Health Insurance

On May 14, the Department of Health and Human Services (HHS) published in the Federal Register its Notice of Benefit and Payment Parameters for 2021 final rule and posted an accompanying fact sheet. The 2021 annual out-of-pocket (OOP) maximums for non-grandfathered group health plans will increase by approximately 4.9 percent over this year’s limits: Self-only coverage: $8,550 in 2021, up from $8,150 in 2020. Other than self-only coverage: $17,100, up from $16,300. These limits apply to all OOP costs for in-network essential health benefits. HHS and IRS Out-of-Pocket Limits Differ There are two sets of limits on out-of-pocket expenses for health plans, determined annually by federal agencies, which can be a source of confusion for plan administrators. The first is the HHS’s annual OOP limits for all non-grandfathered Affordable Care Act-compliant plans, noted above. The second is the IRS’s out-of-pocket limits for health savings account (HSA)-qualified high-deductible health plans (HDHPs), which are expected to be released shortly. Drug Coupons Won’t Count Toward Deductible Drug companies make discounts at the pharmacy counter or post-purchase rebates available for brand-name prescription drugs by issuing coupons or cards that consumers can use to buy the specified medications. Under the 2021 benefit parameters final rule, a group health plan will be permitted, but not required, to count toward annual limits on cost-sharing amounts (such as plan deductibles and out-of-pocket maximums) the value of a drug manufacturer’s payment assistance. Plans can do so by putting in place a co-pay accumulator program, which doesn’t count the value of co-pay assistance coupons or cards toward plan participants’ cost-sharing amounts. The 2021 benefit parameters differ from the rule for 2020, which permitted plans to exclude the value of co-pay coupons from a participant’s cost-sharing limits only when the prescription drug had a medically appropriate generic equivalent available. Enforcement of the 2020 final rule was placed on hold pending publication of the 2021 rule because of implementation concerns over whether co-pay assistance would make a participant ineligible to contribute to an HSA. Under the final rule for 2021, “a self-funded group health plan has the flexibility to determine whether to include or exclude the amount of drug manufacturer co-pay coupons, regardless of whether a medically appropriate generic equivalent is available,” according to an analysis by attorneys at Vorys, a national law firm. “An insured group health plan may also have to comply with any applicable state laws regarding co-pay coupons,” the attorneys noted. “Some states—including Arizona, Illinois, Virginia, and West Virginia—have banned co-pay accumulator programs,” Katie Keith, a former research professor at Georgetown University’s Center on Health Insurance Reforms, wrote on the Health Affairs blog. “In those states, insurers are required to count coupons and co-pay assistance towards a plan’s deductible or out-of-pocket limit.” HSA Eligibility Concerns Last year, the oversight agencies—the HHS, the IRS and the Department of Labor—determined that plan sponsors who complied with the 2020 benefit parameters final rule, before the co-pay coupon provision was suspended, could cause participants enrolled in HSA-compatible HDHPs to become ineligible to make or receive HSA contributions. HSA eligibility requires that account holders have no other health insurance other than an HDHP, except for vision and dental coverage. This requirement excludes any product or service that helps pay medical expenses before the plan deductible is met, such as a drug manufacturer’s discount coupon or rebate. “Unless new guidance is issued by the IRS changing its current position that discounts must be disregarded in determining whether a HDHP deductible has been met, it appears that sponsors of HSA-compatible HDHPs must adopt a co-pay accumulator program in order to preserve participants’ eligibility to make or receive [HSA] contributions,” according to the Vorys attorneys.

