Innovative Benefit Planning Blog

The U.S. Departments of Health and Human Services, Labor, and the Treasury (the “Departments”) recently released final rules regarding the No Surprises Act. The rules specifically address required independent dispute resolution (IDR) of certain claims and expenses and finalize prior interim final rules relating to information that group health plans must disclose. Federal IDR Process The No Surprises Act required regulators to develop an IDR process to resolve conflicts between payers and providers regarding out-of-network expense amounts. Any disputes unresolved after 30 days of negotiating can be referred by either side to binding arbitration from a certified IDR entity. The IDR entity will consider the qualified payment amount (QPA) – the insurance plan's median contracted rate for the same or similar service in an area – and other relevant submitted information, and then select one side’s suggested payment amount. Under interim final rules issued in October 2021, certified IDR entities…

Per the Kaiser Family Foundation, an estimated 8.2 million Americans will be due rebates for 2022. Further the analysis states that health insurers are expected to pay a total of $1 billion to policyholders.  In light of this, plan sponsors should be prepared to handle any Medical Loss Ratio (MLR) rebates they receive from their insurance issuer in a manner that aligns with applicable rules. The Affordable Care Act (ACA) outlines the requirements private health insurance issuers must follow, including obligations related to premium spending. The ACA requires health insurers to spend at least 80% to 85%, depending on the size of the market, of premium dollars on medical care. The remaining 20% to 15% is reserved for administration, marketing expenses and profit. If these requirements are not met, plans are required to provide annual rebates to the policyholders, the Medical Loss Ratio (MLR) Rebates. These refunds or rebates are…

The Biden Administration’s FY 2023 proposed budget requests increased funds to enforce the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Specifically, the budget would allot $125 million to the states for MHPAEA enforcement. Additionally, President Biden requested an additional $275 million for the Department of Labor (DOL) to perform MHPAEA audits of group health plans over the course of the next 10 years. The proposed budget would also grant authority to the DOL to turn enforcement efforts toward the vendors who design and apply quantitative and non-quantitative treatment limitations (QTL and NQTL) for self-funded group health plans. Currently, the DOL’s authority is limited to the group plan sponsors under ERISA. This shift would allow the DOL to zero in on the parties responsible for the creation and administration of the play provisions, which are typically the plan’s carriers, instead of limiting the audit to the plan sponsor,…

On August 16, 2022, President Biden signed the long-awaited Inflation Reduction Act which aims to reduce rising health care costs and greenhouse gas emissions, as well as raise taxes on corporations. The President’s signature comes after the House and Senate passed the bill last week along party lines following much debate and a deal negotiated between Senators Charles Schumer and Joe Manchin. Within the $430 billion dollar legislation there are several health care related provisions which target the prescription drug costs under Medicare, plan subsidies through the Marketplace, and as a result, a likely expansion for individual coverage health reimbursement arrangements (ICHRAs). A breakdown of the health care provisions is below. For a summary of provisions see here. Medicare Part D Prescription Drug coverage: Cost-sharing for insulin will be capped at $35 per month for Medicare Part D participants, and manufacturers will be required to pay Medicare a rebate if…

Around 30 million adults in the U.S. deal with some form of hearing loss, but only an estimated 1 in 5 have addressed the issue with the use of a hearing assistance device. On August 16, 2022, the U.S. Food and Drug Administration (FDA) issued a final rule that would allow Americans to access hearing aids over-the-counter (OTC). The final rule creates a new category for OTC hearing aids, which will allow individuals with perceived mild to moderate hearing loss to purchase hearing aids directly in-store or online without prescription, medical exam or fitting by an audiologist. Prior to this, insurance coverage for hearing aids has been limited, with Medicare offering no coverage for individuals. This final rule is a result of legislation passed in 2017 by Congress (FDA Reauthorization Act of 2017) which required the FDA to create a category of OTC hearing aids and an Executive Order signed…

The IRS announced a decrease in the ACA Affordability Contribution Rate from 9.61 in 2022 to 9.12 percent for the 2023 plan year, the most significant decrease since the ACA’s commencement. Under the ACA, Applicable Large Employers (ALEs), employers with 50 or more full time and/or full-time equivalent employees, are required to offer affordable minimum value coverage to all full-time employees and their dependents. The contribution percentage is used to determine whether the employer-sponsored health coverage is “affordable” under the ACA’s employer shared responsibility provisions. A plan will be considered affordable under the ACA if the employee’s contribution level for self-only coverage does not exceed the specified percentage of the employee’s household income. Failure to offer affordable coverage may result in employer shared responsibility penalties, which can be substantial. The IRS recognizes that it is difficult for an employer to determine an employee’s household income, so employers are able to…

