DOL Releases FMLA Guidance on Telemedicine and Serious Health Conditions

On December 29, 2020, the DOL’s Wage and Hour Division released Field Assistance Bulletin No. 2020-8, which provides guidance to agency field staff on when telemedicine may be considered treatment under the FMLA.

As background, FMLA provides eligible employees of covered employers with unpaid, job-protected leave for specified family and medical reasons. Eligible employees may take up to 12 workweeks of leave in a 12-month period for, among other things, a serious health condition that renders the employee unable to perform the essential functions of their job, or to care for the employee’s spouse, child or parent with a serious health condition.

A serious health condition is defined as an “illness, injury, impairment, or physical or mental condition that involves” either: 1) “inpatient care” such as an overnight stay in a hospital, hospice or residential medical care facility, including any period of incapacity or any subsequent treatment in connection with such inpatient care, or 2) “continuing treatment by a health care provider.” The regulations define treatment as an in-person visit to a healthcare provider. It does not include a letter, phone call, email or text message.

The division recognizes that during the COVID-19 pandemic telemedicine has been increasingly used by healthcare providers to deliver treatment to patients. In July 2020, the division issued FAQ #12 to its Frequently Asked Questions about the FMLA and Pandemic to address this issue. The FAQ provided that until December 31, 2020, telemedicine would meet the FMLA’s treatment standard if certain conditions were met. The current bulletin extends that provision until further notice that telemedicine will meet the FMLA’s treatment standard if the telemedicine visit satisfies all of the following:

*Involves an examination, evaluation or treatment by a healthcare provider
*Is permitted and accepted by state licensing authorities
*Is generally performed by video conference

Employers should be aware of this guidance.

Field Assistance Bulletin 2020-8 »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

DOL Releases FMLA Guidance on Electronic Distribution

On December 29, 2020, the DOL’s Wage and Hour Division released Field Assistance Bulletin No. 2020-7, which provides guidance to agency field staff on posting requirements under FMLA, the Fair Labor Standards Act, the Employee Polygraph Protection Act and the Service Contract Act. The bulletin was issued in response to the many questions the division had received about electronic posting requirements, considering that many workers are performing duties remotely during the COVID-19 pandemic.

As background, many notices relevant to these laws must be posted physically at a worksite. If an employer wanted to distribute the notice exclusively by electronic means, all of the following conditions must be met:

*All of the employer’s employees exclusively work remotely.
*All employees customarily receive information from the employer via electronic means.
*All employees have readily available access to the electronic posting at all times.

Some notices may be distributed electronically to each employee if the following conditions are all met:

*The employees have electronic access as part of their essential duties.
*The employees customarily receive information from the employer electronically.
*The employer has taken steps to inform employees of where and how to access the notice electronically.

Under FMLA, the general notice must be posted in a conspicuous place on the worksite where it is visible to both employees and applicants. If all hiring and work is being done remotely due to COVID-19, then the posting requirement would be met by the employer posting the notice on a website. However, remember that the notice must be accessible by applicants as well. Thus, if an employer posts on the intranet and the intranet is not accessible to applicants, the employer should consider posting on an external website or placing an additional posting on the applicant portal.

Employers should be aware of this guidance. For guidance related to the other laws, please see the bulletin.

Field Assistance Bulletin 2020-7 »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

Agencies Finalize Rules to Enhance Flexibility for Grandfathered Group Health Plans

On December 11, 2020, the DOL, HHS and IRS issued final rules that amend certain requirements for grandfathered group health plans to maintain their grandfather status. The rules provide such plans with greater flexibility to make changes in response to increases in health coverage costs.

As background, the ACA allows certain group health plans that existed as of the law’s enactment on March 23, 2010, to be treated as grandfathered health plans. This treatment exempts the plans from some ACA mandates. To preserve grandfather status, these plans are restricted in their ability to make plan design changes or increase cost sharing. The 2015 grandfathered plan rules outline these limitations.

The final rules follow July 15, 2020, proposed rules, which have been adopted without substantial change. The 2015 existing regulations are modified in two respects.

First, the rules provide an alternative method of measuring permitted increases in fixed amount cost sharing. Under the existing regulations, increases for fixed amount cost sharing other than copayments (e.g., deductibles and out-of-pocket maximums) cannot exceed thresholds based upon the Consumer Price Index measure of medical inflation. Specifically, the 2015 rules define the maximum increase as medical inflation (from March 23, 2010) plus 15 percentage points. However, this component of the CPI index includes price changes for Medicare and self-pay patients, which are not reflected in grandfathered group health plan costs.

