New Rules Require Health Plans to Cover COVID-19 Vaccines, More

December 9, 2020

The Trump administration has issued new interim final rules that set out accelerated coverage requirements for COVID-19 preventative services and covering out-of-network testing for the coronavirus.

There are two parts to the interim final rules:

One requires that COVID-19 preventative services – including vaccines – be covered without any cost-sharing on the part of plan enrollees.
The second creates a reimbursement formula for insurers to pay for COVID-19 testing conducted on their enrollees by out-of-network providers.

The new rules, which implement important parts of the CARES Act, were rolled out by the Treasury, Labor, and Health and Human Services departments.

If you are a plan sponsor, you need to know how this affects your group health plan so you can help your staff understand how testing and preventative COVID-19 services are covered.

COVID-19 preventative services

The CARES Act requires that COVID-19-related preventative services be covered within 15 business days after a doctor recommends that a patient needs them.

COVID-19 preventative services must be covered without any out-of-pocket costs on behalf of health plan enrollees, whether they receive those services inside or outside their plan’s provider network. The reason for this is that as vaccines start rolling out, not all providers may have access in the beginning.

The rules are required to ensure that people who need vaccines can access them without any hardship to help put an end to the pandemic.

Under the rules, insurers must pay out-of-network providers a “reasonable amount,” which would be determined by the prevailing market rates that providers are charging health plans for the service. That may be the Medicare rate, the regulations note.

The rules cover more preventative services than just vaccines. They must also cover services that are “integral” to delivering preventative services, such as administrative costs.

Finally, if a preventative service, including a COVID-19 vaccine, is not billed separately from an office visit, and the primary purpose of the office visit is to deliver the recommended service or vaccine, the plan or insurer may not charge cost-sharing for the office visit.

COVID-19 tests by out-of-network providers

The new rules also set out the parameters for how health plans will pay out-of-network providers for COVID-19 diagnostic tests they perform on the latter’s enrollees.

On testing, the CARES Act requires that:

Health care providers post on their websites the cash price or any lower negotiated price for COVID-19 diagnostic testing. The “cash price” is the charge that applies to a walk-in patient who pays cash for the service.
Health insurers pay out-of-network providers of COVID-19 diagnostic tests the price posted on the provider’s website during the public health emergency.

The takeaway

If you sponsor a group health plan, you should communicate the new rules to your participating employees so that they are aware of the no out-of-pocket rules for COVID-19 preventative services.

You should also keep up with the news about when vaccines will be rolled out in your area, so you can encourage your staff to get vaccinated.

The new rules will sunset at the end of the public health emergency. Currently, that’s slated for Jan. 21, 2021, but will likely be extended as it is unlikely a vaccine can be rolled out en masse by that time.

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New Rule Requires Greater Health Plan Transparency

by Inoventive Solutions

December 3, 2020

The Trump Administration has issued a new rule that will require greater price transparency on the part of health insurers, including the rates charged by in-network physicians and copays and costs of drugs.

The final rule requires health plans and health insurers to disclose on a public website their in-network negotiated rates, billed charges and allowed amounts paid for out-of-network providers, and the negotiated rate and historical net price for prescription drugs.

The aim of the new rule is to give health plan enrollees more information when it comes to making decisions when seeking out and price-comparing care and choosing medications. With more information about health care costs, health plan enrollees can:

Make cost-conscious decisions,
Face fewer out-of-pocket surprise bills, and
Potentially lower their overall health care costs.

The drug price transparency part of the final rule came as a surprise because it was not included in the original proposed regulations.

The new rules do not, however, take effect right away and different parts will be implement at different times. Nonetheless, it’s important for health plan sponsors and employers to be aware of the rules as they will greatly affect how their employees access and shop for coverage and medications.

Most of the rules do not apply to grandfathered plans. Here’s what they will do once they come into effect:

Transparency for enrollees

Insurers will be required to make available to health plan enrollees the following information:

Personalized out-of-pocket cost information (for their particular plan) for all covered health care items and services, including prescription drugs.
All underlying negotiated rates for all covered health care items and services, including prescription drugs.

