits (or, conversely, charge non-vaccinated employees higher premiums, co-pays or deductibles);
  • Exclude all COVID-19 treatment from group health plan coverage for employees who are not vaccinated (example: the plan would deny all claims for out-patient, in-patient or prescription drug treatment of COVID-19 for individuals who are not vaccinated;
  • Provide larger HSA, HRA, or FSA contributions to individuals who are vaccinated.

At the most basic …

By |August 16th, 2021|Affordable Care Act, Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, Human Resources, Medical, Wellness|Comments Off on Legal Alert: COVID-19 Plan Design
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Agencies Release First Rule on the No Surprises Act

On July 13, 2021, the DOL, HHS, and IRS released a joint Interim Final Rule implementing specified provisions of the No Surprises Act, a new law included within the Consolidated Appropriations Act, 2021.  The No Surprises Act addresses, among other things, a prohibition on surprise billing, which impacts emergency room parity rules previously implemented under the Affordable Care Act (“ACA”) and ACA provisions related to provider choice.

The Interim Final Rules will be finalized on September 13, 2021 and apply for plan years beginning on or after January 1, 2022.

Background 

ACA Provider Choice and Emergency Services Requirements

Under §2719A of the ACA, most group health plans that require designation of a participating primary care provider must permit the participant or beneficiary to designate an available, participating primary care provider of their choice, and must inform participants of their ability to make a designation or, if they don’t, a primary care provider will be designated for them. A participant can designate a pediatric primary care provider for children, and the notice must inform participants and beneficiaries that they do not need prior authorization from the plan to access participating Ob-Gyn providers, though prior authorization may be required for certain services and providers may have to comply with any referral processes.  The ACA did not extend these requirements to “excepted benefits” such as stand-alone dental or vision plans, and grandfathered health plans were exempt from complying.

Additionally, §2719A of the PHSA requires emergency services to be provided:

  • Without prior authorization (whether they are provided by an in-network or out-of-network provider);
  • Without regard to whether the health care provider furnishing the emergency services is a participating network provider with respect to the services; and
  • Without imposing administrative requirements or limitations on …
By |August 10th, 2021|Affordable Care Act, Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, IRS, Medical, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on Agencies Release First Rule on the No Surprises Act
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IRS Releases Second Quarter Form 720 for PCORI Fee Payments

Employers that sponsor self-insured group health plans, including health reimbursement arrangements (HRAs) should keep in mind the upcoming July 31, 2021 deadline for paying fees that fund the Patient-Centered Outcomes Research Institute (PCORI).  As background, the PCORI was established as part of the Affordable Care Act (ACA) to conduct research to evaluate the effectiveness of medical treatments, procedures and strategies that treat, manage, diagnose or prevent illness or injury.  Under the ACA, most employer sponsors and insurers are required to pay PCORI fees until 2029, as it only applies to plan years ending on or before September 30, 2029.

The amount of PCORI fees due by employer sponsors and insurers is based upon the number of covered lives under each “applicable self-insured health plan” and “specified health insurance policy” (as defined by regulations) and the plan or policy year end date.  This year, employers will pay the fee for plan years ending in 2020.

The fee is due by July 31, 2021 and varies based on the applicable plan year as follows:

  • For plan years that ended between January 1, 2020 and September 30, 2020, the fee is $2.54 per covered life.
  • For plan years that ended between October 1, 2020 and December 31, 2020, the fee is $2.66 per covered life.

For example, for a plan year that ran from July 1, 2019 through June 30, 2020 the fee is $2.54 per covered life. The fee for calendar year 2020 plans is $2.66 per covered life. The insurance carrier is responsible for paying the PCORI fee on behalf of a fully insured plan.  The employer is responsible for paying the fee on behalf of a self-insured plan, including an HRA.  In general, health FSAs are not subject …

By |May 19th, 2021|Employee Benefits, Employee Communications, Human Resources, IRS, Medical, Private Health Care Exchange, U.S. Department of Labor, Voluntary Benefits|Comments Off on IRS Releases Second Quarter Form 720 for PCORI Fee Payments
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Plan Design and Considerations Based on Section 1557 of the ACA and the Civil Rights Act of 1964

Employers that sponsor group health plans have many regulations to consider in their plan design choices, including nondiscrimination regulations. One of the newest sources of nondiscrimination rules is Section 1557 of the Patient Protection and Affordable Care Act (ACA). Employers also have to consider overarching laws and regulations that impact both their employment practices and their group health plans, such as the Civil Rights Act of 1964.