The alternative standard relies upon the premium adjustment percentage, rather than medical inflation. The premium adjustment percentage is published by HHS in the annual notice of benefit and payment parameters and reflects the cumulative historic growth in private health insurance premiums from 2013 through the preceding calendar year. As a result, this measure may better reflect increases in underlying costs for grandfathered group health plans.

This new measurement method does not replace the current standard. Rather, an employer can use the method that yields the greater result. Therefore, grandfathered plans are allowed to increase these out-of-pocket costs at a rate that is the greater of the medical inflation adjustment percentage or premium adjustment percentage, plus 15 percentage points.

Second, the final rules permit a grandfathered group HDHP to increase fixed-amount cost-sharing requirements, such as deductibles, to the extent necessary to maintain HDHP status without losing grandfather status. This change was designed to ensure that participants enrolled in such coverage remain eligible to contribute to an HSA.

Employers who sponsor grandfathered plans should be aware of these final rules, which will be applicable beginning on June 15, 2021.

Grandfathered Group Health Plans »
Grandfathered Group Health Insurance Coverage »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

IRS Issues Guidance Confirming that Premium Tax Credit Unaffected by Repeal of Individual Mandate

On December 1, 2020, the IRS released final regulations clarifying that when Congress zeroed out the personal exemption deduction (provided for meeting the individual mandate) for taxable years beginning after December 31, 2017, and before January 1, 2026, it did not prevent individuals from claiming the premium tax credit when enrolling in a health plan on the Marketplace.

The premium tax credit is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance bought through the Health Insurance Marketplace. Among other requirements, a person can obtain the credit by establishing a household income for the taxable year that is at least 100% but not more than 400% of the federal poverty line for the taxpayer’s family size for the taxable year. The individual’s family size is determined by the number of personal deductions that the person makes on their individual tax returns.

Although the Tax Cuts and Jobs Act of 2017 (TCJA) ended the personal exemption for the years 2018 – 2025 by effectively making it zero, the TCJA also made clear that this should not be considered when determining whether an individual qualified for the deduction in other parts of the IRS Code. The new regulations make clear that an individual’s family, for purposes of obtaining the credit, include the person’s spouse and any other individual from whom the applicant can claim a personal exemption deduction, regardless of whether the applicant could claim that deduction under the TCJA. Similarly, a person who would be the subject of another person’s claim for a personal exemption cannot obtain the premium tax credit.

The new regulations also govern how to distribute advance payments of the premium tax credit in light of this clarification, as well as income tax return filing requirements related to the premium tax credit.

Employers should be aware of this development and how it may affect employees’ ability to obtain and use the premium tax credit.

IRS Guidance and Final Regulations »

Source: NFP BenefitsPartners

Filed under: Abentras Blog

IRS Releases Draft Instructions for 2020 Form 8955-SSA

On October 30, 2020, the IRS published a draft version of the instructions for 2020 Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits. As background, Form 8955-SSA is used to report information about participants who separated from service during the plan year and are entitled to deferred vested benefits under the retirement plan.
The draft instructions clarify that no attachments are permitted to be filed with the form. There is also clarification regarding which Entry Codes should be used in Part III, line 9, column (a) for the following participant scenarios:

  • **Entry Code A: Separated from service covered by the plan, but vested retirement benefits are not paid and were not previously reported
    **Entry Code B: Were previously reported under the plan but whose information is being corrected
    **Entry Code C: Were previously reported as deferred vested participants on another plan’s filing if their benefits were transferred (other than in a rollover) to the plan of a new employer during the covered period
    **Entry Code D: Were previously reported under the plan but have been paid out or no longer entitled to those deferred vested benefits
  • This draft of the instructions is only for informational purposes and may not be used for 2020 Form 8955-SSA filings, but employers should familiarize themselves with the instructions in preparation for 2020 plan year filings. While many employers outsource the preparation and filing of this form, employers should also familiarize themselves with the form’s requirements and work closely with outside vendors to collect the applicable information.

    Draft Instructions for 2020 Form 8955-SSA »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    Unsecured Websites and Envelopes Lead to $1,000,000 Settlement for HIPAA-Covered Entity

    Aetna Life Insurance Company and an affiliated covered entity (Aetna) agreed to pay $1,000,000 to the OCR and to implement a corrective action plan in order to resolve an investigation into potential violations of HIPAA. The investigation arose from the disclosure of personal health information in correspondence and web-based services.