This information must be provided through an online tool on their website and in paper form upon request. Items or services include encounters, procedures, medical tests, supplies, drugs, durable medical equipment, and fees (including facility fees).

Insurers will be required to make available an initial list of 500 shoppable services that will be determined by the Centers for Medicare and Medicaid, starting with the 2023 plan year. The remainder of all items and services will be required for these self-service tools for plan years that begin on or after Jan. 1, 2024.

Public transparency

Health insurers will be required to make available to the public, consumers, researchers and others the following information in “machine-readable” files:

Negotiated rates for all covered items and services with in-network providers.
Historical payments to, and billed charges from, out-of-network providers.
In-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level.

The idea behind these changes is to provide opportunities for detailed research studies, data analysis, and offer third party developers the ability to create private apps and websites to help consumers shop for health care services and prescription drugs.

These files are required to be made public starting with the 2022 plan year.

The takeaway

These are final rules but, as mentioned, the part of the rule that affects your group health plan and your employees doesn’t take effect until 2023 as the industry will need time to prepare and comply.

Once the rules take effect, your covered employees should have a wealth of information at their fingertips when they are shopping and comparing health services and drug information.

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The Big Question: Can Employers Require Workers to Vaccinate?

by Inoventive Solutions

November 24, 2020

As the COVID-19 pandemic rages on and more employers bring staff back to the workplace, many businesses are considering implementing mandatory vaccination policies for seasonal flus as well as the coronavirus.

A safe and widely accessible vaccine would allow businesses to open their workplaces again and start returning to a semblance of normalcy. But employers are caught in the difficult position of having to protect their workers and customers from infection in their facilities as well as respecting the wishes of individual employees who may object to being required to be vaccinated.

The issue spans Equal Opportunity Employment Commission regulations and guidance, as well as OSHA workplace safety rules and guidance. With that in mind, employers mulling mandatory vaccination policies need to consider:

How to decide if such a policy right for the company,
How they will enforce the policy,
The legal risks of enforcing the policy, and
Employer responsibilities in administering the policy.

Proceed with caution

A number of law firms have written blogs and alerts on the subject of mandatory vaccinations, and the overriding consensus recommendation is to proceed with caution.

In 2009 pandemic guidance issued during the H1N1 influenza outbreak, the EEOC stated that both the Americans with Disabilities Act and Title VII bar an employer from compelling its workers to be vaccinated for influenza regardless of their medical condition or religious beliefs – even during a pandemic.

The guidance stated that under the ADA, an employee with underlying medical conditions should be entitled to an exemption from mandatory vaccination (if one was requested) for medical reasons. And Title VII would protect an employee who objects due to religious beliefs against undergoing vaccination.

In these cases, the employer could be required to provide accommodation for these individuals (such as working from home).

Additionally, the employer would have to enter into an interactive process with the worker to determine whether a reasonable accommodation would enable them to perform essential job functions without compromising workplace safety. This could include:

The use of personal protective equipment,
Moving their workstation to a more secluded area,
Temporary reassignment,
Working from home, or
Taking a leave of absence.

One issue that employment law attorneys say may not have any legal standing is if an employee objects to inoculation based on being an “anti-vaxxer,” or someone who objects to vaccines believing that they are dangerous. In this case, depending on which state your business is located, you may or may not be able to compel an anti-vaxxer to get a vaccine shot.

Protecting your firm

To mount a successful defense of a vaccination policy if sued, you would need to be able to show that the policy is job-related and consistent with business necessity. And that the rationale is based on facts, tied to each employee’s job description and that you enforce the policy consistently without prejudice or favoritism.

Also, you must ensure that any employee who requests accommodation due to their health status or religious beliefs does not suffer any adverse consequences. In other words, you cannot punish someone that is covered by the ADA or Title VII for refusing a vaccine.

Also, you will need to project and safeguard your employees’ medical information, under the law.

The takeaway

A number of employment law experts say that once a vaccine is widely available, most employers will likely have the right to require that workers get it, as long as they heed the advice above about the ADA and Title VII. Until then, you may want to consider following the 2009 guidance.

