The Fact of the Month
Here’s something to talk about when you are discussing plan design options with your clients.
The total cost of health benefits will rise by 5.3% in 2021, taking cost management initiatives into account. The increase is slightly higher than the 5% increase that employers projected in each of the last five years. Including premiums and out-of-pocket costs for employees and dependents, the total cost of health care will be $14,769 per employee this year, an increase of $197 from last year. The total price will rise to an average of just over $15,500 in 2021. In line with recent years, employers will cover nearly 70% of costs while employees will bear about 30%, or almost $4,700.
The Big Three
Each month GPAHU identifies three top public policy or legal developments that could impact our members and clients. Here are this month’s big three!
Pennsylvania Insurance Department Releases 2021 Rates
Pennsylvania Insurance Commissioner Jessica Altman released the 2021 rate filings for ACA compliant fully-insured policies in August. According to the Insurance Department, average rates across the Commonwealth will decrease in the individual market by 2.6 percent, and small group premiums will rise on average by 2.1 percent. According to Commissioner Altman, “This marks the third year where Pennsylvania is seeing increased competition and decreasing or moderately increasing premiums, demonstrating that Pennsylvania’s efforts to stabilize and improve affordability in this market have been working.”
The main reason that premiums are, on average, going down in the individual market is the new reinsurance pool. Based on the proposed filings, the reinsurance program’s impact will make premiums 5.3% lower than they would be without this program in place, an even more significant effect than the 4.6% decrease initially projected. Thirteen counties will also gain a new individual market carrier, and no counties will lose any carriers.
Several Recent Federal Court Decisions That May Impact Your Clients
This summer, a few different federal courts took actions that could impact sponsors of group health plans in the months ahead. Two of these rulings concern anti-discrimination protections for LGBTQ individuals, and one applies to COVID-19 related paid leave. While the substance of these cases is very different, for brokers, the message is the same. Discuss them with your group clients to see if they now need to change any internal procedures. In the case of the gender equity rulings, discuss them with the carriers and third-party administrators you deal with too, in case policies and procedures and plan documents need to change!
The first key ruling occurred on June 15, 2020, when the Supreme Court of the United States extended the scope of Title VII of the Civil Rights Act’s workplace anti-discrimination protections through a 6-3 decision in Bostock v. Clayton County. The ruling, which extends to fringe benefit programs, ensures that these protections include sexual orientation and gender identity. Then, on August 17, 2020, the United States District Court of the Eastern District of New York issued a ruling preventing the Trump Administration from enforcing parts of a rule that rolled back healthcare-related protections for LGBTQ people.
Both of these rulings will impact group health plans moving forward. Existing plan designs and eligibility criteria may need to change to ensure gender equity. For example, exclusions for gender dysphoria or sex-specific contraceptive coverage provisions might require modification. If a group’s plan document references state laws regarding marriage and domestic partnership relationships, a plan amendment might be necessary, since many state laws are discriminatory.
The COVID-19 related ruling happened on August 3, 2020, when the Federal Court for the Southern District of New York struck down four segments of the Families First Coronavirus Response Act’s (FFCRA) interim final rules on paid leave. Businesses with fewer than 500 employees are subject to the FFCRA paid leave requirements. The Court ruled that four sections of the regulation must be changed, and then the Department of Labor responded with a revised regulation that addresses the issues raised by the court.
- The Work Availability Standard—The Court ruling highlighting inconsistencies in the original rule as to if, in all instances, employees are only eligible for FFCRA leave regardless if their employer has work for them to do at the time. The new regulation makes it explicit that to be eligible to take either FFCRA paid sick leave or family/medical leave, in all six qualifying circumstances, a person must be an active employee. Furthermore, the FFCRA leave qualifying event must be the only reason why the person cannot work. Businesses need to adjust their policies accordingly.
- The Definition of Healthcare Provider—The Court found that the DOL went beyond the FFCRA when defining “healthcare provider” and struck down the very expansive definition in the rule. The new rule creates a more limited definition of healthcare provider. Since the FFCRA allows employers to not extend FFCRA paid leave to “healthcare providers,” any entity that was using this exemption needs to check to make sure it still applies to all of the same employees.
- Intermittent Leave— The original rule required employees to seek employer permission before taking FFCRA leave periodically. The court ruling allowed people to take the leave intermittently. The revised regulation goes back to the original policy of allowing employers to require permission first by providing additional legal justification.
- Documentation Requirements—According to the Court, an employer cannot demand FFCRA leave documentation as a condition of taking the leave. Instead, employees must provide the required documentation as soon as practical, even if that is after they take the leave. The new rule affirms this practice.
- Leave Notification – While not addressed in the court ruling specifically, the new rule clarifies that employers can ask employees to give them advance notice of their need to take FFCRA paid leave, if their need for such leave is foreseeable.
Brokers may want to advise clients that are subject to the FFCRA paid leave provisions to review their existing FFCRA paid leave procedures, to see if any need to change as a result of the Court’s ruling.
Pennie Website Is Up and Running
Pennsylvania’s new state-based health insurance exchange has a name – Pennie – and a functioning website, www.pennie.com. The site is all set for consumers and brokers to use as soon as the individual marker open enrollment period begins on November 1, 2020. This year, people will have a month longer to enroll in individual coverage in Pennsylvania than in years past. The state-based exchange board voted to set the Commonwealth’s open enrollment period as November 1, 2020 – January 15, 2020. People need to enroll by December 15, 2020, for coverage that starts on January 1, 2021, but can enroll through January 15, 2021, for coverage that begins on February 1, 2021.
Brokers that registered to help consumers purchase exchange-based individual market consumers will also use Pennie for their purposes. The broker portal is still being finalized, but within a few weeks, the site will include a login screen for registered agencies, brokers, and exchange assisters. In the meantime, browse pennie.com/learn/learn-overview to see how Pennie will partner with brokers in the upcoming open enrollment season.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
NAHU has released a compliance punch-list for small groups. Check it out and use it with your small employer clients!