Welfare Plans

Recent legislation allows employers to continue offering first-dollar telehealth coverage without jeopardizing the ability to contribute to a health savings account (“HSA”), but only through the end of the 2024 plan year.

Background – HSA Eligibility

Employees can make and receive pre-tax contributions to HSAs to use for qualified medical expenses. To be “eligible” to make or receive contributions to an HSA, you (a) must be covered by a high deductible health plan (“HDHP”), and (b) may not have other non-HDHP coverage that covers benefits before the HDHP deductible has been met.

Certain types of coverage, like dental and vision care, is disregarded in determining whether an individual is “eligible” to contribute to an HSA. Disregarded coverage does not have to be coordinated with HDHPs. This means that participants can receive “first-dollar” coverage for disregarded coverage and still be eligible to make or receive contributions to an HSA.Continue Reading Employers Can Continue to Cover Telehealth Benefits Before HDHP Deductible Is Met

Section 9501 of the American Rescue Plan Act, 2021 (“ARPA”) provides for a complete COBRA premium subsidy for all Assistance Eligible Individuals beginning on April 1, 2021, and ending on September 30, 2021. This article discusses who qualifies as an Assistance Eligible Individual, the impact of the relief on such individuals, the impact of the relief on the COBRA maximum coverage period, the additional requirements imposed on employers in connection with the relief, and how employers may receive reimbursements for the subsidy from the federal government.
Continue Reading Special Mandatory COBRA Subsidy in 2021 for Involuntarily Terminated Employees

As we discussed in our previous blog post, Temporary Relief Allows Flexible Spending Arrangements to be More Flexible, Section 214 of the Consolidated Appropriations Act, 2021, Pub. L. 116-260 (the “Act”), allows employers to offer an extended use-it-or-lose-it and/or extended spend-down periods during which participants in a health flexible spending arrangement (“ health FSA”) may have access to unused health FSA amounts until the end of the subsequent plan year and/or after they terminate participation in the health FSA mid-year, respectively. In certain cases, access to unused health FSA amounts can make an individual ineligible to contribute to a health savings account (an “HSA”).
Continue Reading Preserving HSA Eligibility With An Extended Health FSA Use-It-Or-Lose-It Period

Section 214 of the Consolidated Appropriations Act, 2021, Pub. L. 116-260 (the “Act”), allows sponsors of health and dependent care flexible spending arrangements (“FSAs”) to delay forfeitures of unused account balances for 2020 and 2021 plan years and grant participants, including former participants, more time to spend down account balances. Section 214 and implementing guidance also give employers another opportunity to allow participants to change their elections with respect to FSAs and health plans. On February 18, 2021, the Internal Revenue Service (“IRS”) issued IRS Notice 2021-15 to help explain and expand the parameters of this relief.
Continue Reading Temporary Relief Allows Flexible Spending Arrangements to be More Flexible

On October 29, 2020, the Department of Health and Human Services, the Department of Labor and the Department of the Treasury released the final “Transparency in Coverage” rule. The rule requires most group health plans and issuers to provide individualized cost-sharing information to participants, beneficiaries and enrollees upon request, and to publicly disclose in-network provider negotiated rates, historical out-of-network allowed amounts and drug pricing information. The final rule also amends the medical loss ratio (MLR) rules to allow issuers to receive credit in the calculations for savings they share with enrollees utilizing lower-cost, higher value providers.

The final regulations are similar to the proposed regulations issued on November 15, 2019 (described in this previous blog post). While the proposed rule had included a request for information regarding how providing quality measurements and reporting could be used to complement cost-sharing information, the final rules do not address health care quality and continue to focus on price transparency.Continue Reading Final Rules Require Health Plans to Publicly Disclose Reimbursement Rates

On May 12, 2020, the Internal Revenue Service (“IRS”) published Notices 2020-29 and 2020-33. Notice 2020-29 is the latest installment in COVID-19 relief guidance targeted at health and welfare benefits. The Notice enables employers to provide flexibility to employees to modify their health coverage and flexible spending account (“FSA”) elections and gives employees until the end of 2020 (but not 2021) to use certain FSA amounts that may otherwise be forfeited. Unlike certain COVID-19 relief related to retirement plans, employers may make the relief under Notice 2020-29 available to all participants, regardless of whether they have suffered a COVID-19-related loss.

Notice 2020-33 allows employers to adopt an indexed maximum carryover amount for health FSAs, beginning with amounts that may be carried over from the 2020 plan year to the 2021 plan year.Continue Reading IRS Empowers Employers to Increase Health Coverage, FSA Election Flexibility During Pandemic; Clarifies HDHP COVID-19 Relief

The Internal Revenue Service has issued guidance (Notice 2020-15) that allows sponsors of high deductible health plans (“HDHPs”) to reimburse up to the full cost of medical care services and items for testing and treatment of COVID-19 before plan participants meet the plan’s minimum statutory deductible.  Accordingly, participants…
Continue Reading IRS Clears the Way for High Deductible Plans to Waive Cost Sharing for Coronavirus Testing

Businesses are rapidly developing strategies to continue functioning and protect their workforces in the face of the growing Coronavirus COVID-19 outbreak. For obvious reasons, businesses may want to deploy health screening, testing, and professional medical advice services—including telemedicine—to their employees and dependents. It is critical that employers’ health plans support…
Continue Reading COVID-19: Your Health Plans and Your Business Response

The Departments of Health and Human Services, Labor and Treasury released a new “Transparency in Coverage” proposed rule that requires most group health plans and issuers to publicly disclose negotiated rates with in-network providers and historical data showing amounts paid for covered items or services furnished by out-of-network providers.  In addition, group health plans and issuers would be required to create a self-service website through which participants could obtain estimates of out-of-pocket costs for covered items or services.  The proposed rule implements provisions of the Affordable Care Act and is intended to help consumers shop for medical services from lower-cost, higher-value providers.
Continue Reading Group Health Plans Face Automatic Public Disclosure of Negotiated Rates and Plan Payments

Many lawsuits against employer group health plans hinge on the enforceability of the plan’s anti-assignment provision. ERISA does not give providers the right to sue for plan benefits. A provider’s lawsuit must be derived from the participant’s right to plan benefits. In other words, the participant must assign his or her right to the provider. Even with such an assignment, a provider will lack standing to bring a lawsuit if the ERISA plan has a valid and enforceable anti-assignment clause. (ERISA itself generally prohibits assignment of retirement plan benefits, but the ERISA prohibition on assignment does not apply to health and welfare plans.)

While courts have generally held that anti-assignment provisions are enforceable, states have begun weighing in on the side of providers in an attempt to keep these lawsuits alive. But can a state law invalidate anti-assignment clauses in plans subject to ERISA and mandate that benefits be assignable to a healthcare provider? The Fifth Circuit, in Dialysis Newco, Inc. v. Community Health Systems Group Health Plan, 938 F.3d 246 (5th Cir. 2019), recently invalidated a Tennessee law that sought to do just that.Continue Reading Will Your Group Health Plan’s Anti-Assignment Clause Defeat Provider Claims?