If you do implement a policy requiring vaccination, consider:

Fully covering vaccine costs if they are not fully covered by your employees’ health insurance.
Allowing employees to opt out entirely if they have medical or religious objections.
In the event of a medical or religious objection, you must engage in an interactive process to determine whether the individual’s objections can be accommodated.
Including safeguards for keeping your employees’ medical information confidential.
Not abandoning your other efforts to keep your workplace safe, such as the use of social distancing, regular cleaning and disinfecting, and the use of personal protective equipment.

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Uncertainty Weighs on Group Plan Cost Expectations

by Inoventive Solutions

November 17, 2020

U.S. employers are expecting their group health insurance costs to climb 4.4% in 2021, despite the ravages of pandemic and a likely uptick in health care usage next year, according to a new survey.

The expected rate increases are on par with much of the last few years, when insurance premium inflation has hovered between 3% and 4%. Despite the expected increase, employers do not plan to cut back on benefits for their employees, according to the Mercer “National Survey of Employer-Sponsored Health Plans 2020.”

The COVID-19 pandemic has injected a large dose of uncertainty into the marketplace. Overall, health care expenditures have plummeted since the pandemic started, which at first seems counterintuitive. But many hospitals postponed elective and non-emergency surgeries and procedures, while fewer individuals were seeking care either out of fear of going in for it or because they could not get appointments.

For example, the first three months after the pandemic had gotten a foothold in the U.S., according to the Willis Towers Watson “2020 Health Care Financial Benchmarks Survey,” monthly paid claims per employee dropped as follows:

April: 21%
May: 29%
June: 14%

“So far, the additional medical costs associated with the testing and treatment of COVID-19 have been more than offset by significant reductions in utilization across many service categories,” the insurance industry research firm recently wrote in its report.

Additionally, the Mercer report predicts that a significant portion of the deferred care will never be realized. And, for those people who have deferred care, when they eventually decide to come for the care will also depend on the course of the pandemic, hospital capacity and whether people feel safe to go in for the treatment.

“Different assumptions about cost for COVID-related care, including a possible vaccine, and whether people will continue to avoid care or catch up on delayed care, are driving wide variations in cost projections for next year,” Tracy Watts, a senior consultant with Mercer, said.

Employer reactions

Despite the expected cost increases, Mercer found that few employers plan to make any changes to their benefits this year, as they seek to keep things stable for their staff. The survey found that:

57% will make no changes at all to reduce cost in their 2021 medical plans (up from 47% in the prior year’s survey).
18% will take cost-saving measures that shift more health care expenses to their employees, including raising deductibles and copays.

Employers are also adding benefits, some of them prompted by the pandemic and shifts in how health care is accessed. For example:

27% are adding or improving their telemedicine services (telemedicine for episodic care, artificial-intelligence-based symptoms triage, ‘text a doctor’ apps and virtual office visits with a patient’s own primary care doctor).
22% are adding or improving their voluntary benefits (critical illness insurance or a hospital indemnity plan).20% are boosting their mental health services coverage.
12% are offering targeted health services, like for diabetes and other chronic conditions.
9% are offering more support for complex cases.
4% are offering services to limit surprise billing.

The takeaway

Mercer noted the following trends going into 2021:

Keeping the status quo – A majority of employers surveyed are avoiding making any changes to their health plans, including increasing employee cost-sharing, even if premiums increase. Instead they are focused on providing a stable source of health insurance for their staff and supporting their workers as they deal with stress and effects of the pandemic.

Digital migration – More employers are offering digital health resources like telemedicine, tele-health apps and virtual office visits, for their convenience, safety, efficiency and cost-effectiveness.

Costs uncertain – Due to the effects of the COVID-19 pandemic, cost projections are uncertain at best. The avoidance of medical care could translate into a higher utilization in 2021 and hospitals may start charging more to recoup lost revenues from 2020. Or people may have forgone a lot of that care forever. It’s too early to tell.

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How to Distribute Group Health Plan Rebates to Your Staff

by Inoventive Solutions

November 11, 2020

Group health plan insurers are paying out $689 million in rebates to plan sponsors this year, as required by the Affordable Care Act’s “medical loss ratio” provision.

The provision requires insurance companies that cover individuals and small businesses to spend at least 80% of their premium income on health care claims and quality improvement, leaving the remaining 20% for administration, marketing and profit.

