Category: News

On August 20, 2021, the Departments of Health and Human Services (“HHS”), Labor (“DOL”), and the Treasury (collectively called “the Departments”) jointly issued an FAQ which implements parts of the Consolidated Appropriations Act (“CAA”) that was passed at the end of 2020 and the Transparency in Coverage (“TiC”) final regulations that were issued in November of 2020. The requirements under the CAA apply to all group health plans, including grandfathered plans.

The FAQ defers enforcement of certain provisions of the CAA and TiC regulations, including:

• TiC – Machine Readable Files:
  • For files associated with in-network rates and out-of-network allowed amounts and billed charges, delayed until July 1, 2022.
  • For prescription drug files, delayed pending future guidance.
• CAA Price Comparison Tools: Delayed until the first plan year that begins on or after January 1, 2023 (to align with TiC requirements).
• Good Faith Estimate (“GFE”) and Advance Explanation of Benefits (“EOBs”):
  • Delayed pending future rulemaking.
• Reporting on Pharmacy Benefits and Drug Costs:
  • Delayed pending future rulemaking – compliance expected by December 27, 2022.

Other provisions of the CAA will continue to take effect as described under the statute, but with good faith relief available pending future guidance or rulemaking. The following describes each requirement and any available relief.

Transparency in Coverage – Machine Readable Files

Requirement: Group health plans and health insurance carriers must make public three machine-readable files disclosing:

1. in-network rates,
2. out-of-network (“OON”) allowed amounts and billed charges, and
3. negotiated rates and historical net prices for covered prescription drugs.

Originally, group health plans were to comply with this requirement for plan years beginning on or after January 1, 2022.

Enforcement Relief: FAQ 49 provides the following relief with respect to publishing machine readable files:

• The requirement to make public in-network rates and OON allowed amounts and billed charges (1 and 2 above) is delayed until July 1, 2022.
  • For plan years that begin between January 1, 2022 and July 1, 2022, the files must be posted by July 1, 2022.
  • For plan years that begin after July 1, 2022, the files must be posted in the month in which the plan year begins.
• The requirement to make public negotiated rates and historical net prices for covered prescription drug (3 above) has been delayed pending further rulemaking.

Transparency in Coverage – Price Comparison Tools (Including CAA Requirements)

Requirement: Under the TiC requirements, group health plans and carriers must provide for the disclosure of cost sharing information in advance of receiving care. Such disclosure is required to be made through an internet-based self-service tool and in paper form. This requirement takes effect for plan years beginning on or after January 1, 2023, with respect to 500 identified items and services. Full compliance is required for plan years beginning on or after January 1, 2024.

The CAA includes price transparency and cost information requirements that are similar to (if not duplicative of) what is required by the TiC. Under the statute, the CAA requirements take effect for plan years beginning on or after January 1, 2022.

Enforcement Relief: The Departments will delay enforcement of the CAA’s price comparison requirement to align with the TiC effective date (plan years beginning on or after January 1, 2023). In addition, the Departments will undertake rulemaking to determine whether the requirements from the TiC final rules also satisfy the requirements of the CAA. Notably, future guidance will require that cost sharing information be available via telephone (as well as through the internet and in paper form). Plans with existing tools should continue to make them available. While the TiC requirements do not apply to grandfathered plans, to the extent they are duplicative of requirements under the CAA, grandfathered plans will likely need to comply.

Insurance ID Cards

Requirement: The CAA requires plans and carriers to include on any physical or electronic ID cards information about deductibles, out-of-pocket maximums, and a telephone number and website address for individuals to seek consumer assistance. Group health plans must comply with this requirement for plan years beginning on or after January 1, 2022.

Good Faith Relief: While regulations are expected to implement the ID card requirements, they will not be issued until after January 1, 2022. Plans should continue to implement this provision effective with the first plan year that begins on or after January 1, 2022, using a good faith, reasonable interpretation of the statute.

Good Faith Estimate and Advance Explanation of Benefits

Requirement: The GFE and Advance EOB requirements under the CAA go hand in hand. Upon the scheduling of items or services (or upon patient request) providers are required to:

• inquire whether the individual has health insurance coverage, and
• provide a GFE of the expected charges for furnishing those items and services to the group health plan.

Upon receiving a GFE, the group health plan must send the participant or beneficiary an Advance EOB that includes certain prescribed information. Originally, group health plans were to comply with this requirement for plan years beginning on or after January 1, 2022.

Enforcement Relief

The Departments are delaying enforcement until future guidance is issued. Any future guidance will include a prospective applicability date to provide additional time for compliance.

