The Wagner Law Group 2026-06-18T16:04:25Z https://www.wagnerlawgroup.com/feed/atom/ WordPress /wp-content/uploads/sites/1101401/2021/06/cropped-wagner-fav-icon-2-32x32.png by The Wagner Law Group https://www.wagnerlawgroup.com/?p=67446 2025-10-28T18:54:54Z 2025-10-28T18:54:54Z

Independent Non-Coordinated Benefit One type of excepted benefit is an independent non-coordinated benefit, which is a type of benefit provided in the group health insurance market.  To qualify as an independent, non-coordinated benefit in the group market (i) the benefit must be provided under a separate policy, certificate or contract of insurance; (ii) there must be no coordination between the provision of such benefit and any exclusion of benefits under any group health plan maintained by the same plan sponsor; and (iii) the benefit must be paid regarding an event whether or not benefits are provided for such event under any group health plan maintained by the same plan sponsor. In the FAQs, the Agencies have indicated that an employer may offer fertility benefits as an independent non-coordinated excepted benefit.  An independent non-coordinated benefit must be offered as a fully insured arrangement: it cannot be self-funded.  As such, if an employer offers a group health plan and a specified disease or illness policy that covers fertility benefits, participants will not be required to enroll in the employer’s traditional group health plan for the specified disease or illness policy to qualify as an excepted benefit and generally be exempt from the requirements of the ACA. An individual who is enrolled in fertility coverage provided under an independent non-coordinated excepted benefit is not disqualified from participating in a Health Savings Account, or HSA. Limited Excepted Benefit Another type of excepted benefit is a limited excepted benefit.  This is the category under which dental and vision benefits are exempted from most ACA requirements.  This category of benefit can be provided separately or in combination with other excepted benefits and can be either fully insured or self-funded.  If fully insured, the limited benefit must be offered under a separate policy from the group health plan.  A limited benefit must be limited in scope and must not be integrated into the employer’s primary health plan.  It must be available to all similarly situated employees or members of the plan and must not be considered an integral part of the plan. The FAQs allow fertility coverage to be provided as a limited excepted benefit.  As such, the Agencies have indicated that a plan sponsor may offer an excepted benefit health reimbursement arrangement, or HRA, that reimburses an employee’s out of pocket costs for fertility benefits.  The HRA must be entirely employer-paid, so there can be no employee premium for the coverage, and no employee cost-sharing for the benefit.  There must be a dollar cap on the benefit paid: $2,150 for plan years beginning in 2025 and $2,200 for plan years beginning in 2026. An employer may also offer benefits for fertility coaching, or for a fertility navigator service, to help employees and their dependents understand their fertility options.  This assistance may be offered under an employee assistance plan, or EAP, that qualifies as a limited excepted benefit.  An employee assistance plan must not provide significant medical benefits; a fertility benefit that consists of treatment for a fertility condition would be a medical benefit for purposes of evaluating the EAP’s compliance with this requirement.  However, employers could offer treatment for a fertility condition under its group health plan and just offer coaching or a navigator service under its EAP while preserving the EAP’s limited excepted benefit status. The Agencies stated that they intend to issue proposed regulations providing additional ways that certain fertility benefits may be offered as limited excepted benefits.  They are also considering whether to modify the standards under which supplemental health insurance coverage provided by a group health plan, including a supplemental benefit for fertility coverage, will be considered as satisfying the conditions for an excepted benefit.  For example, supplemental coverage excepted benefits currently are limited to 15% of the cost of the plan sponsor’s primary health care coverage, calculated in the same manner as COBRA premiums; the Agencies are considering whether that limitation should be increased. As we move into open enrollment season, employers who are considering increasing coverage for fertility benefits for their employees should be aware of these changes and the possibility of more alternatives to come when designing their 2026 benefit programs. If you are considering increasing fertility benefits for employees, please contact one of the authors to explore the alternatives available for 2026 benefit programs.]]> by WLG https://www.wagnerlawgroup.com/?p=64081 2024-05-09T13:08:36Z 2024-05-07T13:05:10Z

By Dannae Delano In further response[i] to the Supreme Court ruling in Dobbs v. Jackson Women’s Health Organization, which overturned Roe v. Wade, the U.S. Department of Health and Human Services (“HHS”) has made final modifications to the HIPAA privacy rules designed to help protect patients and their providers with respect to reproductive health care.  These changes are effective December 22, 2024, but changes to Notices of Privacy Practices are not required until February 16, 2026. The changes to the privacy rule will require group health plans, including self-funded plans and fully insured plans, with access to protected health information (“PHI”) to make changes to their Business Associate Agreements, Notices of Privacy Practices and HIPAA policies and procedures, and to update the training of plan personnel to include new restrictions on the uses or disclosures of PHI where reproductive health care is legally sought, obtained, provided, or facilitated.  In addition, there is a new attestation requirement that will require group health plans and their business associates to demand an attestation from parties seeking PHI related to reproductive health care that the PHI will not be used or disclosed as prohibited by the new rule.  Attestations must be in writing and signed by the party seeking the PHI or there may be civil or even criminal liability. HHS intends to publish a model notice before the effective date.  Prohibited uses and disclosures include:

• Conducting a criminal, civil, or administrative investigation into any person for the mere act of seeking, obtaining, providing, or facilitating reproductive health care;
• Imposing criminal, civil, or administrative liability on any person for the mere act of seeking, obtaining, providing, or facilitating reproductive health care; or
• Identifying an individual for either of the prohibited actions.

Group health plans that are either self-funded or fully insured and have access to PHI need to act immediately to understand the changes that will be necessary to their plan’s HIPAA compliance documentation, including Business Associate Agreements, Notice of Privacy Practices, and HIPAA Policies and Procedures.  An attestation form and policies will need to be adopted.  Training of plan personnel on the new requirements should occur before the effective date, and all changes will need to be made before training can occur. Please contact Dannae Delano or your Wagner Law Group counsel for help complying with these new HIPAA requirements. __________________________________________________________________________________________________________________________________________________ [i] See our HHS Releases Guidance on HIPAA Protections, https://www.wagnerlawgroup.com/blog/2022/07/hhs-issues-guidance-on-hipaa-protections/, July 13, 2022.]]> by WLG https://www.wagnerlawgroup.com/?p=63785 2024-04-04T14:32:18Z 2024-03-29T14:26:21Z

Lorman Education Services live CLE webinar, May 15, 2024, 1:00 - 2:05 PM (EDT) - Click here for details and registration]]> by WLG https://www.wagnerlawgroup.com/?p=63199 2024-01-05T13:15:46Z 2024-01-04T13:11:23Z

Compliance Issues for Employer Health and Welfare Plans: Fees, Services, Plan Contracts, Reporting, Audits  - Dannae Delano, panelist, Strafford live CLE webinar, January 4. 2024 - Click here for details]]> by WLG https://www.wagnerlawgroup.com/?p=65374 2024-10-31T18:25:09Z 2023-10-31T18:22:21Z

Employee Benefits In Bankruptcy: Update On Key Issues - Israel Goldowitz and Dannae Delano, AIRA Journal Vol. 36, No. 4, 2023]]> by WLG https://www.wagnerlawgroup.com/?p=62304 2023-09-14T10:36:58Z 2023-08-07T12:28:50Z

