Benefit News Brief — 2021-01

Budget Bill Contains Protections Against “Surprise” Medical Bills, Air Ambulance Reform, Increased Transparency and Other Patient Protections

On December 27, 2020, the President signed into law the 2,124 page Consolidated Appropriations Act, 2021 (CAA). The CAA is a $2.3 trillion spending bill that combines $900 billion in stimulus relief for the COVID-19 pandemic in the United States with a $1.4 trillion omnibus spending bill for the 2021 federal fiscal year (combining 12 separate annual appropriations bills).

The new law is divided into 32 “Divisions”, labeled Divisions A-FF. We will summarize the major changes in the law which are relevant to multiemployer retirement and group health plans. Most of the general changes affect only group health plans; but some Divisions have limited application to pension plans.

The group health plan changes are generally effective for plan years beginning on or after January 1, 2022. However, the NQTL analysis discussed on pages 3 and 4 herein should be performed as soon as possible such analyses may be requested by the Secretary beginning on or after about February 10, 2021. Requests are not expected immediately as the Agencies have 18 months to develop regulations. The effective dates for the limited pension plan changes are discussed in the appropriate sections of this publication.

Group Health Plan Changes

Division Y – American Miner Benefits Improvement

This Division authorizes the transfer of federal general revenue funds to the United Mine Workers of America multiemployer benefit plan for retirees who would lose health benefits as a result of future coal operator bankruptcies and disregards the statutory cap put in place in 2019. It also addresses cases, where benefits confirmed in a prior bankruptcy proceeding, are subsequently denied or reduced.

Division BB — Private Health Insurance and Public Health Provisions

This Division has two relevant Titles: (1) surprise billing and (2) promoting transparency. These changes affect both grandfathered and non grandfathered group health plans.

Title I—No Surprises Act

The No Surprises Act is aimed at protecting consumers from “surprise” billing situations and requires health plans to hold patients harmless from surprise medical bills.

Sections 102 to 116 set up the following requirements for group health plans, including self-insured multiemployer group health plans. These sections add ERISA Sections 716-720 and 722-725 (apparently skipping Section 721). The No Surprises Act addresses the following topics, briefly summarized below:

  • Health insurance requirements regarding surprise medical billing. Patients are only required to pay the in-network cost-sharing amount for out-of-network emergency care, for certain ancillary services provided by out-of-network providers at in-network facilities, and for out-of-network care provided at in-network facilities without the patient’s informed consent. The Act also requires that out-of-network surprise bills are attributed to a patient’s in-network deductible and ensures that patients are kept out of the middle of provider plan billing disputes.
  • Determination of out-of-network rates to be paid by health plans by means of an independent dispute resolution process.
  • Health care provider requirements regarding surprise medical billing. This section prohibits out-of-network facilities and providers from sending patients balance bills for more than the in-network cost-sharing amount, in the surprise billing.
  • Ending surprise air ambulance bills. This section requires that patients are held harmless from surprise air ambulance medical bills. Patients are only required to pay the in-network cost-sharing amount for out-of-network air ambulances (including attributing the bill to the in-network deductible). Air ambulances are barred from sending patients balance bills for more than the in-network cost-sharing amount. This section does not apply to ground ambulances.
  • Reporting requirements for air ambulance providers to report to the
    Secretaries of HHS and Transportation regarding air ambulance services.
  • Transparency regarding in-network and out-of-network deductibles and out-of-pocket limitations. Group health plans shall include on their plan identification card issued to the enrollee the amount of the in-network and out-of-network deductibles and the in-network and out-of-network out-of-pocket maximum limitations.
  • Implementing protections against provider discrimination.
  • Reports to Congress are required by certain government agencies on the impact of surprise billing provisions and the adequacy of provider networks
  • Consumer protections through application of health plan external review in cases of certain surprise medical bills.
  • Consumer protections through health plan requirement for fair and honest advance cost estimate. This section requires health plans to provide an Advance Explanation of Benefits for scheduled services at least three days in advance to give patients transparency into which providers are expected to provide treatment, the expected cost and the network status of the providers.
  • Patient protections through transparency and patient-provider dispute
    resolution. Health care providers and facilities must verify, three days in advance of service and not later than one day after scheduling of service, what type of coverage the patient is enrolled in and provide notification of good faith estimate whether or not patient has coverage.
  • Ensuring continuity of care if a provider changes network status.
  • Maintenance of price comparison tool by group health plans.
  • State All Payer Claims Databases.
  • Protecting patients and improving the accuracy of provider directory information. This section requires health plans to have up-to-date directories of their in-network providers, which shall be available to patients online, or within one business day of an inquiry.
  • Timely bills for patients. Requires health care facilities and practitioners to provide bills to patients and health plans by certain dates.

A more detailed summary of the above sections produced by the House Education and Labor Committee is available “here.” We will look at these provisions in detail in future newsletters. We expect a flurry of guidance in the coming months.

Title II – Transparency

  • In addition to limiting billing surprises using the above-listed protections, Title II of Division BB:
  • Increases transparency by removing gag clauses on price and quality
  • Requires disclosure of direct and indirect compensation for brokers and consultants to employer-sponsored health plans and enrollees in plans on the individual market.
    • Strengthens parity in mental health and substance use disorder benefits by requiring group health plans to conduct comparative analyses of the nonquantitative treatment limitations used for medical and surgical benefits as compared to mental health and substance use disorder benefits. A group health plan that provides both medical and surgical benefits and mental health or substance use disorder benefits and that imposes nonquantitative treatment limitations (“NQTLs”) on mental health or substance use disorder “benefits, shall perform and document comparative analyses of the design and application of NQTLs and, beginning 45 days after the date of enactment of the CAA (about February 10, 2021), and make it available to the Secretary,
    upon request. Regulations are expected with 18 months.
  • Requires reporting on pharmacy benefits and drug costs. Not later than December 27, 2021, and not later than June 1 of each year thereafter, a group health plan shall submit detailed information on the plan and its’ participants’ prescription drug usage in the previous plan year to the Secretary, the Secretary of Health and Human Services, and the Secretary of Labor.

Pension Plan Changes

Division N — Additional Coronavirus Response and Relief

This Division adds money purchase plans to the list of plans that are eligible to make in-service coronavirus-related distributions. The effective date is retroactive as if was included in the enactment of Section 2202 of the CARES Act.

Division EE — Taxpayer Certainty and Disaster Tax Relief Act of 2020

This Division, at Section 208 recognizes age 55 as an allowable age for in-service distributions to employees participating in multiemployer pension plans in the building and construction trades where such provisions have historically been in the plan. This change has limited application to only affected multiemployer plans.

Action Items

Group health plan administrators should begin to prepare for the new information disclosure and reporting requirements sooner rather than later and confirm with their applicable service providers their plans to assist in implementing these new requirements. We will take a closer look at these changes as guidance is issued by CMS, the IRS or the DOL.

LEGAL DISCLAIMER: Information contained in this publication is not legal advice, and should not be construed as legal advice. If you need legal advice upon which you can rely, you should seek a legal opinion from your attorney.