Prohibition on Gag Clauses on Price and Quality Data

Requirement: Plans and carriers may not enter into an agreement with a provider, network, TPA or other service provider offering access to a network of providers that directly (or indirectly) restricts the plan from:

• furnishing provider-specific cost or quality of care information or data;
• electronically accessing de-identified claims and encounter data for each participant or beneficiary; and
• sharing such information, consistent with applicable privacy regulations.

Plans and carriers must submit an attestation of compliance.

This requirement was effective December 27, 2020.

Good Faith Relief: Plans should implement this requirement using a good faith, reasonable interpretation of the statute. Future guidance is expected as to how plans will complete and submit the required attestation. This attestation process is expected to begin in 2022.

Provider Directories

Requirement: Group health plans must update and verify the accuracy of provider directory information (every 90 days) and establish a protocol for responding to requests by telephone and email from a member about a provider’s network participation status.

If a participant or beneficiary is furnished an item or service by a non-participating provider (or facility) and the individual was provided inaccurate directory information that stated the provider was “in-network”, the plan must generally treat the item or service as provided in-network.

Group health plans should comply with this requirement for plan years beginning on or after January 1, 2022.

Good Faith Relief: Regulations are expected, but not until after January 1, 2022. Plans should continue implement this provision effective with the first plan year that begins on or after January 1, 2022, using a good faith, reasonable interpretation of the statute.

The Departments have stated that plans will not be out of compliance if they do not impose more than in-network cost-sharing and count any cost-sharing toward the in-network deductible and out-of-pocket maximum in situations where the participant is provided information stating that a provider is in-network.

Balance Billing Disclosure

Requirement: The CAA requires plans and carriers to make certain disclosures regarding balance billing protections to participants and beneficiaries. This notice requirement is effective for plan years beginning on or after January 1, 2022.

Good Faith Relief: Regulations are expected, but not until after January 1, 2022. Plans should continue implement this provision effective with the first plan year that begins on or after January 1, 2022, using a good faith, reasonable interpretation of the statute. Plans will not be out of compliance when using the model notice (as appropriately modified).

Requirement: For plan years beginning on or after January 1, 2022, a patient in a course of treatment with an in-network provider/facility that becomes OON must be notified and given an opportunity to receive coverage on the same terms for up to 90 days.

Good Faith Relief: Regulations are expected, but not until after January 1, 2022. Plans should continue implement this provision effective with the first plan year that begins on or after January 1, 2022, using a good faith, reasonable interpretation of the statute. Any future rulemaking will apply prospectively allowing plans and carriers a reasonable time to comply.

Reporting on Pharmacy Benefits and Drug Costs

Requirement: Group health plans and carriers must submit a report to the Departments with respect to certain health plan and prescription drug information based on the previous plan year. Notably, the 50 most common brand dispensed prescriptions, the 50 most costly drugs, and the 50 drugs with the greatest year-over-year costs. This is in addition to other information including the impact of rebates on premiums and out-of-pocket costs.

Enforcement Relief: Recognizing the significant operational challenges with this requirement, the Departments will defer enforcement for both the first and second deadlines (December 27, 2021 and July 1, 2022, respectively) pending the issuance of regulations or further guidance.

Plans should work to ensure they are able to comply with 2020 and 2021 information reporting by December 27, 2022. 

Employer Action

As many of these provisions are a function of plan administration, it will be important to consult carriers and TPAs (and PBMs with respect to pharmacy reporting) to understand their capabilities to assist in compliance with these new requirements. While the delayed timeframes are helpful, it will be important to understand the provisions and timeframe for when the requirements apply to your group health plan.

The Departments of Labor (“DOL”), Health and Human Services (“HHS”), and the Treasury (collectively, “the Departments”) have jointly released a new FAQ regarding preventive care services and coverage for pre-exposure prophylaxis (“PrEP”).

As background, non-grandfathered group health plans must cover certain preventive care items and services without cost-sharing. On June 11, 2019, the USPSTF released a recommendation with an “A” rating that clinicians offer PrEP with “effective antiretroviral therapy to persons who are at high risk of human immunodeficiency virus (“HIV”) acquisition.” Non-grandfathered group health plans must cover PrEP consistent with the USPSTF recommendations and without cost-sharing effective for plan years beginning on or after June 30, 2020.