By Dannae Delano, Roberta Casper Watson and Barry Salkin On July 25, the Departments of Treasury, Labor, and Health and Human Services (the “Departments”) issued proposed regulations and other related guidance under the Mental Health Parity and Addiction Equity Act (“MHPAEA”), focused primarily on nonquantitative treatment limitations (“NQTLs”).  See our client alert discussing the proposed regulations.  NQTLs include, among other things, medical management standards such as prior authorization limiting or excluding benefits based on medical necessity or medical appropriateness, or whether the treatment is experimental or investigative; formulary design for prescription drugs; for plans with multiple network tiers, such as preferred providers or participating providers, network tier design; methods for determining out of network rates; fail-first policies or step therapy protocols; exclusions based upon failure to complete a course of treatment; and restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits provided under the plan. This followed an enhanced enforcement period in 2022 required under the Consolidated Appropriations Act that was designed to focus on the lack of mental health parity compliance in health plan design.  The proposed regulations would, if finalized, establish new requirements for group health plans to collect and evaluate relevant data in a manner reasonably designed to assess the impact of a NQTL on access to mental health and substance use disorder benefits and medical and surgical benefits, and consider the impact as part of the plan’s or issuer’s analysis of whether the NQTL, in operation, complies with the relevant provisions of the proposed regulations. In Technical Release 2023-01 P, the Departments indicated that they are particularly concerned with the adequacy of plans’ networks for providing mental health and substance use disorder benefits.  They are concerned that participants are more often forced to go out-of-network to obtain mental health and substance use disorder treatment, and that that puts a significant burden on plan participants and limits their access to care for mental health and substance use disorder issues.  As a result, the Departments are suggesting the possible creation of a network adequacy safe harbor, and they set out principles regarding the relevant data that group health plans and health insurance issuers would be required to collect and evaluate for those NQTLs related to network composition. In the Technical Release, the Departments request comments on the type, form, and manner of data required to be collected and evaluated under the proposed regulations, if finalized, and operational instructions on what constitutes relevant data for NQTLs relating to network composition.  This data would be used by plans and issuers as part of their comparative analysis for NQTLs related to network composition. In the Technical Release, the Departments identified four specific types of data they are considering requiring plans and issuers to collect and evaluate as part of their comparative analyses related to network composition: out of network utilization, percentage of in-network providers actively submitting claims; time and distance standards; and reimbursement rates.  If the proposed regulations are finalized, the Departments intend to create an enforcement safe harbor with respect to NQTLs related to network composition for plans and issuers that meet or exceed specific data-based standards.  The exact standards will be identified in future guidance but are anticipated to be high standards. Plans and issuers that satisfy the terms of the safe harbor would not be subject to an enforcement action by the Departments under MHPAEA with respect to network composition for a period of time, as specified in the guidance, with one possible time period being two years from the date when the comparative analysis is requested.  The NQTLs related to network composition covered by the safe harbor would include standards for provider and facility admission to participate in a network or for continued network participation, including methods for determining reimbursement rates, credentialing standards, and procedures for ensuring the network includes an adequate number of each category of provider and facility to provide covered services under the plan or coverage.  The Departments indicated that a phased-in approach for this federal enforcement safe harbor is being considered, in which plans and issuers demonstrate progress towards meeting or exceeding the standards over multiple plan years to establish a long-term standard for plans and issuers to achieve if the standards for the safe harbor are not initially met.  Such standards would provide noncompliant plans and issuers with a pathway to meet or exceed those standards from their current baselines. However, such enforcement relief would only be available if, during the two year or other specified period, the plan or issuer has not reduced its coverage of NQTLs.  Specifically, the plan must not have made a change in benefit design or in the processes, strategies, evidentiary standards, and other factors used to design or apply the plan’s NQTLs to (i) additionally limit the scope or duration of those benefits, (ii) increase the scope or duration of medical and surgical benefits without comparably increasing the scope or duration of mental health or substance use disorder benefits or (iii) substantially affect the probative value of the data submitted in the comparative analysis.  If such a change was made by a plan or health insurance issuer, the enforcement safe harbor would cease to apply as of the date of the change.  In order to qualify for this potential enforcement safe harbor, all of the standards specified in future guidance would need to be satisfied.  As an additional qualification, the potential enforcement safe harbor would be limited to NQTLs related to network composition and would not extend to other NQTLs. Finally, the Departments are asking for comments on various issues relating to the possible federal enforcement safe harbor, including whether plans and issuers would actually seek to utilize a federal enforcement safe harbor.  (It appears that, in light of the continued potential for state enforcement or, for plans covered by ERISA, the private right of action for participants and beneficiaries, and whether states might provide similar relief, the Departments do not want to provide for an enforcement safe harbor that would not actually be utilized. Plan sponsors who have struggled with Mental Health Parity compliance, both due to the complexity of the rules and the cost of compliance, should welcome the proposed regulations and potential enforcement safe harbor and assist the Departments with the information being solicited, in hopes the guidance will be quickly finalized.]]> by WLG https://www.wagnerlawgroup.com/?p=62276 2023-08-01T19:02:01Z 2023-08-02T13:02:10Z

By Roberta Watson, Dannae Delano and Barry Salkin Employers frequently provide group health plan coverage for their employees through pre-tax contributions to a cafeteria plan.  Elections under a cafeteria plan cannot be revoked during the year, unless there is a change in the status of the employee (and in certain circumstances, his or her spouse or dependent), or with respect to events triggering a special enrollment period.  One such event triggering a special enrollment period is ceasing to be eligible under Medicaid or the Children’s Health Insurance Program (“CHIP”).  The minimum special enrollment period for individuals losing eligibility for Medicaid or CHIP is 60 days from the loss of coverage.  The law does not preclude special enrollment periods of greater than 60 days.  Nevertheless, almost all plans provide only for the statutory minimum 60-day special enrollment period. In a July 20, 2023, open letter to employers, plan sponsors, and health plan issuers, CMS, the Center for Medicare and Medicaid Services, a division of the Department of Health and Human Services, encouraged employers and other plan sponsors to provide a temporary special enrollment period beginning March 31, 2023, and ending on July 31, 2024, for persons who lose Medicaid or CHIP coverage during that period and seek to enroll in group health plan coverage. This would be comparable to an extension of the special enrollment period that CMS is making for Exchange-based coverage.  There is no legal basis upon which CMS can rely in requesting this voluntary action by employers.  In effect, CMS is asking employers to take this action because it believes that it is the “right thing to do,” in light of the “complex transition” (discussed more fully below) “and the importance of maintaining life-saving coverage for employees and their families.”  From an ERISA standpoint, an employer wanting to implement this CMS recommendation would need to amend its plan, which is a settlor function, rather than a fiduciary function.  Even if it were treated as a fiduciary function under ERISA, there is no fiduciary duty to maximize a plan participant’s benefits beyond what the law requires.  Nevertheless, employers often act protectively towards their employees when it comes to making sure that they have access to health coverage, so some employers will likely wish to honor CMS’s request. In addition to recommending this plan change with respect to special enrollment periods, CMS also encouraged employers and other plan sponsors to take the following actions:

• Inform employees about Medicaid and CHIP renewals and encourage employees who are covered under Medicaid or CHIP to update their contact information with their state agency. This action is significant, because employees otherwise eligible for Medicaid or CHIP may have lost contact with their state agency.
• Ensure that eligible employees can easily enroll in their employer-based plan after losing Medicaid or CHIP coverage.
• Remind employees that they may be eligible for Exchange-based coverage if they are not eligible for employer-sponsored or other employment-based coverage that is both affordable and meets minimum standards under the Affordable Care Act.

This call for voluntary action by CMS was prompted by a provision of the Consolidated Appropriations Act of 2023 that expired on March 31, 2023.  As CMS explained, eligibility for Medicaid coverage is generally renewed each year.  However, during the pandemic, most Medicaid terminations were paused so that individuals could continue to have coverage. Effective March 31, 2023, continuous enrollment in Medicaid expired and state agencies are presently resuming regular eligibility and enrollment operations, carefully reviewing the eligibility of the enrollees.  The consequence of the resumption of regular state Medicaid processes is that many individuals whose qualifications are reviewed will no longer be eligible for Medicaid or CHIP, as the case may be.  CMS’s concern is that, given the circumstances surrounding the resumption of Medicaid and CHIP renewals for the first time in three years, many individuals will need more than 60 days to apply for and enroll in coverage, because in many instances they will not realize that they have lost coverage until they next attempt to access medical care. Because CMS is only encouraging employers to take action, no action is required. However, cases will certainly arise in which individuals incur significant medical costs after their 60-day special enrollment period has expired and plan sponsors should decide if they want to amend their plans to avoid this result for employer-sponsored coverage in much the same way as CMS is doing for requests made for Exchange based coverage.]]> by WLG https://www.wagnerlawgroup.com/?p=62271 2023-08-01T14:54:02Z 2023-08-01T14:54:02Z

