The First 100 Days: Changes Afoot for Health and Welfare Plans

The first 100 days of President Biden’s presidency are likely to bring a number of changes for employer-sponsored health and welfare plans. The more than three dozen Executive Orders that were issued by the end of January included orders providing a special Affordable Care Act enrollment period, directing the review of policies (and strengthening of protections) related to the Affordable Care Act and Medicaid, and expanding coverage for COVID-19 treatment (including through group health plans) and healthcare for women. As is typical for an incoming administration, President Biden also issued a regulatory freeze, potentially impacting several pending and recently finalized health and welfare-related regulations.

These 100 days may also bring guidance on the various health-related provisions that were a part of the Consolidated Appropriations Act, 2021 (the “Act”), which became law at the end of 2020. We have already discussed the changes for health and dependent care flexible spending accounts under the Act. However, the Act also contained a number of other provisions applicable to health and welfare plans, many of which are intended to increase transparency for plan participants and patients. These included:

• Provisions requiring that group health plans and health insurance issuers be more transparent about in-network and out-of-network deductibles and out-of-pocket limitations (including disclosing this information on ID cards);
• Provisions requiring group health plans and health insurance issuers to provide, when requested, an advance explanation of benefits (“EOB”) for scheduled items or services, which EOB would include a “good faith” estimate of total costs, the amount the plan would be responsible for paying, and the amount the participant would be responsible for paying;
• Provisions requiring group health plans and health insurance issuers to offer a telephone and electronic “price comparison tool,” allowing plan participants to estimate and compare the cost-sharing for which they would be responsible if they utilized specific providers;
• Provisions intended to protect patients from various types of so-called “surprise medical billing,” including balance billing for emergency services, balance billing for certain non-emergency services performed at participating facilities by nonparticipating health care providers, and billing for air ambulance services furnished by nonparticipating healthcare providers;
• Provisions applying the disclosure requirements of Section 408(b)(2) of ERISA to group health plans and prohibiting group health plans from entering into agreements with certain service providers (including third-party administrators and health care providers) that contain so-called “gag clauses”; and
• Provisions establishing various reporting, review and audit mechanisms and requirements at the state and federal level, as well as state-level all payer claims databases.

Employers sponsoring group health plans should expect that their health insurance carriers (or, for self-insured plans, third-party administrators) will bear much of the burden of these new requirements. However, it will be important for HR departments to be up-to-date on the new tools being made available to plan participants, many of which are intended to help participants better understand their plan terms, available providers and potential costs. More importantly, insurers and third-party administrators will be updating their policies, certificates of coverage, benefits booklets, and service agreements to reflect the new requirements – as well as the associated costs. These revised documents should be reviewed closely to ensure they comport with the Act and other applicable laws, as well as the regulations that we expect will be issued over the coming days and months. Summary plan descriptions and plan documents should also be reviewed for any necessary updates.

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