The Fact of the Month
Here is something to mention when discussing cost and benefit trends with clients in the month ahead.
Mental health needs among workforces continued to climb this year, with 77% of large employers reporting an increased interest in mental health coverage and another 16% anticipating one in the future, according to Business Group on Health’s 2024 Large Employer Health Care Strategy Survey. This represents a 33 percentage-point surge over last year when 44% of employers saw increased employee mental health concerns.
Source: Business Group on Health. 2024 Large Employer Health Care Strategy Survey. August 2023. Available at: https://www.businessgrouphealth.org/resources/2024-large-employer-health-care-strategy-survey-intro/
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 Considers 2024 Rate Increases
The Pennsylvania Insurance Department announced it is currently reviewing the proposed 2024 rate increases for individual and small group health insurance offered in the state. The PID is accepting public comments on the rates and filings through September 8, 2023, which may be emailed to email@example.com. The PID plans to approve final 2024 rates later this Fall.
Based on the initial proposals submitted by Pennsylvania’s health insurers, the average individual market rate increase will be 4.2 percent. The average small-group market increase statewide will be 4.1 percent. In addition, Highmark Blue Cross and Blue Shield filed individual and small-group products to be sold in the Philadelphia five-county area for the first time. Geisinger intends to expand its individual small-group offerings to Bedford County.
Biden Administration Issues Proposed Mental Health Parity Regulations and Other Documents
Treasury (“the Departments”) released the long awaited update to the regulations governing the Mental Health Parity and Addiction Equity Act (MHPAEA). The Departments also issued a technical release asking for comments on potential limited enforcement safe harbor for analyzing a plan’s network-centered non-quantitative treatment limitations (NQTLs). Finally, they made the second Mental Health Parity and Addiction Equity Act Comparative Analysis Report to Congress public.
The new rules are a response to the requirement in the Consolidated Appropriations Act, 2021 (CAA) that all plans and issuers subject to the MHPAEA prepare and maintain analyses as to how all NQTLs imposed by their coverage offerings were developed and are applied no more stringently to mental health and substance use disorder (MH/SUD) benefits than to medical and surgical (M/S) benefits.
NQTLs must be reviewed on a case-by-case basis as described in plan documents, as outlined in vendor-written analyses, and through tests of daily plan operations. According to the proposal, if an NQTL does not meet a new three-pronged parity test to ascertain its compliance, it may not be applied to any MH/SUD benefits. The proposal establishes many new definitions and enhances existing ones. Finally, it also explains that for group health plans subject to ERISA, the NQTL analyses are considered plan documents like summary plan descriptions (SPD). So, NQTL analyses are subject to related plan fiduciary review and participant distribution requirements.
Most importantly, even though the proposed new NQTL tests, definitions, and other specifics would not take effect until January 1, 2025, if adopted as written, the regulation rule makes it explicitly clear that existing MHPAEA compliance rules for health insurance issuers and group health plan sponsors remain unchanged, including the written NQTL analysis requirement. Plan sponsors and issuers need to prepare and maintain plan specific NQTL analyses right now, using existing guidance from the Departments.
At a national level, NABIP is reviewing the proposed rule and will submit comments to the Departments on behalf of its entire membership.
Proposed Rule Would Make Significant Changes to the STLDI and Fixed Indemnity Health Insurance Markets
If finalized, a proposed regulation issued by the Biden Administration in July would significantly change the group fixed medical indemnity and individual short-term limited-duration insurance (STLDI) plan markets. However, this is a draft measure, so it has no current legal impact on any group or individual health plan. The Administration is accepting comments on the draft measure through September 11, 2023; it could be revised and finalized at any point after that.
Key changes the proposed rule could cause include:
- Ending the policy of offering employees both a minimum essential coverage or “MEC plan” and fixed indemnity hospitalization insurance as coverage options, with or without potentially other more robust coverage options. By broadening the standard of permissible coordination between “excepted benefit” indemnity plans and group health plans considered to be ACA minimum essential coverage, the new rule would prevent employers from offering both types of coverage to the same group of employees.
- Clarifying how benefits must be paid out under hospital fixed indemnity policies.
- Establishing through the regulatory code that if fixed indemnity policy premiums are paid pre-tax through a Section 125 plan, then any benefit payments are considered taxable income. However, if premiums are paid on a post-tax basis (not included in any Section 125 cafeteria plan), resulting benefits are not taxable.
- Limiting short-term limited-duration medical insurance (STLDI) coverage options to policies with an initial period of three months or less and a maximum coverage period of four months if the coverage is renewed.
- Imposing a notice requirement to ensure consumers receive clear information about the differences between short-term limited-duration insurance, fixed indemnity excepted benefits coverage, and comprehensive coverage when purchasing such coverage.
- Requiring notice distribution along with marketing, enrollment, re-enrollment, and application materials, and whenever STLDI or excepted benefits coverage is sold.
The proposed rule also asked for more information about level-funded plans. NABIP will be submitting comments on this proposal on behalf of all members.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
The American Academy of Actuaries recently published “Drivers of 2024 Health Insurance Premium Changes.” It examines factors that could affect the composition of health insurance risk pools, health care prices, and health care utilization, each of which could affect 2024 health spending projections and premiums.