By Dannae Delano, Roberta Watson and Barry Salkin In FAQ Part 60, the Departments of Health and Human Service, Treasury, and Labor (the “Departments”) addressed limitations on cost sharing under the Affordable Care Act (the “ACA”), certain relationships between the ACA and the No Surprises Act, and facility fees under the No Surprises Act. With respect to non-grandfathered plans, the ACA provides a maximum annual limitation on an individual’s cost-sharing.  This limit is sometimes referred to as the maximum out-of-pocket limitation or MOOP.  Under the ACA, the cost-sharing that is capped by the MOOP does not include premiums, balance billing amounts for non-network providers, or spending for non-covered services.  If a plan includes a network of providers, a plan may count an individual’s out-of-pocket spending for out-of-network items and services towards the MOOP limit but is not required to do so. An out-of-network provider, for purposes of the MOOP cap, is a provider or facility with which the plan or issuer does not have a direct or indirect contractual arrangement with respect to the applicable plan or coverage.  In the new FAQ Part 60, the Departments explain that cost sharing for services provided by participating providers, as defined under the No Surprises Act, would be treated as in-network cost-sharing for purposes of the ACA, and cost-sharing for services provided by nonparticipating providers would be considered to be out-of-network cost sharing for purposes of the ACA.  Consistent with that approach, the Departments indicated that it is not permissible for a plan or issuer to treat a provider, facility, or provider of air ambulance services with which it has a contractual relationship as out-of-network for purposes of the MOOP limit under the ACA while also treating the provider as participating for purposes of the No Surprises Act. The Departments also address facility fees provided outside of hospital settings (e.g., when facility fees are not covered in connection with essential health services).  The Departments indicate that for purposes of the Transparency in Coverage regulations issued by the Trump Administration, and the good faith estimate requirements for uninsured or self-pay individuals under the No Surprises Act, facility fees are included within the definition of “items and services.”  As a result, plans and issuers will be required to make price comparison information for covered facility fees available to participants, beneficiaries, and enrollees on request, as well as providing good faith estimates to uninsured or self-pay individuals, as will be required by the No Surprises Act once those provisions are effective.  The Departments further indicate that future regulations with respect to advanced explanations of benefits and good faith estimates will address facility fees in a similar manner. Employer plan sponsors should be communicating with their group health plan vendors regarding the vendors’ preparation for the Transparency in Coverage, good faith estimates, and advance explanations of benefits required under the No Surprises Act, as explained further under FAQ Part 60.  It is key to remember that, beginning on January 1, 2024, there will be an expanded disclosure requirement for group health plans to provide price comparison information for all covered items and services that will likely address facility fees in a manner similar to FAQ Part 60.]]> by WLG https://www.wagnerlawgroup.com/?p=62245 2023-07-20T18:57:41Z 2023-07-20T18:57:41Z

By Dannae Delano, Roberta Casper Watson and Barry Salkin On July 7, the Departments of Health and Human Services, Labor, and Treasury (the “Departments”) issued proposed regulations modifying the definition of short-term limited duration insurance and the conditions for hospital indemnity and other fixed indemnity insurance to be considered excepted benefits not subject to the market reforms of the Affordable Care Act (“ACA”). The proposed regulations also solicit comments on specified-disease coverage as excepted benefits, and on self-funded level-funded plans maintained by small employers. The press release accompanying the proposed regulations is clear that the regulations are intended to support the goals of the ACA by increasing access to affordable and comprehensive coverage, and promoting consumer understanding that certain coverage options are not comprehensive coverage. The proposed regulations’ intent, as the White House put it, is to “crack down on junk insurance.”  Plan sponsors with any of the types of coverage described below should evaluate what the proposed regulations, once they are finalized, could mean to the coverage they offer their employees. Employers attempting to utilize these products as an alternative to comprehensive health coverage should be aware that significant changes will likely be required of their health insurance coverage offers if the proposed regulations are finalized as proposed.  Short-Term Limited Duration Insurance (“STLDI”)  STLDI is a type of health insurance that is designed to fill temporary gaps in coverage when an individual is transitioning from one source of coverage to another.  STLDI is important because it is exempt from the definition of individual health insurance coverage under the Public Health Service Act and therefore generally not subject to the applicable federal individual market consumer protections and requirements for comprehensive coverage under the ACA.  The Departments propose to amend the definition of STLDI to limit the length of the initial contract period to no more than three months and the maximum coverage period to no more than four months, taking into account any renewals or extensions. This four-month period would match the maximum 90-day waiting period and one month orientation period under the ACA. This change would also reduce the maximum length of STLDI from the current initial contract term of less than 12 months and maximum total duration of 36 months, including renewals and extensions. The Departments are proposing these changes to the terms “short-term” and “limited duration” to clearly differentiate STLDI from comprehensive coverage, realign the definition of STLDI with its traditional purpose of bridging short-term gaps in comprehensive coverage, and avoid the financial risk associated with enrolling in this limited coverage as an alternative, rather than a supplement, to comprehensive coverage. Further, the proposed regulations attempt to address a practice known as “stacking." Stacking is renewing or extending an STLDI policy using separate, sequential STLDI policies that would collectively evade any duration limits. If finalized, the regulation would allow an individual to enroll in consecutive STLDI contracts that in total exceed four months in duration only if the contracts that are effective within a 12-month period were sold by different insurers and were consistent with applicable state law. The proposed regulations also include a required notice emphasizing that STLDI is not comprehensive health insurance coverage. The notice must be displayed prominently in at least 14 point font on the first page (in either paper or electronic form, including on a website) of the policy, certificate, or contract of insurance and in any marketing application, and enrollment and reenrollment materials that are provided to individuals at or before individuals have an opportunity to enroll or reenroll in coverage. Fixed Indemnity Coverage Fixed indemnity coverage is exempt from the federal consumer protections and requirements for comprehensive health insurance because it is designed to provide a source of income replacement rather than full medical coverage. The Departments propose to prohibit fixed indemnity coverage in the individual market from paying benefits on a per-service basis. The purpose of this proposal is “to limit the practice among certain issuers of designing complex fee for service style fixed indemnity plans that resemble comprehensive coverage.”  The Departments also propose additional payment standards for fixed indemnity coverage in both the individual and group markets. (Fixed indemnity coverage is considered an “excepted benefit,” and thus is exempt from many requirements for employer-sponsored group health plans.) To be considered an excepted benefit under the proposed regulations, hospital indemnity or other fixed indemnity insurance would be required to pay benefits in a fixed dollar amount per day or other pay period, without regard to services or items received, the actual or estimated amount of expenses incurred, the severity of the illness or injury, or other characteristics particular to a course of treatment, and not on any other basis, such as a per item or per service basis.  Additionally, to qualify as an excepted benefit, payment must be made without regard to whether the benefits are provided with respect to the event under any other health insurance coverage maintained by the same health insurance provider with respect to the same policyholder. To qualify as an excepted benefit, fixed indemnity coverage must be offered as independent, non-coordinated coverage. The proposed regulations clarify that coordination occurs when fixed indemnity coverage is offered as a complementary coverage option that is coordinated with an exclusion of benefits under a group health plan maintained by the same plan sponsor, even if there is not a formal coordination of benefits arrangement. The notice requirements are identical in form to the STLDI notice requirements. The proposed regulations contain a notice that the plan or issuer must display prominently in at least 14 point font on the first page (in either paper or electronic form, including on a website) of any marketing, application, and enrollment materials that are provided to plan participants at or before the individuals are given the opportunity to enroll or reenroll. In the preamble to the proposed regulations, the Departments also express concerns about fixed indemnity payments being made directly to providers rather than to plan participants, but did not address this issue in the proposed regulations. Effective Dates The effective date of these new provisions with respect to STLDI is 75 days after final regulations are published in the Federal Register.  For new STLDI sold or issued on or after the effective date of the final rules, the amendments to the definition of STLDI would apply for coverage periods beginning on or after such date.  However, for STLDI sold or issued before the effective date of the final regulations (including any subsequent renewals or extensions consistent with applicable law), the current definition of such coverage would continue to apply.  Therefore, existing STLDI could continue to have an initial contract term of less than 12 months and a maximum duration of 36 months, subject to any limits under applicable state law.  However, the Departments propose that the amendments to the notice requirement of the definition of short-term, limited duration insurance would apply for coverage periods beginning on or after the effective date of the final rules, regardless of whether the coverage was sold or issued before, on, or after the effective date of the final regulations.  The Departments also sought comments with respect to both the applicability date of the notice requirements to STLDI plans in existence before the effective date of final regulations and the application of the new definition of STLDI in general. The effective date of these regulations with respect to fixed indemnity coverage is for plan years beginning 75 days after final regulations are published in the Federal Register. For fixed indemnity coverage sold or issued after that date, the final regulations would apply. However, for fixed indemnity coverage sold or issued in the group or individual market prior to the effective date of the final regulations, the amendments related to such coverage would apply with respect to plan years in the group market and policy years in the individual market that begin on or after January 1, 2027. However, the proposed notice requirements would apply to existing fixed indemnity excepted benefits coverage for notices provided in plan years or policy years beginning on or after the effective date of the final regulations. In the preamble to the proposed regulations, the Departments express their understanding that most sales of STLDI occur through group trusts or associations.  An issuer will register its product in one jurisdiction and sell to consumers in another jurisdiction through an association.  In the preamble to the proposed regulations, the Departments remind the regulated community and other interested parties that STLDI sold to individuals through a group trust or association, other than in connection with a group health plan, is not group coverage for purposes of Federal law.  Therefore, unless the STLDI satisfies the definition of STLDI in the proposed regulations, it must comply with ACA requirements for comprehensive individual health insurance coverage. In the preamble to the proposed regulations, the Departments also indicate their awareness that some group trusts and associations have marketed STLDI policies to employers as a form of employer-sponsored coverage. The Departments explain that this approach does not satisfy the STLDI exemption, because any health insurance sold in connection with employment is group health insurance that must comply with the ACA market reforms in the group market, even if it purports to be STLDI.  The Departments did not propose any policies or policy changes specific to STLDI sold through associations, but did request comments on what steps, if any, could be taken to support state oversight of STLDI sold to or through associations. The Departments also indicated in the preamble their  interest in additional strategies to help consumers distinguish between STLDI and comprehensive coverage.  The Departments solicited comments on how the Departments could mitigate direct competition between STLDI and comprehensive coverage to ensure that consumers do not mistakenly enroll in STLDI as an alternative to comprehensive coverage. Specified Disease Excepted Benefit Coverage Coverage limited to a specific disease or illness (for example, cancer-only policies) are categorized in the statute and the regulations as excepted benefits if offered as independent, non-coordinated benefits and certain other conditions are met.  The proposed regulations do not address specific-disease excepted benefits coverage, but the Departments are soliciting comments to gather information from stakeholders to better understand how specified-disease excepted benefits coverage is marketed and sold to consumers and how consumers use this coverage, and to inform any future action regarding specified-disease excepted benefits coverage. Level-Funded Plans In the preamble to the proposed regulations, the Departments observe that level funding is an increasingly popular method of funding for group health plans, especially among small employers.  These level-funded plans purport to be and are regulated as self-funded plans, but often have low stop-loss coverage attachment points, and mimic many features of fully insured plans.  While not addressed in the proposed regulations, the Departments are soliciting comments on level-funded plans to better understand the prevalence of such plans, the designs of such plans, and whether additional guidance or rulemaking is needed to clarify the obligations of a plan sponsor with respect to coverage provided through a level-funded plan arrangement. Written comments on the proposed regulations are due by September 11, 2023.]]> by WLG https://www.wagnerlawgroup.com/?p=62239 2023-07-20T12:18:55Z 2023-07-20T12:08:20Z

