The Fact of the Month
Here’s something to talk about when discussing plan design options and employer contribution strategy with group clients in the New Year.
Even though 64% of Americans say they are “completely” or “mostly” satisfied with their personal experience of the healthcare system, the cost of care is a significant concern. In the past year, one in four Americans skipped a medical treatment because of cost. During the same period, Americans collectively borrowed an estimated $88 billion to cover healthcare costs.
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!
Federal Lawmakers Issue New Guidance on CAA and ARPA Requirements
Over the past month, federal regulators have released several critical pieces of guidance for employers and health care advisors to implement new requirements related to the Consolidated Appropriations Act of 2021 and the American Rescue Place Act. Some of the most critical include:
- The Department of Labor issued the first round of guidance for employers and others to use when administering the COBRA subsidies created by the American Rescue Plan Act. The information includes frequently asked questions (FAQs), a model summary and subsidy application form, and four model notices. The new subsidies cover 100 percent of COBRA premiums (and in some cases comparable state continuation of coverage) for assistance eligible individuals between April 1, 2021, and September 30, 2021.
The new questions and answers guidance correlates closely with the information already available through the ARPA statute, but it does add some clarifying details. Unfortunately, it does not address all common questions, so we expect more guidance to follow soon. One of the most common questions—what exactly does the term involuntary loss of coverage mean?—was not answered directly.
The five model documents are for employers to use to help them implement the new subsidies. Employers are required to provide eligible individuals with specific information about the subsidies. While the use of the model forms is not technically required, it is a best practice. In some cases, an employer might need to modify a model form to match their specific coverage options, which is entirely permissible.
- The DOL also released FAQ-style clarifying guidance outlining the CAA requirement that applies to all group health plans and all individual and group health insurance carriers subject to the federal Mental Health Parity and Addiction Equity Act (MHPAEA). Each of these entities needs to have a comprehensive analysis of any non-quantitative treatment limitations (NQTLs) each specific plan might place on mental health or substance use disorder coverage. The CAA gave 45 days to be ready to provide the federal Department of Health and Human Services (HHS), the DOL, or applicable state authorities, with copies upon request. So, they’ve technically been required since February 10, 2021. A group or plan’s NQTL analysis must include nine specified core components to be considered adequate. It also must “contain a detailed, written, and reasoned explanation of the specific plan terms and practices at issue, and include the bases for the plan’s or issuer’s conclusion that the NQTLs comply with MHPAEA.”
- IRS Announcement 2021-7 proclaims that any personal protective equipment (PPE) people buy to combat the spread of COVID-19 qualifies as medical expenses under IRC §213(d). PPE was not fully defined, but the announcement gave examples of everyday things people buy for their families—masks, hand sanitizer, and sanitizing wipes.
This change in tax status affects employers that offer access to account-based health coverage options. The guidance applies to health flexible spending arrangements (health FSAs), health reimbursement arrangements (HRAs), health savings accounts (HSAs), and Archer medical savings accounts (Archer MSAs). Now, participants will be able to use funds from those accounts to reimburse PPE costs since they are qualified medical expenses.
HRA and Health FSA sponsors will need to make a cafeteria plan amendment to approve this change. These employers have the option to make the change apply retroactively, dating back to any time on or after January 1, 2020, as long as they do so by December 31, 2022. Or, an employer could decide at any time to make PPE reimbursable moving forward. If a plan amendment is necessary, it must be adopted by the last day of the first calendar year, beginning after the end of the plan year in which the amendment took effect.
PAHU Supports Claims Data Legislation
State Representative David Zimmerman (R-99) will be introducing new legislation designed to ensure that employers with 51-99 employees will have access to aggregate health claims data for their group coverage plan. The board of the Pennsylvania Association of Health Underwriters (PAHU) voted to endorse this measure. It will require health insurance carriers to provide claims experience data to group policyholders with 51 or more covered employees within 30 days of the request.
PAHU supported similar legislation authored by Representative Zimmerman last session. He has asked PAHU to testify in support of the bill scheduled for a hearing later this year. The state chapter plans to organize a grassroots campaign to provide additional support for this bill and discuss it with state House and Senate leaders during May meetings.
Philadelphia Updates and Amends Its Paid Leave Law
Philadelphia lawmakers recently enacted the Public Health Emergency Leave (PHEL) Ordinance. It amends and expands the paid leave ordinance passed last year in response to the coronavirus pandemic since that measure expired on December 31, 2020. The amended PHEL ordinance is similar to the federal paid leave provisions created by the Families First Coronavirus Response Act (FFCRA). The new ordinance requires all Philadelphia businesses with at least 50 employees to provide paid time off to employees who have worked for the company for at least 90 days.
The new PHEL leave requirements are already in effect. To qualify, an employee must satisfy one of the following location-based requirements:
- Work within Philadelphia.
- Typically work for an employer in Philadelphia but currently teleworking due to the pandemic.
- Work for an employer from multiple locations with 51 percent or more of their time spent working within Philadelphia.
- Under the PHEL, qualifying employees who work at least 40 hours a week are entitled to 80 hours of leave. Those who work less than 40 hours a week get leave on a pro-rated basis. To calculate leave time for variable hour employees, an employer should average the number of hours the employee was scheduled to work over the past 90 days and multiply it by fourteen.
People can use the leave if they are exposed to COVID-19 or are showing symptoms of COVID-19 (regardless of a diagnosis) or caring for an exposed or sick family member. People can also use the leave to quarantine, to care for a family member under quarantine, or to care for a child whose school or child care arrangement closed due to COVID-19. Obtaining or recovering from a COVID-19 vaccine is also a valid reason to take leave.
Covered employers have to provide notice to all employees who may be eligible, and employees have the right to file a civil action against an employer for an alleged violation of the ordinance. The new ordinance does not sunset on a specific date. Instead, it expires at the end of the Proclamation of Disaster Emergency of the Governor of Pennsylvania related to the COVID-19 pandemic
If you work in Philadelphia, have Philadelphia-based employees, or represent clients that meet these criteria, a best practice would be to inform them about the new leave ordinance and its employee notification and other requirements as soon as possible.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
Before the COVID-19 pandemic, and the related economic downturn, American uninsured rates were lower than ever, but some populations are tough to reach. This new issue brief from the Department of Health and Human Services shows who are uninsured and indicates how to improve outreach efforts to inform eligible individuals about their health insurance coverage options.