This FAQ 47 clarifies:

• Plans must cover, without cost-sharing, items and services that USPSTF recommends should be received prior to being prescribed PrEP as part of the determination of whether such medication is appropriate for the individual and for ongoing follow-up and monitoring. The Q/A-1 provides additional detail of baseline and monitoring services.
• Plans are also required to cover, without cost-sharing, office visits associated with each recommended preventive service for the individual when:
  • the service is not billed separately (or is not tracked as individual encounter data separately) from an office visit, and
  • the primary purpose of the office visit is the delivery of the recommended preventive service.
• Plans may not use reasonable medical management techniques to restrict the frequency of benefits for services specified in the USPSTF recommendation for PrEP, such as HIV and STI screening.
  • When PrEP is medically appropriate for an individual specified in the USPSTF recommendation, as determined by the individual’s health care provider, it would not be reasonable to restrict the number of times the individual may start PrEP.
• Reasonable medical management techniques with respect to coverage of PrEP may be used to encourage individuals prescribed PrEP to use specific items and services, to the extent the frequency, method, treatment, or setting is not specified in the USPSTF recommendation.
  • For example, since the branded version of PrEP is not specified in the USPSTF recommendation, plans may cover a generic version of PrEP without cost-sharing and impose cost-sharing on an equivalent branded version (subject to an accommodation when the generic is not medically appropriate for a particular individual).
• As described in earlier guidance, plans utilizing reasonable medical management techniques must have an easily accessible, transparent, and sufficiently expedient exceptions process.
  • For example, one that allows prescribing and accessing PrEP medications on the same day that an individual receives a negative HIV test or decides to start taking PrEP. Such process cannot be unduly burdensome on the individual or provider.

As plans may not have understood that the regulatory coverage requirements apply to all support services of the USPSTF’s recommendation for PrEP, the Departments will not take enforcement action against a plan for failing to provide coverage of such services until September 17, 2021 (the period ending 60 days after publication of these FAQs), and encourage states to take a similar enforcement approach.

On July 23, 2021, the IRS issued proposed rules that would significantly expand the number of employers required to electronically file information returns with the IRS. Among others things, this change would impact filing of Forms 1094-C/1095-C. If finalized “as is,” this change would take effect for filings due in 2022 (e.g., calendar year 2021 Forms 1094-C/1095-C due to be filed with the IRS by March 31, 2022). It should be noted that this article is limited to the impact the proposed rule may have on Forms 1094-C and Forms 1095-C; however, Forms 1094/1095-B are also affected (e.g., employers with fewer than 50 full-time employees who have a self-funded health plan may use these forms to comply with health coverage reporting). In addition, other forms are affected by this proposed rule but are not addressed in this article, including Forms W-2, 1099 and 5330. Review the proposed regulations for more information.

Under the current rules, employers are required to file Forms 1094-C and 1095-C electronically when filing 250 or more returns. When determining whether the 250 threshold is satisfied, each type of return is considered separately. In addition, corrected returns are generally counted separately from the original information filing and each corrected return is counted separately to determine whether electronic filing is required.

These proposed rules would change those parameters as follows:

• Lower the filing threshold. For filings due in 2022, the proposed regulations require electronic filing when 100 or more returns are filed (as opposed to 250). For filings due in 2023 and beyond, the threshold is further reduced to 10.It is important to note that employers with 50 or more full-time employees are generally required to file Forms 1094/1095-C to comply with the employer shared responsibility mandate. If finalized “as is” the 10-filing threshold will effectively require electronic filing for all Forms 1094/1095-C by 2023.
• Require aggregation. To determine whether an employer must file forms electronically, the proposed rules require all returns to be counted together.For example, under these proposed rules, an employer who files 300 Forms W-2 and 75 Forms 1095-C in 2022 would be required to file Form 1094-C and all Forms 1095-C electronically because, when aggregated, the employer files at least 100 returns (300 W-2s + 75 Forms 1095-C).
• Corrected returns. A corrected information return would be required to be filed in the same manner as the original form.

Employer Action

Although these are only proposed rules, given the potential 2022 effective date, employers should monitor this situation as electronic filing could be required as early as January 2022 for employers who were previously exempt.

On July 19, 2021, the Secretary of Health and Human Services (“HHS”), announced that the administration will renew the COVID-19 pandemic Public Health Emergency, scheduled to expire on July 20, 2021. This will once again extend the period for an additional 90 days and as a result, numerous temporary benefit plan changes will remain in effect.

As previously noted, in a letter sent to state governors, HHS indicated that the agency expects that the Public Health Emergency will likely remain in place for all of 2021. While not formal agency action, it appears that HHS intends to continue to renew the Public Health Emergency through, at least, the end of 2021.

