From fostering a workplace culture centered on supporting the physical, emotional, career and financial wellbeing of employees to ensuring that benefit programs are compliant with local, state and federal requirements, effectively protecting the wellbeing of your employees connects directly to protecting the wellbeing of your organization overall. Compliance Connections delivers actionable guidance designed to help you manage and optimize the connections between the compliance of your benefits and human resources programs to overall organizational wellbeing. Significant federal and state regulatory oversight of health and welfare benefits adds to the complexity of administering those benefits, and with the appearance of overlapping requirements from multiple laws, the whirlwind of changes triggered by a new administration, and the come-and-go nature of temporary relief due to COVID-19, employers won't be blamed if they are a bit bewildered when trying to navigate the additional complexity brought about by 2021. This edition focuses on the regulatory roller coaster ride for employee benefits compliance that was 2021. Below, we explore some of the ways that may have had employers scratching their heads over the past twelve months.
Wondering what exactly is a "good faith effort to comply." The Consolidated Appropriations Act, 2021 (CAA) added numerous new requirements for employer-sponsored group health plans, including a "no gag clause" rule on cost or quality of care data, additional information requirements for medical ID cards, continuity of care coverage and notice requirements, accuracy in provider directories requirements, and balance billing disclosure requirements. Despite the fact that many of the requirements are scheduled to begin with plan years beginning on or after January 1, 2022 (and one requirement is already in effect — the no gag clause rule), the applicable agencies have not released implementing guidance except to state that plans are expected to make a good faith effort to comply. Employers should not translate "good faith effort to comply" into "no need to comply," but the temptation may arise. Instead, employers should review available information, such as the text of the law and articles from reliable resources, and engage their insurers and/or third party administrators (TPAs) to determine what needs to be done in order to satisfy good faith effort requirements. How will your organization strive to meet the CAA's good faith effort to comply requirements?
Watching as Congress crossed the streams. Just when you thought that the Patient Protection and Affordable Care Act (ACA) had nothing new up its sleeve, federal regulators issued final regulations implementing transparency requirements under the ACA in late 2020. Along with a number of other requirements, the ACA rules require plans and insurers to provide machine readable files with detailed information on network contract rates, out-of-network allowed amounts, and prescription drug negotiated rates and historical net prices beginning with plan years in January 2022. Shortly after the ink dried on the ACA regulations, Congress enacted the CAA (not a typo for ACA), which also has transparency requirements. The CAA (still not a typo for ACA) includes a requirement to report certain prescription drug information to applicable regulators beginning in 2022. Based on the overlap between these two requirements, regulators are delaying the effective date of ACA machine readable files for network contract rates and out-of-network allowed amounts until July 2022 for most plans, and the prescription drug files are delayed pending additional guidance. However, under regulations released on November 18, 2021, CAA (yup, still not a typo for ACA) prescription drug reporting for 2020 and 2021 will be required by December 31, 2022. In other words, both ACA and CAA (again, not a typo for ACA) will require plans to meet transparency requirements beginning in mid-2022. What discussions has your organization begun regarding the intertwined transparency requirements under the ACA and CAA?
Eyeing the ever-growing stack of mental health parity requirements. Over the past several years, federal agencies have released several sets of FAQs, a disclosure request template, and other compliance materials on the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Much of this recent guidance relates to the 21st Century Cures Act, which requires federal agencies to issue MHPAEA guidance and step up parity enforcement for non quantitative treatment limitations (NQTLs). The CAA (still not a typo for ACA) amended the MHPAEA to provide new protections. More specifically, the CAA requires group health plans that offer both medical/surgical benefits and mental health/substance use disorder (MH/SUD) benefits and that impose NQTLs on MH/SUD benefits to perform and document their comparative analyses of the design and application of NQTLs. In addition, those comparative analyses must be made available not only to applicable requesting federal or state agencies, but also to participants and beneficiaries (or their authorized representatives) in ERISA-covered plans in order to meet requirements to provide comparative information on medical necessity criteria for both medical/surgical benefits and MH/SUD benefits, as well as the processes, strategies, evidentiary standards, and other factors used to apply an NQTL with respect to medical/surgical benefits and MH/SUD benefits under those plans. Applicable federal agencies have increasingly focused on mental health parity during their compliance processes. In fact, the Department of Labor (DOL) reportedly took the step to require that any plan under audit at the time the initial comparative analysis reporting requirement became effective in February 2021 would be required to produce its NQTL comparative analysis report. Given the increasing focus on mental health parity enforcement, what actions should your plan take to ensure that it can meet applicable requirements?
