New health plan requirements and other updates | Kelley Drye & Warren LLP
This notice provides a summary of recent developments impacting the Affordable Care Act (âACAâ) requirements applicable to employers, as well as other recent changes impacting employer sponsored health plans. .
Lower ACA Affordability Threshold
Employer-sponsored health plans will only meet the ACA affordability requirement in 2022 if the cheapest individual coverage option available under the plan does not exceed 9.61% of income of an employee’s household, up from 9.83% in 2021. This means that a plan that was affordable in 2021 might not be affordable in 2022, even without increasing premiums. Employers must confirm that their health plans will remain affordable for plan year 2022 below the new lower threshold.
Advanced Explanation of Benefits (EOB)
Effective for plan years beginning on or after January 1, 2022, plans and insurers, within one business day of receiving a vendor’s good faith estimate of expected plan fees or the insurer for an item or service (as required by the No Surprises Act), must provide members and beneficiaries with a notice containing various information, including the following:
- For network providers or facilities, the contractual plan rate for the item or service, based on billing and diagnostic codes provided by the provider or facility;
- For providers or off-grid facilities, a description of how the participant or beneficiary can obtain information about the providers or facilities in the plan (if applicable); and
- A good faith estimate of the amount of cost sharing for which the participant or recipient would be responsible for the item or service.
The Ministries of Labor, Health and Social Services and the Treasury (the âDepartmentsâ) have announced that they will not issue regulations regarding these advanced EOB requirements before the effective date of January 1, 2022 and will defer the application until they have done so. . However, plans should prepare to meet these requirements as soon as possible, as this may require substantial effort, including engaging third party administrators (TPAs) to provide information.
Price transparency rules
Under final regulations issued by departments to implement price transparency requirements under the ACA, group health insurance plans and health insurers will be required to disclose information on a public website (in separate machine-readable files) concerning:
- Network supplier prices for covered items and services;
- Authorized off-grid amounts and charges billed for covered items and services; and
- Negotiated rates and historical net prices for covered prescription drugs.
For plan years beginning on or after January 1, 2022, ministries will defer the application of the first two elements until July 1, 2022 and the third element pending new regulations. However, as with the EOBs advanced above, plans should prepare to meet these requirements as soon as possible, as this may require substantial effort, including engaging PTAs to provide information.
The rules also require health insurance plans and insurers to provide a price comparison tool over the phone and through the plan or insurer’s website that would allow participants to compare their share of cost-sharing in the plan. plan framework for particular services and items for the plan year (with respect to specific geographic areas and participating providers under the plan or coverage). The Departments will postpone the application of this provision until 2023.
Mental Health Parity and Substance Abuse Equity Act (MHPAEA) compliance
The DOL verified companies’ compliance with the MHPAEA, in particular with regard to Non-Quantitative Processing Limitations (NQTL). Group health plans offering both medical / surgical and mental health / addiction benefits should perform a detailed benchmarking of the design and application of any NQTL and be able to produce documentation of this analysis at the request of government departments or plan members. While sponsors of fully insured health plans may rely on their insurers to prepare the analysis, sponsors of self-insured health plans will be responsible for producing their own. They must therefore:
- Work with their PTAs to ensure that an NQTL analysis has been prepared and documented;
- Review analysis to verify compliance with mental health parity requirements; and
- Work with lawyer ERISA to develop a DOL audit response plan.
Washington State Partnership Access Line Funding Program (WAPAL)
Washington state requires health insurance companies and employers who sponsor self-funded health plans covering Washington residents to pay quarterly fees to support the WAPAL funding program, which helps health care providers manage the mental health needs of patients. While health insurance companies are responsible for fees for fully insured groups, employers who sponsor self-funded plans will need to check with their PTAs to determine which party is responsible for the payment. Currently, the fee is $ 0.13 per covered life per month, with the first payment due on November 15, 2021.
Illinois Consumer Coverage Disclosure Act
Effective August 27, 2021, employers with employees in Illinois are required to disclose to group health plan participants a written list of covered benefits included in group health insurance coverage in a format that allows for Easily compare these covered benefits with the essential health insurance benefits required. Individual health insurance coverage regulated by the State of Illinois. This information must be provided to employees upon hiring, annually and upon request. Failure to meet disclosure requirements can result in a penalty of $ 1,000 for the first offense, up to $ 3,000 for the second offense, and up to $ 5,000 for a third or subsequent offense (for employers with 4 or more employees).