On May 12, 2020, the IRS released Notice 2020-29, which provides temporary flexibility for mid-year election changes under a Section 125 cafeteria plan during calendar year 2020. The changes are designed to allow employers to respond to changes in employee needs as a result of the COVID-19 pandemic. This guidance relates to mid-year elections for self-insured and fully insured employer-sponsored health coverage, health flexible spending arrangements (health FSAs) and dependent care assistance programs (DCAPs). Permitted Election Changes For employer-sponsored health coverage, a Section 125 cafeteria plan may permit an employee to prospectively: Make a new election if the employee previously declined coverage; Revoke an existing election and enroll in different health coverage sponsored by the employer; or Revoke an existing election, if the employee is or will be enrolled in other health coverage. Employees may also prospectively revoke an election, make a new election or decrease or increase an existing election for a health FSA or DCAP. A plan may permit any of the election changes described in the notice, regardless of whether they satisfy existing mid-year election change rules. Employer Requirements An employer using this relief may determine the extent to which such changes are permitted and applied. If these changes are permitted, the employer must adopt a plan amendment by Dec. 31, 2021, and inform employees of the change. The amendment may be retroactive to Jan. 1, 2020. Changes to the plan may also implicate other applicable laws, such as participant notification requirements under ERISA.

On May 12, the IRS released two notices allowing employees during 2020 to make changes to their enrollments in employer-sponsored health plans and to adjust pretax contributions to health flexible spending accounts (health FSAs) and dependent care flexible spending accounts (dependent care FSAs). These changes, which apply only to plan year 2020, had been advocated by the Society for Human Resource Management (SHRM). Health Plan Enrollments and Elections In IRS Notice 2020-29, the agency said it would allow increased flexibility regarding midyear election changes for group health plans and FSAs.For instance, employees will now be able to make these changes: Enroll in employer-sponsored health plans during the plan year by making a new election. Employees may do so even if they had previously declined enrollment. Switch health plans or tiers within plans.Employees will be able to drop current coverage to enroll in different coverage offered by the same employer or change from single coverage to family coverage, for instance. Although allowing employees to make these newly permitted plan changes during 2020 is optional for employers, many “will want to enable employees to enroll or revoke an enrollment election in various group health plan options,” noted Gary Kushner, president and CEO of HR and benefits consulting firm Kushner & Company in Portage, Mich. David Speier, managing director for benefits accounts at consultancy Willis Towers Watson, said that allowing midyear plan elections could mean that employees will “switch to a plan that increases the employer’s financial burden during a difficult time,” for instance if employees opt for a low-deductible plan with higher premiums. However, other midyear changes could reduce an employer’s cost, “as when employees elected a dental plan but now opt out because they can’t use it this year,” Speier added. FSA Enrollments and Elections For both health FSAs and dependent care FSAs (used to fund caregiving expenses with pretax dollars), employees will be able to enroll, drop coverage, and increase (within the annual limit) or decrease payroll-deducted contributions during 2020.  “This is welcome relief, and many employers will consider providing it under their plans,” said William Sweetnam, legislative and technical director at the Employers Council on Flexible Compensation, which represents sponsors of account-based benefit plans. Julie Stone, North America co-leader for the health management practice at Willis Towers Watson, explained, “At a time where some people may be cash-strapped, deferring elective procedures, new eyeglasses, etc., may well make sense, and so being able to suspend contributions to a health FSA or limited purpose dental/vision FSA is important.” Kushner blogged, “Many employers would embrace enabling dependent care FSA participants to increase (or more likely decrease or revoke) their elections if schools and day care centers are closed, or if the employee is working from home.”  