Important Definitions

Emergency Period. HHS issued a Public Health Emergency beginning January 27, 2020. This Emergency Period is now set to expire October 18, 2021 (unless further extended or shortened by HHS).

Outbreak Period. The Outbreak Period started March 1, 2020.The end date is applied on a participant-by-participant basis and is the earlier of 1) one year after the date the participant was eligible for relief and 2) 60 days after the announced end of the National Emergency. The Departments are expected to announce the end date; at this time, no end date has been announced.

While there are other temporary benefit plan provisions and changes that are allowed due to the public health emergency, summarized below are only those provisions directly impacted by the Emergency Period extension.

Benefit Plan Changes in Effect Through the End of the Emergency Period

• COVID-19 Testing. All group health plans must cover COVID-19 tests and other services resulting in the order for a test without cost-sharing (both in-network and out-of-network), prior authorization, or medical management and includes both traditional and non-traditional care settings in which a COVID-19 test is ordered or administered.
• COVID-19 Vaccines. All non-grandfathered group health plans must cover COVID-19 vaccines (including cost of administering) and related office visit costs without cost-sharing; this applies, to both in-network and out-of-network providers, but a plan can implement cost-sharing after the Emergency Period expires for services provided out-of-network.
• Excepted Benefits and COVID-19 Testing. An Employee Assistance Program (“EAP”) will not be considered to provide significant medical benefits solely because it offers benefits for diagnosis and testing for COVID-19 during the Emergency Period and therefore, will be able to maintain status as an excepted benefit.
• Expanded Telehealth and Remote Care Services. Large employers (51 or more employees) with plan years that begin before the end of the Emergency Period may offer telehealth or other remote care services to employees (and their dependents) who are not eligible for other group health plan coverage offered by the employer.
• Summary of Benefits and Coverage (“SBC”) Changes. Group health plans may notify plan members of changes as soon as practicable and are not held to the 60-day advance notice requirement for changes affecting the SBC during the plan year or for the reversal of COVID-19 changes once the Emergency Period expires, provided the plan members are timely made aware of any increase and/or decrease in plan benefits summarized on the SBC.
• Grandfathered plans. If a grandfathered plan enhanced benefits related to COVID-19 for the duration of the Emergency Period (e.g. added telehealth or reduced or eliminated cost-sharing), the plan will not lose grandfathered status if the changes are later reversed when the Emergency Period expires.

Benefit Plan Changes in Effect Through the End of the Outbreak Period

On an individual basis, group health plans, disability, and other employee welfare benefit plans will disregard the period of one year from the date an individual is first eligible for relief, or 60 days after the announced end of the National Emergency, whichever occurs first, when determining the following:

• COBRA. Timeframe for the employer to provide a COBRA election notice; the 60-day election period for a qualified beneficiary to elect COBRA; the COBRA premium payment deadlines (45 days for initial payment, 30-day grace period for ongoing payments); the deadline to notify the plan of qualifying events or disability determinations.
• HIPAA Special Enrollment. 30 days (60 days for Medicaid/CHIP events) to request a special enrollment right due to loss of health coverage, marriage, birth adoption, or placement for adoption.
• ERISA Claims Deadlines. Timeframe to submit a claim and appeal of an adverse benefit determination. For non-grandfathered medical plans, timeframe to request external review and perfect an incomplete request.
  • This includes claim deadlines for a health FSA or HRA that occur during the Outbreak Period.
• Fiduciary Relief of Certain Notification and Disclosure Deadlines for ERISA Plans. A plan will not be in violation of ERISA for a failure to timely furnish a notice, disclosure, or document throughout the duration of the Outbreak Period if the plan and fiduciary operate in good faith and furnish the notice, disclosure, or document as soon as administratively practicable (which may include the use of electronic means such as email and text messages).

Employer Action

Employers should continue to adhere to the national pandemic-related benefit changes and expanded timeframe for providing COVID-19 coverage and other required plan notifications. State and local emergency measures may expire at different times and could impact employee benefit plans (such as insured group health plans) and other state and/or local programs (such as paid leave) differently than the timeframes required under federally regulated program requirements.

On July 26, 2021, the IRS released Notice 2021-46 providing additional guidance on the 2021 COBRA premium assistance (or “COBRA subsidy”). The 2021 COBRA subsidy was included as part of the American Rescue Plan Act (“ARP”). This IRS guidance is coming relatively late, with only two months remaining in the COBRA subsidy period.

Background

Assistance eligible individuals (“AEIs”) who are COBRA qualified beneficiaries (“QBs”) because of an involuntary termination of employment or a reduction in hours receive a 100% COBRA subsidy for the period of April 1, 2021 through September 30, 2021.

