The Fact of the Month
Here’s something to talk about when you are discussing plan design options with your clients.
High health plan deductibles are an increasingly common strategy to enhance health care consumerism and lower health care spending. Proponents speculate cost-sharing is a tool for teaching plan members to “choose wisely” when it comes to the services they use. But does this work? Perhaps not as well as many have hoped. A study recently released by the Employee Benefits Research Institution concludes that people are 83 percent more likely to stop “choosing wisely” and gravitate towards low-value health care once they satisfy their plan’s deductible!
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!
Election Season is ALMOST Over!
This year, Election Day decided to stretch into Election Season. Pennsylvania and many other states still haven’t officially certified results (which is more typical than many would lead you to believe). Despite that, it seems 99.99% certain that former Vice President Joseph R. Biden is the President-Elect of the United States, and that Senator Kamala Harris is the Vice President-Elect. Democrats remain in control of the federal House of Representatives, but the GOP picked up at least five seats. Control of the United States Senate will remain undecided until at least January 5, 2021. Due to the resignation of Senator Johnny Isakson and a special election, both of Georgia Senate seats are in play and are headed to run-off elections. Right now, Republicans hold 50 Senate seats, but if the Democrats flip the two GOP-held seats during the run-off, they will effectively control that chamber, too, since Vice President Harris could be the tie-breaking vote. Otherwise, a divided government remains at the federal level.
In the Commonwealth of Pennsylvania, we continue to have a divided government too. Our Governor, Tom Wolf, is a Democrat, but Republicans control both houses of the legislature, and the GOP even gained more Senate seats this time around.
The Greater Philadelphia Association of Health Underwriters, and our state and national affiliates, the Pennsylvania Association of Health Underwriters and the National Association of Health Underwriters all work on a bipartisan basis to advance public policy solutions of interest to our membership and their clients. We know that quite a lot of our membership is excited for a change in leadership at the federal level, and about half as many are probably anxious and disappointed. It’s essential to keep in mind that all public policy changes take time. The most important thing to do right now is to remain calm about the future and make sure clients are informed and confident about their benefits choices and responsibilities! From the association end, we will keep working in Harrisburg and Washington, DC, with current and incoming policymakers to communicate health insurance coverage realities!
Three recently released final federal health care price transparency rules will significantly impact both insurance carriers and businesses that sponsor group health plans in the years ahead. Almost all health insurance carriers and employer group plans will need to make arrangements to disclose a significant amount of health plan price information to the public and even more data to plan participants, with disclosure deadlines beginning on January 1, 2022.
By the first deadline, health insurance issuers and group plan sponsors will need to ensure that three machine-readable data files covering in-network rates, payments for out-of-network providers, and pharmaceutical pricing information are available and kept up-to-date online. For plan and policy years that begin on or after January 1, 2023, employer plans and health insurance carriers will have to make detailed personalized cost estimates for 500 designated shoppable services available. All plan participants need to be able to access this information before they incur a claim via a web-based searchable tool. Paper personalized estimates also have to be made available on request. By plan or policy years beginning on or after January 1, 2024, all required personalized cost estimate data must be made available for every covered provider and possible plan services.
Employers with fully-insured group coverage may transfer their liability to their health insurance issuer as part of their coverage contract. However, it will require contract changes, and there will likely be a premium impact due to the transfer of risk. Businesses that provide self-funded or level-funded major medical coverage retain ultimate compliance responsibility. These groups can hire vendors to meet their obligations or work with their TPA and even seek indemnification through administrative services agreements. However, any employer that uses self-funding strategies in their major medical plan now has a significant new liability source.
Recent State-Level Action in Pennsylvania and New Jersey Will Impact Employers Plans
Pennsylvania Governor Tom Wolf recently signed legislation that requires health insurers to assess all of their coverage offerings for mental health and substance abuse parity requirement compliance. PAHU supported the two related bills since, in our view, they will help all businesses with fully-insured coverage and any agent that sells and helps administer such a health plan to groups with more than 50 employees. Many employers do not realize this, but if a group is subject to the federal Mental Health Parity and Addiction Equity Act (MHPAEA), it shares parity compliance liability with their health insurance carrier. The liability applies even though the carrier completely controls the plan’s design and coverage determinations. Ensuring that health insurance companies can prove that every coverage option they offer is compliant reduces liability for all groups.
The other recent state-level action that may impact GPAHU members is happening across the river in New Jersey. Governor Phil Murphy recently signed Executive Order 192, which requires Garden State employers to conduct COVID-19 symptom screenings at the worksite and implement many other worksite safety precautions. The extensive requirements are the first state action of this kind nationwide but probably will not be the last.
Many brokers with NJ-based clients ask if there are any privacy or discrimination issues associated with mandatory worksite screenings. However, Executive Order 192 specifies that employers must execute all requirements in a manner that is consistent with federal confidentiality requirements and any other applicable laws. Employers also have to follow any additional related guidance from the federal Centers for Disease Control and Prevention, the Equal Employment Opportunity Commission, and the New Jersey Division on Civil Rights. These entities all allow employers to take employees’ temperatures and do COVID-19 symptom checks onsite. The CDC states that employees who become ill with symptoms of COVID-19 should leave the workplace, and state and federal rules allow employers to ask for medical documentation before allowing an employee to return.
NJ-based employers do need to avoid any federal privacy and Americans with Disabilities Act violations. To do so, they must keep any medical information they may learn about an employee through work-related COVID-19 protections separate from the employee’s personnel file. ADA rules require medical records to go in a completely segregated file, in a different physical or virtual location.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
If you are looking for the definitive resource on what employers may and may not do when it comes to the coronavirus, look no further than the Equal Employment Opportunity Commission’s consolidated COVID-19 resources for employers web page.