Health and welfare benefits in the Consolidated Appropriations Act
The Consolidated Appropriations Act (the “Act”) was enacted by the President on December 27, 2020 and includes important health and provident benefits provisions that affect group health plans and health insurance issuers. The law is the most comprehensive law to impact group health plans since the Affordable Care Act (ACA).
This On the subject summarizes the main provisions of the Act that apply to sponsors of group health and welfare plans. The law includes provisions regarding (1) flexible spending arrangements; (2) surprise medical billing; (3) the benefits for mental health and substance use disorders; (4) drug benefit reports; and (5) disclosure of compensation to the service provider. (For a summary of the main provisions of the Health Act, please click here.)
FLEXIBLE EXPENDITURE TERMS (FSAS)
FSA plan sponsors are permitted, but not required, to modify their cafeteria plans to take advantage of the new relief provisions described below prior to the end of the first calendar year beginning after the end of the plan year during from which the change takes effect. (For example, if mid-year election changes are allowed in 2021, a calendar year plan must be amended by December 31, 2022.) Additionally, the plan must be managed in accordance with the amendment conditions at the date of entry into force of the amendment.
For plan years ending in 2021, a plan may allow participants to prospectively change the number of their contributions to health care or long-term care ASPs, regardless of any change in status.
- Carry forward of account balances
A plan may allow participants to carry over unused amounts or remaining contributions to a health care or dependents ASP from the 2020 plan year to the 2021 plan year, or to the 2021 plan year. in the year of the 2022 plan.
ASPs for healthcare and dependents can extend their grace period up to 12 months after the end of the plan year, for plan years ending in 2020 or 2021.
- Unused balances in FSA Healthcare accounts
A plan may allow an employee who terminates their participation in a healthcare ASP in the 2020 or 2021 calendar year to continue to receive refunds on unused account balances until the end of the period. year of the plan in which such participation ended (including any applicable grace period).
- FSA Dependent Care & Aging
For dependents who were no longer eligible during the pandemic (more specifically, during the last year of the plan with a regular enrollment period ending no later than January 31, 2020), plans can extend the plan. ‘maximum age of 13 to 14 years.
SURPRISE MEDICAL BILLING PROVISIONS
For plan years beginning on or after January 1, 2022, employer-sponsored health insurance plans that cover emergency services must provide services without requiring prior authorization determinations, regardless of whether a health care provider providing the services is a participating provider. to the plan’s network or to the emergency establishment. These non-ancillary services are now to be provided without coverage limits or more stringent requirements than emergency services provided by participating providers. In addition, cost-sharing requirements for off-grid services cannot be higher than those for services provided by on-grid providers. The Act also prohibits air ambulance services from billing the balance of persons covered by a group health plan or individual or group health insurance.
Like many state surprise billing laws, the law includes open negotiation and independent dispute resolution (IDR) procedures for use by plans or non-participating insurers and providers to determine how much will be paid. for a service provided. The parties can participate in a 30-day open negotiation process that begins on the day the provider receives the initial plan payment (or denial notice) for the service.
If the plan or the insurer and the provider cannot agree on a payment amount during the 30 day open negotiation period, then either party can invoke the IDR process by sending a notice to the other party and to the Department of Health and Human Services (HHS). If this happens, a “certified IDR entity” will determine the amount of payment for the service. As part of the implementation guidelines for the IDR process (to be published in the future), there will be criteria for jointly determining payment amounts for multiple disputed items (for example, whether the services are related to the processing of ‘a similar condition). More details are awaited in the form of guidance from the agency.
- Advance estimates of the health plan
Beginning in 2022, if a plan member plans a health care service to be provided by a provider with sufficient notice, the provider must notify the health plan in advance. Group health plans and insurers that receive notice from the provider regarding a member’s expected service must provide the member with notice — in most cases, within one business day of receipt. in the opinion of the supplier — containing the specified coverage information.
For example, the notice of the plan to a participant should indicate whether the provider is a participating provider in the regular service and, if so, the contracted rate for the service based on the relevant billing and diagnostic codes. The notice must also include a good faith estimate of the amount the Medicare plan will pay for the scheduled services.
- External examination and surprise medical billing
On or before January 1, 2022, Medicare plans must apply the ACA’s external review procedures for denial of benefits related to the provisions of the Surprise Medical Billing Act.
BENEFITS FOR MENTAL HEALTH AND CONSUMPTION OF SUBSTANCES
Plan sponsors who provide both medical / surgical and mental health or substance use disorder benefits and who impose non-quantitative treatment limitations (NQTLs) on mental health or disorder benefits related to substance use are required to perform and document benchmarking of the design and application of NQTLs. Start February 10, 2021, these scans should be made available to the Department of Labor (DOL), HHS, or the Internal Revenue Service (IRS) upon request. Employers whose plans place separate limits on mental health benefits (for example, pre-certification) will have to test the program and keep a copy of the current test in case one of the agencies requests it.
STATEMENT OF PHARMACY BENEFITS
Through December 27, 2021, and each year thereafter, plans will be required to submit to DOL, HHS and IRS a report containing specific information on benefits paid for prescription drugs provided to members and beneficiaries. Therefore, plan sponsors should immediately start registering:
The dates of the plan year, the number of members and beneficiaries, and each state in which coverage is offered;
The 50 most frequently dispensed brand-name prescription drugs and the total number of paid claims for each drug;
The 50 most expensive prescription drugs by total annual expenditure;
The 50 prescription drugs with the largest increase in plan spending over the previous plan year;
Average monthly premium paid by the employer and by members and beneficiaries; and
Impact of discounts, fees and other remuneration paid by drug manufacturers on premiums and reimbursable costs.
DISCLOSURE OF SERVICE PROVIDER COMPENSATION
Service providers for social assistance plans have been temporarily exempted from the requirement under the Employees Retirement Income Security Act (ERISA) to provide fee information to plan trustees; however, the Act puts an end to this stay and extends the rules for the disclosure of expenses to group health insurance plans. Service providers for group health insurance plans must comply with applicable fee disclosure rules December 27, 2021. Such fee disclosure potentially applies to all group health plan providers, including brokers and consultants, who provide services to a group health plan funded by plan assets.
Plan sponsors will need to take steps to comply with the Act. Very immediately, plan sponsors must determine whether they should incorporate the FSA’s optional relief provisions from the law for the 2021 plan year and communicate such changes to members as soon as possible. In addition, plan sponsors should begin collecting appropriate data to ensure compliance with the reports required under the Act that are due before the end of 2021. In addition, plan sponsors should update the documents in the plan. plan and summary plan descriptions for a number of provisions of the Act, as well as future related guidance. Finally, plan sponsors should review their agreements with providers, such as administrative service agreements and agreements with pharmacy benefit managers, to ensure that all data collection and reporting arrangements are compliant. legal requirements.
We anticipate that most employer-sponsored group health plans will attempt to meet the disclosure obligations of the Act (some of which appear to overlap with the obligations of recently published price transparency regulations) by using third-party providers on behalf of the diet. Plan sponsors should exercise caution when entering into contracts with third party providers to fulfill their obligations under the Act, to ensure both that they are able to meet the heavy burdens of the Law and that the plan and the company are sufficiently compensated and protected in the event of a fall of the supplier. short.