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. This edition focuses on tricky compliance issues that may arise due to relief associated with COVID-19.
Below, we explore items to add to your Compliance To-Do list.
- Take on telehealth. The Consolidated Appropriations Act of 2022 (CAA 2022), which was signed into law on March 15, 2022, includes an extension of a recently expired provision allowing High Deductible Health Plans (HDHPs) to reimburse telehealth and other remote care services before the covered individual has met the HDHP statutory deductible. This relief is extended from April 1, 2022 through the end of the year. This extension is not based on plan years, so any employer can avail itself of the relief if it wants to provide coverage for telehealth services prior to the deductible being satisfied — but only for the remainder of this calendar year. For calendar year plans, this means that there is a gap between January 1 and March 31, 2022, during which coverage for telehealth on a pre-deductible basis will generally render an individual ineligible to contribute to a health savings account (HSA). Employers who wish to adopt the CAA 2022 relief should contact their third-party claims administrators (for self-insured plans) or insurance carriers (for fully-insured plans) to ensure that they are able to administer partial year relief. Employers must also be prepared to communicate with employees and determine whether plan amendments and summary plan description (SPD) updates for their HDHPs are required. A cafeteria plan with a health flexible spending account (FSA) option that is compatible with HSA participation (e.g., a "limited purpose health FSA") may also need to be amended to allow continued reimbursement of telehealth expenses. What changes to your benefits does the recent telehealth relief trigger?
- Beware of DCAP limitations. The Consolidated Appropriations Act 2021 (CAA 2021) amended the law to permit dependent care assistance programs (DCAPs) to temporarily extend their grace periods from two months and 15 days to 12 months for 2020 and 2021. The CAA 2021 also permitted a carryover of unused amounts from the 2020 and 2021 plan years. However, beginning in 2022, the "old" rules again apply — e.g., the maximum grace period for the 2022 calendar year plan year will be the first two months and 15 days in 2023. No carryover will be permitted for calendar year 2022 or later. Plans that permitted the relief must now ensure that their DCAP limits meet the 2022 and beyond standards. Do your DCAP limits meet the post-CAA 2021 requirements?
- Watch out for springing claims and appeals! Under the COVID-19 National Emergency declared by the President, plans subject to ERISA or IRS regulations (e.g., private employers and church plans) must disregard the period from March 1, 2020 until 60 days after the end of the National Emergency or such other date announced by the Department of Labor and the IRS for purposes of certain timeframes (called the "Outbreak Period"). Nonfederal governmental plans are encouraged (but not required) to provide similar relief to participants and beneficiaries. The Outbreak Period applies to certain COBRA timeframes, HIPAA special enrollments, and claims and appeals deadlines. The claims and appeals deadlines may be the trickiest to administer because many plans already have lengthy deadlines for claims to be submitted and appeals to be made. For example, if an employee incurred a claim in April 2020, the group health plan may require the employee to submit that claim by April 2021, but the plan is required to toll the timeframe, so the employee would have an additional year to submit that claim (April 2022). Such "springing" claims may cause issues when plans change third party administrators or insurers. What discussions are needed with your TPA or insurer to address potential springing claims and appeals under your health plans?
- Cross the T's and dot the I's on your direct coverage program. Under the Families First Coronavirus Response Act (FFCRA), as amended by the Coronavirus Aid, Relief and Economic Security (CARES) Act, COVID-19 testing provided by a provider must be covered without cost sharing during the Public Health Emergency (PHE) declared by the Secretary of the Department of Health and Human Services. More recent guidance clarified that individuals who purchase over-the-counter (OTC) COVID-19 diagnostic tests for personal use will be able to seek reimbursement from their group health plans or health insurance — and in some cases will be able to have the tests paid for at point of sale, if their plan provides a "direct coverage" option. Plans that implement a direct coverage arrangement cannot exclude tests bought at non-participating or out-of-network pharmacies, but can limit reimbursement to $12 per individual test (or the cost of the test, if less than $12) for tests. If there is no network rate or negotiated rate under the plan, the plan must pay the out of network rate that is publicly posted on their website; however, if the plan establishes a "direct coverage arrangement" with a pharmacy, PBM or retailer (or any combination), then it can limit the plan's payment to out-of-network retailers to $12 per test. Per the rules, the direct coverage program must have an adequate number of retail locations, both in-person and online. What additional steps does your plan need to take to have a compliant direct coverage program for OTC COVID-19 tests?
- Be careful with COVID testing limitations. The FFCRA coverage requirement for COVID-19 tests that are diagnostic and medically appropriate for an individual, as determined by an attending health care provider in accordance with currently accepted standards of medical practice, is not limited in number. Although plans and issuers may not impose prior authorization or other medical management requirements to deny coverage for individuals who are tested multiple times, providers are urged to consult guidance issued by the Centers for Disease Control and Prevention (CDC), as well as state, tribal, territorial, and local health departments or professional societies, when determining whether diagnostic testing is appropriate for a particular individual. In contrast, plans may limit the number of tests covered to eight OTC tests per covered individual in a 30-day period (or per calendar month). Plans are not permitted to use a smaller limit over a shorter period such as four tests over a 15-day period. This limit only applies to OTC COVID-19 tests that are administered without a prescription or the involvement of a health care provider. Does your health plan have appropriate limits (or a lack of limits) on COVID-19 tests?
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.