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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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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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IRS Releases 2022 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits

In Rev. Proc. 2021-25, the IRS released the inflation adjusted amounts for 2022 relevant to Health Savings Accounts (HSAs) and high deductible health plans (HDHPs). The table below summarizes those adjustments and other applicable limits.

  2022 2021 Change
 

Annual HSA Contribution Limit

(employer and employee)

 

 Self-only: $3,650 Family: $7,300 Self-only: $3,600 Family: $7,200 Self-only: +$50 Family: +$100
 

HSA catch-up contributions

(age 55 or older)

 

 $1,000 $1,000 No change
 

Minimum Annual HDHP Deductible

 

 Self-only: $1,400 Family: $2,800 Self-only: $1,400 Family: $2,800 No change
 

Maximum Out-of-Pocket for HDHP

(deductibles, co-payment & other amounts except premiums)

 

 Self-only: $7,050 Family: $14,100 Self-only: $7,000 Family: $14,000 Self-only: +$50 Family: +$100

IRS Releases 2022 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits

In Rev. Proc. 2021-25, the IRS released the inflation adjusted amounts for 2022 relevant to Health Savings Accounts (HSAs) and high deductible health plans (HDHPs). The table below summarizes those adjustments and other applicable limits.

  2022 2021 Change
 

Annual HSA Contribution Limit

(employer and employee)

 

 Self-only: $3,650 Family: $7,300 Self-only: $3,600 Family: $7,200 Self-only: +$50 Family: +$100
 

HSA catch-up contributions

(age 55 or older)

 

 $1,000 $1,000 No change
 

Minimum Annual HDHP Deductible

 

 Self-only: $1,400 Family: $2,800 Self-only: $1,400 Family: $2,800 No change
 

Maximum Out-of-Pocket for HDHP

(deductibles, co-payment & other amounts except premiums)

 

 Self-only: $7,050 Family: $14,100 Self-only: $7,000 Family: $14,000 Self-only: +$50 Family: +$100

 

Out-of-Pocket Limits Applicable to Non-Grandfathered Plans

The ACA’s out-of-pocket limits for in-network essential health benefits have also been announced and have increased for 2022.

  2022 2021 Change
 

ACA Maximum Out-of-Pocket

 

 Self-only: $8,700

Family: $17,400

 Self-only: $8,550

Family: $17,100

 Self-only: +$150

Family: +$300

 

Note that all non-grandfathered group health plans must contain an embedded individual out-of-pocket limit within family coverage if the family out-of-pocket limit …

By |May 12th, 2021|Employee Communications, Human Resources, IRS, Legislation, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on IRS Releases 2022 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits
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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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How Many Years Is A One Year Extension? DOL Clarifies its Disaster Relief Guidance

The Department of Labor (DOL) has released Notice 2021-01, which clarifies the end date for the relief provided in April 2020 under Notice 2020-01. Per the latest guidance, individuals (and plans) are granted relief based on their own fact-specific timeframes and, therefore, may still take advantage of the relief beyond February 28, 2021 until the earlier of (a) 1 year from the date they were first eligible for relief, or (b) 60 days after the announced end of the COVID-19 National Emergency.

As background, in April 2020 the DOL announced that certain deadlines under ERISA were suspended starting March 1, 2020 until 60 days after the announced end of the COVID-19 National Emergency or such other date determined by the agencies (the “Outbreak Period”). The following deadlines applicable to participants and beneficiaries are tolled (paused) during the Outbreak Period:

  • The 30-day period (or 60-day period, if applicable) to request a HIPAA special enrollment;
  • The 60-day period for electing COBRA continuation coverage;
  • The date/deadline for making COBRA premium payments;
  • The deadline for individuals to notify the plan of a COBRA qualifying event or determination of disability;
  • The deadline within which employees can file a benefit claim, or a claimant can appeal an adverse benefit determination, under the group health plan or disability plan claims procedures described in the plan;
  • The deadline for claimants to file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination; and
  • The deadline for a claimant to file information to perfect a request for external review upon finding that the request was not complete.

