by US Rx Care | Sep 1, 2021 | Uncategorized
The 100% COBRA health insurance subsidies for workers who lost their jobs during the COVID-19 pandemic are about to expire on Sept. 30, and that means employers who have former staff receiving those subsidies must notify them of their expiration.
If you have former employees who are still on COBRA benefits and receiving the subsidy that was required by the American Rescue Plan Act, you will need to send them a timely notice that the 100% subsidy will end at the end of September and that they will have to start paying premiums if they wish to continue coverage after it has ended.
The expiration notice must be sent out 15 to 45 days before the expiration of the subsidy or before COBRA benefits expire (laid-off employees are only eligible to purchase COBRA health insurance continuation coverage for 18 months after they are laid off or quit).
In other words, employers have to send out expiration notices to some former employees who have been receiving COBRA coverage that their 18 months is up.
Some employers should already have sent out expiration notices.
Employers or plan administrators must notify employees receiving COBRA subsidies no more than 45 days before Sept. 30 and no less than 15 days before they will lose the subsidy. Sept. 15 is the absolute last day to send the notices.
Who should you send notices to?
If you have any former employees who are receiving COBRA premium assistance you must send them an expiration notice, even if they have reached their maximum coverage period of 18 months. There were three ways a former employee could qualify for the subsidy:
- Eligible individuals who had a COBRA election in place as of April 1, 2021.
- Eligible individuals who did not have a COBRA election in place (but were previously offered COBRA under federal law) could start to receive the subsidy on April 1.
- Eligible individuals who experience a COBRA qualifying event between April 1 and Sept. 30.
What should the notice say?
The IRS has created a model expiration notice, which you can find here.
While it is not mandatory that you use the model notice, it’s a good idea, because using it demonstrates “good faith” compliance with the law.
Here are the details you’ll need to include in the notice:
- Date of the notice.
- Names or status of the beneficiary.
- Name of the group health plan or insurance policy.
- Whether the beneficiary is receiving the notice because their maximum COBRA continuation period is ending (18 months) or because the subsidy is expiring.
- Date on which the maximum period of continuation coverage will end, or the date of the end of the COBRA subsidy. Depending on their premium period, their subsidized COBRA coverage can last beyond Sept. 30, according to the IRS. Under the rules, the subsidy continues until the end of the last “period of coverage” beginning on or before Sept. 30. In other words, if premiums are usually assessed on a monthly period basis, including the period from Sept. 26 to Oct. 26, the subsidy would cover the entire period ending on Oct. 26.
- Monthly premium cost that the beneficiary must pay to keep their continuation coverage going after the subsidy expires. It must also include other coverage options.
by US Rx Care | Aug 24, 2021 | Uncategorized
As the federal government continues rolling out new laws and regulations aimed at increasing price transparency in the health care industry, one group is fighting back: pharmacy benefit managers.
The Pharmaceutical Care Management Association, a trade association for PBMs, has sued the Department of Health and Human Services, Internal Revenue Service and Department of Labor, all of which were instrumental in rolling out transparency regulations in 2020, which took effect Jan. 1, 2021.
The rules specifically require health plans (including PBMs) and health insurers to disclose on their websites their in-network negotiated rates, billed charges and allowed amounts paid for out-of-network providers, and the negotiated rate and historical net price for prescription drugs.
PBMs were included in the transparency rules because numerous reports have found that some of them rely on opaque contracts with pharmacies and drug companies, and that they allegedly fail to pass on rebates and lower drug prices they negotiate to their enrollees.
The lawsuit comes as PBMs are feeling the heat over their practices. At least seven states and the District of Columbia are investigating them, mainly focusing on whether they fully disclose the details of their business and whether they receive overpayments under state contracts.
Also, attorneys general in four states have sued PBMs, mostly alleging that they misled state-run Medicare programs about pharmacy-related costs.
What the PBMs are saying
The PBMs allege in their lawsuit that the rule will not benefit consumers because their knowing what the contracted drug prices are won’t have an effect on them as there are no actions they can take knowing this information.