By Dannae Delano, Seth Gaudreau and Barry Salkin The SECURE 2.0 Act of 2022, Division T of Public Law No. 117-328 (“the Act”) includes dozens of provisions that affect retirement plans and retirement plan sponsors.  This alert focuses on several changes related to the correction procedures that plan sponsors can use for the correction of errors in administering retirement plans. These changes include expansion of the IRS’s Self-Correction Program (“SCP”) for retirement plan failures under the Internal Revenue Service’s (“IRS”) Employee Plans Compliance Resolution System (“EPCRS”), changes related to recovery of inadvertent benefit overpayments, and a permanent safe harbor correction method for elective deferral failures related to automatic enrollment arrangements in certain retirement plans.  In addition, the IRS has also issued the first guidance implementing these changes (“Notice 2023-43”) that clarifies that the changes are immediately applicable (with certain exceptions, including corrections by IRA custodians and trustees) and provides interim guidance that will remain in effect until EPCRS is updated. EPCRS Self-Correction Program Expansion The ability of plans sponsors to “self-correct” is not new. The EPCRS SCP allows certain compliance issues to be self-corrected by plan sponsors without the need to make a submission to the IRS or obtain IRS approval.  Generally, self-correction has only been available for insignificant failures and failures that are corrected within a few years of the failure.  Under the Act, SCP now allows for any “eligible inadvertent failure” to be self-corrected, if the failure: (i) is corrected within a reasonable time after it is discovered; (ii) is not identified by the IRS before the plan sponsor has taken actions that demonstrate a commitment to self-correction; and (iii) is not egregious, related to the diversion or misuse of plan assets, or directly or indirectly related to an abusive tax avoidance transaction. As was previously required and often overlooked, to qualify for the new SCP, the plan must have “established practices and procedures” designed to prevent failures. Prior to the Act, EPCRS allowed certain participant loan errors to be corrected without reporting the error on Form 1099-R, only if the error was submitted for IRS approval using the Voluntary Compliance Program (“VCP”) (or Audit CAP if the error is discovered on audit). The Act specifically authorizes self-correction of inadvertent failures related to plan loans to participants.  Further, if the EPCRS plan loan correction rules are followed, the Department of Labor (“DOL”) must treat self-corrected participant loan errors as satisfying the applicable requirements under its Voluntary Fiduciary Correction Program (“VFCP”).  Previously, participant loan error corrections could only be submitted to the DOL’s VFCP for approval after the IRS had issued a compliance statement on the correction. Under the Act, the current EPCRS guidance (“Rev. Proc. 2021-30”) is required to be updated within two years of enactment. Notice 2023-43, provided in a question-and-answer format, is intended to assist taxpayers by providing interim guidance in advance of an update to Rev. Proc. 2021-30.  Notably, the guidance confirms that failures that occurred before SECURE Act 2.0 was enacted on December 29, 2022, may be corrected in accordance with the new rules.  The guidance is not comprehensive and does not address the recovery of plan overpayments, correction of automatic contribution errors, or any elements over which the DOL has authority. The Notice focuses on the following issues:

• A plan sponsor may self-correct an eligible inadvertent failure before Rev. Proc. 2021-30 is updated if certain conditions are satisfied and certain exceptions do not apply;
• A custodian of an individual retirement account described in section 408(a) of the Internal Revenue Code, or an individual retirement annuity described in section 408(b) (an IRA) may not correct an eligible inadvertent failure under EPCRS before Rev. Proc. 2021-30 is updated; and
• Interim interpretive guidance that applies with respect to corrections of eligible inadvertent failures.

The guidance under which a plan sponsor may self-correct an eligible inadvertent failure under section 305 of the Act, provided certain exceptions do not apply, is as follows:

• Section 305 of the Act allows for errors not identified by the Secretary before any actions occurred that demonstrate a specific commitment to implement a self-correction with respect to the eligible inadvertent failure. The guidance clarifies the following related to self-correcting non-identified inadvertent failures:
  • A plan sponsor should document the intended correction at the beginning of the correction process.
  • A specific commitment is a facts and circumstances consideration so a plan sponsor must demonstrate it is actively pursuing the self-correction.
  • Under examination means it has been identified by the Secretary, but an insignificant failure may still be corrected while under examination.
• Section 305 of the Act provides that a self-correction must be completed within a reasonable period after the failure was identified. The guidance clarifies the following regarding what a reasonable period is:
  • Reasonable period is a facts and circumstances consideration, but for failures that are not employer eligibility failures, it includes the end of the 18^th month after the plan sponsor identifies the failure. In certain circumstances, this could result in a shorter correction period than under prior law.
  • For eligibility failures, the sponsor must cease all contributions to the plan as soon as practicable but no later than the last day of the 6^th month after the failure is identified.
• Section 305 of the Act requires that a failure not be egregious, not directly or indirectly relate to an abusive tax avoidance transaction, and not relate to the diversion or misuse of plan assets. There is no specific guidance provided but Notice 2023-43 identifies certain failures that are ineligible for self-correction, as discussed below.
• Section 305 of the Act provides that self-correction must satisfy all the provisions applicable to self-correction in the current EPCRS with certain exceptions. The guidance clarifies the following requirements for self-correction:
  • Most current EPCRS rules apply.
  • Nine inadvertent failures are not eligible for self-correction until EPCRS is updated, including:
    • Failure to adopt a written plan document
    • A significant failure in a terminated plan
    • Any amounts or coverage testing failure insufficiently corrected as provided under Rev. Proc. 2021-30
    • Use of a plan amendment to correct an operation failure if the amendment is less favorable to the participant or beneficiary than the original plan terms
  • Existing recordkeeping requirements for self-correction apply.
  • Certain current EPCRS rules no longer apply:
    • Qualified and 403(b) plans are no longer required to have a determination letter
    • Certain nondiscrimination and employer eligibility failures are no longer prohibited from being self-corrected
    • Prohibitions from self-correcting loan failures do not apply
    • The time limits to self-correct a significant plan failure no longer apply