However, for any FSA, “employers may be more reluctant to enable employees to decrease or revoke their election if they’ve already claimed their previous full election amount and payments have been disbursed,” he added. In 2020, employees can contribute $2,750 to a health FSA, including to a limited-purpose FSA restricted to dental and vision care services, which can be used in tandem with a health savings account (HSA). The dependent care FSA maximum, which is set by statute and not adjusted annually for inflation, is $5,000 a year for individuals or married couples filing jointly, or $2,500 for a married person filing separately, subject to earned income limits. FSA Use-It-or-Lose-It Rules For plan years ending before Dec. 31, 2020, employers can amend a health or dependent care FSA plan to permit participants to “spend down” through year-end 2020 any remaining amounts from 2019 that would otherwise be forfeited. Employers can allow claims incurred at any time in 2020 to be applied to any remaining 2019 FSA balances. Sweetnam noted an issue with this extension that could complicate matters for employees who had a 2019 health FSA and were newly enrolled in an HSA in 2020: An employer that carries over unused funds from a prior year to a current year under a general-purpose health FSA will not be eligible for HSA contributions for the entire current plan year. “Carryover 2019 FSA amounts can be used to pay for health care expenses below the deductible in 2020, thus making participants [with both carryover health FSAs and new HSAs] ineligible to make HSA contributions in 2020,” Sweetnam said. “Consequently, employers may want to consider the impact on HSAs as they decide whether to extend the claims period for health FSAs.” To avoid this issue, employers can allow 2019 carryover health FSA funds to be transferred an HSA-compatible, limited-purpose FSA, which can be used only for vision care and dental expenses. Increased Carryover Cap IRS Notice 2020-33, also released May 12, increases the amount of funds that health FSA participants can carry over without penalty at the end of the year for plans that use the carryover option. The carryover amount will now be indexed for inflation by making it 20 percent of the allowable payroll-deductible contribution limit, which is $2,750 for plan year 2020. As a result, the maximum unused amount from a plan year starting in 2020 allowed to be carried over to the immediately following plan year beginning in 2021 is $550, up from the previous limit of $500. While Sweetnam called the inflation adjustment helpful, he noted that many have advocated allowing much larger carryover amounts or eliminating the use-it-or-lose-it rule completely. “I think that the limited amount of the increase means that the IRS and Treasury Department were concerned that they did not have the authority under the Internal Revenue Code to provide for a larger carryover amount,” he suggested. Notice 2020-33 also clarified that the previously provided temporary relief for high-deductible health plans (permitting them to cover COVID-19 related services at no cost) may be applied retroactively to Jan. 1, 2020. Different Plans Had Different RulesSome midyear elective-contribution changes have long been permitted. For instance, changes to payroll deductions to fund 401(k) or similar defined contribution retirement plans, HSAs, and commuter benefit plans can

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) into law to provide $2.2 trillion in federal funding to address the COVID-19 crisis. The CARES Act makes a variety of changes affecting health plans. These changes include:  Expanding the types of coronavirus testing that all health plans and health insurance issuers must cover without cost-sharing (such as deductibles, copayments or coinsurance) or prior authorization; Accelerating the process that will require health plans and issuers to cover preventive services and vaccines related to COVID-19; Allowing telehealth and other remote care services to be covered under a high deductible health plan (HDHP) before the deductible is met, without affecting the HDHP’s compatibility with health savings accounts (HSAs) (applicable for HDHP plan years beginning on or before Dec. 31, 2021); and Treating over-the-counter (OTC) medications, along with menstrual care products, as qualified medical expenses that may be paid for using HSAs or other tax-advantaged arrangements, such as health flexible spending accounts (FSAs) or health reimbursement arrangements (HRAs). Highlights The CARES Act includes a variety of changes for group health plans and health insurance issuers. COVID-19 vaccines and preventive services must be covered without cost-sharing soon after they become available. Individuals can use their HSAs, health FSAs or HRAs for OTC medications, without a prescription. HDHPs can cover telehealth services without a deductible. Important Dates Jan. 1, 2020 – HSAs, health FSAs and HRAs can reimburse OTC medications without a prescription. March 27, 2020 – HDHPs can cover telehealth or other remote care services without a deductible.  