    On April 27, 2017, Aetna discovered that two of its web services that displayed plan-related documents to health plan members could be accessed without entering login credentials and was indexed by various internet search engines. The breach disclosed the names, insurance identification numbers, claim payment amounts, procedures service codes and dates of service for 5,002 individuals. In June 2017, Aetna submitted a breach report to OCR.

    On July 28, 2017, Aetna mailed benefit notices to members in windowed envelopes that revealed the words “HIV medication” to anyone who looked through the window. This breach affected 11,887 people. Aetna submitted a breach report to OCR regarding this matter in August 2017.

    On September 25, 2017, a research study sent correspondence to Aetna members participating in an atrial fibrillation study with the name and logo of the study on the envelope, thus revealing the fact that the recipients may have an irregular heartbeat. This breach affected 1,600 people and Aetna submitted a breach report regarding this matter in November 2017.

    While investigating these disclosures, OCR alleged that Aetna “failed to perform periodic technical and nontechnical evaluations of operational changes affecting the security of their electronic PHI (ePHI); implement procedures to verify the identity of persons or entities seeking access to ePHI; limit PHI disclosures to the minimum necessary to accomplish the purpose of the use or disclosure; and have in place appropriate administrative, technical, and physical safeguards to protect the privacy of PHI.”

    The breach resulted in a settlement in which Aetna agrees to pay the OCR $1,000,000 and implement policies and procedures that comply with federal guidelines for maintaining the confidentiality of personal health information within 90 days, and submit annual reports of its compliance.

    Although these HIPAA violations were perpetrated by a health insurance carrier, employer plan sponsors should review their HIPAA policies and procedures for compliance. Correspondence and web services that deal with personal health information should be carefully reviewed in order to ensure that they comply with federal confidentiality guidelines. Additionally, health plans with access to ePHI should ensure the security of that data.

    Settlement Agreement »
    Press Release »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    HHS Publishes Rule on Transparency in Coverage

    On October 29, 2020, the Departments of HHS, Treasury and Labor (the “Departments”) released the Transparency in Coverage final rule. First proposed in November 2019 (as directed by Executive Order 13877), the final rule imposes new cost-sharing and pricing disclosure requirements upon group health plans and health insurers.

    As background, the Trump administration has focused on promoting price transparency to provide individuals with necessary cost-sharing data to make informed healthcare decisions. Under rules set to take effect in 2021, hospitals will soon be required to disclose standard charges for products and services, including negotiated rates with insurers. The Transparency in Coverage final rule builds upon these regulatory initiatives and is applicable to non-grandfathered group health plans (including self-insured plans) and health insurance issuers. However, account-based plans such as HRAs and FSAs, and excepted benefits (e.g., dental and vision benefits offered under a separate policy), are not subject to these new requirements.

    The final rule requires group health plans and health insurance issuers in the individual and group markets to provide increased access to pricing information through two approaches:

      1. Disclosing cost-sharing information for all covered healthcare items and services (including prescription drugs) through an internet-based self-service tool and in paper form upon request
      2. Making detailed pricing information publicly available (which includes negotiated rates for all covered items and services between the plan or issuer and in-network providers; historical payments to, and billed charges from, out-of-network providers; and in-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level)

    Under the first approach, when requested by a participant, beneficiary or enrollee, disclosures must be provided that include estimates of their cost-sharing liability with different providers (allowing them to better understand and compare healthcare costs prior to receiving care). The content will include estimated cost sharing, actual negotiated rates, out-of-network allowed amounts, real-time accumulated amounts towards deductibles and out-of-pocket maximums, and treatment limitations. Any prerequisites for coverage, such as prior authorization, would also need to be referenced. Where bundled payments are applied, disclosures must be provided if cost sharing is imposed separately for each item and service. Further, the rules do not require disclosure of balance billing amounts for out-of-network providers, but provide for a disclaimer to alert participants of a potential balance bill. This part of the rule will be phased in, with disclosures required for plan years beginning on or after January 1, 2023, for an initial list of 500 items and services, and all items and services to be disclosed for plan years that begin on or after January 1, 2024.

    As for the second approach, group health plans and insurers are required to publicly disclose negotiated rates for in-network providers and historical out-of-network allowed amounts in standardized files on their website. These machine-readable files must be updated monthly (clearly indicating the date that the files were most recently updated), and are intended to encourage price comparison and innovation. This part of the rule is effective for plan years beginning on or after January 1, 2022.

