Ringing in the New Year: Key Developments for Health Plan Sponsors | Perkins Coie

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There are many new and expanded regulatory requirements for group health plans and group health plan issuers to be aware of this year. Many of these requirements were enacted under the Consolidated Appropriations Act of 2021, which was passed in December 2020. This update describes the key regulatory requirements that we see the most questions or movements from customers about. This is not an exhaustive list, and we encourage plan sponsors to reach out to their consultants, carriers, and other providers who support plan administration and design who may be impacted by these new requirements.

Comparative analysis of mental health

Group health insurance plans (and issuers) that provide mental health and/or substance use disorder benefits are required to undergo a comparative analysis of benefit design and the use of non-quantitative treatment limits (NQTLs). NQTLs differ from financial constraints like cost sharing and quantitative constraints like visit limits. NQTLs include limitations such as medical management standards for medical necessity or appropriateness, experimental or investigational exclusions, and drug formulation designs. See 29 CFR 2590.712(c)(4). Accordingly, while plan design and coverage terms are relevant, a self-funded plan sponsor must coordinate with its third-party claims administrator to complete this analysis (and possibly others – e.g., if determining medical necessity is outsourced to another provider).

Coverage of COVID-19 OTC testing

Beginning January 15, 2022, group health plans (and issuers) must provide 100% coverage for over-the-counter COVID-19 diagnostic tests, with no co-payment or medical management restrictions—even if the test was purchased without a provider’s prescription or clinical evaluation. However, the plan may impose dollar or volume limits under certain circumstances, and the plan may also implement safeguards against fraud and abuse. Read more on our sister blog, Coronavirus (COVID-19): Guidance for Businesses.

Billing protection for medical surprises, including an independent dispute resolution mechanism

For plan years beginning on or after January 1, 2022, group health insurance plans (and issuers) must implement protections against off-network compensation billing and co-payment related to emergency services and certain non-emergency and air ambulance services. Plans and issuers must also implement additional safeguards, including procedures for resolving patient-provider disputes and enhanced rights to external review.

Plans and issuers must also communicate these surprise billing protections, which must be made publicly available, posted on a public website, and included in declarations of performance. The US Department of Labor (DOL) has issued a model notice.

Self-funded plan sponsors should also confirm whether they opt for state-level protections. Most states have consumer insurance coverage, but a subset of states (such as Washington State) have enacted their own surprising billing requirements.

Continuity of care and transitional care protection

For plan years beginning on or after January 1, 2022, group health insurance plans (and issuers, providers, and facilities) must notify “continuing patients” when expiration, non-renewal, or termination of certain contractual relationships may result in changes in provider or the condition of the facility network and therefore affect coverage of benefits. These individuals must also be given the opportunity to apply for transitional care, which would allow them to continue accessing these benefits for up to 90 days. According to the Common Agency FAQ, pending further rulemaking, the plans should implement the continuity of service requirements in good faith and a reasonable interpretation of the Act (Code Section 9818 and ERISA Section 718).

Provider Directories and Cost Sharing Protection

As a further safeguard against billing surprises (see Common Agency FAQ), for plan years beginning on or after January 1, 2022, group health insurance plans (and issuers) must establish a process to update and verify the accuracy of provider directory information and establish a log to respond to requests from a participant, beneficiary or registrant about a provider’s network status. In addition, databases must be maintained to ensure the accuracy of vendor directories. If services are received in reliance on incorrect information (e.g. provider listed as on network was off network), the plan must provide cost-sharing relief.

Disclosure of Brokerage and Consulting Fees

For contracts entered into, extended or renewed on or after December 27, 2021, group health plan trustees are required to obtain disclosures from providers who are expected to receive at least $1,000 for the provision of brokerage services or consulting to to support their fiduciary obligations, only to pay reasonable compensation for services. The law lists types of mediation and consulting services that are subject to disclosure. However, as per DOL Field Assistance Bulletin 2021-03, these terms are to be interpreted broadly – this is not necessarily limited to the “recording broker” and the provider need not hold a broker license. Pending further guidance, plan trustees and vendors are required to comply in good faith and a reasonable interpretation of the law (ERISA Section 408(b)(2)), which might include analogy to existing requirements and procedures for similar disclosures required for a qualified Retirement plans are required.

Benefits of Prescription Drugs and Expense Reporting

Beginning December 27, 2022 and annually thereafter, group health insurance plans (and issuers) are required to submit information about prescription drug benefits and expenses — including information about commonly dispensed drugs, most expensive drugs, and rebates paid by drug manufacturers to plans and third-party administrators, and pharmacy benefits managers . While the carrier, third-party claims administrator, or pharmacy benefits administrator is expected to undertake reporting on behalf of a self-funded plan, plan sponsors should specifically acknowledge this. Enforcement was delayed by comment on the joint agency’s interim final rules, with the first deadline for submitting data for 2020 and 2021 extended to 27 December 2022. Thereafter, reporting is due on June 1 of each year.

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