The MLR threshold is higher for large group insured plans, which must spend at least 85% of premium dollars on health care and quality improvement.

Employers who sponsor health small and large group health plans around the country in the last few months have received notices of rebates from their insurers. For those who have received one for the first time, there’s always a question of what they should do with the surprise funds.

MLR rebates are based on a three-year average, meaning that 2020 rebates are calculated using insurers’ financial data in 2017, 2018 and 2019.

You received a rebate…now what?

Health insurers may pay MLR rebates either in the form of a premium credit (for employers that are still using the insurer) or as a lump-sum payment. More than 90% of group plan rebates come as a lump-sum payment.

Once an employer receives this money, it is their responsibility to distribute the rebate to plan beneficiaries appropriately within 90 days, or risk triggering ERISA trust issues.

How the employer distributes the check will depend on how much their employees contribute to the plan, if at all. Here are the basic rules for employers handling their MLR rebate checks:

If you paid 100% of the premiums, the rebate is not a plan asset and you can retain the entire rebate amount and use it as you wish.
If the premiums were paid partly by you and partly by the participants, the percentage of the rebate equal to the percentage of the cost paid by participants must be distributed to the employees.

If you have to distribute funds to the plan participants, the Department of Labor provides a few options (if the plan document or policy does not already prescribe how they should be distributed):

The funds can be used to reduce your portion of the annual premium for the subsequent policy year for all staff who were covered by all of your group health plans.
The funds can be used to reduce your portion of the annual premium for the subsequent policy year for only those workers covered by the group health policy on which the rebate was based.
You can provide a cash refund to subscribers who were covered by the group health policy on which the rebate is based.

How it works (example)

Total premiums paid to an insurance company for a plan with 100 covered employees during 2019 = $2,000,000.
Total participant contributions during 2019 = $500,000 (25% of total plan premiums for the year).
The employer receives a $30,000 rebate from the carrier in 2020.
A total of $7,500 is considered plan assets and must be distributed to the employees (25% of the $30,000).

Tax treatment of cash refunds

If your employees paid for their share of the health premium with pre-tax earnings, the refund would also have to be taxed. But if they paid for their premiums post-tax, they would not be required to pay taxes on the refund (unless they deducted the premiums on their income tax returns).

You must distribute rebates to your staff within 90 days of receiving them.

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Helping Your Older Workers Transition to Medicare

by Inoventive Solutions

November 5, 2020

As health insurance costs rise and our workforce ages, fewer employers are providing retiree health insurance benefits to their older workers, and are instead asking them to sign up for Medicare.

It’s a delicate situation as some older workers may resent being pushed to Medicare, especially if they’ve worked for their employer a long time. But employers obviously want to keep their staff happy and not risk losing them just because they are asking them to move to Medicare.

The share of people aged 65 to 74 in the workforce has been steadily rising for years. It’s projected to reach 30% in 2026, up from 27% in 2016 and 17% in 1996, according to the Bureau of Labor Statistics. And among those 75 and older, the share projected to be working in 2026 is 10.8%, up from 8.4% in 2016 and 4.6% in 1996.

While some employers opt to keep their Medicare-eligible workers on their group health plans, the majority do not. With the Kaiser Family Foundation estimating that only 29% of employers are keeping their Medicare-eligible employees on their company health plans, how can they support transitioning from their employer health plans to Medicare plus supplemental coverage?

If you have employees who will soon be eligible for Medicare and you want to transition them, you can help them and be there for them as a trusted source of information. Here’s what you can do to help workers who are nearing retirement to enroll:

Consider group Medicare Advantage coverage – There are a number of Medicare Advantage insurers that offer group Medicare coverage, which will help provide a transition from regular group health insurance. The nice thing about Medicare Advantage group health coverage is that often the premiums are quite low compared to regular health plans.

We can help you get set up with a Medicare Advantage group carrier that can take the administrative burden off you. We can send plan materials and other resources directly to your Medicare group members.

You can also choose to have Medicare group members billed directly for their premiums, or you as their employer can be billed.