    The final rule also provides that beginning with the 2020 MLR reporting year, insurers can claim credit towards their MLR for “shared savings” if a participant selects a lower-cost, higher-value provider.

    Employers should be aware of the final rule, its new requirements and its phased-in effective dates. Although a good faith safe harbor allows for certain mistakes (as long as the issue is corrected as soon as practicable), plans and insurers face increased compliance obligations to implement these new requirements. For fully insured plans, the insurer is responsible for these new requirements. For self-insured plans, the ultimate responsibility to comply with this rule rests on the plan sponsor; however, they can utilize TPAs to assist. That said, employers should discuss these new disclosure obligations with their insurance carriers and/or TPAs to confirm compliance as applicable.

    Transparency in Coverage Final Rule »
    HHS Fact Sheet »
    HHS News Release »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    Agencies Issue Joint Guidance on COVID-19 Vaccine Coverage

    On October 28, 2020, the IRS, DOL and HHS released interim final regulations regarding various COVID-19 testing and treatment updates. The guidance includes vaccine coverage requirements applicable to group health plans. Price transparency for COVID-19 diagnostic tests is also addressed.

    As background, the CARES Act requires that non-grandfathered group health plans provide coverage without cost sharing for qualifying COVID-19 preventive services. Such services include immunizations that are specifically recommended by the CDC.

    To ensure rapid access to a COVID-19 vaccine, once available, the guidance incorporates the CARES Act implementation requirements. Specifically, group health plans must provide coverage for COVID-19 immunizations within 15 business days of the CDC’s recommendation for individual usage. (It is not necessary that the vaccine be recommended for routine usage, as is typically required for coverage of preventive services).

    The coverage must be provided without cost sharing regardless of whether the immunization is received in-network or out-of-network. Integral items and services (such as a medical professional’s administration of the vaccine) must also be covered without cost sharing. However, cost sharing is permitted for unrelated items and services rendered during the same provider visit, if billed separately.

    The CARES Act also required that providers publicize cash prices for COVID-19 diagnostic tests during the public health emergency. This new guidance defines the “cash price” as the charge that applies to an individual who pays cash (or cash equivalent) for a COVID-19 diagnostic test. Each provider must make this cash price available on its website; if the provider does not have a website, the cash price must be made available in writing within two business days upon request and through signage (if applicable). These requirements are intended to assist individuals seeking testing and provide plans with information to better negotiate provider rates.

    In the event of noncompliance with this price transparency mandate, the guidance outlines potential CMS enforcement actions. These measures include written warnings, corrective action plans and the imposition of civil monetary penalties.

    Group health plan sponsors should be aware of these regulations and prepare to provide coverage for COVID-19 vaccines without cost sharing within 15 days of a CDC recommendation. Grandfathered group health plans and excepted benefits are not technically covered by the rule, but are encouraged to provide similar coverage without cost sharing.

    The guidance is effective immediately and extends through the duration of the public health emergency. Comments are requested regarding certain aspects of the rule and can be submitted through January 4, 2021.

    Interim Final Rule »
    Fact Sheet »
    News Release »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    IRS Releases 2020 ACA Reporting Forms and Instructions

    The IRS recently published the final versions of the 2020 reporting Forms 1094-B and 1095-B, 2020 reporting Forms 1094-C and 1095-C, and instructions for those forms. Forms 1094-B and 1095-B are used by insurers and small self-insured employers to report that they offered MEC. Forms 1094-C and 1095-Cs are used by ALEs to report that they offered minimum value, affordable coverage to their full-time employees. These forms are filed with the IRS, and copies of Forms 1095-B and 1095-C are also distributed to individuals.

    This year’s forms feature a few new changes. The Plan Start Month section of Form 1095-C must now be completed. In addition, the penalty for the failure to file a correct information return increased to $280 per return (up from $270 for each incorrect return), and the penalty cap is raised to a total of $3.392 million for a calendar year, up from a cap of $3.339 million in 2019. Finally, the updated draft 1095-C form shows that the affordability safe harbor percentage threshold is 9.78% in 2020, down from the 9.86% threshold in 2019.