Action Steps Employers that sponsor group health plans should become familiar with the CARES Act changes for their plans. While many of the changes are mandatory, there are some discretionary changes that employers can decide whether to make (in consultation with their issuers or benefits administrators). Any health plan changes should be communicated to plan participants. Coverage Requirement for Coronavirus Testing Effective March 18, 2020, the Families First Coronavirus Response Act (FFCRA) requires group health plans and health insurance issuers to cover COVID-19 testing without imposing any cost sharing (such as deductibles, copayments or coinsurance) or prior authorization or other medical management requirements. The CARES Act expands the FFCRA’s coverage requirement for COVID-19 testing. Coverage Mandate This coverage mandate applies to the following health plans and issuers, regardless of grandfathered status under the Affordable Care Act (ACA): þ  All fully insured group health plans þ  All self-insured group health plans þ  Health insurance issuers offering group or individual coverage During the COVID-19 public health emergency, health plans and issuers must cover FDA-approved diagnostic testing products for COVID-19, including any items or services provided during a visit to a provider (in-person or telehealth), urgent care center or emergency room that relate to COVID-19 testing. Effective March 27, 2020, the CARES Act expands this coverage mandate to include COVID-19 tests provided on an emergency basis, state-developed tests and any other tests approved by the U.S. Department of Health and Human Services.  This coverage cannot be subject to any plan deductible, copayment or coinsurance.  Provider Reimbursement Rates The CARES Act also addresses provider reimbursement rates for COVID-19 testing. A health plan or issuer must pay a health care provider the negotiated rate for COVID-19 testing. However, if a health plan or issuer does not have a negotiated rate with a provider, it must pay the cash price published by the provider on its public website or negotiate or lower price. Accelerated Coverage for COVID-19 Preventive Services and VaccinesThe ACA requires non-grandfathered group health plans and health insurance issuers to cover certain preventive health services without imposing cost-sharing requirements for the services. The recommended preventive care services covered by these requirements are:   ·         Evidence-based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force (USPSTF); ·         Immunizations for routine use in children, adolescents and adults that are currently recommended by the Centers for Disease Control and Prevention (CDC) and included on the CDC’s immunization schedules; ·         For infants, children and adolescents, evidence-informed preventive care and screenings provided for in the Health Resources and Services Administration (HRSA) guidelines; and ·         For women, evidence-informed preventive care and screening provided in guidelines supported by HRSA. In general, health plans and issuers are not required to cover a new preventive care recommendation or guideline until at least one year after the new recommendation or guideline goes into effect. The CARES Act shortens this deadline to ensure that health plans and issuers cover COVID-19 preventive services and vaccines without cost-sharing once they are approved and available. Under the CARES Act, health plans and issuers must cover COVID-19 preventive services and vaccinations without cost-sharing within 15 days after a recommendation from USPSTF or the CDC. HDHP Coverage of Coronavirus Costs Only individuals who are covered by HDHPs can make contributions to HSAs. To qualify as an HDHP, a health plan cannot pay medical expenses (other than preventive care) until the annual minimum deductible has been reached. IRS Notice 2020-15 and the CARES Act provide exceptions to this general rule to encourage testing for and treatment of COVID-19. ·         IRS Notice 2020-15 provides that HDHPs can pay for COVID-19 testing and treatment before plan deductibles have been met, without jeopardizing their status. As noted above, the FFCRA requires health plans and issuers to cover COVID-19 testing without imposing any cost sharing or prior authorization or other medical management requirements. ·         Effective March 27, 2020, the CARES Act allows HDHPs to provide benefits for telehealth or other remote care services before plan deductibles have been met. This rule is applicable for plan years beginning before Jan. 1, 2022. This is a discretionary change for employer-sponsored health plans, and not a coverage mandate. Tax-Free Coverage for OTC Drugs and Menstrual Products Effective Jan. 1, 2020, the CARES Act provides that OTC medicines are qualifying medical expenses that may be paid for (or reimbursed) on a tax-free basis

During this time of uncertainty, our health providers have created web pages to keep you up to date in this ever changing times. Florida Blue https://www.floridablue.com/blog/covid-cases-confirmed-in-florida Aetna: https://www.aetna.com/individuals-families/member-rights-resources/covid19.html UHC https://www.uhc.com/health-and-wellness/health-topics/covid-19 Humana https://www.humana.com/coronavirus Ameritas Group https://my.visme.co/view/ojq8y8q4-covid-employer Ameritas Individual https://my.visme.co/view/ojq8yz91-covid-individual