The subsidy expires the earlier of:

• The first date that the AEI is eligible for other group health plan coverage or Medicare;
• The end of the maximum COBRA period; or
• September 30, 2021.

Employers are eligible to recoup the cost of the subsidy as a payroll tax credit.

Employers and their COBRA administrators must issue notices with respect to the subsidy.

This latest guidance from the IRS includes a series of FAQs that provides additional information to employers, health insurers, and plan administrators on the COBRA subsidy. While the guidance does not answer all outstanding questions related to the COBRA subsidy, it does provide helpful clarification on the availability of the COBRA subsidy for extended coverage periods, loss of the COBRA subsidy for dental and vision coverage, and which entity may claim the COBRA subsidy tax credit.

Eligibility for COBRA Premium Assistance – Extended Coverage Options

Q:Is the COBRA subsidy available for an AEI eligible for an extended period of COBRA continuation coverage due to a disability determination, second qualifying event, or state mini-COBRA?

Yes. The IRS confirmed that for those AEIs who are eligible to continue COBRA coverage beyond 18 months due to a disability determination, second qualifying event, or an extension under state mini-COBRA, such individuals will also be considered AEIs (absent eligibility for other group coverage or Medicare) to the extent the additional coverage period falls between April 1, 2021 and September 30, 2021.

End of the COBRA Subsidy – Dental and Vision Coverage

Q: If an AEI elects COBRA continuation coverage for only dental and/or vision coverage and receives a COBRA subsidy, does the AEI cease to be eligible for the COBRA subsidy if they subsequently become eligible for other group health plan coverage or Medicare that does not provide dental or vision benefits?

Yes. The AEI’s COBRA subsidy for all plans ends when the individual becomes eligible for coverage under any other disqualifying group health plan or Medicare. As a result, an AEI that becomes eligible for Medicare will lose eligibility for the COBRA subsidies for medal, vision, and dental coverage despite most Medicare plans’ limited coverage of dental or vision benefits. The same holds true for an AEI that becomes eligible for other group medical coverage where the AEI’s new plan sponsor does not offer vision or dental benefits, or if the benefits provide less coverage than the COBRA plans in which the AEI is currently enrolled.

It is important to note that the subsidy requirements terminate once an AEI becomes eligible for a form of disqualifying coverage. The AEI does not need to enroll in the coverage to lose the subsidy.

Claiming the COBRA Subsidy Payroll Tax Credit

As described in ARP and subsequent guidance, the funding to offset the additional expense of subsidized COBRA coverage for AEIs comes in the form of a payroll tax credit. With respect to federal COBRA, the common law employer sponsoring the plan will generally receive the payroll tax credit. Carriers claim the credit with respect to fully insured plans that are not subject to federal COBRA but are subject to a state mini-COBRA law.

In Notice 2021-46, the IRS provides additional clarification on the entity that may claim these credits and specifies certain situations where the right to claim the COBRA subsidy payroll tax credit falls to any entity other than the common law employer of the AEI.

Q: Who is the common law employer maintaining the plan?

The common law employer maintaining the plan is the current common law employer for an AEI whose hours have been reduced or the former common law employer for those AEIs who have been involuntarily terminated from employment.

Q: Who may claim the COBRA payroll tax credit when the group health plan is subject to both federal COBRA and the state mini-COBRA coverage?

The common law employer maintaining the plan is entitled to claim the payroll tax credit when the state mini-COBRA coverage is comparable to federal COBRA and the group health plan is subject to both laws. Therefore, even if the state mini-COBRA coverage would otherwise require the AEI to pay the premiums directly to the insurer during the period of state-mandated coverage after federal COBRA coverage ends, the insurer is not entitled to claim the COBRA subsidy payroll tax credit.

Q: Which entity is entitled to claim the COBRA subsidy payroll tax credit when a group health plan subject to federal COBRA covers employees of different common law employers who are members of the same controlled group?

When a plan subject to federal COBRA covers employees of two or more members of a controlled group, each common law employer that is a member of the controlled group is entitled to claim the payroll tax credit with respect to its employees or former employees who are AEIs. While all members of a controlled group are treated as a single employer for employee benefit purposes, each member is a separate common law employer for employment tax purposes.

Q: In the event of business reorganizations, which entity is entitled to claim the COBRA payroll tax credit for AEIs who are merger and acquisition qualified beneficiaries (“M & A QBs”) if the selling group remains obligated to provide COBRA constitution coverage?