Some carriers will let you customize your group Medicare Advantage plan with different deductibles, coinsurance and copayment amounts.

Help with the ‘donut hole’ – All Medicare plans have a coverage gap (known as the “donut hole”) for medicines. The coverage gap begins after an enrollee and their drug plan (or Medicare Advantage plan) have spent a certain amount for covered drugs. While they are in the coverage gap, which starts after they and their plan have spent $4,130 on pharmaceuticals in a given year, they will pay 25% of the cost of most drugs.

Seniors can’t get a plan on their own that offers help through the coverage gap. Retirees can only skip the coverage gap through an employer-sponsored plan. That’s where you come in.

By offering your retirees a prescription drug plan with coverage through the gap, you’ll help ease the financial burden that the coverage gap can present.

Make it user-friendly -For years your employees have been used to the top-shelf open enrollment system you have had in place for your workforce, with support like a hotline and access to plan information, such as lists of provider networks and formularies, as well as many different mediums for accessing enrollment information (like e-mail and mobile phone apps).

A recent study found that nearly 70% of workers who are 60 years or older find plan comparison tools and plan guidance tools valuable as they make health care decisions. Since this is what they are used to, you can provide the integrated, consumer-oriented experiences to help facilitate their enrollment in a Medicare Advantage plan.

Educate them about supplemental coverage – Medicare enrollees have access to an average of 28 Medicare Advantage plans, which means they will have a wider array of plans to choose from than they may be used to under their employer’s group plan.

They will also likely be bombarded with offers from various plans by mail and e-mail. It’s often confusing for many people to sift through the plans and find the one that’s best for their life and health circumstances. Many Medicare beneficiaries will seek out an advisor to help them choose the right plan.

In this case, a thoughtful employer would contract with an advisor to help their senior employees choose the best plan for them.

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Final Rule Paves Way for Drug Imports to Reduce Patient Costs

by Inoventive Solutions

October 27, 2020

The Department of Health and Human Services and the Food and Drug Administration have issued a final rule and guidance that paves the way for states to allow pharmacists and wholesalers to import prescription drugs in order to reduce costs for patients.

The final rule implements a provision of federal law that allows FDA-authorized programs to import prescription drugs from Canada under specific conditions, according to a report by Kaiser Health News. Prices are cheaper in Canada because the government there caps how much drug makers can charge for medicines, while the free market reigns supreme in the United States.

Even though insulin is not included among the drugs covered by the rule, the Trump administration also issued a request for proposals seeking plans from private companies on how insulin could be safely brought in from other countries and made available to consumers at a lower cost than products sold in the U.S.

Why now?

Congress has allowed drug importation since 2003, but only if the secretary of the Department of Health and Human Services certified it is safe. That had never happened until this year, when Secretary Alex Azar approved an application by Florida, according to a letter he wrote to congressional leaders.

For decades, Americans have been buying drugs from Canada for personal use – either by driving over the border, ordering medication online or using storefronts that connect them to foreign pharmacies, according to Kaiser Health News. Though the practice is illegal, the FDA has generally permitted purchases for individual use.

About 4 million Americans import medicines for personal use each year, and about 20 million say they or someone in their household has done so because prices are much lower in other countries, according to surveys.

How it would work

The administration envisions a system in which a Canadian-licensed wholesaler buys from a manufacturer of drugs approved for sale in Canada and exports them to a U.S. pharmacy, wholesaler or importer that has contracted with the state in which they operate.

To be eligible for importation, a drug would need to be approved by Canada’s Health Canada’s Health Products and Food Branch and needs to meet the conditions in an FDA-approved new drug application.

Essentially, eligible prescription drugs are those that could be sold legally on either the Canadian market or the American market with appropriate labeling.

Under the final HHS and FDA rule, state importation programs will have the flexibility to decide which drugs to import and in what quantities.

The rule also requires drug manufacturers to provide importers with documentation guaranteeing the medications are the same drugs as those already sold in the U.S.

Parts of this report were reprinted from Kaiser Health News.

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Pandemic Clouds Health Insurance Cost Predictions

by Inoventive Solutions

October 21, 2020

With large employers expecting health insurance rates to climb 5.3% in 2021, they are concerned about how the COVID-19 pandemic will affect overall health care costs in the coming years, a new survey has found.

