PPI in the News Compliance Corner - September 30, 2021 Archive
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On September 16, 2021, the Departments of Labor, Health and Human Services, and the Treasury (collectively, “agencies”) jointly published proposed rules regarding the implementation of provisions of the Consolidated Appropriations Act, 2021 (CAA), including the No Surprises Act. Among other items, the regulations address required reporting of air ambulance services by group health plans (including grandfathered plans), insurers and providers.

The No Surprises Act prohibits surprise billing of participants for certain out-of-network healthcare services, including air ambulance services, provided under particular circumstances. To increase price transparency, the No Surprises Act also requires group health plans, insurers and air ambulance providers to submit certain information to the agencies, including claims data about air ambulance services. The purpose of the data collection is to provide the regulators with a more complete understanding of air ambulance services provided across the industry. HHS is then required to issue a comprehensive public report summarizing the data and providing an assessment of certain aspects and characteristics of the air ambulance market.

Under the proposed rules, plans and insurers would be required to provide the following information regarding air ambulance claims: whether the services were provided on an emergency basis; whether the service provider is part of a hospital-owned or sponsored program, municipality-sponsored program, hospital independent partnership (hybrid) program, independent program, or tribally operated program in Alaska; whether the transport originated in a rural or urban area; the type of aircraft used for the transport (fixed-wing or rotary-wing air ambulance); and whether the provider of the air ambulance service has a contract with the plan or issuer to provide air ambulance services. Additionally, the plans and insurers would need to submit certain claims-level data, including: the date of service, billing and procedural codes, information about each air transport (such as loaded miles and whether the transport was inter-facility), and claims adjudication and payment information. HHS intends to match this claims-level data with information submitted by the air ambulance providers to complete the analysis necessary to fulfill the public reporting requirement.

The information would be submitted to HHS for a period of two calendar years, beginning with 2022. The 2022 calendar year data would be due by March 31, 2023, and the 2023 calendar year data would be due by March 30, 2024.

To streamline the process and avoid unnecessary duplication of reporting, an insured plan could enter a written agreement with the insurer, under which the insurer could assume responsibility for providing the necessary data on the plan’s behalf. In such case, if the insurer fails to timely report, the insurer (and not the plan) would be in violation of the requirements. Although a self-insured plan could contract with a third-party administrator for assistance, the ultimate reporting obligation remains with the plan.

The proposed rules also provide guidance for insurers regarding broker compensation disclosures for individual health insurance or short-term, limited-duration insurance. (The guidance does not address compensation disclosures in the group health plan context.) To satisfy the transparency provisions of the CAA, insurers are required to make disclosures to enrollees and submit reports to HHS regarding direct and indirect compensation provided by an insurer to a broker associated with enrolling the individuals in such coverage. The proposed rules define direct and indirect compensation, explain that the required disclosures would include the commission schedule and structure for any compensation not captured by this schedule, and discuss the timing of the disclosures (e.g., upon enrollment, renewal or invoicing). HHS proposes that these new requirements apply to contracts executed between brokers and insurers on or after December 27, 2021.

Furthermore, the rules propose amendments to existing regulations to clarify the complaint investigation process, potential investigations with respect to nonfederal governmental plans, and the imposition of civil monetary penalties against plans and insurers.

Sponsors of group health plans should be aware of the proposed rules and should consult with their insurers or service providers regarding implementation of the air ambulance services reporting requirements. Comments regarding the proposed regulations can be submitted through October 18, 2021.

Requirements Related to Air Ambulance Services, Agent and Broker Disclosures, and Provider Enforcement »

On September 14, 2021, the Department of Labor, Department of the Treasury, and Pension Benefit Guaranty Corporation (collectively, “agencies”) released proposed rules regarding changes to the Form 5500 requirements, most of which will affect the filing requirements for retirement plans. The proposed changes include both revisions to the content of the forms and changes to certain Form 5500 regulations.

Employers that sponsor ERISA benefit plans have compliance obligations regarding the annual filing of Form 5500, which is generally due within seven months of the close of the plan year (unless an extension is filed). Form 5500, including all required schedules and attachments, is used to report certain funding and operational information to the DOL concerning employee benefit plans subject to ERISA. In addition, failure to comply with the Form 5500 filing requirements timely can result in penalties under both ERISA and the IRS Code.

The proposed changes mostly incorporate amendments to the Code and ERISA as originally made by the Setting Every Community Up for Retirement Enhancement (SECURE) Act. (For an overview of the SECURE Act, see the article from the January 9, 2020, edition of Compliance Corner, “SECURE Act Adopted in Government Appropriations Bill.”)

Highlights of the proposed changes (which are quite extensive) include, but are not limited to:

• Modifying the Form 5500 instructions so that a single aggregated Form 5500 can be filed for a defined contribution group (DCG) reporting entity, and including a new Schedule DCG that would report plan-level information. In addition, an independent qualified public accountant must audit the single shared trust (with plan-level auditor’s report and financial statements attached to the Schedule DCG if a participating plan is also required to be audited). To file a single aggregated Form 5500, plans must verify that they meet the DCG eligibility requirements.
• Adding a new Schedule MEP (Multiple Employer Plan) to the Form 5500 to be used to report the MEP and related participating employer and contribution information. There is also a new type of defined contribution pension plan permitted by the SECURE Act, a PEP, which is operated by a pooled plan provider (PPP) and allows unrelated employers to participate in the plan without a common interest. A PEP would also complete the newly proposed Schedule MEP. Part III of the Schedule MEP includes information specific to PEP compliance (with several additional proposed revisions to the Form 5500 related to PEPs). The proposed rules add a checkbox to Form 5500 to indicate that a Schedule MEP will also be included with the filing, and all MEPs (including PEPs) and all DCGs are required to file Form 5500 regardless of size (with no option to file Form 5500-SF).
• Changing how defined contribution plan participants are counted, which expands the availability of simplified Form 5500 filing. The determination of a “small plan” would be based only on the number of participants with account balances (versus the number eligible to participate).
• Adding questions regarding nondiscrimination testing.
• Standardizing schedules for investment assets that include new questions regarding plans’ trusts and trustees.
• Requiring MEWAs (Multiple Employer Welfare Arrangements) that offer coverage for medical benefits to include a list of participating employers in the Form M-1. (MEWAs providing other types of benefits would continue to utilize the Form 5500 to provide required information.) Certain MEWAs will also be required to include a good faith estimate of each participating employer’s percentage of the total contributions made by all participating employers during the plan year.

As mentioned, these rules are only proposed at this time and are not yet final. Comments on the proposed rules are being solicited and must be received by the DOL on or before November 1, 2021. If adopted, the proposed changes would generally be effective for plan years beginning on or after January 1, 2022; however, changes to reporting requirements for MEPs would apply for plan years beginning on or after January 1, 2021.

Employers should be aware of these developments, and we will continue to monitor and communicate any updates accordingly.

Proposed Revision of Annual Information Return/Reports »
Press Release »