Benefit plan administration can be complicated and challenging, but sometimes it is not the complex issues that cause the biggest problems; it’s the simplest, such as remembering to ensure plan documents and amendments are actually signed. Far too often, when new plans or plan amendments are adopted, the board or a plan committee will adopt resolutions approving the new plan or amendment, but the actual documents are never signed. Unfortunately, this area of non-compliance may go unnoticed until an IRS or DOL audit or the sale of the plan sponsor, where signed documents are requested but the plan sponsor cannot find them. To avoid being caught with unsigned plan documents, plans sponsors should: Adopt procedures so that immediately after new plans or amendments are adopted, the documents are signed and dated by an authorized signer; After documents are signed, maintain the executed documents in an easy to find location, and… Continue Reading
Departments Release FAQs about the No Surprises Act and Other Transparency Provisions for Group Health Plans
The DOL, HHS, and Treasury (collectively, the “Departments”) jointly released FAQs addressing the implementation of certain requirements under the No Surprises Act of the Consolidated Appropriations Act of 2021 (the “CAA”), which are generally effective for plan years beginning on or after January 1, 2022, and other transparency provisions of the Affordable Care Act (the “ACA”) and CAA. The FAQs address the following topics: Transparency in Coverage Machine-Readable Files, Price Comparison Tools, Transparency in Plan or Insurance Identification Cards, Good Faith Estimate, Advanced Explanation of Benefits, Prohibition on Gag Clauses on Price and Quality Data, Protecting Patients and Improving the Accuracy of Provider Directory Information, Continuity of Care, Grandfathered Health Plans, and Reporting on Pharmacy Benefits and Drug Costs. Notably, the Departments state in the FAQs that enforcement of the requirement that plans publish machine-readable files relating to certain in-network and out-of-network information will be deferred until July 1, 2022… Continue Reading
The DOL and UnitedHealthcare (“UHC”) recently reached a settlement agreement for UHC’s alleged violations of the Mental Health Parity and Addition Equity Act (the “MHPAEA”). Under the MHPAEA, employer-sponsored group health plans and health insurance issuers that provide mental health or substance use disorder (“MH/SUD”) benefits are prohibited from imposing less favorable benefit limitations on those benefits than on medical/surgical benefits. In its investigation, the DOL found that UHC, among other things, “systematically reimburse[d] participants and beneficiaries for out-of-network mental health services in a more restrictive manner than for out-of-network medical and surgical services.” This case is another indication that MHPAEA enforcement is a high priority for the DOL. As discussed in our prior blog posts here and here, the MHPAEA requires employer-sponsored group health plans that impose nonquantitative treatment limitations (“NQTLs”) on MH/SUD benefits to perform and document a comparative analysis of the design and application of NQTLs. This… Continue Reading
The American Rescue Plan Act of 2021 (the “ARPA”) provides a 100% COBRA premium subsidy (the “COBRA Subsidy”) to certain COBRA qualified beneficiaries, which we previously reported on here, here, and here. Under the ARPA, the COBRA Subsidy is set to expire on September 30, 2021. The APRA requires that certain notices be sent to affected qualified beneficiaries regarding the COBRA Subsidy, including a notice of the upcoming expiration of their premium assistance. This expiration notice must be sent no fewer than 15 days and no more than 45 days before an individual’s COBRA Subsidy expires. The DOL has released a model “Notice of Expiration of Period of Premium Assistance” that plans may use to satisfy the notice requirement. Because the COBRA Subsidy is set to expire on September 30, 2021, the deadline to send out the expiration notices is quickly approaching. Employers are reminded to contact their third-party COBRA administrators,… Continue Reading
At a time when digital security and cyberattacks are key concerns for individuals and businesses alike, plan sponsors and other plan fiduciaries have a key role to play in protecting retirement plan assets and data. Otherwise known as “responsible plan fiduciaries,” these individuals and certain plan service providers have a fiduciary duty to ensure there is a robust cybersecurity program in place to keep plan assets and data secure. As we previously reported on our blog here, the DOL recently issued guidance in this arena to keep employers and plan fiduciaries compliant. The DOL is now specifically targeting employers and plan fiduciaries who fail to adequately protect employee retirement plan assets from hackers and cyberthieves, so the time to act is before the DOL issues a plan audit and before participants are victimized by cybercriminals or hackers. The DOL requires that plan fiduciaries responsible for prudently selecting and monitoring service… Continue Reading
As discussed in our prior blog posts, available here, here, and here, an employer must maintain documentation demonstrating that its group health plan is compliant with mental health and substance use disorder parity rules. The DOL has made compliance with these rules a high priority, and DOL enforcement efforts have begun. Employers should follow up with their medical, network, prescription drug, and other third-party service providers to define expectations and set deadlines for the production of information that employers need for the required reporting. Given the amount of detail, effort, and coordination that this compliance documentation requires, employers should ensure that a compliant report can be timely provided if there is a DOL inquiry.