Plan sponsors may rely on the Notice until Rev. Proc. 2021-30 is updated pursuant to the Act. During this period, if a self-correction was completed by a plan sponsor on or after December 29, 2022, and before May 25, 2023, the plan sponsor may apply a good faith, reasonable interpretation of section 305 of the Act in completing the self-correction. A plan sponsor that completed a self-correction during this period in a manner that accords with Notice 2023-43 will be treated as having applied a good faith, reasonable interpretation of section 305 of the Act. Recovery of Retirement Plan Overpayments Previous IRS guidance mandated that plan fiduciaries take reasonable steps in their attempt to recover overpayments made to plan participants and beneficiaries, and there were also fiduciary implications under Title I of ERISA with respect to recovery of overpayments.  The Act grants plan fiduciaries the discretion not to seek recoupment of “inadvertent benefit overpayments” made to participants or beneficiaries.  If the plan fiduciary attempts recovery, the Act includes the following limitations on the ability to recover overpayments:

• No interest or fees may be sought from the participant.
• If the plan fiduciary seeks to recover overpayments of a non-decreasing annuity by reducing future benefit payments: (i) the reduction must cease after the plan has recovered the full dollar amount of the overpayment; (ii) the amount recouped each calendar year may not exceed 10 % of the full dollar amount of the overpayment; and (iii) future benefit payments may not be reduced to below 90 % of the periodic amount otherwise payable under the terms of the plan. Alternatively, if the plan fiduciary seeks to recover overpayments of a non-decreasing annuity through one or more installment payments, the payments that may be required in a calendar year may not exceed the benefit reductions that would be permitted for the year under the preceding sentence.
• If the plan fiduciary seeks to recoup past overpayments of a benefit other than a non-decreasing annuity, the plan fiduciary must satisfy requirements to be developed by the Secretary of Labor.
• Efforts to recover overpayments are: (i) not accompanied by threats of litigation, unless the responsible plan fiduciary makes a determination that there is a reasonable likelihood of recovering an amount greater than the cost of recovery, and (ii) not made through a collection agency or similar third party, unless the participant or beneficiary ignores or rejects efforts to recover the overpayment following either a final judgment in federal or state court or a settlement between the participant or beneficiary and the plan.
• Recoupment of past overpayments to a participant may not be recovered from any beneficiary of the participant, including a spouse, surviving spouse, former spouse, or other beneficiary.
• Recoupment may not be sought if the first overpayment occurred more than three years before the participant or beneficiary is first notified in writing of the error, except in the case of fraud or misrepresentation by the participant or beneficiary.
• The participant or beneficiary may contest the recoupment under the plan’s claims procedures.
• The plan may consider hardship to the participant or beneficiary.

The above limitations are not applicable if the participant or beneficiary is “culpable” for the overpayment. A participant or beneficiary is culpable if the individual bears responsibility for the overpayment based on misrepresentations or misstatements or knows that the overpayments were materially in excess of the correct amount. While this provision of SECURE 2.0 is very granular, it still leaves many open questions, including the threshold question of what constitutes an inadvertent benefit overpayment Safe Harbor for Correction of Employee Elective Deferral Failures The Act makes permanent a safe harbor, already included in EPCRS, for correcting certain elective deferral failures in 401(k) plans and 403(b) plans with automatic enrollment and/or automatic escalation features. Under the safe harbor, no corrective contributions for reasonable administrative errors are required for the missed elective deferrals if, generally, correct deferrals start within 9½ months after the end of the plan year in which the failure begins (or the first pay date in the month following the month the participant notifies the plan sponsor of the error), corrective contributions are made for any missed matching contributions, and a notice is provided to the affected participant within 45 days after correct deferrals begin. Unlike the existing safe harbor, under the Act the correction method may be used to correct errors that relate to former employees and remains available even after the IRS identifies the error.  The permanent safe harbor is effective with respect to errors for which the correction deadline is after December 31, 2023. Plan sponsors should make self-correction a priority given the new and expanded opportunities to self-correct plan qualification issues.  In addition, intended corrections should be documented early on in the correction process to ensure the requirements for self-correction are met. Taking advantage of the expanded opportunities to self-correct will allow plans to remain qualified without requiring expensive VCP filings or the risk of fixing the issues found while the plan or plan sponsor is under examination by the IRS.  We will continue to keep our clients and readers informed on EPCRS updates to help plan sponsors capitalize on all self-correction opportunities.]]> by WLG https://www.wagnerlawgroup.com/?p=62052 2023-06-26T19:30:28Z 2023-06-05T18:43:41Z

client alerts, the end of the National Emergency and the cessation of the outbreak period on July 10, 2023, will result in, among other things, the end of the tolling and extension of election and payment periods with respect to COBRA.  As a result, the rules that were in effect prior to the pandemic will continue to apply.  With respect to an initial qualifying event, an affected individual will have 60 days within which to make an election, and 45 days within which to remit their initial premium. Thereafter, premium payments must be remitted every 30 days. In response to the anticipated ending of the outbreak period on July 10, 2023, the Massachusetts Division of Insurance, on April 10, 2023, issued Special Bulletin 2023-09 to, among others, commercial health insurers, to address the implications of the ending of the National Emergency with respect to COBRA.  The Division expressed concern that “loss of these COBRA flexibilities will…contribute to individuals experiencing loss of health insurance coverage and churn in the marketplace for individual and group health insurance.”  Therefore, “in the interest of facilitating a smooth transition back to non-emergency ‘normal’ commercial health insurance dynamics after three years of the Covid-19 pandemic,” with respect to any individual who experiences a loss of COBRA coverage, including losses due to voluntary termination or termination for non-payment, commercial health insurance carriers must consider such loss of COBRA coverage an event triggering special enrollment rights.  Upon the occurrence of such a triggering event, affected plan participants will have a period of 60 days either prior to or after the event to request the special enrollment period.  Carriers were further required to extend all special enrollment periods granted as the result of such a triggering event to November 2023 for coverage becoming effective in 2023. This Bulletin does not apply to self-insured group health plans, and it is still too early to determine the extent to which regulators in other jurisdictions will take similar action.  As is generally the case with agency regulation at both the federal and state level, the regulation may be subject to judicial challenge. Employers with insured group health plans in Massachusetts will need to take care to ensure any pre-tax premium benefits are operated in accordance with the new Special Enrollment event and the appropriate plan documents, and that participants are properly notified of the new Special Enrollment right and how it will work with their benefits.]]> by WLG https://www.wagnerlawgroup.com/?p=61552 2023-04-26T18:56:52Z 2023-04-14T15:43:52Z

March 13, 2020 – Enforcement Discretion Regarding COVID-19 Community-Based Testing Sites During the COVID-19 Nationwide Public Health Emergency

March 17, 2020 – Enforcement Discretion for Telehealth Remote Communications During the COVID–19 Nationwide Public Health Emergency

April 9, 2020 – Enforcement Discretion Under HIPAA To Allow Uses and Disclosures of Protected Health Information by Business Associates for Public Health and Health Oversight Activities in Response to COVID-19 

January 19, 2021 – Enforcement Discretion Regarding Online or Web-Based Scheduling Applications for the Scheduling of Individual Appointments for COVID-19 Vaccination During the COVID-19 Nationwide Public Health Emergency

On April 11, 2023, President Biden signed legislation ending the nationwide COVID-19 public health emergency (PHE) May 11, 2023. OCR has now announced its plan to end the HIPAA enforcement discretion described above, also on May 11, 2023. For the Telehealth Remote Communications guidance issued on March 17, 2020, however, OCR has established a 90-day transition period that will end on August 9, 2023. During this transition period, OCR will continue to exercise its enforcement discretion and will not impose penalties on healthcare providers for noncompliance with HIPAA that occurs in connection with the good faith provision of telehealth. The 90-day transition period ONLY applies to the Telehealth Remote Communications compliance. Consequently, full enforcement of HIPAA will resume on May 12, 2023, and covered entities continuing to utilize Telehealth Remote Communications will have until August 10, 2023, to resume full HIPAA compliance. Covered entities, including group health plans, and their business associates should immediately review how their processes may have changed during the pandemic as a result of relying on OCR’s enforcement discretion, and should cease or replace any practices that fail to comply with HIPAA.]]> by WLG https://www.wagnerlawgroup.com/?p=61481 2023-04-11T18:04:07Z 2023-04-11T16:14:26Z

The 30- or 60-day period within which to request special enrollment;

The 60-day election period for COBRA continuation coverage;

The date for making COBRA premium payments;

The date for individuals to notify the plan of a qualifying event or determination of disability;

The date by which individuals may file a benefit claim under the plan’s claims procedures;

The date by which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedures;

The date by which claimants may request external review after receipt of a final adverse determination; and

The date by which a claimant may request information to perfect a request for external review upon a finding that the request was not completed.