    The 2020 forms and instructions also require employers to include information concerning Individual Coverage Health Reimbursement Arrangements (ICHRAs), if applicable. The instructions for Form 1094-C state that offers of ICHRA coverage count as offers of minimum essential coverage and both Forms 1095-B and 1095-C have new codes for information concerning ICHRAs offered to employees. Line 8 of Form 1095-B has a new Code G, which identifies ICHRAs as the type of employer-sponsored coverage. Form 1095-C’s Line 14 now has codes to identify the full-time or part-time status of the employee offered an ICHRA, whether the ICHRA was offered to a full-time employee’s spouse or dependents, whether the ICHRA is affordable, and whether the affordability was based upon where the full-time employee lives or works (the ZIP code of the full-time employee’s residence or place of work can be entered on Line 17, if the employee was offered an ICHRA). The employee’s contribution is recorded on Line 15.

    As a reminder, the date by which employers must distribute Forms 1095-B or 1095-C to individuals has been extended. 2020 forms must now be distributed to individuals by March 2, 2021 (instead of January 31, 2021). Even though this extension is provided, employers are encouraged to furnish the 2020 statements as soon as they are able. Further, as in prior years, this notice does not extend the date by which employers must file Forms 1094-B/C and 1095-B/C with the IRS. That said, reporting entities must still file Forms 1094-B/C and 1095-B/C with the IRS by March 1, 2021 (as February 28, 2021, falls on a Sunday) if filing by paper, and March 31, 2021, if filing electronically. As noted above, the penalty for failure to comply is $280 per failure. This means that an employer who fails to file a completed form with the IRS and distribute a form to an employee/individual would be at risk for a $560 penalty.

    Form 1094-B »
    Form 1095-B »
    Form 1094-C »
    Form 1095-C »
    Instructions for Forms 1094-B and 1095-B »
    Instructions for Forms 1094-C and 1095-C »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog

    Tenth Circuit: Employer’s Discretionary Authority Must be Communicated to Plan Participants

    On July 24, 2020, in Lyn M v. Premera Blue Cross, et al., the US Court of Appeals for the Tenth Circuit (the “Tenth Circuit”) ruled that an ERISA group health plan administrator was not entitled to a discretionary standard of review because this standard was not adequately disclosed to plan participants. The Tenth Circuit further held that the plan administrator had failed to refer to the applicable medical policy when evaluating the appealed medical claim at issue.

    As background, an ERISA plan’s benefit determinations are entitled to a favorable standard of review, known as the arbitrary and capricious standard, if there is language in the plan document granting the plan administrator discretion to interpret the plan and make benefit determinations. This standard involves a more limited judicial review of participant challenges to plan benefit determinations and often results in the disposal of cases at an early stage in the legal process. Absent such language in the plan document, de novo review applies, and the trial court would typically conduct a more independent and thorough review of a participant’s claim.

    In Premera, parents sought medical benefits under the Microsoft Corporation Welfare Plan for their minor child’s psychiatric treatment. The claims administrator, Premera, denied the claim and subsequent appeal as not medically necessary based upon the definition of “medical necessity” in the SPD, rather than the more comprehensive definition in the medical policy.

    The district court reviewed Premera’s denial of the appealed claim under the arbitrary and capricious standard because the plan language gave the claims administrator discretionary authority to interpret and administer the plan. Under this standard, the court deferred to the administrator’s determination that the disputed services were not medically necessary, and ruled in favor of Premera and the plan fiduciary, Microsoft Corporation.

    On appeal, the Tenth Circuit reversed the district court decision and held that the discretionary standard of review was not applicable because participants had not been notified of this more limited scope of judicial review of their claims. In other words, the plan administrator had not specifically disclosed its discretionary authority in the SPD or other distributed materials or the existence of a document with information about such discretionary authority. Additionally, the Tenth Circuit found that Premera erred in failing to consider the definition of medical necessity in the medical policy.

    Accordingly, the case was returned to the district court for review of the claim under the de novo standard of review, thus allowing for a broader judicial analysis of the evidence without deference to the plan administrator’s benefit determinations.

    ERISA plan sponsors, particularly those within the Tenth Circuit’s jurisdiction, should be aware of this development. The Tenth Circuit includes districts in Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming. Sponsors seeking to benefit from the application of the discretionary standard of review in the event of litigation should consider referencing this standard in the SPD in addition to the plan document. Furthermore, employers should recognize their obligation as plan fiduciaries to oversee claims administrators and ensure their claim review processes and communications adhere to ERISA requirements and the specific plan terms. Plan document providers and/or counsel should be consulted for further assistance.

    Lyn M v. Premera Blue Cross, et al. »

    Source: NFP BenefitsPartners

    Filed under: Abentras Blog