Employers are entering the second year of open enrollment taking place during the COVID-19 pandemic, which is still having an outsized impact on the process and which has changed the face of health insurance.

There are a number of issues that will have an effect on health plans, including regulations and laws affecting coverage that were born out of the pandemic. Mercer LLC recently published a list of compliance-related priorities that health plan administrators and sponsors have to consider, including:

Legal and regulatory changes

Health plan transparency in coverage rules takes effect on Jan. 1, 2022. Newly introduced regulations require hospitals to publish their standard prices, and for negotiated rates between health plans and providers to be made transparent too.

Employers will need to communicate these changes to their employees, particularly rules that require health plans to provide enrollees with out-of-pocket estimates for upcoming procedures.

Also, the No Surprises Act, which will prohibit surprise bills for certain out-of-network services, takes effect at the start of 2022 for providers and group health plans. Employers need to meet with their plan administrator to make sure that their plans are in compliance with these new regulations.

COVID-19 issues

The pandemic will continue casting its shadow over health insurance and open enrollment.

Legislation passed last year requires health plans to cover additional services such as mental health and telehealth until the end of this year. Whether your plan offerings will keep providing those enhanced benefits or not, you’ll need to communicate that to plan participants and include it in your plan documents.

You should also confirm that your group plans comply with COVID-19 testing and vaccine coverage requirements in the Family First Coronavirus Response Act, the CARES Act and any state laws.

Gender and family planning issues

Employers should review their benefit eligibility rules after the Supreme Court in 2020 ruled that Title VII of the 1965 Civil Rights Act protects LEGBTW employees from discrimination in benefits.

You should ensure that benefits offered to opposite-sex spouses are the same as are offered to same-sex spouses.

Mental health parity

All health plans have to prepare a comparative analysis of their medical and surgical benefits and mental health and substance abuse treatment benefits to demonstrate that treatment limitations are applied comparably. This job does not fall on the employer, but you should make sure your plan has prepared the analysis or is working on it.

This is part of new laws that require health plans to offer similar benefit coverage for mental health and substance abuse treatment as they do for other medical and surgical procedures and services.

HSA, HRA and FSA revisions

The CARES Act temporarily authorized employers to allow employees with health savings accounts, health reimbursement arrangements and flexible spending accounts to make mid-year changes to how much they deposit in those accounts.

It also authorized them to permit employees to roll over unused amounts in their health and dependent-care flexible spending arrangements from 2020 to 2021 and from 2021 to 2022.

Employers that opted to allow their employees to make these changes and roll over funds, have to communicate to their employees that these changes come to an end on Dec. 31 this year.

There were also some permanent changes made by the CARES Act, including reinstating over-the-counter medical products as eligible expenses for HSAs, certain HRAs and FSAs without a prescription.

These accounts may now allow certain menstrual care products, such as tampons, pads, liners and cups, as eligible medical expenses. These are retroactive benefits to Jan. 1, 2020.

Make sure to notify your staff of these changes. You can tell them that if they have receipts for eligible expenses that date back to then, they can submit them for reimbursement.

The IRS has announced the new affordability requirement test percentage that group health plans must comply with to conform to the Affordable Care Act.

Starting in 2021, the cost of self-only group plans offered to workers by employers that are required to comply with the ACA, must not exceed 9.83% of each employee’s household income.

Under the ACA, “applicable large employers (ALEs)” — that is, those with 50 or more full-time workers — are required to provide health insurance that covers 10 essential benefits and that must be considered “affordable,” meaning that the employee’s share of premiums may not exceed a certain level (currently set at 9.78%). The affordability threshold must apply to the least expensive plan that an employer offers its workers.

The threshold was increased because premiums for health coverage increased at a greater rate than national income growth during 2020.

With this in mind, if you are an ALE you should consult with us to ensure that you offer at least one plan with premium contribution levels that will satisfy the new threshold.

Failing to offer a plan that meets the affordability requirement to 95% of your full-time employees can trigger penalties of $4,060 (for 2021) per full-time employee, minus the first 30. The penalty is triggered for each employee that declines non-compliant coverage and receives subsidized coverage on a public health insurance exchange.

Since most employers don’t know their employees’ household incomes, they can use three ways to satisfy the requirement by ensuring that the premium outlay for the cheapest plan won’t exceed 9.83% of:

• The employee’s W-2 wages, as reported in Box 1 (at the start of 2021).
• The employee’s rate of pay, which is the hourly wage rate multiplied by 130 hours per month (at the start of 2021).
• The individual federal poverty level, which is published by the Department of Health and Human Services in January of every year. If using this method, an employee’s premium contribution cannot be more than $104.52 per month.

Out-of-pocket maximums

The IRS also sets out-of-pocket maximum cost-sharing levels for every year. This limit covers plan deductibles, copayments and percentage-of-cost co-sharing payments. It does not cover premiums.

The new out-of-pocket limits for 2021 are as follows:

• Self-only plans — $8,550, up from $8,150 in 2020.
• Family plans — $17,100, up from $16,300 in 2020.
• Health savings account-qualified self-only plans — $7,000, up from $6,900 in 2020.
• HSA-qualified family plans — $14,000, up from $13,800 in 2020.