The trade association said: “The rule offers consumers no actionable information because net prescription drug prices are not charged to consumers and never appear on a bill.” Instead, the information will likely confuse consumers, it alleges.
The trade body in its court filing said PBMs maintain that their business model hinges on their ability to negotiate confidentially and keep the details of their manufacturer contracts as trade secrets that are not available to other drug manufacturers or otherwise disclosed to the public.
“Confidentiality, in turn, allows PBMs to bargain from a position of strength to reduce drug prices,” it wrote. “Government-enforced information sharing will raise costs by reducing PBMs’ ability to negotiate deeper discounts on drug prices.
“The regulation threatens to drive up the total drug price ultimately borne by health plans, taxpayers and consumers by advantaging drug manufacturers in negotiations over price concessions,” it added.
by US Rx Care | Aug 17, 2021 | Uncategorized
Despite a new law requiring hospitals to post detailed pricing information for their treatments and procedures online, fewer than 10% of U.S. adults are aware of the requirement.
That’s a problem considering that a growing number of Americans have high-deductible health plans, which come with up-front lower premiums but with higher out-of-pocket expenses.
One of the driving forces behind HDHPs is that they give the enrollee more “skin in the game,” by incentivizing them to shop around for care since they will have to pay for it themselves up to their deductible.
But if people are not aware they can find pricing for medical services on providers’ websites, they may not know how to begin comparing prices.
A new study by the Kaiser Family Foundation found that only 9% of those surveyed were aware that hospitals are required to publish the prices for their services online, in line with new price transparency regulations that took effect Jan. 1, 2021.
The price transparency rule, implemented by the Trump administration, requires hospitals to post on their websites:
- A plain language description of each shoppable service and item.
- A description of charges, including:
– Payer-specific negotiated charge, or the price a third party payer such as a health insurance company would pay.
– Discounted cash price, or the price a patient would pay without insurance.
– Gross charge, or the charge absent any discounts.
– De-identified maximum and minimum negotiated charges for each.
- Any primary code used by the hospital for purposes of accounting or billing.
Here’s what the survey found:
- 69% of respondents were unsure whether hospitals are required to disclose the prices of treatments and procedures.
- 22% believed hospitals are not required to disclose this information.
- 9% were aware hospitals are required to disclose the prices of treatments and procedures on their websites.
- 14% said that they or a family member had gone online in the past six months to research the price of a treatment at a hospital.
- Younger adults (ages 18 to 49) were more likely to say they or a family member had searched for the price of care online.
Educating your staff
Employers with HDHPs should inform their staff about the price transparency rule so that they can research pricing ahead of any procedures they may have. Most health system websites should be posting their pricing by now, but it may take some digging to find them.
If they have been ordered to get a certain procedure, they can start by going to each provider available to them through their health insurance and researching the pricing on their website. If they can’t find the information, they should call the provider to get the information. They will need the negotiated price between their health plan and the provider.
Prices can vary dramatically between providers, and your staff need to make sure they are comparing the exact same service between them.
They should also consider calling the providers and inquiring about the cash price for the services. In some instances, the cash price may end up being even less than their deductible or copay.
One problem: Many hospitals have not published their rates and there has been a lack of consistency between providers in terms of how they are providing the information.
This has prompted the CMS to audit hospitals’ websites and complaints, and it recently started sending out notices to hundreds of hospitals that are not complying with the transparency regulations.
Finally, many insurance carriers offer searchable online databases for their enrollees where people can research the approximate cost of certain procedures among all the providers available to them.
by US Rx Care | Aug 11, 2021 | Uncategorized
There are signs that the Internal Revenue Service is starting to step up its enforcement of the Affordable Care Act employer mandate.
During the past six months, there’s been an uptick in the number of employers receiving initial notices stating they may be out of compliance with the requirement that they offer their workers coverage.
Also, the IRS has announced that it will no longer provide “transition relief” to employers that file incomplete 1094/1095C forms, make mistakes on them or fail to file them.