Following the ping pong ball. In an attempt to increase vaccination rates in America and bring an end to the COVID-19 pandemic, President Biden served-up a vaccine mandate for employers with 100 or more employees. As with ping pong, the play is fast and demands quick reaction time. OSHA scored the first point for the Biden Administration when, on November 4, 2021, it issued its Emergency Temporary Standard (ETS) on COVID-19 vaccination and testing requirements. Under the ETS, employees of private businesses with 100 or more employees are required to either be fully vaccinated by January 4, 2022, or submit to weekly testing. On November 6, 2021, the Fifth Circuit Court of Appeal joined the game, returning OSHA's volley altering the vaccine mandate trajectory. Specifically, the Fifth Circuit granted a temporary stay freezing enforcement of the ETS while the request for a permanent injunction works its way through the court system. In addition to the lawsuit in the Fifth Circuit, at least 34 other lawsuits have been filed necessitating consolidation of the actions. On November 16, 2021, a court clerk for the U.S. Judicial Panel on Multidistrict Litigation assigned the consolidated cases to the Court of Appeals for the Sixth Circuit. The method by which the clerk selected the Cincinnati-based appellate court: randomly selecting a ping pong ball out of a drum. Employers who fall under the purview of the vaccine mandate are advised to monitor the on-going match as it plays out in the federal court system over the coming months. How will your organization be impacted by the winner of the table tennis match over OSHA's ETS?
Sitting back as the ACA Survives. Again. "Have we written about this before?" This is probably the same question Supreme Court Justices asked themselves when writing the opinion for California v. Texas after another round of challenges on the constitutionality of the ACA individual mandate reached their doors. Perhaps some of the Justices have an "ACA folder" on their desktops where they copy and paste certain text to include in their portions of opinions. Regardless, it is important for employers to understand that, even though California v. Texas settled the most recent challenge to the individual mandate, litigation continues with challenges to various portions of the ACA, including further challenges to Section 1557 (focused on nondiscrimination provisions), the health insurance tax, and the contraceptive mandate. While the ACA remains the law of the land, prudent employers will be mindful that additional tweaks to continued implementation of the ACA may be ahead. How does your organization stay abreast of changes to the ACA due to litigation?
This is a preview edition of Compliance Connections, a monthly publication produced by Gallagher's Compliance Consulting Practice. For five more action steps, contact your Gallagher representative or visit our Compliance Resources page to subscribe and receive the full version of this publication each month.
Compliance is a series of actions, not a final destination. As a trusted advisor, Gallagher has developed this Compliance Connections series to help you pursue a path through employee benefits compliance issues as part of an overall continuing compliance plan. Plan sponsors should carefully evaluate their health and welfare plans to determine if they are in compliance with both federal and state law. If you have any questions about one or more of the compliance requirements listed above, or would like additional information on how Gallagher constantly monitors laws and regulations impacting employee benefits in order to support plan sponsors in their compliance efforts, please contact your Gallagher representative.
The intent of this analysis is to provide you with general information. It does not necessarily fully address all your organization's specific issues. It should not be construed as, nor is it intended to provide, legal advice. Questions regarding specific issues should be addressed by your organization's general counsel or an attorney who specializes in this practice area.