When the selling group remains obligated to provide COBRA continuation coverage to M & A QBs after a business reorganization, the entity in the selling group that maintains the group health plan is entitled to claim the COBRA subsidy payroll tax credit.

The FAQs above highlight some of the information contained in Notice 2021-46. The guidance also provides clarification as it relates to who claims the payroll tax credit in a Multiple Employer Welfare Plan (“MEWA”) and Professional Employer Organizations (“PEOs”), certain government plans and small market group plans purchased through the Small Business Health Options Program (“SHOP”). Review the guidance for further details.

Employer Action

Employers should continue to work with their COBRA administrators to ensure compliance with the ARP COBRA subsidy. Employers may need to engage payroll or tax professionals for assistance in claiming the tax credits.

The American Rescue Plan Act of 2021 included COBRA premium assistance (a 100% COBRA subsidy) for certain assistance eligible individuals (“AEIs”) who lose group health plan coverage as the result of an involuntary termination of employment or a reduction of hours. The COBRA subsidy is available to AEIs for the period between April 1, 2021 and September 30, 2021. Among other requirements, employers (and their COBRA vendors) must issue notice prior to the expiration of the subsidy.

Specifically, with respect to the September 30, 2021 expiration date, AEIs must be provided with a notice of expiration of the COBRA subsidy between August 16 and September 15, 2021. The notice must explain the date that the premium assistance will expire and that the individual may be eligible for coverage without any premium assistance through COBRA, a group health plan, the Marketplace, or Medicare/Medicaid.

The Departments have issued a Model Notice of Expiration of Period of Premium Assistance. While employers are not required to use the Model Notice, doing so is considered a best practice. The model notice may be found under Model Notices athttps://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy-for-employers-and-advisers.

Employer Action

With respect to the September 30, 2021 subsidy expiration date, employers should work with their COBRA vendors to provide AEIs with this notice between August 16 and September 15, 2021. Employers will need to confirm each AEI’s date for the end of the maximum COBRA period and the premium to continue COBRA coverage when the subsidy expires.

The Consolidated Appropriations Act, 2021 (“CAA”) imposes new reporting requirements related to pharmacy benefits and prescription drug costs that apply to group health plans and health insurance issuers. On June 21, 2021, the Departments of Labor, the Treasury and Health and Human Services (collectively, “the Departments”) issued a request for information (“RFI”) regarding this new requirement. The RFI will help the Departments formulate rulemaking to implement this new requirement.

While there are no action items for employers related to the RFI, it does lay out some initial questions related to this new requirement and provides some insight as to the Departments’ thinking.

Background

As previously reported, by December 27, 2021, and not later than June 1 of each year thereafter, the CAA requires group health plans and health insurance carriers offering group or individual health insurance coverage to submit a report to the Departments with respect to certain health plan and prescription drug information based on the previous plan year.

Specifically, the report will include:

• beginning and end dates of the plan year;
• the number of participants, beneficiaries, or enrollees, as applicable;
• each state in which the plan or coverage is offered;
• the 50 most frequently dispensed brand prescription drug and the total number of paid claims for each such drug;
• the 50 most costly prescription drugs by total annual spending and the annual amount spent by the plan or coverage for each such drug;
• the 50 prescription drugs with the greatest increase in plan expenditures over the plan year preceding the plan year that is the subject of the report, and, for each such drug, the change in amounts expended by the plan or coverage in each such plan year;
• total spending by the plan or coverage broken down by the type of health care services;
• spending on prescription drugs by the plan or coverage as well as by participants, beneficiaries, and enrollees, as applicable;
• the average monthly premiums paid (broken out by employer and employee contributions);
• rebates, fees, and any other remuneration paid by drug manufacturers to the plan or coverage or its administrators or service providers, including the amount paid with respect to each therapeutic class of drugs and for each of the 25 drugs that yielded the highest amount of rebates and other remuneration under the plan or coverage from drug manufacturers during the plan year; and
• any reduction in premiums and out-of-pocket costs associated with these rebates, fees, or other remuneration.

Eighteen months after the date this information is submitted and biannually thereafter, the Departments will issue a report on prescription drug reimbursements under group health plans and group and individual health insurance coverage, prescription drug pricing trends, and the role of prescription drug costs in contributing to premium increases or decreases under such plans or coverage, aggregated so that no drug or plan specific information is made public.

REQUEST FOR COMMENTS

The RFI asks 41 questions related to this new reporting requirements (with some containing multiple sub-questions). Responses will be used to help formulate future guidance.