Notices were recently sent out for the 2018 tax year. Many of the proposed assessments would result in penalties that are in the millions.
The IRS is charged with ensuring that employers with 50 or more full-time or full-time-equivalent workers comply with the employer mandate, which requires them to offer them health coverage that is affordable and covers 10 essential benefits, as per the ACA. These “applicable large employers” (ALEs) are subject to penalties for not complying.
For 2021, the fines are as follows:
Internal Revenue Code Section 4980H(a) violations: $2,700 per employee. This penalty applies when an ALE does not offer coverage or offers coverage to less than 95% of its full-time staff (and their dependents), and when at least one full-time employee receives a premium tax credit to help pay for coverage through a marketplace exchange.
Internal Revenue Code Section 4980H(b) violations: $4,060 per employee. This applies when an ALE offers coverage to at least 95% of its full-time employees (and their dependents), but at least one full-time worker receives a premium tax credit to help pay for coverage through a government-operated marketplace.
This can occur if the employer did not offer coverage to that particular employee or because the coverage they were offered was either unaffordable or did not provide minimum value.
What the IRS is doing
No statute of limitations for 4980H violations — At the end of 2020, the IRS Office of Chief Counsel issued a memo that stated there is no statute of limitations for employers to avoid penalties for violating Section 4980H.
This means that ALEs who fail to comply with the ACA can be hit with penalties at any time in the future once the IRS discovers the violation.
Ceasing its ‘good faith transition relief’ — This was intended to temporarily give employers more time and a break on penalties when they report incomplete or incorrect information on their 1094/1095C forms. Last year was the final year this good faith transition relief would be offered. The IRS explicitly noted that it would not be extended again.
The relief available to employers who needed it included a 30-day extension for meeting the deadline to file IRS Form 1095-C, as well as good faith relief from penalties for making mistakes, filing incomplete or not filing the ACA-related forms with the IRS or not filing on time.
What to do
The IRS has been sending out notices of ACA non-compliance for the 2018 policy year.
If you receive one of these notices — a Letter 226-J — you need to act quickly to avoid penalties as you have just 30 days to respond. If you need more time, the most that the IRS will likely grant you is a 30-day extension.
Regardless of if you’ve received a notice, you may want to review your 2018 ACA filings. If you identify any mistakes in them, you can correct the filings before the IRS will issue a Letter 226J penalty notice or another type of penalty.
To avoid penalties related to the annual filings of the 1094/1095C forms, make sure that you stay on top of filing deadlines. Also, ensure that the forms are correct and complete to avoid penalties. You can expect the IRS to be diligent in reviewing these forms.
by US Rx Care | Aug 3, 2021 | Uncategorized
The Centers for Medicare and Medicaid Service in late June released a series of new regulations targeted at banning surprise billing in most instances, taking aim at a scourge that ends up costing many covered individuals thousands of dollars even when they are treated in-network.
The goal of the rule, slated to take effect Jan. 1, 2022, is to ensure that health plan enrollees are not gouged for out-of-network billing and balance billing for most services unless divulged to the beneficiary and approved by them in advance.
Balance billing ― when a medical provider bills a covered individual for the difference between the charge and the amount the insurer will pay ― is already prohibited by Medicare and Medicaid.
The interim rule will cover people who are insured by employer-sponsored health plans and plans purchased through publicly operated marketplaces. The new regulations are being implemented as required by the No Surprises Act of 2021, which passed through Congress with bipartisan support.
The effects of surprise billing
Surprise billing happens when people unknowingly get care from providers that are outside of their health plan’s network, which can happen for both emergency and non-emergency care. Examples of surprise billing include:
- Someone breaks their leg in a fall and has to go to the nearest emergency room, which is not part of their insurer’s network. They are billed at market rates as their insurer doesn’t cover the service.
- Someone has an operation in a network hospital but one of the providers treating them (an anesthesiologist or radiologist, for example) is not in the network, so the covered individual is billed at market rates.