In recent years disparate treatment on the basis of sex, particularly gender identity and sexual orientation, has been a hotbed of discussion and litigation. Adding additional confusion has been shifts in interpretations and enforcement of Section 1557 between the last three presidential administrations.

Employers should be sure to consider the impact of both Section 1557, and the Civil Rights Act of 1964 as they make benefit plan design choices, as well as in developing overall employment practices.

Civil Rights Act of 1964 and Bostock v. Clayton County

The Civil Rights Act of 1964 is an important law that is both a civil rights and labor law and on its basic level outlaws discrimination on the basis or race, color, religion, sex, or national origin. More specifically under Title VII, which governs equal employment opportunity, it is unlawful for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment for any of the basis of race, color, religion, sex, or national origin.

The heart of the most recent Supreme Court ruling on Title VII in Bostock v. Clayton County was an employee’s “sex” included an employee’s sexual orientation or gender identity, therefore, protecting an employee from termination …

By |May 14th, 2021|Broad Reach Benefits, Compliance, Employee Benefits, Health Care Reform, Human Resources, Legislation, Medical|Comments Off on Plan Design and Considerations Based on Section 1557 of the ACA and the Civil Rights Act of 1964
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DOL Releases Model Notices and Other Resources Related to COBRA Premium Assistance

On April 7, 2021, the U.S. Department of Labor (DOL) released a link to its webpage dedicated to the COBRA premium assistance authorized under the American Rescue Plan Act, 2021 (ARPA), the third COVID-19 stimulus bill.  The webpage includes model notices, frequently asked questions, and related information.  With the exception of the model notices, the guidance appears targeted towards impacted workers, leaving many employer-related questions unanswered.  This alert summarizes the recent guidance and model notices.

What does ARPA Provide and Who is an Assistance Eligible Individual?

Among other things, the ARPA provides a 100% subsidy for COBRA premiums for group health plans (other than health FSAs) from April 1, 2021 through September 30, 2021 for assistance eligible individuals (AEIs).  AEIs are employees and their family members who are:

  • eligible for, and enroll in, COBRA (or state mini-COBRA) due to a reduction in hours or involuntary termination of employment;
  • not eligible for other group health plan coverage or Medicare; and
  • still within their maximum COBRA continuation coverage period (generally, 18 months).

AEIs include individuals newly eligible for COBRA between April 1, 2021 and September 30, 2021, individuals who were in their COBRA election period as of April 1, 2021, and individuals who would be AEIs but whose COBRA coverage lapsed due to non-payment prior to April 1, 2021.  AEIs also include any qualified beneficiaries, such as family members, who did not elect COBRA continuation coverage when first eligible.  Generally, this means an employee (and their qualified beneficiaries) with a COBRA start date on or after November 1, 2019, would have one or more months of eligibility for the COBRA subsidy.  Therefore, employers should identify any employees involuntarily terminated or whose hours were reduced on or after October …

By |April 8th, 2021|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, Human Resources, Medical, Private Health Care Exchange, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on DOL Releases Model Notices and Other Resources Related to COBRA Premium Assistance
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Health Plan Rules—Treating Employees Differently

Some employers may want to be selective and treat employees differently for purposes of group health plan benefits. For example, employers may consider implementing the following plan designs:

-A health plan “carve-out” that insures only select groups of employees (for example, a management carve-out);

– Different levels of benefits for groups of employees; or
– Varied employer contribution rates based on employee group.

In general, employers may treat employees differently, as long as they are not violating federal rules that prohibit discrimination in favor of highly compensated employees. These rules currently apply to self-insured health plans and arrangements that allow employees to pay their premiums on a pre-tax basis. The nondiscrimination requirements for fully insured health plans have been delayed indefinitely.

Employers should also confirm that any health plan rules do not violate other federal laws that prohibit discrimination. In addition, employers with insured plans should confirm that carve-out designs comply with any minimum participation rules imposed by the carrier.

