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.
Typically, medical inflation outpaces inflation in the rest of the economy. But currently, medical prices are growing at a similar rate as in past years, while prices in some other parts of the economy are growing much more rapidly than in the past. Using the CPI, overall prices grew by 6.0% in February 2023 from the previous year, while prices for medical care increased by only 2.3%. As a result, overall prices excluding medical care grew by 6.4%.
Source: Rakshit, Shameek; Wagner, Emma; Hughes-Cromwick, Paul; Cox, Cynthia; Amin, Krutika.
“How Does Medical Inflation Compare to the Rest of the Economy?” Kaiser Family Foundation, March 29, 2023. https://www.kff.org/health-costs/issue-brief/how-does-medical-inflation-compare-to-inflation-in-the-rest-of-the-economy
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!
New Guidance on the End of Federal COVID-19 Health Coverage Protections
The Departments of Labor, Health and Human Services and Treasury recently issued FAQs explaining the impact the wind-down of the COVID-19 national emergency period and the related public health emergency (PHE) will have on health plans. Key takeaways include:
- The “Outbreak Period” rules, which suspended health plan timeframes for making elections and paying premiums under COBRA, requesting special enrollment in a group health plan, and filing claims and appeals under a plan’s claims procedures will be ending soon. These timeframes were generally paused for one year or until 60 days after the end of the Covid-19 emergency period. The Administration will be using May 11, 2023, as the last day of the national emergency period, so the “Outbreak Period” will end on July 10, 2023.
- Health plans are legal permitted and explicitly encouraged to allow plan participants more time to complete outbreak period actions, but the statutory minimums are as follows:
- COBRA election notices for individuals who lose group health plan coverage before the Outbreak Period ends on July 10, 2023, will be due no earlier than September 8, 2023.
- Any COBRA premiums due for coverage through July 2023 are due no earlier than August 24, 2023.
- Participants who experience qualifying events up until the end of the outbreak period will have until August 9, 2023, or September 8, 2023 (depending on the type of qualifying event) to request special enrollment in a group health plan.
- Participants will have until September 8, 2023, to submit claims, file appeals, or request external review.
- After the PHE ends, on May 11, 2023, plans will no longer be required to provide first-dollar coverage of COVID-19 diagnostic testing (including over-the-counter tests). In addition to imposing cost-sharing requirements, plans will be permitted to apply prior authorization requirements and other medical management at their discretion. Importantly, claims should be administered based on the date an item or service was rendered (i.e., the date a COVID-19 test was purchased), not the date a claim was processed for purposes of administering this rule.
- Unlike diagnostic tests, plans must continue to cover in-network COVID-19 vaccines without cost-sharing once the PHE ends.
- HDHPs may continue to cover both testing and treatment of COVID-19 prior to the satisfaction of an applicable deductible pending future guidance on the topic, and the future guidance will not require plans to make changes mid-year.
- Plans are only required to provide participants with 60-day notice of coverage changes that may result from the end of the PHE if they change the content of the Plan’s summary of benefits and coverage. However, health plans are strongly encouraged to notify plan participants of upcoming changes anyway.
- Group health plans are encouraged to remember that with states being allowed to resume Medicaid and CHIP eligibility reassessments as of April 1, 2023, many individuals will experience qualifying events for special enrollment in group health coverage. Typically, these individuals will have 60 days to exercise their special enrollment rights, but if their qualifying event occurs during the outbreak period, or before July 10, 2023, they will have until September 8, 2023, to enroll in a group plan if they are eligible for such coverage.
U.S. District Court Judge Reed O’Connor of the Northern District of Texas recently issued a final judgment that strikes down portions of the Affordable Care Act’s (ACA) preventive care coverage requirement. In response, the Biden Administration issued these FAQs explaining the impact on health insurers and group health plan sponsors.
The ACA required coverage of the following without cost-sharing:
- Services with an A or B rating in the current recommendations of the U.S. Preventive Services Task Force (USPSTF);
- Preventive care and screenings for infants, children, and adolescents in comprehensive guidelines supported by the Health Resources and Services Administration (HRSA);
- Preventive care and screenings for women’s health specified in HRSA guidelines; and
- Immunizations recommended by the Advisory Committee on Immunization
Judge O’Connor’s ruling states that health plans cannot be required to cover the services with an A or B rating recommended by the USPSTF free of charge if the recommendation occurred after the ACA passed on March 23, 2010. The ruling further provides that employers with religious objections to PrEP HIV medications cannot be required to cover those medications.
The new guidance makes it clear that:
- The ruling has no impact on the ACA’s preventive care requirements for ACIP-recommended immunizations and HRSA-recommended preventive care, including women’s contraceptive care, even if they overlap with items and services recommended with an “A” or “B” rating by the USPSTF on or after March 23, 2010.
- Since COVID-19 vaccines and their administration are an ACIP-recommended immunization, health plans and issuers must still cover them without applying cost-sharing.
- If a state law mandates health insurance issuers provide first-dollar coverage of items and services recommended with an “A” or “B” rating by the USPSTF on or after March 23, 2010, then health insurance carriers must follow the state law.
- Health plan sponsors and health insurance issuers should consider other applicable federal and state laws when determining if they may change coverage terms during the plan or policy year, as well as any other legal and contractual requirements. This includes things like collective bargaining agreements and state laws that may prohibit issuers from modifying coverage other than at the time of coverage renewal.
- Health plan sponsors and health insurance issuers still need to comply with the federal requirement of 60-days’ notice and the delivery of a new summary of benefits and coverage (SBC) if there is a material modification of coverage that would affect the content of the SBC. Further, group health plans subject to ERISA generally must provide a summary of material reduction in covered services or benefits within 60 days of adoption of a material reduction of benefits.
- The ruling does not affect the preventive services that health savings account-compatible HDHPs can cover without applying a deductible.
- The Administration knows many recommendations made before March 23, 2010, have changed, such as a change in status from A or B, or an expansion of the range of populations subject to the recommendations. The Administration will issue more guidance about what to do in these cases soon.
- This ruling may ultimately result in limited cost-sharing for some plans, but change is not mandatory. Health plans are not required to stop covering USPSTF recommended A &B services, nor must they apply cost-sharing to these services.
Pennie Gets New Executive Director
The Pennsylvania Health Insurance Exchange Authority Board of Directors has named Devon Trolley as the next Executive Director of Pennie. Trolley replaces Zachary Sherman, Pennie’s inaugural Executive Director, who left his post at the end of March. Trolley comes to Pennie from GetCoveredNJ, New Jersey’s state-based insurance marketplace, where she managed the launch and growth of the program since 2020.
Prior to her tenure in New Jersey, Trolley worked for the federal government at the Centers for Medicare and Medicaid Services (CMS) on the implementation and stabilization of the federal health insurance marketplace (Healthcare.gov) in key strategic and policy roles. She also served as a Senior Advisor in the Office of the CMS Administrator working to address the opioid crisis and improve maternal health and worked in the United States Senate during the passage of the Affordable Care Act in 2010. She is an alumna of Penn State University.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
Each year, the federal Department of Labor publishes a report about the status of self-funded group health plans in the United States. Click here to read the 2023 report.