Those expectations gleaned from the survey by the National Business Group on Health would mean average premiums and out-of-pocket spending could reach $15,500 per worker. The expected increase is on par with the average 5% annual increase that large employers have projected in the last five years.

Employers have been using different strategies to tame those costs, most notably pushing more telemedicine for their workers, a trend that has increased during the pandemic.

Additionally, employers have increased their investments in employee health and well-being programs, a trend that was largely spurred by the pandemic and employers’ understanding that their business performance is linked to the health of their workers.

The numbers going into 2021 are squishy because there has been a significant drop-off in the use of medical services in 2020 due to the pandemic. Many people have delayed non-urgent care to avoid the risk of being infected with COVID-19 if they go to the hospital.

Other people with serious conditions have also unwisely decided to forgo care out of fear of getting sick from the coronavirus.

Health care experts are not sure if that means there will be an uptick in utilization in 2021 and think the 5.3% estimate increase in costs will pan out if people continue to put off care, Conversely, if care resumes in 2021, the projected trend may prove to be too low.

Here’s what large employers are expecting:

Average total health care spending on premiums and out-of-pocket costs will reach $15,500 per worker in 2021, up from $14,769 this year.
Large employers will cover nearly 70% of costs (premiums), while employees bear the rest. That would mean the average outlay per employee would be $10,850 for the employer and $4,650 for the employee.

Trends

Employers are continuing to address health care costs by focusing on new areas that can improve health outcomes for their workers. The trends that large employers predict would continue in 2021 are:

Continued move towards telehealth services – The use of telemedicine has exploded during the COVID-19 pandemic. Among the survey respondents:

76% have made changes to provide better access to telehealth services.
71% have boosted the types of telehealth services they offer, such as adding health coaching and emotional well-being support.
80% expect virtual health will play a significant role in how care is delivered in the future. That’s compared with just 64% last year and 52% in 2018.
52% will offer more virtual care options next year.
Nearly all will offer telehealth services for minor, acute services.
91% will offer online counseling or therapy.
29% may start offering virtual care for musculoskeletal issues, like physical therapy for back and joint pain.

Boosting wellness and mental health services – As many as 88% of respondents said they wouldprovide access to online mental health support resources, such as apps, videos, and articles. The survey also found that:

54% are lowering or waiving costs for virtual mental health services in 2021.
27% will reduce the cost of counseling services at the worksite.

Focusing on primary care – More employers are looking at advanced primary care strategies to reduce costs, with 51% saying they will have one at least one such strategy in place for 2021.

This would include contracting directly with primary care providers who can improve the delivery of preventive services, chronic-disease management, mental health, and whole-person care.

Addressing high-cost drug therapies – Two-thirds of respondents said they were very concerned with the cost of new million-dollar treatments, just one of which can blow up their health cost budget.

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Getting a Head Start on Open Enrollment

by Inoventive Solutions

October 13, 2020

With open enrollment right around the corner, it’s time to review the health plan options available to you for the next year and prepare your workplace for signing up for the 2021 policy year.

The big decision for employers is finding a plan that fits not only their budget but also the budgets of their employees. And this is particularly important for “applicable large employers” under the Affordable Care Act, who must also ensure that the least expensive of their plans must not cost more than 9.83% of any of their health-plan-eligible employees’ household incomes.

This year, due to the COVID-19 pandemic, benefits advisors recommend that employers get an earlier than usual start on preparing for their upcoming open enrollments. The following are just a few issues you need to consider for this year’s open enrollment:

Determine how many employees will receive coverage – It’s to your advantage to try to get as many of your employees to enroll in your health plan as possible, particularly if you are a small employer. The more lives in your plan, the more the risk is spread for the insurer, which can translate into lower policy premiums for all of your workers.

Keep things simple – Try not to make open enrollment complicated. Your employees have enough on their minds during the pandemic. Your literature and meetings should provide easy-to-follow instructions that tell your workers:

What they need to do to enroll or re-enroll.
How they can choose the right health plan for themselves and their family, and
When the deadline is.