The disregarded periods will end 60 days after the expiration of the NE, a period referred to as the Outbreak Period. See also our client alert, “Administration to End Special Covid Deadlines and Coverage for Welfare Plans and Participants.”  The effect of these disregarded periods is that the deadlines for taking the actions listed above (requesting special enrollment, making a COBRA election, etc.) will not apply until the end of the disregarded period for the actions in question. In January, President Biden announced his intention to end the PHE and NE on May 11, 2023.  However, the U.S. House of Representatives and Senate passed a joint resolution to end the NE earlier, and President Biden is expected to sign the bill.  The NE end date under the legislation is not entirely clear, but it is possible it could be effective on signature.  Consequently, the NE could end even before the previously announced May 11, 2023, date, but the bill does not change the end of the PHE. In Frequently Asked Questions (FAQs) issued by HHS, DOL, and Treasury (the “Agencies”) on March 29, 2023, the Agencies stated that, since both the PHE and the NE will end on May 11, 2023, the Outbreak Period will end on July 10, 2023.  However, since the disregarded period cannot exceed one year, a disregarded period will end on the earlier of one year from the date the action would otherwise have been required or permitted, or July 10, 2023.  Therefore, no disregarded period can end after July 10, 2023, although the FAQs noted that further guidance is expected as to the reimposition of regular deadlines, and encouraged employers to continue the extended deadlines until that further guidance is issued.  The Agencies particularly indicated support for employers who wish to keep the same rules in place for the remainder of the current plan year. In addition to the end of the outbreak period deadline extensions, the FAQs also clarified how COVID-19 coverage and payment requirements under the Family First Coronavirus Act (FFCRA) and the CARES Act will be affected when the PHE ends. Specifically, the Agencies provided that the statutory requirements of the FFCRA requiring plans and issuers to cover COVID-19 diagnostic tests that meet statutory requirements and certain associated tests and services without imposing any cost sharing, prior authorization, or other medical management requirements will cease to apply at the end of the PHE.  Further, if such coverage is provided, plans or issuers may impose cost sharing, prior authorization, or other medical management requirements for such items and services.  Nevertheless, the Agencies “encourage” plans/issuers to continue to provide this coverage without imposing cost sharing or medical management requirements after the PHE ends and to continue to covering benefits for COVID-19 testing and treatment, telehealth and remote care services after the end of the PHE. With respect to notifying plan participants and enrollees if these changes in coverage under the plan are made, the Agencies encouraged plans and issuers to notify participants, beneficiaries, and enrollees of key information regarding coverage of COVID-19 diagnosis and treatment, including testing.  In addition to encouraging such notification, the Agencies observed that, if the change in terms of coverage would constitute a material modification to the contents of a summary of material modifications, participants and beneficiaries would need to receive notice of the material modification. The FAQs also stated that the advance notification requirements generally applicable to a material modification of a summary of material modifications apply.  The Agencies further noted that certain reimbursement and cash price posting requirements for testing and vaccines under the CARES Act will no longer apply after the end of the PHE. Regarding the rapid coverage of preventive services and vaccines for coronavirus, after the end of the PHE, non-grandfathered group health plans must continue to cover, without cost sharing, qualifying coronavirus preventive services. The coverage must be provided within 15 business days after the date on which an applicable recommendation is made by the United States Preventive Services Task Force (USPSTF) or the Advisory Committee on Immunization Practices.  Note, however, that a Texas District Court decision holding that the USPSTF does not have the authority, under the U.S. Constitution, to make recommendations that bind plan sponsors calls that part of the FAQ into question. The FAQs do not address the impact of the Texas decision.  In any event, the FAQs note that after the end of the PHE, nothing requires a plan or issuer to provide benefits for qualifying coronavirus preventive services delivered by an out-of-network provider if the plan or issuer has a network of providers. Additionally, nothing precludes a plan or issuer that has a network of providers from imposing cost sharing for qualifying coronavirus preventive services delivered by an out-of-network provider. However, if a plan or issuer does not have a provider in its network who can offer a qualifying coronavirus preventive service, and if the preventive requirement remains in effect, the plan or issuer must cover the item or service when furnished by an out-of-network provider, and may not impose cost sharing with respect to the item or service. The FAQs also addressed special enrollment periods for individuals losing coverage under Medicaid or the Children’s Health Insurance Program (CHIP). The Agencies indicated that, from the onset of the PHE, state Medicaid agencies generally have not terminated the enrollment of Medicaid beneficiaries who were enrolled on or after March 18, 2020, and through March 31, 2023 (the continuous enrollment condition). After March 31, 2023, certain individuals who had previously qualified for Medicaid or CHIP coverage will cease to be eligible. According to the Agencies, individuals who lose Medicaid or CHIP coverage from March 31, 2023, through July 10, 2023, are eligible for relief and can request special enrollment in a group health plan until 60 days after July 10, 2023. The Agencies noted that neither ERISA nor the Code prohibits extension of this period beyond the 60-day statutory minimum. The Agencies also identified actions that employers might take, although not legally required to do so, to assist employees who have been benefiting from Medicaid or CHIP to maintain their health coverage. Finally, the Agencies indicated that an individual covered by a high deductible health plan (HDHP) that is providing medical care services and items purchased for testing for and treatment of COVID-19 may continue to contribute to a health savings account (HSA) until further guidance is issued. Future guidance will not generally require HDHPs to make changes in the middle of a plan year for covered individuals to remain eligible to participate in an HSA. The end of the PHE, whether it occurs on May 11, 2023 or earlier, will require various actions and decisions by plan sponsors and plan administrators, including plan amendments; issuing of summaries of material modifications and an updated summary of benefits and coverage; other forms of notice to plan participants and COBRA enrollees of the end of the extended deadlines; and coordination with third party administrators and service providers with respect to any delinquent claims, COBRA election and payment deadlines, and any external appeals.]]> by WLG https://www.wagnerlawgroup.com/?p=60599 2023-03-09T15:56:27Z 2023-03-09T15:51:01Z

Restricts disclosure of provider-specific cost or quality of care information or data to referring providers, a plan sponsor, and individuals who either were or were eligible to become participants, beneficiaries, or enrollees;

Restricts electronic data access to de-identified claims and encounter information or data for each participant, beneficiary, or enrollee upon request;

Restricts either the sharing of information or data described in the two preceding bullet points or is a direction that such information be shared with business associates.

