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Need-to-Know End-of-Year Compliance Updates
As 2022 ends, there are several new benefits compliance updates for year-end that employers and insurers need to know. This list of new benefits compliance topics is a general overview of the topics HR Service has received the most questions about. It is not meant to be a comprehensive or complete catalog.
NOTE: The information provided here is accurate as of the publication date. However, government agencies may make revisions and amendments to various pieces of healthcare-related legislation very close to the due dates, so please monitor for any last-minute changes which may occur. HR Service will provide an update for any major shifts in the federal requirements.
Transparency in Coverage Rules
Many of the requirements for the Transparency in Coverage rules have been implemented. However, a major new element is due for plans starting or renewing on or after January 1, 2023. It requires group health plans and issuers to disclose to participants, beneficiaries, or enrollees — upon request — cost-sharing information for a covered item or service from a particular provider or providers. This is an internet-based tool with the opportunity to make the same information available in paper form upon request. This applies in 2023 to the 500 most commonly applied items and services, with additional information on all other types of items and services due next year, on January 1, 2024. In addition, plans that start or renew after January 1, 2023, must comply as of the inception or renewal date. The internet-based self-service Explanation of Benefits Estimator must contain the following information:
- Estimate of cost-sharing liability for the covered item or service
- Accumulated amounts incurred to date
- Provide the in-network rate for in-network providers for the covered item or service (includes negotiated rate and the underlying fee schedule)
- Provide the out-of-network allowed amount for the covered item or service
- Explain when a bundled payment arrangement is available for a list of the items or services
- Note whether there are any prerequisites for the covered item or service
- Include caveats (e.g., “this is only an estimate”)
Prescription Drug Data Collection
As part of the Consolidated Appropriations Act, which became law on December 27, 2020, group health plans must report certain information related to planning medical costs and prescription drug spending to the government. The first reports for plan years 2020 and 2021 are due on December 27, 2022. Subsequent reports will be due no later than June 1 of every year.
Group health plans must provide the following plan-specific information along with a narrative response explaining the information in each file.
- General information regarding the plan or coverage;
- Enrollment and premium information, including average monthly premiums paid by employees versus employers;
- Total health care spending, broken down by type of cost (hospital care; primary care; specialty care; prescription drugs; and other medical costs, including wellness services), including prescription drug spending by enrollees versus employers and issuers;
- The 50 most frequently dispensed brand prescription drugs;
- The 50 costliest prescription drugs by total annual spending;
- The 50 prescription drugs with the greatest increase in plan or coverage expenditures from the previous year;
- Prescription drug rebates, fees, and other remuneration paid by drug manufacturers to the plan or issuer in each therapeutic class of drugs, as well as for each of the 25 drugs that yielded the highest amount of rebates; and
- The impact of prescription drug rebates, fees, and other remuneration on premiums and out-of-pocket costs.
As we approach the December 27, 2022 reporting deadline, employers with self-funded or level-funded plans should confirm what information their Third-Party Administrators (TPAs), Pharmacy Benefit Managers (PBMs), and other vendors will be submitting to CMS on their behalf, and what information the employer will need to submit to CMS. To the extent necessary, they should coordinate amongst the third parties to ensure that all reporting obligations have been met. Employers should also consider reviewing and revising their contracts with these TPAs, PBMs, and vendors as necessary to reflect the updated reporting responsibilities.
During the pandemic period, employers offering High Deductible Health Plans (HDHPs) have been required to cover telemedicine and other remote care services free of charge before the required deductible is met. This requirement relates to services provided on or after January 1, 2020, for plan years beginning on or before December 31, 2021, and for months beginning after March 31, 2022, and before January 1, 2023. There is no requirement to continue to offer this after the end of 2022.
Accordingly, effective January 1, 2023, HDHPs should no longer offer this free of charge until the deductibles have been met, to avoid compromising their HDHP status and rendering participants HSA ineligible. HDHPs should also notify plan participants of this change.
Abortion Benefits Considerations
In June 2022, the Supreme Court decision in Dobbs v. Jackson Women’s Health Organization overturned previous Supreme Court abortion-related decisions Roe v. Wade and Planned Parenthood of Southeastern Pa. v. Casey. As a result, various state civil and criminal laws restricting or prohibiting abortion services have taken effect, including some civil “aiding or abetting” laws that allow civil actions against any person who knowingly aids or abets an abortion, including paying for or reimbursing the costs of an abortion. While this area of the law is not settled and likely will not be settled for many years, employers may want to consider the following:
- ERISA Preemption of State Abortion Laws: ERISA, which generally preempts state laws “insofar as they may . . . relate to any employee benefit plan,” may prevent some state abortion laws from applying to self-funded group health plans. However, although ERISA preemption is generally broad, the preemption issue for state abortion laws will likely need to be litigated before it can be determined with certainty that any given law is preempted.
- Abortion Services Covered under the Plan: Employers may want to consider reviewing their plan documents to understand whether and how their group health plan covers abortion services (e.g., elective abortions, non-elective abortions, drug-induced abortions, etc.). Employers may find that a plan amendment is necessary to clarify abortion-related coverage or, more specifically, to clarify that the plan only covers abortion services or drugs if they are legal where provided or prescribed, factoring in compliance with the Emergency Medical Treatment and Labor Act. Including clear language regarding abortion coverage in ERISA plan documents may also be helpful for plans to obtain the benefit of ERISA preemption, when applicable.
- Travel Benefits for Abortion Services: In response to the SCOTUS decision, several large employers announced they would pay for employees to travel out-of-state to obtain legally provided abortions and other reproductive care services. It is not clear how states will treat these travel benefits, which present potential civil and/or criminal liability risks. Employers interested in adopting these benefits may want to carefully consider the risks associated with potential violations of state abortion law and determine the appropriate parties that need to be involved in the decision-making process (e.g., executives, legal counsel, directors, fiduciary committees, etc.).
For consistency, it would be necessary to offer identical travel benefits for other medical services such as reproductive care, gender affirmation services, mental health parity, and similar ERISA-related situations if abortion services travel benefits are offered.
We have additional information regarding state laws, aiding/abetting, states who implemented laws blocking the jurisdiction of other states/prohibiting cooperation, and medical coverage restrictions posted on our website, https://www.hrserviceinc.com/employer-abortion-policy-considerations/ .
For questions or additional information about these and other compliance topics, please contact HR Service Inc. at 833-685-8400 ext. 1