Employer Health Plan Requirements Under The Consolidated Appropriations Act
The Consolidated Appropriations Act of 2021 (CAA) was signed into law in December 2020, providing further stimulus and support to organizations and individuals affected by the COVID-19 pandemic.
Among its many provisions are the most comprehensive changes to active employee health plans since the Patient Protection and Affordable Care Act (ACA) which address: protections against surprise billing, updating provider directories, gag clause removal, broker and consultant compensation disclosure, continuity of care, and identification card requirements.
Other provisions, such as medical and drug cost reporting, advanced explanation of benefits, and the price comparison tool, have been delayed. More information will be provided on these as it becomes available.
Surprise Billing
What is it?
Effective January 1, 2022, the No Surprises Act (Act) is a key component of the CAA. It seeks to protect patients from surprise medical bills when they receive unanticipated out-of-network care from providers and facilities delivering emergency care or from out-of-network providers delivering emergency and non-emergency care at in-network facilities. The Act also protects patients from surprise bills from out-of-network air ambulance services.
The Act applies to grandfathered and non-grandfathered plans but does not apply to retiree-only plans, health reimbursement arrangements, excepted benefits, or short-term limited-duration insurance plans.
What does it do?
Under the Act, plans and providers are prohibited from billing patients more than in-network cost-sharing amounts in certain circumstances.
Disputes are negotiated between the plan and the provider before initiating an independent dispute resolution process if negotiations fail.
What should employers do?
Employers should check with vendors to ensure that they are complying with all rules and update vendor contracts as needed.
The independent dispute resolution process expands types of claims eligible for external review, essentially creating new rights for plan participants. An update to your plan document and summary plan description may be required.
In the case of air ambulance services, the plan must report certain information to the federal government. Employers should work with vendors to verify who will conduct that reporting.
Provider Directory
What is required?
Effective January 1, 2022, plans must ensure that provider directories are current and accurate (updated at least every 90 days) and establish a database of in-network providers.
If a participant provides documentation that he or she received and relied on incorrect information from the plan about a provider’s network status prior to a visit, the plan cannot impose a cost-sharing amount greater than in-network rates.
What should employers do?
Employers should check with vendors to ensure that they are complying with all rules and update vendor contracts as needed.
Removal of Gag Clauses
What is it and what does it do?
Effective upon enactment of the CAA, group health plans may no longer agree to restrictions in provider network contracts that would prevent them from obtaining cost and quality of care information and/or providing that information to participants. Plans must also ensure they have access to specific claims data that shows costs related to claims. Providers would be allowed to prohibit plans from publicly disclosing this information.
What should employers do?
Employers should check with vendors to ensure that they are complying with all rules and update vendor contracts as needed.
Plans must certify compliance annually, although further guidance is needed on how it must be submitted.
Broker and Consultant Compensation Disclosure
What is it and what does it do?
Effective December 27, 2021, health insurance issuers offering individual coverage or short-term, limited-duration insurance are required to disclose the compensation of $1000 or more paid to brokers and consultants. The broker or consultant is required to make certain disclosures to the plan fiduciary regarding services provided and a description of all covered compensation. Errors must be corrected within 30 days.
What should employers do?
Employers should check with vendors to ensure that they are complying with all rules and update vendor contracts as needed.
Continuity of Care
What is it and what does it do?
Effective January 1, 2022, if a participant is receiving care at an in-network facility and the participant is considered to be a “continuing care patient,” special rules apply upon termination of the relationship between the plan and the provider or termination of benefits under the plan.
The plan is required to notify any continuing care patient of the termination of and his or her right to elect continued transitional care. The participant must elect such care within 90 days of notice of termination.
What should employers do?
Employers should check with vendors to ensure that they are complying with all rules and update vendor contracts as needed.
An update to your plan document and summary plan description may be required.
Modify Identification Cards
What is required?
Effective January 1, 2022, plans and providers must include new information on ID cards in “clear writing,” including deductibles and out-of-pocket maximums for both in-network and out-of-network claims and a phone number and website where participants can seek consumer assistance information.
What should employers do?
Employers should check with vendors to ensure they are updating cards and update vendor contracts as needed.
