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New FAQs Address Issues Related to Contraceptive Coverage under Group Health Plans

The federal Treasury, DOL, and HHS (collectively, the “Agencies”) jointly issued a new set of FAQs to address various issues regarding the requirement for most employer-provided and other applicable group health plans to cover contraceptives without cost-sharing under the preventive care mandate of the Affordable Care Act (the “Contraceptive Coverage Mandate”). In particular, the FAQs are intended to (i) respond to reports that individuals continue to experience difficulty accessing contraceptive coverage without cost sharing; (ii) clarify application of the Contraceptive Coverage Mandate to fertility awareness-based methods and emergency contraceptives; and (iii) address the preemption of state law by the Contraceptive Coverage Mandate.  Specific issues addressed in the FAQs include the following:  The requirement for plans to cover items and services that are integral to the furnishing of a recommended preventive service, such as anesthesia necessary for a tubal ligation procedure; The requirement for a plan to cover, without cost-sharing, FDA-approved… Continue Reading

Reminder to Review Health Plan Subrogation and Reimbursement Language Before It’s Too Late

A recent case from the U.S. Court of Appeals for the Ninth Circuit serves as a reminder to employers to review the subrogation and reimbursement language in their group health plan documents. In this case, a motion picture industry health plan provided that a participant must reimburse the plan from any amount recovered from a third party who was responsible for the injury. If a participant fails to reimburse the plan from a third-party recovery, under the terms of the plan, the amount of unreimbursed benefit payments is deducted from future benefit payments made on behalf of such participant by the plan. In accordance with the plan’s provisions, when one of the plan’s participants failed to reimburse the plan from a third-party recovery, the plan began deducting the unreimbursed amount from future benefit payments. The participant and other covered family members sued. A federal district court granted summary judgment in… Continue Reading

The Reversal of Roe v. Wade: What ‘s Next For Your Group Health Plan?

On June 24, 2022, the U.S. Supreme Court issued its decision in Dobbs v. Jackson Women’s Health Organization. This decision overturned the Court’s prior decisions in Roe v. Wade and Planned Parenthood v. Casey, by holding that the U.S. Constitution does not confer any right to an abortion and returning the authority to regulate abortion back to the states. Some employer-sponsored group health plans provide coverage for abortion procedures and related expenses. The full impact of Dobbs on such coverage is unknown at this time, pending future legal developments in the states, guidance from the federal government, and the results of new court cases which will likely be filed in response to this decision. In the meantime, the following considerations may be relevant for employers that sponsor a group health plan: The application to a group health plan of any new or revised abortion-related laws that are passed in the… Continue Reading

Eleventh Circuit Affirms Summary Judgment Because ERISA Plan Included Unambiguous Reservation of Rights Language

In Klaas v. Allstate Ins. Co., Allstate sponsored an employee welfare benefit plan subject to ERISA that paid life insurance premiums for certain retirees. Allstate made various representations that this benefit would continue for the remaining lives of the retirees. In 2013, Allstate informed the retirees that it would stop paying their life insurance premiums. The retirees sued alleging Allstate violated ERISA by no longer paying those premiums after making representations that the benefit would continue for a lifetime. The Eleventh Circuit affirmed the district court’s ruling, holding that no ERISA violation occurred because Allstate’s plan documents contained a no-vesting clause and an unambiguous reservation of rights provision that gave Allstate the right to modify or terminate retiree life insurance at any time.  This case is a good reminder to pay careful attention to what insurers and third-party administers put into your plan documents. Unlike retirement plans subject to ERISA,… Continue Reading

New FAQs Address Interaction of No Surprises Act’s Federal IDR Process with DOL Claims Regulations

A set of FAQs recently issued by HHS’s Centers for Medicare and Medicaid Services provide additional guidance regarding the federal independent dispute resolution process (“Federal IDR Process”) that was established under the “No Surprises Act” (the “Act”), enacted as part of the Consolidated Appropriations Act of 2021. The purpose of the Federal IDR Process is to resolve certain types of payment disputes between group health plans or health insurance issuers (each, a “Plan”) and out-of-network health care providers, facilities, and providers of air ambulance services (collectively, “OON Providers”). These disputes concern the out-of-network rates that Plans will pay for emergency, air ambulance, and certain other services subject to the Act that are furnished to plan participants by OON Providers. The Federal IDR Process generally applies to Plans effective for plan (or policy) years beginning on or after January 1, 2022, and to OON Providers beginning on January 1, 2022.  Among… Continue Reading