However, the prohibition on gag clauses does not prevent health care providers, networks or associations of providers, or other service providers from placing reasonable restrictions on any of the information covered by the gag clause requirements. The gag clause provisions became effective on December 27, 2020, and plans and issuers are required under the CAA to submit an annual attestation of complying with these requirements (a “Compliance Attestation”) to HHS, DOL, and the Treasury Department (the “Departments”). The Departments believed that the gag clause provisions themselves were self-implementing and did not require regulatory guidance.  However, the Departments also indicated they anticipated issuing guidance on the annual verification requirement, and such guidance was provided on February 24, 2022, in FAQ Part 57. The first Compliance Attestation is due no later than December 31, 2023, and covers the period from December 27, 2020, or later if the effective date of the plan or health insurance coverage was later, through the date of attestation. Compliance Attestations must be submitted by health insurance issuers in both the group health and individual markets, and by fully-insured as well as self-insured group health plans, including plans that are grandfathered and grandmothered.  A grandfathered plan is a group health plan that was in effect on March 23, 2010, and is exempt from several provisions of the Affordable Care Act (the “ACA”) if certain conditions are satisfied.  A grandmothered plan is a plan that does not fully comply with the ACA but is protected from ACA enforcement by a policy sometimes referred to as a nonenforcement policy.  Grandmothered plans are transitional health insurance policies purchased between March 23, 2010, and October 1, 2013 (December 31, 2013 in some states).   However, a plan that is required to attest is not required to attest with respect to any excepted benefits. The FAQ also listed entities that are not required to attest. These include plans or issuers offering only excepted benefits; issuers offering only short-term, limited duration insurance; Medicare and Medicaid; a state’s Children’s Health Insurance Program (“CHIP”); Tricare; the Indian Health Services Program; Basic Health Programs plans; and HRAs including ICHRAs and other account-based group health plans. A plan or issuer may designate any person within the organization as the person authorized to attest on behalf of the plan or issuer. A self-insured or partially self-insured plan or a health insurance issuer may also designate a TPA or other service provider to submit the attestation on its behalf, with the caveat that the self-insured or partially self-insured plan or health insurance issuer remains the party with the legal requirement to submit an attestation. Additionally, there are FAQS concerning the manner in which plans and issuers should submit an attestation; technical requirements for using the Compliance Attestation user interface; and the procedures that interested parties should follow if they suspect a violation of the gag clause prohibitions or the related attestation requirements. While explicit, direct violations of the prohibition on gag clauses may not be difficult to determine, provisions that have the effect of restricting the disclosure of information or data in violation of the gag clause prohibitions may not be obvious. Therefore, it is important that ERISA counsel for plans review service contracts with third parties such as TPAs to ensure that such provisions are either removed from the service agreement or modified to bring it into compliance.  Also, such agreements should provide the way the TPA or other service provider will handle compliance and attestation on behalf of the plan. In addition, with ERISA fiduciary lawsuits being filed against health providers last year spurring everyone to remember what has happened since the early 2000s with retirement plans and noncompliance, plan sponsors should not continue to be content resting on their laurels and assuming that their TPAs and providers are taking care of compliance issues.  Rather, the fiduciaries should consider their own fiduciary responsibilities to the health plans they sponsor.]]> by WLG https://www.wagnerlawgroup.com/?p=60429 2023-02-15T18:10:21Z 2023-02-15T17:58:02Z

by WLG https://www.wagnerlawgroup.com/?p=60161 2023-02-07T17:18:12Z 2023-02-07T16:53:10Z

Secure Act 2.0 Litany of Retirement Change Presents Employers Enhanced Retirement Opportunities for Employee - Marcia Wagner, Dannae Delano, Alexander Olsen, Kim Shaw Elliott and Barry Salkin, Bloomberg Tax, Tax Management and Compensation Journal, Vol. 52, No. 02, February 3, 2023]]> by WLG https://www.wagnerlawgroup.com/?p=59122 2022-12-29T17:41:54Z 2022-12-15T15:39:39Z

First Circuit Illustrates the Importance of the Fiduciary Responsibilities of Health and Welfare Plan Sponsors and Severance Providers Under ERISA - Dannae Delano, Barry Salkin and Roberta Casper Watson, Bloomberg Tax Management Compensation Planning Journal, Vol. 50 No. 12, December 2, 2022]]> by WLG https://www.wagnerlawgroup.com/?p=58899 2022-11-18T15:01:00Z 2022-11-18T15:01:00Z

One or more family members are eligible for a special enrollment period to enroll in coverage through an Exchange, or one or more family members seek to enroll in coverage during the Exchange’s annual open enrollment period; and

The revocation of the election of the group health plan family coverage corresponds to the intended enrollment of the family member(s) in a qualified health plan through an Exchange for new coverage that is effective no later than the day immediately following the last day of group health plan coverage.

If these conditions are satisfied, and the employee does not also enroll in coverage through an Exchange, the employee must either elect self-only coverage under the group health plan or elect family coverage that includes any family members that did not enroll in coverage under the Exchange. The guidance in Notice 2022-41, which the IRS indicated that it intends to reflect in future regulations under Code Section 125, becomes effective in 2023. As would be the case with other modifications to a cafeteria plan, the cafeteria plan must be amended to provide for these change in status election changes. The general rule is that the plan sponsor must adopt the amendment on or before the last day of the plan year in which the new elections are allowed, and the amendment may be made retroactively effective to the first day of that plan year, so long as the cafeteria plan operates in accordance with the guidance under Notice 2022-41 and the employer informs plan participants of the change. The guidance contains an important proviso, however, with respect to the timing of an amendment implementing this notice: for the plan year beginning in 2023, the amendment may be made by the end of the 2024 plan year. For example, if the plan year of a cafeteria plan runs from July 1 to June 30, an amendment for the plan year beginning July 1, 2023, may be made until June 30, 2025. However, an amendment cannot permit an employee to revoke coverage on a retroactive basis. As a procedural rule, the guidance permits a cafeteria plan to rely on the reasonable representation of an employee that the employee and/or the employee’s family members have enrolled or intend to enroll in a qualified health plan through an Exchange for new coverage that is effective immediately after the coverage that is being revoked. Initially in issuing Notice 2022-41, the IRS seemed to believe mid-year election changes would only be relevant for non-calendar year plans because affected families covered by calendar year plans would be able to make the relevant elections during the plan’s normal open enrollment period. In publishing the Notice, however, the IRS has made subtle changes to its language indicating that the provision allowing mid-year changes is applicable to calendar year plans as well. As noted above, the IRS’s newly issued regulation under Code Section 36B was based on a reinterpretation of Code Section 36B. While most comments on the proposed regulation supported the IRS’s change in position, some comments expressed the view that the interpretation in the 2013 regulations was the correct interpretation. As is frequently the case these days, it is likely to be challenged as being inconsistent with the text of the ACA. If that legal challenge is successful, and the previous regulations under Code Section 36B restored, presumably Notice 2022-41 will be withdrawn. However, in the event that any such legal challenge has not invalidated the Notice by January 1, 2023, plan sponsors, particularly of non-calendar year plans, may wish to consider and implement this guidance.]]> by WLG https://www.wagnerlawgroup.com/?p=58657 2022-10-26T13:33:09Z 2022-10-25T13:16:30Z

It should come as no surprise that most Americans do not have the information available to them that is necessary to make informed decisions about their medical care that includes the cost of the considered procedure. The No Surprises Act requires providers and facilities to provide to the plan or issuer a good faith estimate (a “GFE”) of the expected charges for furnishing the scheduled item or service, as well as any items or services reasonably expected to be provided in conjunction with those items or services for individuals who desire a good faith estimate of likely deductibles, copayments and any other non-covered expenses in connection with a potential claim for covered items or services and who are enrolled in coverage. This GFE from the providers and facilities, when given to the plan, will enable the plan to respond to similar requests from covered individuals. The Internal Revenue Code, ERISA and the Public Health Services Act require that group health plans and health insurance carriers offering group or individual health insurance coverage, upon receiving a GFE regarding an item or service, send to a covered individual, either through mail or electronically, as requested by the covered individual, an advanced explanation of benefits (an “AEOB”) in clear and understandable language. The applicable Agency regulations of the Departments of Treasury, Labor, and Health and Human Services (the “Agencies”) specify the information that must be contained in the AEOB, and also indicate that the information provided is only an estimate based on the items and services reasonably expected to be provided at the time of scheduling, and is subject to change; and may also contain other information and disclaimers consistent with the information and disclosures required under the No Surprises Act. In connection with these data transmission elements of the No Surprises Act, the three Agencies sought comments on a variety of issues associated with the implementation of these rules, as follows:

