The Consolidated Appropriations Act of 2021 imposed a mountain of compliance requirements on Employer Sponsored Health Plans. And whether you’re self-funded or fully insured, all of the requirements are ultimately the responsibility of the employer. Here are some requirements you need to know:
· Mental Health Parity – Embedded in the CAA is a new obligation for group health plan sponsors and insurers that provide health insurance to document that their group health plan or insurance policy complies with the non-quantitative treatment limitations of the Mental Health Parity and Addiction Equity Act of 2008 (the “MHPAEA”). The provision was effective February 10, 2021. Employers should be testing their plan’s quantitative treatment limitations annually to make sure cost sharing is appropriate for the coming year. This is a very complicated process that requires the help of your compliance team or other professionals. This is the number one enforcement priority of the DOL and the penalties for non-compliance can be up to $100 per participant per day.
· RxDC Reporting – The new reporting requirement applies to most health insurance issuers and group health plans, including self-funded and grandfathered plans. The CAA created a data collection requirement for insurance companies, pharmacy benefit managers (PBMs), and employers sponsoring group health plans. It will provide CMS with aggregated premium and spending information from health plans. Data must be submitted via the RxDC module in the Health Insurance Oversight System (HIOS). Health plans are now required to submit their prescription drug and health care spending data for both the 2020 and 2021 reference years by this year’s deadline of December 27, 2022.
· Gag Clause Prohibition – The CAA amends the Employee Retirement Income Security Act (ERISA), the Public Health Service Act (PHSA), and the Internal Revenue Code to require employer-sponsored health plans to ensure they have access to certain cost and quality of care information. Specifically, this includes removing restrictions on disclosing provider-specific cost or quality-of-care information, electronic access to de-identified claim information and restrictions on sharing these types of data or information. In other words, employers will have to attest to federal authorities that there are no provisions in their third-party contracts with vendors that prohibit their access to claim, costs, and quality information. Obviously, this will be difficult for employers as carriers and networks depend on keeping such information away from health plan participants for various reasons.
· Brokers / Consultants Compensation Disclosure – The CAA adds additional requirements into Section 408(b)(2) of ERISA regarding the written disclosure of broker direct AND indirect (bonuses, trips, etc.) compensation from your group health plan. The disclosure requirement is all-encompassing, and the descriptions must be sufficient for the employer to evaluate reasonableness. It is the requirement of the health plan(employer) to obtain disclosure from the broker. If the broker fails or refuses to disclose, the plan fiduciary (the employer) is liable for a DOL penalty unless the employer reports the failure in writing to the DOL.
If you’re working with a broker, advisor, Carrier, TPA, or anyone else that services your employee group health plan that hasn’t sounded an alarm bell on CAA 2021 you need to talk to us before you find out the hard way that the federal government will have little to no tolerance for non-compliance. Call us at (815) 742-2066 or visit us at primumriskstrategies.com