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More COBRA Election Notice Litigation: Are Your Mailing Procedures Adequate?

The last few years have seen dozens of lawsuits filed alleging failures associated with COBRA election notices. Generally, these complaints allege that (i) any deviations from the DOL model COBRA election notice (a) were done to save money for the employer and deter employees from electing coverage, and (b) resulted in a notice that would not be understood by the average participant, and (ii) the election notices did not include the required content prescribed by applicable COBRA regulations. Recent cases highlight another area of potential litigation–whether proper mailing procedures for the election notices have been followed and can be proven by the employer.  In one such case, a former employee was provided a COBRA election notice for medical coverage that was sent to her former mailing address because an updated address had not been provided to the employer’s third-party COBRA administrator. The court noted that the employer’s delegation of COBRA… Continue Reading

Employers Can Register For Electronic National Medical Support Notices

The electronic National Medical Support Notice (“e-NMSN”) process is a free, voluntary electronic exchange of National Medical Support Notices (“NMSNs”) between state child support agencies and employers, third-party providers, plan administrators, and unions. The HHS Office of Child Support Enforcement (“OCSE”) has issued FAQs about e-NMSN, which went live in February 2022, that highlight its potential benefits and how it operates. The FAQs state that OCSE places NMSN files from child support agencies on the employer’s designated secure server. After the employer completes the NMSN forms, OCSE picks up the NMSN files from the employer’s server and transmits them to the child support agency’s secure server. Along with the benefits associated with being able to administer NMSNs virtually, the FAQs state e-NMSN allows child support agencies to notify employers that health coverage is no longer ordered or is no longer enforced by the child support agency. An employer or plan administrator can register to use… Continue Reading

U.S. Supreme Court Rules Limited Coverage for Dialysis Does Not Violate Medicare Secondary Payer Statute

On June 21, 2022, the U.S. Supreme Court issued its decision in Marietta Memorial Hospital Health Benefit Plan v. DaVita Inc. In this case, an employer-sponsored group health plan paid limited benefits for outpatient dialysis, and DaVita Inc. (the dialysis provider) sued the plan for violating the Medicare Secondary Payer statute (the “MSP Statute”). Generally, the MSP Statute prohibits an employer-sponsored group health plan from (i) differentiating in its benefits coverage between individuals having end stage renal disease (“ESRD”) and other individuals, and (ii) taking into account that an individual is entitled to or eligible for Medicare due to ESRD. For individuals who have ESRD, the primary treatment is renal dialysis, which is very expensive. The U.S. Court of Appeals for the Sixth Circuit previously ruled that the MSP Statute permits disparate-impact liability and that the limited payments for dialysis treatment had a disparate impact on individuals with ESRD. However, in… Continue Reading

New HIPAA Guidance: Use of Remote Technologies for Audio-Only Telehealth

HHS recently issued guidance to clarify how health plan and health care provider covered entities under HIPAA (each, a “Covered Entity”) may use remote communication technologies to deliver audio-only telehealth services (“Audio Services”) in accordance with HIPAA’s privacy and security rules. Audio Services may be offered by a Covered Entity in order to expand access to health care by individuals who are unable to use video telehealth services due to disability, limited English proficiency, lack of internet availability, or other factors.   Topics addressed by the guidance include: Reasonable safeguards that must be implemented by a Covered Entity that is providing Audio Services, including verifying the identity of the individual who is being provided the Audio Services before any PHI is disclosed; The application of the HIPAA security rule, which imposes requirements on the use and disclosure of electronic PHI, to various forms of communication technologies that may be used… Continue Reading

BCBSTX Sued in Proposed Class Action for Alleged Violations of Mental Health Parity Rules

As we have discussed in prior blog posts here and here, noncompliance with the Mental Health Parity and Addition Equity Act (the “MHPAEA”) continues to be a source of significant potential legal liability for employers that sponsor group health plans as well as for their third-party claims fiduciaries or health insurers.  As further evidence of that trend, a proposed class action lawsuit has recently been filed against Blue Cross and Blue Shield of Texas (“BCBSTX”), as a designated claims fiduciary or health insurer under the class members’ employer-sponsored group health plans, for alleged violations of the MHPAEA. In particular, the class claims that BCBSTX imposed more restrictive standards on coverage of residential mental health care than the standards applied to coverage of care at skilled nursing facilities. Under the MHPAEA, employer-sponsored group health plans and health insurers that provide mental health or substance use disorder benefits are prohibited from imposing less… 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

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.

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

Prepare Benefits Materials in Consideration of the Surprise Medical Billing Rules and Model Notice

As employers prepare group health plans, SPDs, and other employee benefits materials for 2022, they need to consider the new surprise medical billing requirements under the No Surprises Act of the Consolidated Appropriations Act of 2021. Interim final rules were recently released for these new requirements, which are generally effective for plan years beginning on or after January 1, 2022. Provisions that may need to be changed include those regarding: (i) coverage of emergency services, including the definitions of emergency services and emergency medical conditions, how benefit payments are calculated, and coverage for out-of-network, independent freestanding emergency departments; (ii) network cost-sharing for out-of-network providers at network facilities who do not obtain consent for non-emergency services; and (iii) coverage of out-of-network air ambulance services. In addition, there is a new notice required that must be made publicly available, posted on a public website of the plan, and included in the plan’s… Continue Reading

Reminder – Employers Must Maintain Mental Health/Substance Abuse Parity Documentation

As discussed in our prior blog post here, effective as of February 10, 2021, employer-provided group health plans that impose nonquantitative treatment limitations (?Ç£NQTLs?Ç¥) on mental health or substance use disorder benefits (?Ç£MH/SA Benefits?Ç¥) must have documentation demonstrating that the NQTLs satisfy the mental health and substance use disorder parity rules (?Ç£Compliance Documentation?Ç¥). As discussed in another one of our prior blog posts here, the DOL has identified particular NQTLs on which it will focus its enforcement efforts. The DOL also clearly communicated that general statements to the effect that the plan has compliant processes will not meet the Compliance Documentation requirements. We have noted that some third party administrators are producing reports and other documents that fail to satisfy the Compliance Documentation requirements. For example, such documents may refer to the administrator?ÇÖs internal policies or procedures without adequately describing them, or they may simply incorporate internal policies by reference… Continue Reading

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