Health Plan Design—General Rules

Nondiscrimination Tests

In general, a health plan will not have problems passing any applicable nondiscrimination test when the employer treats all of its employees the same for purposes of health plan coverage (for example, all employees are eligible for the health plan, and the plan’s eligibility rules and benefits are the same for all employees). However, treating employees differently may make it more difficult for a health plan to pass the applicable nondiscrimination tests. Examples of plan designs that may cause problems with nondiscrimination testing include:

  • Only certain groups of employees are eligible to participate in the health plan (for example, only salaried or management employees);
  • The health plan has different employment requirements for plan eligibility (for example, waiting periods and entry dates) for different employee groups;
  • Plan benefits …
By |April 5th, 2021|Broad Reach Benefits, Compliance, Employee Benefits, Employee Communications, Health Care Reform, Legislation, Long-Term Care, Medical, Private Health Care Exchange, Section 125, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on Health Plan Rules—Treating Employees Differently
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Congress Passes the American Rescue Plan Act

Congress has passed, and President Biden has signed, the American Rescue Plan Act, 2021 (ARPA), the third COVID-19 stimulus bill.  This new $1.9 trillion stimulus package includes several health and welfare benefits-related provisions relevant to employers and plan sponsors, as summarized below.

FFCRA Paid Leave Extended and Enhanced

While COVID-19 vaccines are starting to become more readily available, the pandemic continues. In recognition, Congress extended through September 30, 2021, the refundable payroll tax credits for emergency paid sick leave (EPSL) and extended family and medical leave (E-FMLA), which were enacted pursuant to the Families First Coronavirus Response Act.  As with the extension through March 31, 2021 under the second stimulus package (the Consolidated Appropriations Act, 2021), only the tax credits are extended, which means compliance with the EPSL or E-FMLA requirements is voluntary for employers after December 31, 2020.

The ARPA expands FFCRA leave in several ways for employers who choose to offer it from April 1, 2021 through September 30, 2021:

  • The 10-day limit for EPSL resets as of April 1, 2021. Employees were previously limited to 80 hours from April 1, 2020 through March 31, 2021.
    • Paid leave continues to be limited to $511 per day ($5,110 total) for an employee’s own illness or quarantine (paid at the employee’s regular rate), and $200 per day ($2,000 total) for leave to care for others (paid at two-thirds of the employee’s regular rate).
  • A new “trigger” is added under both the EPSL and E-FMLA provisions. Employees qualify for leave if they are:
    • seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19, and the employee has been exposed to COVID–19 or the employee’s employer has requested such test or diagnosis;
    • obtaining …
By |March 14th, 2021|Compliance, Employee Communications, Human Resources, Legislation, Medical, U.S. Department of Labor|Comments Off on Congress Passes the American Rescue Plan Act
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IRS Provides Guidance on FSA Relief Authorized in the Consolidated Appropriations Act, Grants Other Cafeteria Plan Relief

We are just weeks shy of the one-year anniversary of the President’s declaration of the COVID-19 National Emergency, and the COVID-19 National and Public Health Emergencies are still in effect.  As a result of the long-term impact of the pandemic, many employees faced forfeiting their unused health FSA and dependent care assistance program (DCAP) funds at the end of the 2020 plan year.

As a result, and as we previously reported, a second stimulus relief bill (the Consolidated Appropriated Act, 2021) was signed into law on December 27, 2020, which provided much-needed relief for health FSAs and DCAPs.  On February 18, 2021, the IRS released Notice 2021-15, which provides additional guidance related to the relief in the stimulus bill as well as further relief for cafeteria plans and HRAs.  The guidance and relief are summarized in more detail below.

IRS Guidance Related to the Second Stimulus Bill (CAA, 2021)

Health FSA and DCAP Carryovers – The stimulus bill authorized employers offering a DCAP or health FSA to allow participants to carry over all unused DCAP and health FSA contributions or benefits remaining at the end of the 2020 plan year to the 2021 plan year.  Notice 2021-15 clarifies that:

  • Employers may require employees to make an election in the 2021 or 2022 plan year to access the carryover from the previous plan year.
  • The carryover relief applies to all health FSAs, including limited purpose health FSAs.
  • If an employee uses the mid-year election change relief discussed elsewhere in this alert to prospectively elect to participate in the health FSA mid-year, the employee can access the full amount of their carryover from 2020 retroactive to January 1, 2021.
  • Employers can restrict the amount employees can carryover, i.e., they …
By |March 9th, 2021|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, Human Resources, IRS, Medical|Comments Off on IRS Provides Guidance on FSA Relief Authorized in the Consolidated Appropriations Act, Grants Other Cafeteria Plan Relief
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