• Underserved and Marginalized Communities—The Agencies requested comments on the steps that the Agencies should take to ensure that individuals from underserved and marginalized communities are aware of the opportunity to request GFES and AEOBs and are able to use that information to facilitate meaningful decision-making regarding their health care. Among the options that the Agencies requested comments on were providing oral language services, notices in non-English languages, and non-English statements in English versions of notices indicating how to access language services.
• Privacy Concerns—The Agencies solicited comments on what privacy concerns were raised by the transfer of AEOB and GFE data, since these transfers would list an individual’s scheduled or requested item or service, including the expected billing and diagnosis code for the item or service. The agencies asked whether this type of data exchange creates any new or unique privacy concerns for individuals enrolled in a plan or coverage.
• Applicable Standard—Under applicable law, while the transmittal of AEOBS and GFEs would be subject to HIPAA’s privacy and security rules, no law or regulation currently requires plans issuers, carriers, health care providers or facilities to use a specific transaction standard to exchange AEOB or GFE data. The Agencies noted that the favored approach was a standards-based Application Program Interface (“API”), a standard that was developed to facilitate the secure exchange of health care information. At the same time, the Agencies acknowledged that many providers and facilities continue to rely on manual or paper-based technologies, such as portals, fax machines, or call centers. In that connection, the Agencies solicited comments as to the burdens associated with applying the more high tech standard to small, rural, or certain other providers and facilities, such as those who are new and financially vulnerable, and/or operating solely in the individual and small group market, and whether there should be an exception or phased-in approach to adopting the standard API approach for such organizations.
• Coordination with Consent and State Law Requirements—The information required to be provided to the requesting individual could be affected by a plan participant’s consent to waive the No Surprises Act’s balance billing and cost-sharing protections. The Agencies sought comments on such issues as whether a nonparticipating provider or facility should be required to inform a plan issuer or carrier if it has obtained the individual’s consent, if it will be seeking the individual’s consent, and whether the individual has declined to give consent. If so, should such communication be part of the GFE or transmitted in a separate communication? In a similar vein, if an individual has consented to the waiver of the No Surprises Act or applicable state law protections against balance billing and cost sharing protections, in what manner should the AEOB reflect that the otherwise applicable protective provisions do not apply? If so, should the AEOB take account of the possibility that the consent might be revoked and issue two sets of AEOBs, one reflecting the individual’s consent to waive the protections, and a second form assuming that the individual decides to revoke his or her consent after it has been waived and the No Surprises Act and state law protections are again applicable?

• Coordination with Transparency in Coverage Requirements—The Agencies commented that the AEOB content requirements are similar to the Transparency in Coverage internet-based self-service tool requirements. The Agencies solicited comments on the extent to which coordination of the internet-based self-service tool requirements of the AEOB requirements helps minimize the burden on plan issuers and carriers in implementing both requirements.

Among the other issues on which the three Agencies sought comments were the following:

• Whether a plan issuer or carrier should be required to provide a copy of the AEOB that was furnished to the individual to the provider or facility that provided the GFE to the plan, issuer, or carrier.
• What burdens or barriers would be placed on plans, issuers, and carriers if they implemented a provision of the relevant laws permitting individuals to make a request for an AEOB directly to a plan, issuer, or carrier?

• What approaches should be considered when proposing requirements for AEOBs and GFEs that take account of secondary and tertiary payers and unique benefit designs, such as account-based plans?

• Whether a diagnosis code should be required for the calculation of the AEOB.

• Whether the provider or facility should verify the individual’s enrollment status in a health plan or coverage for the scheduled (or requested) items or services.

A request by government agencies for comments on a particular issue or issues is not always the first step in the issuance of regulatory guidance, but the request does indicate the type of difficult implementation issues that the three Agencies, as well as the Office of Personnel Management, are presently interested in addressing in some fashion.  It will be interesting to see what comments the Agencies receive, and what regulations result from their inquiry. Regardless, it is clear that the Administration is prioritizing advance cost estimate disclosures so that all Americans can make informed decisions regarding health care, especially those in marginalized populations.]]> by WLG https://www.wagnerlawgroup.com/?p=58104 2022-10-03T13:33:21Z 2022-08-25T16:56:13Z

Last November, we published a law alert regarding the first two rounds of regulatory guidance on the No Surprise Billing portion of the Consolidated Appropriations Act, 2021 (the “CAA”). Since that date, separate District Courts in Texas, at the urging of providers, invalidated a portion of the regulations applicable to the independent dispute resolution (“IDR") for non-participating providers and a portion of the IDR provisions applicable to air ambulance services.  In response to these court decisions and a series of comments on the prior interim final regulations, the Departments of Treasury, Labor and Health and Human Services (the “Agencies”), issued revised final regulations. The Agencies explain in the preamble to the final regulations that these rules are narrow in scope and intended to address only a limited number of issues that are applicable to the no surprise billing requirements under the CAA.  The IDR process has been overwhelmed since it was implemented due to significantly more claims being filed than anticipated and these court decisions invalidating the interim final regulations.  The IDR arbitrations began slowly moving forward when the Agencies issued a similar directive in April prior to the release of the revised final requestions.  These final regulations increase transparency requirements with regard to qualified payment amounts (“QPAs”) set by a plan or issuer and also give providers a slight edge in the IDR process by not tying the process so strictly to QPAs, which has been expected since the issuance of the directive in April. One of the issues on which the Agencies received significant comments was the disclosure of downcoding by plans or issuers in response to a non-participating provider’s submission for payment.  A non-participating provider would submit a claim for services based on one or more medical codes, and the plan or issuer, upon review, would determine that the services should have received a different code that would provide a lower reimbursement rate.  This information could be requested by the non-participating provider, but it was not part of the mandated disclosure provided with the initial payment or notice of denial of payment. The concept of downcoding was discussed in the preamble to the previously issued regulations but was not formally defined.  The revised regulations define “downcoding” as the alteration by a plan or issuer of a service code to another service code, or the alteration, addition, or removal by a plan or issuer of a modifier, if the changed code or modifier is associated with a lower QPA than the service code or modifier billed by the healthcare provider, facility or provider of air ambulance services.  If  a QPA is based on a downsized service code or modifier, in addition to the information already required to be disclosed in connection with an initial payment or notice of denial of payment, a plan or issuer must disclose in writing that the service code or modifier billed by the non-participating provider or air ambulance service was downcoded; an explanation of why the claim was downcoded, including a description of which service codes were altered, if any, and which modifiers were added, altered, or removed, if any; and the amount that would have been the QPA had the service code or modifier not been downcoded.  This additional disclosure significantly increases transparency in the QPA from a provider’s perspective. In response to the court decisions invalidating portions of the regulation and to comments it received regarding the July 2021 and October 2021 interim final rules, the Agencies modified the IDR process in providers’ favor by reducing the emphasis on QPA consideration.  The certified IDR entity must select the offer that such entity determines best represents the value of the qualified IDR item, weighing only the following factors:

• the QPA for the applicable year for the same or similar item or service; the level of training, experience, and quality and outcomes measurements of the provider or facility that furnished the qualified IDR item or service;
• the market share held by the provider or facility or that of the plan or issuer in the geographic region in which the qualified IDR item or service was provided;
• the acuity of the participant or beneficiary receiving the qualified IDR item or service, or the complexity or acuity of furnishing the qualified IDR item or service to the participant or beneficiary;
• the teaching status, case mix, and scope of services of the facility that furnished the qualified IDR item or service, if applicable;
• a demonstration of good faith efforts or lack thereof made by the provider or facility or the plan or issuer to enter into network agreements with each other and, if applicable, contracted rates between the provider or facility, as applicable; and
• information provided by a party, either in response to a request by the certified IDR entity or on their own, that does not include information provided to the certified IDR entity as part of the initial submission.

The regulations further provide that the certified IDR entity should evaluate whether the information is credible and relates to the offer submitted by either party for the payment amount for the item or service that is the subject of the payment dispute.  If a statement is not credible or does not relate to either party’s offer for the payment amount, or it is otherwise taken into account (i.e., because no item can be double counted), it must not be considered.  The regulations contain a series of examples illustrating the application of these rules.  The rules for air ambulance services are generally the same, although different factors, which are reserved in these final regulations, would be taken into account. The certified IDR entity’s written decision must include an explanation of their determination, including what information the certified IDR entity determined demonstrated that the selected out of network rate best represents the value of the qualified IDR item or service, including the weight given to the QPA and the other factors listed above.  If the certified IDR entity relies on information other than the QPA in selecting an offer, the written decision must include an explanation of why the certified IDR entity concluded that information was not included in the QPA. While the No Surprise Act regulations are generally effective January 1, 2022, these modifications to the regulations will not be in effect until six months after their publication in the Federal Register. While these changes were “no surprise,” given the court decisions and the April directive by the Agencies, plans and issuers should be aware of the increased transparency that will be required in the form of required downcoding disclosures and the reduced emphasis on QPAs in the IDR process going forward.]]>