The summer has seen a flurry of compliance-related activity, most notably the landmark decision issued by the U.S. Supreme Court to overturn Roe v. Wade. As we move into the second half of the 2022 employee benefits compliance calendar, there are a number of important issues to note.SCOTUS OVERTURNS ROE V. WADE; EMPLOYERS WEIGH BENEFITS RESPONSESAs forecast in a leaked draft opinion in May, the U. S. Supreme Court officially overturned Roe v. Wade on June 24. The official opinion specifically held that the U.S. Constitution does not confer a right to abortion; Roe and Casey (the two landmark abortion rights cases) are overruled; and the authority to regulate abortion is returned to the people and their elected representatives. Thus, each state will now have autonomy to decide how it will handle abortion rights within – and potentially beyond – its borders.Employers have been weighing what, if anything, they will do regarding abortion and abortion-related services and expenses under…

July 1, 2022, marks the effective date for plans and issuers to begin posting two Machine-Readable Files (MRF) links to a public website so individuals can readily learn their in-network group health plan costs, as well as historical paid amounts for out-of-network services. Ahead of this deadline, plans and issuers should have communicated with plan sponsors the location of the link and how they can access the information associated with the link. Each MRF must use a non-proprietary, open format to be identified in technical implementation guidance, i.e., JSON, XML, etc. Carriers providing files in PDF format are not in compliance with the required standards.Below are some highlights and next steps for plan sponsors that may be helpful as they continue to navigate this new requirement and make efforts to ensure compliance.Purpose and IntentThe machine-readable files requirement is part of a broader effort to achieve overall pricing transparency in healthcare.…

Employers likely have questions about abortion-related employment protections and healthcare benefits after Friday’s SCOTUS controversial decision that overturned Roe v. Wade. Given the ruling, people in states with strict abortion limitations may end up traveling to other states to receive abortion-related care. Can employees take job-protected leave to obtain such services? What other rights might employees have under federal employment laws? Here are a few points you should keep in mind in light of the June 24 Dobbs v. Jackson Women’s Health Organization decision. Anti-Discrimination Laws Protect Abortion-Related Decisions Employers should understand the workplace protections employees have under existing federal anti-discrimination laws and how they apply to an employee’s decision whether to have an abortion. The Interplay of Employment Discrimination Statutes Title VII of the Civil Rights Act of 1964 bans employment discrimination based on color, national origin, race, religion, and sex. Additionally, in 1978, Congress enacted the Pregnancy Discrimination…

In a 7-2 decision, the U.S. Supreme Court has issued its opinion in Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc., ruling in favor of Marietta Memorial Hospital's health plan. In the Court's opinion, drafted by Justice Brett Kavanaugh, the Court held the plan did not violate a federal statute which obligates private insurers to cover the first 30 months of dialysis following a patient's end-stage renal disease diagnosis. In the opinion, which reversed the judgment of the U.S. Court of Appeals for the Sixth Circuit, Justice Kavanaugh opined, "The question in this case is whether a group health plan that provides limited benefits for outpatient dialysis - but does so uniformly for all plan participants - violates the Medicare Secondary Payer statute. We agree with petitioner Marietta and the United States as amicus curiae that the answer is no."In 2018, DaVita, Inc. sued Marietta Memorial Hospital’s health…

The month of May again brought relatively little major employee benefit compliance guidance from federal agencies. However, there was plenty of activity in the courts to provide useful insight into steps employer plan sponsors can take to safeguard against benefits litigation. DEPARTMENT OF LABOR PROVIDES MENTAL HEALTH CONDITION GUIDANCE UNDER FMLA The U.S. Department of Labor (DOL) released Fact Sheet #280 as well as Frequently Asked Questions (FAQs) about how the Family and Medical Leave Act of 1993 (FMLA) accommodates mental health-related leaves. The DOL’s Wage and Hour Division issued the guidance as part of Mental Health Awareness Month to provide employers additional information on how to handle leave requests for mental health concerns. Among the notable provisions in the guidance – especially given the ongoing COVID-19 pandemic, incidents of gun violence, and news regarding the economy – is a reminder that an FMLA-eligible individual working for an employer subject to FMLA may take…

June 1, 2022 As of July 1, 2022, group health plans must clear one of the first major compliance hurdles required by the Affordable Care Act’s (ACA) Transparency in Coverage (TiC) Final Rules. By that date, plans and insurance carriers must have prepared and posted two machine-readable files (MRFs) to a public website so individuals can readily learn their in-network group health plan costs as well as historical paid amounts for out-of-network services. (A third MRF relating to prescription drugs will be required later and is not subject to the July 1, 2022, deadline.) There is still some confusion surrounding the MRF requirement, so this Advisor is designed to provide important context and actionable steps for plan sponsors to understand their transparency obligations as they cope with the new TiC disclosure requirement. Background The ACA contains numerous provisions requiring medical care and services to be delivered more transparently. The TiC…