Some of the questions are summarized as follows:

• General implementation concerns. This includes:
  • What challenges do plans and issuers anticipate facing in meeting the statutory reporting obligations? For example, do plans or issuers currently have access to all the information they are required to report?
  • How much time will plans and issuers need to prepare their data and submit it to the Departments? What data sources are readily available and which data may take longer to compile?
  • Among group health plans, are there different considerations for reporting by fully insured versus self-funded plans, or for insured plans with small group versus large group coverage?
• Entities that must report. Will self-insured plans contract with third-party administrators to submit this information on behalf of the plan? What role will Pharmacy Benefits Managers (“PBMs”) play in furnishing necessary information to plans and will PBMs conduct some or all of the reporting?
• Information required to be reported. This includes:
  • How will the plan determine the 50 prescription drugs that are most frequently dispensed and the 50 drugs with the greatest increase in expenditures?
  • How will the plan determine the 25 drugs with the highest amount of rebates from drug manufacturers during the plan year?
• Compliance costs. What costs or other impacts do plans anticipate from implementing this new reporting requirement?

Employer Action

As this is just an RFI, there are no action items at this time. However, this information is helpful to understand the complexities of this upcoming reporting requirement. It is likely the Departments will issue regulations at a later date.

Background

The “individual mandate” provision of the ACA as originally enacted in 2010 required most U.S. residents to obtain minimum essential health insurance coverage or pay a monetary penalty. The individual mandate penalty withstood a legal challenge in 2012 when the Supreme Court ruled it was a valid exercise of Congress’ taxing power. However, Congress effectively eliminated the individual mandate penalty by reducing it to zero effective January 1, 2019.

As a result, Texas (along with other states and two individuals) filed a lawsuit against federal officials. The plaintiffs alleged that the ACA’s individual mandate to obtain health insurance was unconstitutional without the tax penalty; that the individual mandate provision was not severable from the rest of the ACA; and therefore, that no provision of the ACA was enforceable.

After a tumultuous, see-saw litigation trail in the U.S. District Court for the Northern District of Texas and U.S. Court of Appeals for the Fifth Circuit, the Supreme Court agreed to review the case.

Court Decision

On June 17, 2021, the Supreme Court issued its 7-2 decision dismissing the case on the grounds that the individual and state plaintiffs did not have standing to bring the lawsuit because they had not incurred nor were expected to incur any financial injury that was “fairly traceable” to the ACA’s individual mandate.

The Court was not persuaded by the individual plaintiffs’ claims of monetary harm due to the costs of purchasing health insurance, because there was no penalty or other consequence to plaintiffs for failing to obtain such health insurance under the individual mandate. Similarly, the Court held that the states failed to demonstrate how their increased costs (allegedly due to an influx of individuals participating in state-operated insurance programs, such as Medicaid, and administrative expenses related to other ACA provisions) were attributable to the “unenforceable” individual mandate.

Interestingly, by dismissing the case on the threshold issue of standing, the Court did not address the questions of whether the individual mandate without a penalty is unconstitutional, and if so, whether this one provision can be separated from the ACA without striking down the entire Act. Therefore, those issues remain unresolved.

Employer Action

There is no impact to employer-sponsored health plans or other requirements under the ACA. We will continue to monitor litigation in this area and provide updates of further developments.

Most plans will be required to cover new preventive items and services beginning later this year, or in 2022 or 2023 (depending on the plan year), including ones related to Hepatitis B virus infection screenings and colon cancer screenings.

Background

Non-grandfathered group health plans must provide coverage for in-network preventive items and services and may not impose any cost-sharing requirements (such as a copayment, coinsurance, or deductible) with respect to those items or services.

Evidence-based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force (“USPSTF”) are considered to be “preventive.” The USPSTF recommendations can change, and those changes generally apply for plan years that begin on or after the date that is one year after the date the new recommendation or guideline is considered to be issued.

