By Chris MacAli
If benefits compliance seems like a never-ending game of whack-a-mole, 2022 will not disappoint. While challenges related to the COVID-19 pandemic dominate headlines, a number of new 2022 benefits compliance obligations and updates may fly under the radar. While these changes may not be top-of-mind at the moment, it is critical employers understand them and take steps to comply when appropriate.
Transparency in Coverage
A series of new requirements are going into effect aimed at increasing transparency in health coverage with the hope of lowering costs and eliminating surprise medical bills for consumers. Bipartisan policymakers have been advocating for cost transparency in health care for years. Unfortunately for employers, transparency will add a number of requirements for group health plans. Employers should work with their carriers, Third-Party Administrators (TPAs), and Pharmacy Benefit Managers (PBMs) to coordinate compliance obligations and understand what action is needed. In many cases, it will be necessary and appropriate for vendors to assist with compliance.
Effective for plan years beginning on or after January 1, 2022
Insurance ID Cards – Insurance ID cards must include in-network and out-of-network deductibles, out-of-pocket maximums and a telephone number and website address for assistance.
Accurate Network Provider Directory – Plans must ensure in-network provider directories are up-to-date and accessible online and by phone. Participants relying on inaccurate plan information in out-of-date directories will only be responsible for in-network rates.
Ban on Surprise Medical Bills and Participant Notification – Plans can no longer charge members out-of-network rates for emergency care, services provided by certain out-of-network providers at in-network facilities, and air ambulance services. Notice of these changes must be posted on a public website.
Continuity of Care Notification – If a provider is removed from a plan’s network, plans must notify patients receiving or scheduled to undergo certain treatment from that provider. If elected, plans must cover services by the provider under the same terms and conditions for up to 90 days following notice.
Effective July 1, 2022
Machine-Readable Files – Non-grandfathered group health plans must disclose certain cost-sharing information on a public website in machine-readable files. The files must be available by either July 1, 2022, (for plan years beginning between Jan. 1, 2022 and July 1, 2022), or the month in which the plan year begins (for plan years beginning after July 1, 2022). Enforcement of an additional file with prescription drug information is delayed pending further guidance.
Effective December 27, 2022
Reporting on Pharmacy Benefits and Drug Costs – Group health plans must report information on plan prescription drug spending to regulators, including plan year dates, number of enrollees, each state where coverage is provided, and most common and costly prescription drugs dispensed by the plan. Information for 2020 and 2021 is due by Dec. 27, 2022, and for subsequent years will be due by June 1 of the following year.
Likely Effective in 2022
Ban on Gag Clauses Attestation – Group health plans are currently prohibited from entering into agreements with providers or administrators that would restrict plan access and sharing of certain cost, quality of care, and claims information with certain stakeholders. Plans are required to confirm compliance with this rule by submitting an attestation form annually to government regulators. While it is not yet clear when attestation compliance will be required, regulators expect to provide guidance and begin collection in 2022.
Coverage of COVID-19 Tests
Effective January 15, 2022, all group health plans are required to cover Over-the-Counter (OTC) COVID-19 diagnostic tests at no charge whether ordered by a physician or not. Previously, only tests ordered by an attending health care provider were required to be covered. While plans may require participants to pay for tests out-of-pocket and submit for reimbursement, regulators encourage plans to provide for direct reimbursement at the point of sale, with no out-of-pocket cost to the consumer. Plans that allow for direct reimbursement are able to limit reimbursement to 8 tests per covered member per 30-day period, and reimbursement for tests purchased at out-of-network pharmacies can be limited to the lesser of $12 or the cost of the test.
Employer ACA Reporting and Elimination of Good Faith Standard
Since 2015, Applicable Large Employers (ALEs) and self-funded group health plans have been required to complete informational reporting regarding coverage and offers of coverage to their employees under the Affordable Care Act. Although there are statutory penalties for filing failures, for each prior year of reporting, the IRS has provided transitional penalty relief for plans that showed they made good faith efforts to comply. The IRS has announced that transitional relief is no longer available for the 2021 tax year reporting due in 2022. As a result, the IRS can impose penalties for filing failures, including failure to report all required information and reporting incorrect information. It is not clear how aggressive the IRS will be in assessing penalties. However, the maximum potential penalty amount is significant – $280 for each return or statement to which a failure relates, capped at $3,426,000 per calendar year.
Expiration of COVID-19 Related Relief
The CARES Act allowed no-cost telemedicine services to be provided to individuals without compromising HSA eligibility for plan years beginning January 1, 2020, through December 31, 2021. For plan years beginning on or after January 1, 2022, telemedicine services (unless limited to permitted insurance, permitted coverage or preventive care) provided below fair-market value before the minimum HSA deductible is met will cause individuals to lose eligibility to make HSA contributions. In addition, relief applicable to Section 125 plans and Flexible Spending Accounts (FSAs), including mid-year election changes without a qualifying event and carryover of unlimited unused FSA funds will expire in 2022.
Employers hoping for a calm 2022 with few new benefits compliance obligations will be sorely disappointed. But employers should get their proverbial game faces on, act now and get ahead to ensure compliance, because new requirements are sure to pop up in 2023.
Senior Employee Benefits Compliance Officer
McGriff
Christopher.MacAli@mcgriff.com