The Affordable Care Act contains broad provisions requiring health insurers and group health plans to make substantial amounts of information available to the public to facilitate transparency in health care pricing, and several recent Executive Orders have also focused on the availability of health pricing information. In 2020, under the authority of the Affordable Care Act, the Departments of Health and Human Services, Labor, and the Treasury issued transparency in coverage regulations (often referred to as the “TiC Rules”), which require most health plans and health insurance issuers in the group and individual markets (“Plans and Issuers”) to publicly disclose health plan pricing and cost sharing information. The first deadline under the TiC Rules was originally set for January 1, 2022, but was delayed to July 1, 2022 in part due to the enactment of the Consolidated Appropriation Act (which contained additional, and somewhat overlapping, transparency in coverage rules).

Specifically, by July 1, 2022, the TiC rules require that each Plan and Issuer make two “machine readable files” (or “MRFs”) of pricing information available on its public website. Generally speaking, the MRFs that must be available must include (1) the payment rates negotiated between plans or issuers and providers for all covered items and services (the “In-Network File”), and (2) the unique amounts a plan or issuer allowed, as well as the associated billed charged for covered items or services furnished by out-of-network providers during a specified time period (the “Out-of-Network File”). (The deadline for a third file, which must contain pricing information for prescription drugs, was originally January 1, 2022, and has been extended indefinitely pending coordination with similar requirements under the Consolidated Appropriations Act.) Plans and Issuers are not required to disclose information that would violate health privacy laws. The MRFs must be updated monthly and clearly note the date they were last updated. The MRFs must be in a non-proprietary, open-standards format that is “platform independent” and available to the public without restrictions that would impede re-use, such as a JSON file. Microsoft Word, Microsoft Excel, and PDF files are not acceptable because they are proprietary formats.

Continue Reading Transparency in Coverage Deadline Looms – Are You Ready?

At long last, the Department of Labor has provided guidance on interpreting requirements imposed on group health plan fiduciaries as a part of the Consolidated Appropriations Act, or CAA. On December 27, 2020, Congress amended Section 408(b)(2) of ERISA through its enactment of the CAA. Section 408(b)(2) provides a prohibited transaction exemption for transactions between plans that are subject to Title I of ERISA and “parties in interest” with respect to such plan for the provision of services that are necessary for the establishment or operation of the plan, provided that the compensation paid by the plan to the provider is “reasonable.” One requirement for compensation to be considered reasonable for purposes of Section 408(b)(2) is that the plan fiduciary receive disclosure regarding the compensation received by the service provider. Prior to the CAA, these disclosure requirements only applied to certain retirement plan service providers. However, the CAA expanded these requirements to providers of brokerage or consulting services to group health plans who expect to receive $1,000 or more in direct or indirect compensation  (“Covered Providers”). In addition to disclosing the direct compensation received from a group health plan for its services, Covered Providers must also disclose indirect compensation received from third parties. The disclosure is intended to ensure that plan fiduciaries are informed as to the potential for conflicts of interests as a result of, and the reasonableness of compensation in connection with, third-party payments received by a Covered Provider. The new rules imposed by the CAA took effect on December 27, 2021.

Shortly after these provisions of the CAA took effect (and more than a year after the passage of the CAA), the Department of Labor (“DOL”) released Field Assistance Bulletin 2021-03 (the “Bulletin”) on December 30, 2021, which states that the DOL will focus its enforcement efforts on cases where Covered Providers are not acting in accordance with a good faith, reasonable interpretation of the applicable requirements of Section 408(b)(2). The Bulletin also includes guidance in the form of several questions and answers. The Bulletin confirms that while compensation arrangements relating to the provision of services to pension plans and group health plans differ in many respects, Covered Providers may look to prior DOL guidance issued with respect to pension plans (where applicable) to determine their own obligations with respect to Section 408(b)(2). As a result, the DOL states that it does not believe that comprehensive regulations are needed, but will instead monitor the situation to determine whether (and what) additional guidance may be needed.

Continue Reading DOL Provides Long-Awaited Guidance on Service Provider Health Plan Disclosures and Related Enforcement Policy

On June 17, 2021, the Supreme Court in a 7-2 decision rejected a challenge to the individual mandate and the overall constitutionality of the Patient Protection and Affordable Care Act (the “ACA”) in the third major challenge to the law to reach the high court. The decision in California et. al. v. Texas et. al., 593 U. S. ___ (2021), was somewhat anticlimactic as the basis for the decision was that the plaintiffs did not have standing to bring the action. Accordingly, the Court did not address or provide guidance on the substantive constitutionality or severability issues raised in the lower courts. The decision does, however, signal that even a conservative Court is unlikely to overturn the ACA any time soon and so compliance with the various provisions of the ACA will be required. The decision has also been heralded as a victory for patients who are able to keep their health coverage as the country exits a year and half long pandemic. In addition, Democrats have expressed an intent to try to expand the ACA’s reach by adding provisions designed to make health care more affordable and accessible to the American people.