New Preventive Items and Services

The newly covered items and services are as follows:

Topic	USPSTF Recommendation	Effective for Plan Years Beginning On or After:
Unhealthy drug use screening: adults age 18 years or older	Screening by asking questions about unhealthy drug use in adults age 18 years or older when services for accurate diagnosis, effective treatment, and appropriate care can be offered or referred	July 1, 2021
Sexually transmitted infections behavioral counseling: sexually active adolescents and adults at increased risk	Behavioral counseling for all sexually active adolescents and for adults who are at increased risk for sexually transmitted infections	September 1, 2021
Healthy diet and physical activity behavioral counseling intervention for cardiovascular disease prevention: adults 18 years or older with cardiovascular disease risk factors	Offering or referring adults age 18 years or older with cardiovascular disease risk factors to behavioral counseling interventions to promote a healthy diet and physical activity	December 1, 2021
Hepatitis B virus infection screening: adolescents and adults at increased risk for infection	Screening for hepatitis B virus (HBV) infection in adolescents and adults at increased risk for infection	January 1, 2022
Tobacco smoking cessation and behavioral interventions: all adults	For non-pregnant adults, it is recommended that clinicians ask about tobacco use, advise cessation of use, and provide behavioral interventions and U.S. FDA-approved pharmacotherapy for cessation For pregnant persons, it is recommended that clinicians ask about tobacco use, advise cessation of use, and provide behavioral intervention for cessation	February 1, 2022
Lung cancer screening: adults age 50 to 80 years who have a 20 pack-year history and currently smoke or have quit within the past 15 years	Annual screening for lung cancer with low-dose computed tomography (LDCT) in adults age 50 to 80 years old who have a history of smoking at least 20 packs of cigarettes per year and who currently smoke or have quit smoking within the past 15 years	April 1, 2022
Hypertension screening: adults age 18 years or older without known hypertension	Hypertension screening in adults 18 years or older with office blood pressure measurement, and blood pressure measurement outside of the clinical setting for diagnostic confirmation before starting treatment	May 1, 2022
Colorectal cancer screening: adults age 45 to 75 years old	Colorectal cancer screening for all adults age 45 to 75 years old	June 1, 2022
Healthy weight and weight gain in pregnancy behavioral counseling interventions: pregnant persons	Clinicians offer pregnant persons effective behavioral counseling interventions aimed at promoting healthy weight gain and preventing excess gestational weight gain in pregnancy	June 1, 2022

Employer Action

Employers sponsoring non-grandfathered group health plans should review the various preventive care requirements effective for their upcoming plan years. Such coverage must be provided in-network, without cost-sharing.

For fully insured health plans, carriers are generally responsible for compliance and should include these benefits as applicable. Self-funded health plans should discuss with TPAs to ensure coverage is in effect for plan years that begin on or after the applicable effective dates.

For a complete list of preventive items and services, visit:https://uspreventiveservicestaskforce.org/uspstf/recommendation-topics

The Patient-Centered Outcomes Research (PCOR) fee filing deadline is August 2, 2021, for all self-funded medical plans and HRAs for plan years ending in 2020. The IRS issued Notice 2020-84 announcing the adjusted fee amount for this year as well as limited transition relief.

The plan years and associated amounts are as follows:

Plan Year	Amount of PCOR Fee	Payment and Filing Date
February 1, 2019 – January 31, 2020	$2.54/covered life/year	August 2, 2021
March 1, 2019 – February 28, 2020	$2.54/covered life/year	August 2, 2021
April 1, 2019 – March 31, 2020	$2.54/covered life/year	August 2, 2021
May 1, 2019 – April 30, 2020	$2.54/covered life/year	August 2, 2021
June 1, 2019 – May 31, 2020	$2.54/covered life/year	August 2, 2021
July 1, 2019 – June 30, 2020	$2.54/covered life/year	August 2, 2021
August 1, 2019 – July 31, 2020	$2.54/covered life/year	August 2, 2021
September 1, 2019 – August 31, 2020	$2.54/covered life/year	August 2, 2021
October 1, 2019 – September 30, 2020	$2.54/covered life/year	August 2, 2021
November 1, 2019 – October 31, 2020	$2.66/covered life/year	August 2, 2021
December 1, 2019 – November 30, 2020	$2.66/covered life/year	August 2, 2021
January 1, 2020 – December 31, 2021	$2.66/covered life/year	August 2, 2021

Employers with self-funded health plans ending in 2020 should use the 2nd quarter Form 720 to file and pay the PCOR fee by August 2, 2021. The information is reported in Part II.

Please note that Form 720 is a tax form (not an informational return form such as Form 5500). As such, the employer or an accountant would need to prepare it. Parties other than the plan sponsor, such as third-party administrators and USI, cannot report or pay the fee.

Temporary Transition Relief

Generally, there are three established methods a self-funded group health plan may use to determine the average number of covered lives for purposes of calculating the PCOR fee:

• The Actual Count Method,
• The Snapshot Method, and
• The Form 5500 method.

For plan years that end on or after October 1, 2019 and before October 1, 2020, in addition to the established counting methods, a plan may use any reasonable method for calculating the average number of covered lives. This relief has not been extended.