Departments Solicit Comments regarding Consolidated Appropriations Act of 2021 Prescription Drug Reporting Requirements
Under the Consolidated Appropriations Act of 2021 (the ?Ç£CAA?Ç¥), employer-sponsored group health plans will be required to submit to the DOL and/or Treasury Department a new annual report containing information pertaining to plan participation and prescription drug coverage provided under the plan during the previous plan year (the ?Ç£Rx Report?Ç¥). Among other items, the Rx Report must include information regarding (i) claims paid under the plan for the 50 most frequently dispensed brand prescription drugs (?Ç£Claims Paid Items?Ç¥), (ii) annual spending for the 50 most costly prescription drugs (?Ç£Spending Items?Ç¥), and (iii) rebates, fees, and other remuneration paid by drug manufacturers to the plan, its administrators, or service providers (?Ç£Rebate Items?Ç¥). The first Rx Report is due by December 27, 2021, and each subsequent Rx Report is due by each June 1. Recently, the DOL, Treasury Department, and HHS (the ?Ç£Agencies?Ç¥) jointly issued a ?Ç£request for information?Ç¥ (the ?Ç£RFI?Ç¥) seeking public… Continue Reading
DOL Rules that Audio Recordings and Transcripts of Telephone Conversations with Plan?ÇÖs Insurer may have to be Disclosed
The DOL recently issued Information Letter 06-14-2021 addressing whether the claims procedure regulations under ERISA require plan fiduciaries to provide, upon request, the audio recording and transcript of a telephone conversation between a claimant and a representative of the plan?ÇÖs insurer relating to an adverse benefit determination. The claims regulations under ERISA provide that a document, record, or other information is relevant to a claim for benefits, and therefore must be provided to a claimant upon request, if it (i) ?Ç£was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination?Ç¥ or (ii) ?Ç£demonstrates compliance with the administrative processes and safeguards.?Ç¥ The DOL concluded that a recording or transcript of a conversation between a claimant and a plan?ÇÖs insurer would not be excluded from the ERISA disclosure requirements on the… Continue Reading
Among the new requirements that are, or soon will be, imposed on employer-sponsored group health plans subject to ERISA (?Ç£GHPs?Ç¥) by the Consolidated Appropriations Act of 2021 (the ?Ç£CAA?Ç¥) are compensation disclosure requirements which apply to GHPs and certain of their third-party service providers. Background ERISA contains prohibitions on certain transactions between an employee benefit plan, including a GHP and a party-in-interest, such as a third-party service provider.?á Section 408(b)(2) of ERISA provides an exemption from the prohibited transaction rules for reasonable contracts entered into by a plan and a service provider for necessary plan-related services (?Ç£Contract?Ç¥), provided that no more than reasonable compensation is paid for such services (the ?Ç£Prohibited Transaction Exemption?Ç¥). The relevant fiduciary of the plan under ERISA (the ?Ç£Fiduciary?Ç¥) is responsible for determining whether compensation to be paid under the Contract is reasonable in order to comply with the Prohibited Transaction Exemption. Disclosure Requirement under the… Continue Reading
The DOL, HHS, and Treasury recently published FAQs About Affordable Care Act Implementation Part 46 (the ?Ç£FAQs?Ç¥). The FAQs specify that the maximum annual limitations on cost-sharing for the 2022 plan year are (i) $8,700 for self-only coverage, and (ii) $17,400 for other than self-only coverage, which we previously discussed in our blog post here. These final limitations reflect a reduction in the amounts originally proposed by HHS (i.e., $9,100 for self-only coverage and $18,200 for other than self-only coverage), and the FAQs provide an explanation of why the finalized limits are different from the proposed limits. The FAQs are available?áhere.