Health Plans

Recent legislation allows employers to continue offering first-dollar telehealth coverage without jeopardizing the ability to contribute to a health savings account (“HSA”), but only through the end of the 2024 plan year.

Background – HSA Eligibility

Employees can make and receive pre-tax contributions to HSAs to use for qualified medical expenses. To be “eligible” to make or receive contributions to an HSA, you (a) must be covered by a high deductible health plan (“HDHP”), and (b) may not have other non-HDHP coverage that covers benefits before the HDHP deductible has been met.

Certain types of coverage, like dental and vision care, is disregarded in determining whether an individual is “eligible” to contribute to an HSA. Disregarded coverage does not have to be coordinated with HDHPs. This means that participants can receive “first-dollar” coverage for disregarded coverage and still be eligible to make or receive contributions to an HSA.…

Continue Reading Employers Can Continue to Cover Telehealth Benefits Before HDHP Deductible Is Met

Section 9501 of the American Rescue Plan Act, 2021 (“ARPA”) provides for a complete COBRA premium subsidy for all Assistance Eligible Individuals beginning on April 1, 2021, and ending on September 30, 2021. This article discusses who qualifies as an Assistance Eligible Individual, the impact of the relief on such individuals, the impact of the relief on the COBRA maximum coverage period, the additional requirements imposed on employers in connection with the relief, and how employers may receive reimbursements for the subsidy from the federal government.
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Continue Reading Special Mandatory COBRA Subsidy in 2021 for Involuntarily Terminated Employees

On October 29, 2020, the Department of Health and Human Services, the Department of Labor and the Department of the Treasury released the final “Transparency in Coverage” rule. The rule requires most group health plans and issuers to provide individualized cost-sharing information to participants, beneficiaries and enrollees upon request, and to publicly disclose in-network provider negotiated rates, historical out-of-network allowed amounts and drug pricing information. The final rule also amends the medical loss ratio (MLR) rules to allow issuers to receive credit in the calculations for savings they share with enrollees utilizing lower-cost, higher value providers.

The final regulations are similar to the proposed regulations issued on November 15, 2019 (described in this previous blog post). While the proposed rule had included a request for information regarding how providing quality measurements and reporting could be used to complement cost-sharing information, the final rules do not address health care quality and continue to focus on price transparency.…

Continue Reading Final Rules Require Health Plans to Publicly Disclose Reimbursement Rates

The Internal Revenue Service has issued guidance (Notice 2020-15) that allows sponsors of high deductible health plans (“HDHPs”) to reimburse up to the full cost of medical care services and items for testing and treatment of COVID-19 before plan participants meet the plan’s minimum statutory deductible.  Accordingly, participants in a HDHP that waives…

Businesses are rapidly developing strategies to continue functioning and protect their workforces in the face of the growing Coronavirus COVID-19 outbreak. For obvious reasons, businesses may want to deploy health screening, testing, and professional medical advice services—including telemedicine—to their employees and dependents. It is critical that employers’ health plans support these efforts and not get…

The Departments of Health and Human Services, Labor and Treasury released a new “Transparency in Coverage” proposed rule that requires most group health plans and issuers to publicly disclose negotiated rates with in-network providers and historical data showing amounts paid for covered items or services furnished by out-of-network providers.  In addition, group health plans and issuers would be required to create a self-service website through which participants could obtain estimates of out-of-pocket costs for covered items or services.  The proposed rule implements provisions of the Affordable Care Act and is intended to help consumers shop for medical services from lower-cost, higher-value providers.
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Continue Reading Group Health Plans Face Automatic Public Disclosure of Negotiated Rates and Plan Payments

Many lawsuits against employer group health plans hinge on the enforceability of the plan’s anti-assignment provision. ERISA does not give providers the right to sue for plan benefits. A provider’s lawsuit must be derived from the participant’s right to plan benefits. In other words, the participant must assign his or her right to the provider. Even with such an assignment, a provider will lack standing to bring a lawsuit if the ERISA plan has a valid and enforceable anti-assignment clause. (ERISA itself generally prohibits assignment of retirement plan benefits, but the ERISA prohibition on assignment does not apply to health and welfare plans.)

While courts have generally held that anti-assignment provisions are enforceable, states have begun weighing in on the side of providers in an attempt to keep these lawsuits alive. But can a state law invalidate anti-assignment clauses in plans subject to ERISA and mandate that benefits be assignable to a healthcare provider? The Fifth Circuit, in Dialysis Newco, Inc. v. Community Health Systems Group Health Plan, 938 F.3d 246 (5th Cir. 2019), recently invalidated a Tennessee law that sought to do just that.…

Continue Reading Will Your Group Health Plan’s Anti-Assignment Clause Defeat Provider Claims?

In January, we posted about the Department of Labor’s (DOL or the “Department”) proposed rule to allow more Association Health Plans (AHPs) to be regulated as large group health plans.  The proposed rule garnered national attention and the Department received over 900 stakeholder comments from consumer groups, individual employers, employer associations, health insurance issuers, business groups, and state regulators.  Supporters of the rule emphasized the need for more affordable health care options while detractors raised concerns about the rule’s potential effects on the existing health care markets and the scope of coverage that will be available to individuals who enroll in AHPs.

On June 19, 2018, the Department finalized the rule, 83 Fed. Reg. 28912 (June 19, 2018) (codified at 29 C.F.R. 2510), with relatively few changes to the proposed rule.…

Continue Reading DOL Finalizes Highly Anticipated Rule Aimed at Expanding Access to Association Health Plans

Taxpayers may treat the $6,900 original annual contribution limit for family coverage to health savings accounts (“HSAs”) as the limit for 2018, according to IRS guidance released on April 26, 2018 (press release; IRS Rev. Proc. 2018-27).  Employers that took steps to comply with the reduced limit may need to take action.

As discussed in our earlier blog post, the contribution limit for family coverage to HSAs for 2018 was reduced by $50 from $6,900 to $6,850.  Bowing to pressure from stakeholders who explained to the Treasury Department and IRS that implementing the reduction would impose administrative and financial burdens, the IRS announced that for 2018, taxpayers with family coverage under a high deductible health plan may treat $6,900 as the maximum deductible HSA contribution.

This is welcome relief for employers that had not yet taken steps to comply with the reduced limit.  However, for employers that already informed participants of the change and took steps to modify salary reduction elections or return contributions in excess of the lower limit, this guidance likely triggers additional action.…

Continue Reading Original HSA Family Contribution Limit to Remain in Place for 2018