Friends, we’re sure your to-do lists are as long as ours, but we need to add another item or two. Sadly, it’s not for anything fun either, like throwing a mask-burning party with your fully-vaccinated friends. (Although you should totally do that and invite us – we promise to bring wine and a fun dessert and not speak in acronyms!) So instead, we’re going to suggest something about as nerdy and boring as possible—reviewing and revising all of your health plan service agreements to make sure they adequately address looming legal liabilities.
We’ve told you about all the compliance requirements the Consolidated Appropriations Act of 2021 created for sponsors of group health insurance plans and health insurance carriers a time or two or three. We’ve also covered how the final transparency rules create new responsibilities for carriers and employers.
What we haven’t necessarily stressed is how all of these changes will impact contracting. Not only do we worry about getting the new work done; we also worry about the amendments needed to various service agreements.
If all of that left you scratching your head and wondering what in the world your two friends are talking about, don’t worry. We’ve put together a checklist to help friends spanning all parts of the employee benefits compliance world!
- COBRA – Continuation coverage is kind of a hot mess right now. Do you have a vendor involved? Have you checked your contract to see who is obligated to do what in terms of notifying employees and handling all aspects of both subsidy administration and the “outbreak period?” If you think you have the current situations under control, both legally and operationally, what about any future situations? The past year taught us a lot, including to always account for the possibility of madness ahead. Does your contract include language to address any odd legal changes that could affect COBRA in the future?
- Mental Health Parity and Addiction Equity Act (MHPAEA) Analyses - Every group plan sponsor subject to MHPAEA was supposed to have a detailed comparative analysis of how their plan maintains parity relative to non-quantitative treatment limitations (NQTLs) done by February 10, 2021. We know from personal experience that the DOL is already asking to review this information—yup, the audits are real... If you offer fully insured coverage, your carrier shares responsibility for this report. What does your agreement with them say about preparing and providing government-mandated documents for you? Have you gone to the carrier yet and asked when you can expect your report and what you might need to do to get it? If you offer self-funded coverage, you are the one and only entity legally responsible for producing this report. But we haven’t met an employer yet who has all of the needed information on hand. What does your administrative services agreement say about your TPA helping you meet legal obligations to maintain your plan? What about your contracts with any carve-out vendors? If you are a TPA or another vendor providing services to self-funded plans (i.e., PBMs, care managers, utilization management firms, behavioral health vendors, network providers), what do your contracts say about sharing data with employer clients to help them meet federal legal requirements?
- Transparency - Three big deadlines are coming up for all entities that sponsor group health insurance and health insurance carriers:
- January 1, 2022 - Disclosing machine-readable files online of all in-network rates, out-of-network payments, and pharmacy rates.
- January 1, 2022 - Providing plan beneficiaries with “advance EOBs” before they incur a claim.
- January 1, 2023 and January 1, 2024 - Providing plan beneficiaries with an online advance price and negotiated rate disclosure tool specific to each plan participant. There needs to be a paper copy option available too. Data needs to be online for 500 specified services by 2023 and then every single covered provider and service by 2024.
Fully insured groups can cede their transparency responsibility to their carrier via upcoming service agreements (likely for a price), and self-funded plans can try to address these items contractually with their TPAs. TPAs do not have to provide their self-funded groups with these services, but it might be hard to retain clients if they don’t. So, review those service agreements now and update them to determine who will do this, how, at what (if any) level of indemnification, and for what price.
- Surprise Billing - New federal surprise balancing billing protections for consumers start with plan years on or after January 1, 2021. For those with fully insured coverage, the health insurance carrier will handle all of the details. However, for self-funded plans, SOMEONE needs to decide when a claim subject to the law can’t be resolved within the thirty-day open negotiation window. Also, who makes decisions and represents the plan when it comes to arbitration? TPAs and applicable groups should iron out the pertinent details in their service agreements moving forward.
- Group Plan Claims Data Requirements - Beginning in 2022, each employer that offers group health insurance is tasked with annually reporting extensive health plan demographic information, pharmacy cost data, and other health and prescription drug claims details to the federal government. This requirement applies to both fully insured and self-funded plans and extends down to groups of two lives. The rules on how to do this, exactly when an employer needs to file their disclosure, and how the federal government will handle transmission are still TBD. However, while each employer will be responsible for filing, there is no way that a group health plan could complete the disclosure without detailed data from their pharmacy benefit manager and whoever is processing the group’s medical claims. Each employer needs to check their service agreement to make sure that they will have timely access to the necessary data, and they will probably want to contract with a vendor to help them with the transmissions.
- Compensation Disclosures - Almost all group health insurance service agreements entered into on or after December 27, 2021 will require agents, brokers, consultants, and a wide range of other vendors to disclose compensation to plan fiduciaries. This applies to contracts with both fully insured and self-funded group health plans and includes any indirect and direct payment in amounts over $1,000. The vendors subject to this requirement are responsible for giving the information to the sponsors of each group health plan they serve. Still, employers also bear a lot of responsibility in enforcing the law. Both employers and consultants can be subject to heavy fines if they don’t do their parts. So, from the employer end of things, make sure your agreements with all vendors require timely disclosure of information. On the agent/broker/consultant side, you’ll need to work with all of your affiliates and partners to ensure everyone is disclosing appropriately and divvy up responsibilities fairly. For example, a TPA might want to disclose to groups directly and then require all vendors and agents they work with to do their own disclosures.
As we say in almost every post, friends, we know this is a lot. We are so sorry. For what it’s worth, we look back wistfully at the days when employer reporting was our biggest challenge too.
We can also offer concrete help if you need it. For friends, MZQ is currently reviewing and revising administrative services agreements to make sure they address current and upcoming compliance responsibilities. We’re also taking on MHPAEA NQTL analysis clients right now and we partner with a fantastic COBRA vendor. Once the rules are written, we plan to offer clients help with the new claims data reporting requirements and the vendor compensation disclosure process.
You can reach us via phone, by email, or when posting a comment. Or, like all working pandemic mothers, we also respond to frantic pantomiming during Zoom calls, cryptic notes shoved under our office doors, and children screeching our names from shockingly far distances away.