Two-thirds of bankruptcies are caused by outstanding medical debt, and out-of-network billing is partly to blame for that.
Studies have shown that more than 39% of emergency department visits to in-network hospitals resulted in an out-of-network bill in 2010, increasing to 42.8% in 2016. During the same period, the average amount of a surprise medical bill also increased, from $220 to $628.
What the regulations do
The new regulations:
- Ban surprise billing for emergency services, regardless of where they are provided. That means if a person has no choice but to go to an emergency room that is out of network, they can only be billed at the same rate they would be charged for services at an in-network hospital.
- Bar health insurers from requiring prior authorization for emergency services, and they can’t charge their higher out-of-pocket costs for emergency services delivered by an out-of-network provider. They would also be required to count enrollees’ cost-sharing for those emergency services toward their deductible and out-of-pocket maximums.
- Ban out-of-network charges for ancillary care at an in-network facility in all circumstances. This happens when there is an out-of-network provider working at an in-network hospital.
- Ban other out-of-network charges without advance notice.
- Require providers and hospitals to give patients a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate.
What’s next
This is an interim final rule that is still out for public comment. It may be changed after the CMS receives comments.
More than likely it will take effect at the start of 2022, mostly intact.
by US Rx Care | Jul 27, 2021 | Uncategorized
The Consolidated Appropriations Act of 2021 requires agents, brokers and consultants providing health plan-related services to disclose the compensation they receive and the services they perform for that compensation.
The rules apply to individual insurance agents/brokers as well as brokerages and agencies that earn more than $1,000 in direct or indirect compensation selling or administering individual or group health coverage and other medical-related services.
The law also requires employers who sponsor group health plans to make sure those disclosures are included in their contracts, and they will have to be able to prove that’s the case.
The rule, which takes effect Dec. 27, 2021, requires them to divulge to clients what they are being paid in fees or commissions in connection with:
- Brokerage services for placing business with a group health plan,
- Pharmacy benefit administrators,
- Benefit administrators and record-keepers,
- Medical management vendors,
- Disease management vendors,
- Stop-loss insurance,
- Wellness services,
- Employee assistance programs,
- Transparency tools and vendors,
- Compliance services, and
- Group purchasing organization preferred-vendor panels.
The bill defines compensation as anything of monetary value except non-monetary compensation valued at $250 or less.
Required disclosures
The disclosures must include:
- A description of the services to be provided to the group health plan pursuant to the consulting or brokerage services contract.
- A statement that the broker or consultant expects to provide services to the plan as a fiduciary (if applicable).
- A description of all direct compensation the broker or consultant expects to receive in connection with the services they provide.
- A description of all indirect compensation the broker or consultant expects to receive for their services (other than compensation they may receive from a plan that is not directly tied to the compensation for placing a particular account).
- If the broker or consultant is sharing their compensation with affiliates or subcontractors, a description of that compensation.
- A description of all transaction-based compensation.
- A description of any compensation payable in connection with termination and, if applicable, how any prepaid amounts may be refunded and calculated.
The broker or consultant has to provide the above information to the plan fiduciary “reasonably in advance” of the contract taking effect or being renewed. Also, if any of the compensation changes, the broker or consultant is required to notify the plan fiduciary of that change no later than 60 days from the date the broker was made aware of the change.
If the broker or consultant fails to provide the required information or if the information is incomplete or inaccurate, the plan fiduciary must:
- Take reasonable steps to obtain the correct information after they discover it’s missing or incorrect,
- Inform the Department of Labor about the missing or erroneous information, and
- Consider whether to terminate or continue the arrangement if the service provider fails to comply with a request for information within 90 days.
The takeaway
This is a major change that any employer who provides group health insurance, wellness services and other related services needs to be on top of. Once the new regulations take effect, no broker or consulting contracts will be considered reasonable unless they include the required compensation disclosures.
Before these new rules take effect, you should work with your broker or consultant on putting in place procedures for obtaining this information. Employers will also need to establish procedures for documenting all of the information to show they are complying with the law.
