Beginning in 2021, employers who sponsor group health plans (GHPs) must begin complying with several requirements of the Consolidated Appropriations Act (CAA) of 2021. The CAA also includes provisions for COVID-19 relief, student loan repayment extension, and retirement plan safe harbors. Much of the legislation addresses economic stimulus and support; however, there remains over 500 pages of text applicable to GHPs.
To read the full text (you’ve been duly warned;) click below:
- Rules Committee Print
- Consolidated Appropriations Act, 2021 (CAA, 2021), L. No. 116-260 (Dec. 27, 2020)
- Available at https://www.congress.gov/bill/116th-congress/house-bill/133/text
A highlight of some of the general requirements applicable to GHPs for compliance:
- paying out-of-network services at in-network rates for emergency services;
- creating a process for resolution of disputes regarding rates to be to paid out-of-network providers;
- transparency regarding out-of-network deductibles;
- providing a good faith advance on payment estimates;
- continuity of care when a provider contract terminates;
- creation and maintenance of a price comparison tool;
- updating provider directories;
- restricting gag clauses in network contracts;
- enhanced disclosure requirements regarding compensation paid by plans to brokers and consultants; and
- annual reporting regarding drug costs.
Additional specifications* include:
FSA Relief. The Act loosens certain rules applicable to health and dependent care flexible spending arrangements (FSAs).
- Health or dependent care FSAs may allow unused amounts from a plan year ending in 2020 to be carried over to 2021, and unused amounts from a plan year ending in 2021 to be carried over to 2022.
- Grace periods for plan years ending in 2020 or 2021 may be extended to 12 months after the end of the plan year.
- For plan years ending in 2021, plans may allow employees to make a prospective election change to modify their FSA contributions without a change in status.
- Health FSAs may allow employees who ceased participation during the 2020 or 2021 calendar year to continue to receive reimbursements from unused benefits or contributions through the end of plan year in which participation ceased (including any grace period).
- Dependent care FSAs may extend the maximum age from 12 to 13 for eligible dependents who aged out of eligibility during the last plan year with a regular enrollment period ending on or before Jan. 31, 2020 and may allow employees with unused balances for that plan year to apply this rule to claims for reimbursement of the unused balance in the following plan year.
- Plans adopting any of these voluntary changes must be amended by the end of the first calendar year beginning after the end of the plan year in which a change took effect and must be operated in accordance with the amendment’s terms beginning on its effective date.
Surprise Medical Billing. The Act contains extensive provisions intended to protect consumers from surprise medical bills for services provided by nonparticipating providers or facilities. (Participating providers and facilities are those that have a contractual relationship with the group health plan or insurer, while nonparticipating providers and facilities lack these contractual relationships.)
- Different rules apply for emergency and non-emergency services, but in each case, plans and insurers are limited in cost-sharing and other restrictions they can impose.
- Plans and insurers must make initial payments or issue denial notices to providers within specified timeframes.
- Group health plans and insurers must provide external review (in accordance with existing ACA external review requirements) for any adverse determination relating to emergency services or air ambulance services (addressed separately in the Act).
- These provisions generally apply to plan years beginning on or after January 1, 2022.
Mental Health Parity Expansion.
- Health plans and insurers that impose a nonquantitative treatment limitation (NQTL) on mental health or substance use disorder benefits (such as a restriction based on facility type) must perform and document a comparative analysis of the NQTL’s design and application.
Deductible Medical Expenses.
- The ACA increased the threshold for deductible medical expenses from 7.5% to 10% of adjusted gross income. Subsequent legislation restored the 7.5% threshold for 2017 through 2020 (see our article). The Act makes the 7.5% threshold permanent.
*Courtesy of Thomson Reuters/EBIA © 2021. All rights reserved.