Continue Reading States Lack Standing – ACA Remains Standing

On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (ARPA) which contains a variety of employee benefit provisions. ARPA contains both mandatory and discretionary provisions relating to benefits. The following summarizes the provisions of ARPA relating to COBRA premium subsidies (mandatory changes), changes to the cap on pre-tax dependent care assistance benefits (discretionary), changes to section 162(m) of the Internal Revenue Code relating to a corporation’s deduction for executive compensation in excess of certain limitations (mandatory but not effective until 2026), and updates to the employee retention credit (initially implemented as a part of the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act).

Continue Reading ARPA to the Rescue: COBRA Subsidies, DCAP Relief and More!

The first 100 days of President Biden’s presidency are likely to bring a number of changes for employer-sponsored health and welfare plans. The more than three dozen Executive Orders that were issued by the end of January included orders providing a special Affordable Care Act enrollment period, directing the review of policies (and strengthening of protections) related to the Affordable Care Act and Medicaid, and expanding coverage for COVID-19 treatment (including through group health plans) and healthcare for women. As is typical for an incoming administration, President Biden also issued a regulatory freeze, potentially impacting several pending and recently finalized health and welfare-related regulations.

These 100 days may also bring guidance on the various health-related provisions that were a part of the Consolidated Appropriations Act, 2021 (the “Act”), which became law at the end of 2020. We have already discussed the changes for health and dependent care flexible spending accounts under the Act. However, the Act also contained a number of other provisions applicable to health and welfare plans, many of which are intended to increase transparency for plan participants and patients.
Continue Reading The First 100 Days: Changes Afoot for Health and Welfare Plans

After several delays, the Consolidated Appropriations Act, 2021 (the “Act”) was signed into law on December 27, 2020.  Although the Act primarily addresses coronavirus emergency response and relief and appropriations through September 30, 2021, it also contains several provisions of interest for employers that sponsor benefit plans, including temporary flexibility for health care and dependent care flexible spending accounts (FSAs), changes to retirement plan provisions, and certain health care plan changes related to so-called “surprise billing”.  The following summarizes the provisions of the Act that affect health care and dependent care FSAs.

Continue Reading New Year, Old FSA Money?

The Tenth Circuit’s recent split decision in M. v. Premera Blue Cross, No. 18-4098 (July 24, 2020), poses a significant threat to the deferential standard of review typically applied to benefit plan claim determinations, and imposes a new burden on plan administrators.

More than 30 years ago, the Supreme Court held in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), that benefit denials are “reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Applying the Firestone doctrine, lower courts have consistently applied the substantially more deferential “arbitrary and capricious” or “abuse of discretion” standard of review to benefit denials when the plan at issue granted the plan administrator (or relevant fiduciary) discretionary authority consistent with the Firestone case.

The Tenth Circuit, in Premera, changes that standard.

Continue Reading Tenth Circuit Decision Puts New Emphasis on Including Discretionary Authority Language in Summary Plan Descriptions

The IRS and the Treasury Department, acknowledging the widespread impact of COVID-19, have issued Notice 2020-29 and Notice 2020-33, granting much-sought flexibility for flexible spending accounts (“FSAs”) and health plans.  Though the Section 125 cafeteria plan rules applicable to FSAs and health plans already permitted some limited election changes in the case of changes in status (for example, in the event of significant cost or coverage changes), they did not address the wide array of changes that many participants have wanted to make based on the ripple effects of the COVID-19 crisis.  In addition, the existing Section 125 rules required that any change to the election be consistent with (as determined under the rules) and on account of the applicable change in status.

Continue Reading Flexibility for Flexible Spending Accounts in Light of COVID-19

The Department of Labor (together with the Treasury Department) has issued helpful deadline relief for participants and beneficiaries in health, disability, other welfare and pension plans, as well as for plan sponsors and administrators of such plans, during the COVID-19 National Emergency.  The guidance came just in time for plan administrators at risk of missing the deadline for distributing annual funding notices, which was April 29 this year.

Continue Reading DOL Issues COVID-Related Deadline Relief

The Families First Coronavirus Response Act, signed into law on March 18, 2020, is a  significant piece of federal legislation addressing the 2019 Novel Coronavirus (COVID-19) pandemic.  Among its many provisions is a broad requirement that group health plans and health insurance issuers provide coverage for COVID-19 testing without any cost sharing, prior authorization,