Public Disclosure of Provider Reimbursement Rates Begins July 1, 2022
On July 1, 2022, enforcement of the machine-readable file requirement of the Transparency in Coverage (TiC) final rule begins. Under the rule, non-grandfathered group health plans and insurers must publicly post machine-readable files that disclose in-network provider negotiated rates and historical out-of-network allowed amounts and billed charges for plan years beginning on or after January 1, 2022. (Enforcement of the prescription drug rate file requirement is postponed pending regulatory review.)
The files must be in a specified format, updated monthly and posted on a public website accessible to any person free of charge. No conditions can be imposed to access the files, such as establishing a user account or password or submitting personally identifiable information.
Group health plan sponsors should be in consultation with their insurers or third-party administrators to ensure timely compliance with the July 1 deadline. For fully insured plans, the legal obligation can be contractually transferred to the insurer. For self-insured plans, the sponsor remains liable for TiC compliance even if a TPA contractually agrees to assist with the creation and implementation of the files.
For further information, please see:
Can a group health plan exclude coverage for Applied Behavior Analysis therapy related to treatment of autism spectrum disorder?
HSA Eligibility Impacted by Third Party Drug Payments
May 10, 2022
The Commissioner of Insurance Donelon recently issued Bulletin 2022-01, which provides guidance on SB 94, which was enacted during the 2021 session. SB 94 requires all health insurers to “include any cost-sharing amounts paid by the enrollee or on behalf of the enrollee by another person” when calculating a participant’s deductible and out-of-pocket (OOP) maximum. In the recent bulletin, Commissioner Donelon provided guidance on the type of payments that must be included. For example, a group medical policy must include the amount of a prescription drug discount or third-party payment, such as a drug manufacturer’s payment, toward an individual’s deductible and OOP maximum.
This presents a qualification issue for high deductible health plans (HDHPs). Under federal law, for an HDHP to be qualified and its participants to be eligible for HSA contributions, only actual out-of-pocket amounts paid by the participant may be included in the deductible and OOP maximum. This means that policies issued in Louisiana must comply with the state insurance requirement, which will result in the coverage being disqualified for HSA contributions. The bulletin suggests that the only solution available to Louisiana participants right now is for HDHP participants not to use drug discounts or third-party payments.
The requirement was effective June 2021, so Louisiana insurers must send communication to HDHP participants to explain the issue. Employers should work with insurers and third-party HSA administrators to resolve eligibility issues for any impacted participant. This could include distributing excess HSA contributions for an individual for whom a third-party payment or drug discount went toward their deductible or OOP maximum.
This is a trending issue for employers nationwide as many states have enacted similar laws. We will continue to monitor this issue and report any developments in Compliance Corner.
Massachusetts Paid Family and Medical Leave (MAPFML) Program Updated Guidance and Resources
Recently, the Massachusetts Department of Family and Medical Leave (the “Department”) updated Massachusetts Paid Family and Medical Leave (MAPFML) program resources for employers and employees to provide additional guidance and clarifications through frequently asked questions and other online publications. The updated guidance describes how employers’ paid leaves and MAPFML benefits coordinate, and how employees can check the status of their PFML payments and report other leave(s) and income on their MAPFML application forms.
Additionally, the Department added a site to explain what employers need to consider if they decide to switch between private plans and PFML state-based program, including the impact on employee leaves during the transition.
With the newly updated guidance, employers who have at least one employee working in Massachusetts should review these updated resources and consider their obligations to comply with MAPFML, including tracking MAPFML leaves and benefits along with other leaves (e.g., the federal FMLA and employer’s PTO, STD/LTD and parental leaves). Moreover, employers should consider how best to inform their employees of their rights under MAPFML. Lastly, covered employers who participate in the MAPFML state-based program should collect the employees’ contributions through payrolls accurately, and remit the total premiums and report quarterly to the Department via MassTaxConnect. For further information, please refer to the state’s site here.
The updated MAPFML publications:
Switching Between Private Plans and PFML »
PFML Frequently Asked Questions for Employers »
Using the Employer Leave Administrator Dashboard for PFML Applications »
PFML Workforce Notifications and Rate Sheet for Massachusetts Employers »
Transitional Relief Extended for Grandmothered Plans
May 10, 2022
On May 4, 2022, Commissioner Downing issued an informational bulletin to announce an extension of transitional relief for certain non-grandfathered individual and small group policies known as “grandmothered” policies. The bulletin follows the recent CMS extension of the federal nonenforcement policy concerning specific ACA compliance requirements for these plans.
