It’s MLR Rebate Time Again!
The ACA requires insurers to submit an annual report to HHS accounting for plan costs. If the insurer does not meet the medical loss ratio standards, they must provide rebates to policyholders. Rebates must be distributed to employer plan sponsors between August 1, 2022, and September 30, 2022. Employers should keep in mind that if they receive a rebate, there are strict guidelines as to how the rebate may be used or distributed.
For more information, please see our recent FAQ
If an employee doesn’t return to work following FMLA or state law leave, when should benefits terminate?
State Issues Regulations Implementing the State’s Mental Health Parity Law
August 30, 2022
The Department of Insurance and Financial Institutions announced that its final rules implementing the Arizona Mental Health Parity Act (Jake’s Law) are effective September 4, 2022. These five rules provide guidance for plans issued in the state to report their compliance with the statute.
Jake’s Law implements the federal MHPAEA at the state level. MHPAEA generally establishes that health insurance issuers that provide mental health or substance use disorder (MH/SUD) benefits may not, among other things, impose less favorable benefit limitations on MH/SUD benefits than on medical/surgical benefits. Specifically, healthcare insurers cannot apply financial requirements or quantitative treatment limitations (QTLs) to MH/SUD policy benefits that are more restrictive than the predominant financial requirements or treatment limitations that apply to substantially all medical/surgical benefits. Healthcare insurers cannot impose nonquantitative treatment limitations (NQTLs) with respect to MH/SUD benefits in any classification unless the processes, strategies, evidentiary standards or other factors used in applying the NQTL to MH/SUD benefit classifications are comparable to those used with medical surgical/benefits classifications.
The rules provide a process by which plans issued in the state report their compliance with Jake’s Law. Issuers must file reports for each plan they offer, informing the state whether the plans cover MH/SUD benefits, and, if so, whether those benefits are in parity with medical/surgical benefits. Issuers are required to file a report for each plan every three years demonstrating its compliance with NQTL requirements, with an annual report requirement that provides any updates to the last triennial report as well as an attestation by an officer or director of the healthcare insurer that the healthcare plan follows MHPAEA. The new rules also provide an exhibit that lists all the required information for those reports.
In addition, the new rules require healthcare insurers that issue health plans in Arizona and whose policy forms are not exempt from the form filing requirement to demonstrate their compliance with the financial requirements and QTL parity requirements of MHPAEA through their form and rate filings with the Department.
Employers with plans issued in the state should be aware of these new requirements.
District of Columbia
Transportation Program Requirements for Employers
August 30, 2022
By January 15, 2023, certain Washington, DC employers must report their compliance with the DC Parking Cashout Law of 2020. The reporting will cover future compliance. When available, the report templates will be available on the District Department of Transportation website.
The Cashout Law applies to employers with 20 or more employees in the district who offer free or subsidized parking benefits to employees. To comply, covered employers must implement one of the following compliance options:
- Offer a Clean Air Transportation Fringe Benefit. Offer the equivalent value in benefits to covered employees who do not drive to work in the form of a transit subsidy, increased compensation, and/or a healthcare contribution.
- Implement a transportation demand management (TDM) plan. Create a District Department of Transportation (DDOT)-approved TDM plan and reduce employees’ commuter trips made by car by at least 10% year over year until 25% or less of employees’ commuter trips are made by car.
- Pay a Clean Air Compliance fee to DDOT. Pay $100 per employee per month for employees offered a parking benefit.
Please note that the Cashout Law is in addition to the Employer Commuter Requirement. Since January 1, 2016, employers with 20 or more employees in DC must offer access to one or more of the transit benefit options. All employees working 50% or more of their service time in DC are counted in the following transit benefit options:
- Employee pays pre-tax contributions for transit benefits.
- Employer pays transit benefit costs for employees (either through reimbursement or the provision of pre-paid metro cards).
- Employer provides transportation through a shuttle or vanpool.
To comply, employers must:
- Notify employees of the available transit benefit program.
- Provide information to covered employees on how to apply and receive benefits.
- Issue benefits to covered employees who request or apply for them.
- Maintain records to establish compliance with the requirements.
- Record that notice was given to employees.
- Provide records showing that elected benefits were provided.
DC employers should review both sets of requirements and comply as necessary.
Coverage for Rituximab
August 30, 2022
On May 12, 2022, Gov. Hogan signed HB 820 into law. The new law requires health insurance policies issued or renewed on or after January 1, 2023, to provide coverage for rituximab for the treatment of pediatric autoimmune neuropsychiatric disorders associated with streptococcal infections (PANDAS) and pediatric acute onset neuropsychiatric syndrome (PANS).
Employer plan sponsors of fully insured policies issued in Maryland should be aware of the coverage change and work with the insurer to update plan documents as necessary.
Michigan Court Delays Reinstatement of Expanded Paid Medical Leave Act and Higher Minimum Wage
August 30, 2022
A Michigan court has delayed the effective date of its July 19, 2022, ruling in Mothering Justice et al. v. Nessel, et al. The ruling, first covered in our August 4, 2022, edition of Compliance Corner, found that the state’s legislature violated the Michigan Constitution when it amended two recently adopted ballot initiatives in 2018. As a result, the court voided Michigan’s then-current Paid Medical Leave Act (PMLA) and minimum wage laws, reverting to versions of those laws originally adopted by the legislature, versions that provide expanded paid sick leave and a higher minimum wage.
The latest court order recognizes concerns regarding the ability of employers and state agencies to immediately accommodate the statutory changes. With these concerns in mind, the court delayed the effectiveness of its ruling until February 20, 2023. Employers in Michigan should monitor the state’s Department of Labor and Economic Opportunity website for updates and work with legal counsel to modify their paid leave policies and compensation practices as necessary.
Clarification Regarding Cost-Sharing for Insulin Drugs
August 30, 2022
On August 8, 2022, Insurance Commissioner McVey issued Bulletin 2022-09, which provides clarification related to the maximum cost-sharing that may be charged to a covered participant for insulin drugs. Existing law prohibits health insurance policies from charging a participant more than $100 cost-sharing per 30-day period for insulin drugs. Some insurers interpreted this to mean $100 per insulin drug category. For example, if a participant was prescribed both rapid-acting insulin and short-acting insulin during a 30-day period, the insurer was imposing $100 cost-sharing for each category for a total of $200. The bulletin clarifies that the maximum $100 cost-sharing applies to all combined insulin drug categories. In other words, in the above example, the participant could only be charged a $100 cost-sharing for both prescription categories combined.
As this is an interpretation of an existing law, it is considered effective immediately. Employer plan sponsors should be aware of the change in coverage and work with insurers to revise plan documents as necessary.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.