Certain deadlines impacting employers/plan sponsors were also extended, such as the deadline to provide a COBRA election notice, …

By |March 1st, 2021|Broad Reach Benefits, Compliance, Employee Benefits, Human Resources, Legislation, Medical, Private Health Care Exchange, U.S. Department of Labor|Comments Off on How Many Years Is A One Year Extension? DOL Clarifies its Disaster Relief Guidance
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Department of Labor Issues Updated FFCRA Regulations In Light Of Recent Federal Court Decision

On September 11, 2020, the U.S. Department of Labor (“DOL”) released a temporary rule updating certain FFCRA regulations.  The temporary rule is scheduled to be published on September 16, 2020 and will be effective immediately through the expiration of the FFCRA’s paid leave provisions on December 31, 2020.

The temporary rule updates FFCRA regulations issued in April 2020 in response to a recent federal District Court decision which found four portions of the initial regulations invalid:  provisions related to whether the FFCRA applies if employers do not have work available for employees; the timing for which employees must request the need for leave; the definition of health care provider; and the availability of intermittent leave.

While many anticipated that the DOL would appeal the decision, the DOL elected to reaffirm and clarify its position on some of these issues, while choosing to revise or update others. Thus, while the court’s order was limited to companies operating in New York (or potentially only those in the Southern District of New York), the DOL’s revisions to the regulations apply to all employers subject to the FFCRA (inside and outside New York).

The District Court’s order and the updated regulations are discussed in more detail below.

New York Federal District Court Decision

Soon after the FFCRA regulations were implemented, the State of New York sued the DOL in the United Stated District Court for the Southern District of New York claiming the DOL exceeded its authority when it implemented several provisions of the FFCRA regulations. The District Court agreed in part and, in August, the court issued an order invalidating several portions of the FFCRA regulations.

  • Work Availability Requirement – The original regulations limited the availability of emergency paid sick leave …
By |September 17th, 2020|Compliance, Employee Benefits, Legislation, Medical, U.S. Department of Labor|Comments Off on Department of Labor Issues Updated FFCRA Regulations In Light Of Recent Federal Court Decision
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Carrier Premium Credits and ERISA Fiduciary Obligations

Due to COVID-19 and state and local stay-at-home orders, utilization of group medical and dental insurance benefits is down.  As a result, some carriers recently notified employers that they will be issued premium credits. When asking how these premium credits should be treated by the employer, we often compare then to the ACA’s medical loss ratio (MLR) rebates.  While these premium credits are not MLR rebates, a similar decision must be made to determine whether they, like MLR rebates, are ERISA plan assets.

Background

As background, the Affordable Care Act’s MLR rule requires health insurers to spend a certain percentage of premium dollars on claims or activities that improve health care quality, otherwise they must provide a rebate to employers. At the same time the U.S. Department of Health and Human Services issued the MLR rule, the U.S. Department of Labor (DOL) issued Technical Release 2011-04 (TR 2011-04), which clarifies how rebates should be treated under ERISA.  Under ERISA, anyone who has control over plan assets, such as the plan sponsor, has fiduciary obligations and must act accordingly.

Clearly, the premium credits we are seeing are not subject to the MLR rule; however, a similar analysis applies.   TR 2011-04 clarified that insurers must provide any MLR rebates to the policyholder of an ERISA plan.  However, while the DOL’s analysis was focused on MLR rebates, it recognized that distributions from carriers can take a variety of forms, such as “refunds, dividends, excess surplus distributions, and premium rebates.”  Regardless of the form or how the carrier describes them, to the extent that a carrier credit, rebate, dividend, or distribution is provided to a plan governed by ERISA, then the employer must always consider whether it is a “plan asset” …

By |May 18th, 2020|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Legislation, Medical, Private Health Care Exchange, U.S. Department of Labor, Voluntary Benefits|Comments Off on Carrier Premium Credits and ERISA Fiduciary Obligations
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