Reminder to Check Your Form 1094-C Before It’s Filed with IRS

Applicable large employers have until February 28th (March 31st if filed electronically) to submit their Forms 1094-C and 1095-C to the IRS for compliance with the ACA. The Form 1094-C is used, in part, to report to the IRS whether the employer has offered health coverage to at least 95% of its full-time employees. In our experience, most employers intend to meet this 95% threshold in order to avoid the extremely large penalty that otherwise is imposed under the ACA. However, some employers are reporting they did NOT meet this 95% threshold on their Forms 1094-C, even though they did, usually as a result of an error made by a service provider completing the form. This results in the IRS sending a notice of a proposed assessment of the employer shared responsibility penalty under the ACA. If an employer does not timely respond to the notice, the IRS will send… Continue Reading

FAQs Provide Additional Guidance Regarding At-Home COVID-19 Testing Coverage Requirements

As discussed in our prior blog post here, employer-provided group health plans, and insurers and other issuers, are required to cover the cost of over-the-counter, at-home COVID-19 tests (“OTC Tests”) authorized by the Food and Drug Administration (“FDA”). The DOL, HHS, and the Treasury Department (collectively, the “Departments”) previously issued guidance establishing a safe harbor that, if satisfied, allows plans and issuers to limit the reimbursement of OTC Tests to $12 per test (or the actual cost of the OTC Test, if lower). The Departments recently issued additional guidance in the form of FAQs clarifying how plans and issuers may comply with the safe harbor OTC Test coverage requirements. The FAQs clarify that whether a plan or issuer satisfies the safe harbor by providing adequate access to OTC Tests through its direct coverage program will depend on the particular facts and circumstances, but will generally require that OTC Tests are… Continue Reading

DOL Issues Temporary Enforcement Policy and Clarifications regarding Required Group Health Plan Disclosures under the CAA

In a recent Field Assistance Bulletin No. 2021-03 (the “FAB”), the DOL announced its temporary enforcement policy (the “Enforcement Policy”), as well as certain clarifications, regarding the new required group health plan service provider disclosures under Section 408(b)(2)(B) of ERISA (the “Disclosure Requirement”). The Disclosure Requirement, which was implemented by the Consolidated Appropriations Act of 2021 (the “CAA”), requires certain persons or entities that provide brokerage or consulting services to group health plans (each, a “Service Provider”) to disclose specified information to a responsible plan fiduciary about the direct and indirect compensation the Service Provider expects to receive in connection with its services to the plan. Links to our prior blog posts about the Disclosure Requirement are available here and here.  With respect to the Enforcement Policy, the FAB provides that, pending further guidance, the DOL will not treat a Service Provider as having failed to make required disclosures to… Continue Reading

IRS Increases Dollar Amount Basis of PCORI Fee

The IRS recently issued Notice 2022-4, which increases the dollar amount that is the basis of the fee established under the Affordable Care Act to help fund the Patient-Centered Outcomes Research Institute (the “PCORI Fee”). The PCORI Fee is imposed on plan sponsors of applicable self-funded health plans and issuers of specified health insurance policies. The PCORI Fee is based on a flat dollar amount multiplied by the average number of lives covered under the plan for the applicable plan year. The dollar amount for plan and policy years that ended on or after October 1, 2020 and before October 1, 2021, was $2.66. Notice 2022-4 increases the dollar amount for plan and policy years that end on or after October 1, 2021 and before October 1, 2022, to $2.79. IRS Notice 2022-4 is available here.

New Federal Reporting Requirements for Prescription Drug and Health Care Spending

The Consolidated Appropriations Act of 2021 (“CAA”) requires employer-sponsored group health plans to submit certain information about prescription drug and health care spending, premiums, and enrollment to HHS, the DOL, and the Treasury on an annual basis. Interim final rules were issued implementing this requirement, with enforcement delayed so that reporting for 2020 and 2021 is not due until December 27, 2022. However, employers are advised to contact their third party administrators and pharmacy benefit managers soon to determine if they will submit these reports on behalf of the group health plan and will be ready to do so by the deadline.  Although an employer with a self-funded group health plan may contract with a third party administrator and/or pharmacy benefit manager to handle these reporting requirements, the employer remains liable if there is a compliance failure.  The interim final rules are available here. 

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