Health & Welfare Plans Newsletter

December 17, 2020

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[Guidance Overview]

Final Regs Issued Affecting Group Health Plan Grandfathered Status

"These final regulations generally preserve the 2015 regulations, but introduce two changes. First, a grandfathered group health plan that is a high deductible health plan (HDHP) is able to modify the fixed-amount cost-sharing requirements as necessary to comply with the requirements applicable to HDHPs contained in Internal Revenue Code Section 223(c)(2).... Second, these final regulations introduce an alternative method to calculate the 'maximum percentage increase' for determining the permitted change based on a premium adjustment percentage." Icon to read more

Ascensus

[Guidance Overview]

Exceptional Usefulness and Quality iconFinal ACA Grandfathered Health Plan Rules Include Delayed Applicability Date

"[DOL, HHS and the Treasury Department] have finalized regulations that amend existing regulatory requirements for ACA grandfathered health plans to provide plan sponsors greater flexibility in making certain changes regarding cost-sharing requirements without losing grandfathered status. The final regulations adopt proposed regulations issued by the Departments last summer without substantive changes. Acknowledging the US outbreak of COVID-19, ... the final regulations include a delayed applicability of June 15, 2021." Icon to read more

Thomson Reuters Practical Law

Supreme Court: State Regs on PBM Reimbursements to Pharmacies Not Preempted by ERISA

"ERISA plans that utilize PBMs and have participants in Arkansas or other states with similar regulations may see price increases as PBMs are required to increase their reimbursement costs, which will presumably be passed along to plans. This could lead to ERISA plans paying significantly different drug costs depending upon the state in which the drugs were dispensed.... More broadly, this decision has potential impacts for ERISA plans -- especially self-insured plans -- beyond PBMs.... This decision also seems to leave room for substantial future litigation on whether purported 'cost regulations' effectively dictate plan choice." [Rutledge v. Pharmaceutical Care Mgmt. Assoc., No. 18-540 (S. Ct. Dec. 10, 2020)] Icon to read more

Slevin & Hart, P.C.

Boost to Independent Pharmacies -- Supreme Court Sides with State Regulation of PBMs

"The case is an interesting contrast to [Gobeille v. Liberty Mutual Ins. Co.] where the Court found that ERISA preempted a Vermont law requiring health plans to disclose certain plan cost information to the state. The Court determined that gathering and reporting such information were matters central to plan administration such as recordkeeping, disclosure and reporting -- areas preempted by ERISA. Had [the Arkansas law] mandated a similar duty on PBMs to track and report certain cost information the result may have been different." [Rutledge v. Pharmaceutical Care Mgmt. Assoc., No. 18-540 (S. Ct. Dec. 10, 2020)] Icon to read more

Crowell Moring

Prohibited Transactions, Exemptions and Enforcement for Pharmacy Benefit Managers Under ERISA

"While the [DOL] typically has not provided clear or comprehensive guidance to hospital systems seeking to use affiliates to provide services to medical plans, there is limited guidance in the form of individual prohibited transaction exemptions (PTEs) that apply only to specific in-house providers. These individual exemptions ... offer additional insight into the DOL's perspective on affiliated service providers in the context of prescription drug plans." Icon to read more

Newport Group

Exceptional Usefulness and Quality iconCan Employers Retroactively Amend Health FSAs to Cover All Over-The-Counter Drugs and Menstrual Care Products?

"Health FSAs are almost uniformly included as a component part of an employer's Section 125 cafeteria plan. In general, proposed regulations issued under Section 125 of the Internal Revenue Code prohibit amending a Section 125 cafeteria plan to retroactively add new benefits.... [If] a Health FSA always allowed the reimbursement of OTC drugs, but the amendment simply removed the prescription requirement, there is an argument that this is not the retroactive addition of a new benefit." Icon to read more

Miller Johnson

CMS Office of the Actuary Releases 2019 National Health Expenditures

"The 4.6% growth in healthcare expenditures was faster than the 4.0% overall economic growth as measured by [GDP] in 2019. The growth in total national healthcare expenditures in 2019 reached $3.8 trillion, or $11,582 per person ... Spending for personal health care, which includes health care goods and services, accounted for 84% of total health care spending in 2019 and increased 5.2% ... The net cost of health insurance declined 3.8% in 2019 largely because of a suspension of the health insurance providers' tax." Icon to read more

Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

OCR Report on 2016-2017 HIPAA Audits: Most Covered Entities and Business Associates Not in Compliance (PDF)

36 pages. "OCR concluded that most covered entities met the timeliness requirements for providing breach notification to individuals, and most covered entities (that maintained a website about their customer services or benefits) also satisfied the requirement to prominently post their Notice of Privacy Practices (NPP) on their website. However, OCR also found that most covered entities failed to meet the requirements for other selected provisions in the audit, such as adequately safeguarding protected health information (PHI), ensuring the individual right of access, and providing appropriate content in their NPP. OCR also found that most covered entities and business associates failed to implement the HIPAA Security Rule requirements for risk analysis and risk management." Icon to read more

U.S. Department of Health and Human Services [HHS], Office for Civil Rights [OCR] Health Information Privacy Division

[Opinion]

Restoring the Preemption Status Quo: Rutledge, ERISA, and State Health Policy Efforts

"Rutledge represents a step back from the expansive application of ERISA preemption found in Gobeille. That is very welcome news to states looking to control pharmaceutical pricing in health insurance plans and (likely to a lesser extent) to states considering other major health policy initiatives. Nevertheless, Rutledge represents a return to ERISA preemption status quo rather than a new path forward in balancing ERISA and state health care reforms. There is still a significant need for Congress to reconsider the broad preemption mandate it created in ERISA, especially in the context of health care policy." [Rutledge v. Pharmaceutical Care Mgmt. Assoc., No. 18-540 (S. Ct. Dec. 10, 2020)] Icon to read more

Health Affairs Blog

Benefits in General

[Official Guidance]

DOL Regulatory Agenda, Fall 2020 (Employee Benefit Items)

Proposed Rules (EBSA)

  • Revisions to Streamline Reporting on the Form 5500 ("Reforming the Form 5500")

Final Rules (EBSA)

  • Pension Benefit Statements -- Lifetime Income Illustrations
  • Adoption of Amended and Restated Voluntary Fiduciary Correction Program
  • Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency

Prerule Stage (WHD): The Family and Medical Leave Act of 1993 Icon to read more

U.S. Department of Labor [DOL]

Press Releases

Most Popular Items in the Previous Issue

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