Get an early start and provide employees with health plan information prior to open enrollment, so as to give them enough time to review and compare their insurance options.

Informing your employees – If you are planning to meet with your staff in person, you’ll need to plan for social distancing as well as offering employees that cannot or do not feel safe the option to join the meeting via video conferencing.

If you plan to have your staff enroll and choose plans electronically, you need to make provisions for the ones who may not have access to a good internet connection or the technology to do so.

Periodically remind your employees to submit their applications or make changes before the end of the open enrollment period. Have a mechanism in place for identifying and approaching laggards as the deadline approaches.

The COVID factor – Your employees will want to know if testing and treatment of COVID-19 will be covered, as well as any vaccine that may eventually become available. Federal legislation enacted in March required all private insurance plans to cover costs associated with COVID-19 tests. A number of insurers announced that they would also waive all cost-sharing for in-network medical visits related to COVID-19, as well as for telehealth visits.

Since there are no laws that require private insurance plans to waive cost-sharing for COVID-19 treatment, you will have to explore your plan options to see which ones may offer treatment without cost-sharing. Also check to see if the plans you have access to will waive out-of-pocket fees for a coronavirus vaccine should one become available.

Coverage questions for your employees – Encourage your employees to ask questions during your meetings, and ask them to consider re-evaluating their coverage in light of:

Change in dependents – Will employees be adding or removing any dependents, such as children or a spouse, from their health plans? Will you the employer contribute to qualified dependent coverage and if so, how much?
Health issues – Does any employee have evolving health issues that will require more medical services than they have used in the past. They should also check to make sure their plan network includes their personal physician, as well as covering the medicines they may be taking regularly.
Affordability – How much are they willing to pay for coverage and what kind of deducible would be in their price range? What is the premium cost-sharing (how much the employee pays for their share of the premium)?

The takeaway

During the pandemic, you’ll need to get a head start on open enrollment by getting information on your offerings to your staff as early as possible. Be prepared to answer questions about coverage, particularly as it pertains to COVID-19.

You can work with us to make sure you have everything in place for a successful open enrollment.

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How to Distribute Group Health Plan Rebates to your Staff

by Inoventive Solutions

October 7, 2020

Group health plan insurers are paying out $689 million in rebates to plan sponsors this year, as required by the Affordable Care Act’s “medical loss ratio” provision.

The MLR threshold is higher for large group insured plans, which must spend at least 85% of premium dollars on health care and quality improvement.

MLR rebates are based on a three-year average, meaning that 2020 rebates are calculated using insurers’ financial data in 2017, 2018 and 2019.

You received a rebate…now what?

Once an employer receives this money, it is their responsibility to distribute the rebate to plan beneficiaries appropriately within 90 days, or risk triggering ERISA trust issues.

How the employer distributes the check will depend on how much their employees contribute to the plan, if at all. Here are the basic rules for employers handling their MLR rebate checks:

If you paid 100% of the premiums, the rebate is not a plan asset and you can retain the entire rebate amount and use it as you wish.
If the premiums were paid partly by you and partly by the participants, the percentage of the rebate equal to the percentage of the cost paid by participants must be distributed to the employees.

If you have to distribute funds to the plan participants, the Department of Labor provides a few options (if the plan document or policy does not already prescribe how they should be distributed):

The funds can be used to reduce your portion of the annual premium for the subsequent policy year for all staff who were covered by all of your group health plans.
The funds can be used to reduce your portion of the annual premium for the subsequent policy year for only those workers covered by the group health policy on which the rebate was based.
You can provide a cash refund to subscribers who were covered by the group health policy on which the rebate is based.

How it works (example)

Total premiums paid to an insurance company for a plan with 100 covered employees during 2019 = $2,000,000.
Total participant contributions during 2019 = $500,000 (25% of total plan premiums for the year).
The employer receives a $30,000 rebate from the carrier in 2020.
A total of $7,500 is considered plan assets and must be distributed to the employees (25% of the $30,000).

Tax treatment of cash refunds

You must distribute rebates to your staff within 90 days of receiving them.

New Rules Require Health Plans to Cover COVID-19 Vaccines, More

COVID-19 tests by out-of-network providers