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On May 12, 2020, the Internal Revenue Service (“IRS”) published Notices 2020-29 and 2020-33. Notice 2020-29 is the latest installment in COVID-19 relief guidance targeted at health and welfare benefits. The Notice enables employers to provide flexibility to employees to modify their health coverage and flexible spending account (“FSA”) elections and gives employees until the end of 2020 (but not 2021) to use certain FSA amounts that may otherwise be forfeited. Unlike certain COVID-19 relief related to retirement plans, employers may make the relief under Notice 2020-29 available to all participants, regardless of whether they have suffered a COVID-19-related loss.

Notice 2020-33 allows employers to adopt an indexed maximum carryover amount for health FSAs, beginning with amounts that may be carried over from the 2020 plan year to the 2021 plan year.…

Continue Reading IRS Empowers Employers to Increase Health Coverage, FSA Election Flexibility During Pandemic; Clarifies HDHP COVID-19 Relief

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?

On January 5, 2018, the Department of Labor (DOL or the “Department”) published a proposed rule to allow more Association Health Plans (AHPs) to be regulated as large group health plans. 83 Fed. Reg. 614 (Jan. 5, 2018) (to be codified at 29 C.F.R. pt. 2510). The proposed regulation was developed in response to President Trump’s October 12, 2017 Executive Order 13813, directing the executive branch to facilitate the purchase of insurance across state lines and, specifically, directing the DOL to “consider proposing regulations or revising guidance . . . to expand access to health coverage by allowing more employers to form AHPs.” The proposed regulation fulfills this charge by relaxing the Department’s existing interpretation of the conditions under which an association is considered the employer sponsor of a single multiple employer welfare arrangement under the Employee Retirement Income Security Act (ERISA). 83 Fed. Reg. at 626. An AHP that is a single multiple employer arrangement more easily qualifies as a plan offered in the large group market because it may aggregate employees of all employer members to determine the plan’s market. In some cases under the proposed rules, an AHP may be offered to employers in more than one State, even if the AHP is insured.
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Continue Reading DOL Proposes to Relax Regulations Governing Association Health Plans