Here’s something to talk about when discussing plan design options and employer contribution strategy with group clients in the New Year.
Hospital admissions remained below expected levels in early 2021. This suggests much of the care people put off during the early months of the COVID-19 pandemic may never happen. Though admissions for COVID-19 in March 2021 were down from their peak in January 2021 as vaccines became available, the virus continued to drive a significant share of admissions to hospitals. Health spending more broadly remains below pre-pandemic levels.
Source: Source: Kaiser Family Foundation and Epic Health Research, August 2021, https://www.healthsystemtracker.org/brief/early-2021-data-show-no-rebound-in-health-care-utilization/
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!
PA Health Insurance Markets Will Be More Competitive in 2022
The Pennsylvania Insurance Department (PID) is currently approving rates and policy options for 2022. In the year ahead, eight insurers will offer health plans in the Commonwealth–the highest number since the Affordable Care Act. Plus, in all 67 of Pennsylvania’s counties, Pennsylvanians will have multiple choices for individual and small group coverage. Specifically, 22 counties will gain one insurer, and three counties will gain two new carriers. CIGNA is also returning to the state in 2022 and will serve the Philadelphia five-county area.
According to the PID, carrier rate increase requests were modest for the year ahead. Individual market rate increase requests averaged out at 2 percent statewide, and small group carriers requested an average increase of 4.8 percent. Final approved rates will be made public in September. Until then, the public can submit comments on rate increase requests to ra-in-comment@pa.gov.
IRS Releases More COBRA Guidance
The recent release of IRS Notice 2021-46 provides agents and health plan administrators with more answers to frequently asked questions about administering the temporary COBRA subsidies created by the American Rescue Plan Act of 2021. It is a supplement to the original COBRA subsidy guidance, Notice 2021-31.
Points clarified by Notice 2021-46 include:
People with subsidy eligibility for multiple reasons may have extended COBRA eligibility windows. These people may still qualify for the subsidy even if they did not notify the plan or insurer of the intent to elect extended COBRA coverage before April 1, 2021, due to the deadline relief in the Joint Relief and EBSA Disaster Notice 2021-1.
Suppose a person with subsidized dental or vision coverage through COBRA gains access to any qualified employer coverage or Medicare. In that case, they lose COBRA subsidy eligibility, even if the new coverage does not include vision or dental.
If an assistance eligible individual is entitled to both Federal COBRA and state continuation coverage (such as in states with extended eligibility like New Jersey and New York), their former employer can receive a tax credit for the individual’s entire subsidy period. This is true even if state continuation coverage premiums are paid to the carrier directly.
An assistance eligible individual’s common-law employer is almost always the “premium payer” and the entity eligible to recoup premium expenses via a federal payroll tax credit. However, a third-party payer may be eligible to claim the tax credit in limited circumstances, such as with a PEO. To qualify, the third-party payer must:
- Pay the assistance-eligible individual’s wages and federal employment taxes;
- Maintain the group health plan and serve as the plan sponsor; and
- Already comply with all COBRA requirements, not just the subsidy, including sending COBRA general notices and receiving COBRA premium payments directly from the individual, even if the subsidy did not apply.
Biden Administration Hints About Which New Health Plan Requirements May Be Delayed
The Consolidated Appropriations Act of 2021 (CAA), signed into law by President Trump last December, includes many new health plan requirements. All have effective dates of December 27, 2021, or the plan year beginning on or after January 1, 2022. More regulatory guidance is needed to implement these provisions of the law. As part of the interim final rule on surprise balance billing, the Biden Administration indicated which regulations it will release to meet CAA deadlines and which rules they will likely delay.
Rules on the following topics will most likely come this fall. So, the Administration will probably enforce these parts of the law on time:
- Surprise billing protections;
- Limitations on short-term limited-duration health insurance plans;
- Compensation disclosure requirements for health insurance agents, brokers, and other service providers who work with group health plans; and
- Price comparison tools that health plans must make available to participants.
Requirements that the Biden Administration will probably not enforce right away since they may not release the related regulations until 2022 include:
- Changes to health insurance ID cards to include cost-sharing information;
- Requirements concerning the accuracy of health plan network directories;
- Provisions about continuity of care when plan networks change;
- The prohibition on “gag clauses” in pharmacy contracts; and
- The requirement that employer group health plans of all sizes and funding structures annually disclose detailed pharmacy and medical claims information to the federal government.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
Health Coverage: State-to-State is an interactive map detailing the critical role health plans play in all states regarding access to health care coverage, the number of jobs the industry generates, and tax revenues paid to support the local economy.