On November 14, 2013, CMS announced a transitional policy with respect to the healthcare reform mandates for coverage in the individual and small group markets. This nonenforcement policy provided relief from certain market reforms, including prohibitions of coverage exclusions based on pre-existing conditions and requirements to cover essential health benefits and limit annual out-of-pocket spending.
Under the policy, state authorities could permit health insurance issuers to continue coverage that would otherwise have been cancelled for failure to comply with the ACA requirements. The commissioner has historically allowed insurers the option to continue such coverage. The recently announced extension applies to renewals for plan or policy years beginning on or after October 1, 2022 and remains in effect until CMS announces that all such coverage must come into compliance with the specified requirements.
Small employers currently covered by such grandmothered policies issued in the state should be aware of the bulletin. These employers should work with their advisors and insurers regarding renewal of the coverage.
Extended Relief for Non-ACA-Compliant Small Group and Individual Policies and Plans
May 10, 2022
On April 22, 2022, Commissioner Mulready released Bulletin No. 2-2022 that extended the ability of health insurance carriers in the individual and small group market to continue transitional health insurance plans indefinitely until CMS issues an announcement ending the nonenforcement of certain market reforms.
On March 23, 2022, CMS provided guidance for a transition policy extension that allows insurers the option to renew non-grandfathered non-ACA-compliant plans if the state allows for such an extension. Such transition policies are not required to comply with certain ACA mandates, including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit. This bulletin applies this most recent federal extension to Oklahoma and allows the issuer to renew these non-ACA-compliant plans.
Small employers that are interested in renewing their non-ACA-compliant plan should work with their advisors and insurers.
Coverage for Autism Spectrum Disorder
May 10, 2022
On April 19, 2022, Insurance Commissioner White released Administrative Letter 2022-2 related to coverage of autism spectrum disorder (ASD). After discussions with CMS and research, the Virginia Bureau of Insurance has revised its position on ASD and related insurance coverage. Policies issued on or after January 1, 2023, must classify ASD as a mental health disorder. Coverage under any group medical policy must provide for the treatment of ASD, including medically necessary behavioral health treatment, pharmacy care, psychiatric care, psychological care and therapeutic care. Coverage must specifically include applied behavioral analysis (ABA) services. The Bureau will consider any ABA exclusion to be a violation of both Virginia law and the Mental Health Parity and Addiction Equity Act. There is an exception for grandfathered small group health insurance coverage, which is not subject to MHPAEA requirements.
Further, treatment of ASD, including ABA services, will be considered an essential health benefit under Virginia’s benchmark plan. Thus, insured policies and self-insured plans that identify Virginia as their benchmark plan will be prohibited from excluding or placing dollar limits on such coverage.
Disability Coverage for Childbirth
May 11, 2021
The Bureau of Insurance issued guidance which states that, effective July 1, 2021, newly issued short-term disability policies must pay benefits for a full 12 weeks immediately following childbirth. There can be no exclusion or waiting period applied. The Bureau clarified that the mandate will not apply to renewed short-term disability policies or long-term disability policies.
Employers sponsoring short-term disability plans will want to familiarize themselves with this policy and work with their carrier to implement it.
Federal Court Dismisses WA Long-Term Cares Act Lawsuit
May 10, 2022
On April 25, 2022, Judge Zilly of the US District Court for the Western District of Washington dismissed a class action lawsuit filed on behalf of employers and employees challenging the WA Cares premium assessed at the rate of .58 percent of wages violated ERISA and other federal laws.
The federal court dismissed the lawsuit on the basis that the WA Cares Act is not established or maintained by an employer and/or employee organization and therefore, is not governed or preempted by ERISA. The Court also held that the premiums assessed by the WA Cares Act constitute a state tax. Because the federal court lacks jurisdiction over state tax, only state courts have jurisdiction to rule on the WA Cares Act.
Employers who have at least one employee working in Washington should monitor the developments as further updates and changes are expected in the coming months.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.