New Year, New Requirements: What’s Affecting Employer-Sponsored Health and Welfare Plans?

FEBRUARY 9, 2021

To discuss current issues affecting employer-sponsored health and welfare plans in the U.S., the national employee benefits compliance team at USI Insurance Services recently hosted a webinar, New Year, New Requirements: Recent Health & Welfare Developments. The speakers answered questions on a number of pressing topics, including:

• Passage of the 2021 Consolidated Appropriations Act (CAA),
• Health care policy issues under the new Biden administration,
• Updates related to COVID-19, and
• Other recent developments that may impact health care plans and policy.

The speakers provided additional insight on these changes, as well as some best practices for employers in this complex regulatory environment. The webinar was recorded and is available on demand. Following are some of the webinar highlights.

2021 Consolidated Appropriations Act

Wendy Carmichael, SVP of Regional Employee Benefit Compliance for USI Southwest, talked through the various benefit provisions included in the CAA. New optional relief has been made available to employers that sponsor health flexible spending arrangements (health FSAs) and dependent care assistance programs (DCAPs), including:

• The availability of either an unrestricted carryover of unused funds or an up-to-12-month grace period for health FSAs or DCAPs with plan years ending in 2020 or 2021
• Mid-year election change relief for health FSAs and DCAPs

Employers that choose to adopt these changes should ensure they document plans appropriately and meet operational requirements. The webinar’s Q&A session highlighted some best practices and recommendations for employers considering these changes.

In addition, under the CAA, health plans will have additional compliance issues to address beginning late 2021 and into 2022:

• New federal prohibition on surprise medical bills for plan years that begin on or after January 1, 2022
• Additional transparency requirements including broker/consultant compensation disclosures, reporting of prescription drugs costs to the government, and consumer transparency obligations including enhancements to ID cards, advance explanations of benefits, price comparison tools and timely updates to provider directories
• For group health plans subject to the Mental Health Parity and Addiction Equity Act (MHPAEA), new requirements to perform and document a comparative analysis on nonquantitative treatment limitations in plan design

Health Care Policy in the Biden Administration

Michael Rosenman, USI New England’s Regional Employee Benefit Counsel, provided an overview of what health care policy under the Biden administration may look like. The administration’s recently released $1.9 trillion economic rescue package includes the following provisions relevant to employers:

• The possibility of a COBRA subsidy through September 30, 2021
• Lowering affordability thresholds
• Reinstating paid leave benefits under the Families First Coronavirus Relief Act, and expanding the program to 14 weeks of paid leave and including employers with more than 500 employees

In addition, highlights from the recent health-care-related executive orders signed by President Biden on January 28, 2021, include opening a special enrollment opportunity in the Marketplaces from February 15, 2021 through May 15, 2021, and directing relevant government agencies to review and reconsider rules that limit access to health care coverage.

COVID-19 Updates

Alicia Scalzo Wilmoth, USI’s National Practice Leader for Employee Benefit Compliance, spoke about some of the pressing issues around the COVID-19 pandemic. Employers should think about:

• Deadline extensions related to COBRA, special enrollment rights and ERISA claims requirement during the outbreak period as we approach nearly one year of relief
• Coverage for various COVID-19-related testing and vaccinations in the group health plan
• Workplace vaccination policies and the possibility of using incentives to encourage vaccination as COVID-19 vaccines become more readily available

Other Recent Developments That May Impact Health Care Plans and Policy

The Equal Employment Opportunity Commission’s (EEOC) proposed wellness program regulations appear to narrow the use of vaccine incentives in certain participatory programs. In wrapping up the webinar, the speakers discussed this, as well as the U.S. Supreme Court case addressing the constitutionality of the Affordable Care Act and possible outcomes.

With a new government administration and a global pandemic, employers must develop health and welfare plans in an increasingly complex environment. Employers looking for helpful next steps around these hot topics should watch the webinar using the link below.

Watch the webinar replay: New Year, New Requirements: Recent Health & Welfare Developments 

USI’s national employee benefits compliance team is comprised of nationally networked ERISA and employee benefits attorneys regionally based throughout the U.S. to support clients. The team frequently publishes compliance updates and hosts webinars on regulatory issues that impact employers. To learn more about USI’s national employee benefits compliance services, contact your local USI benefits advisor or visit www.usi.com. For COVID-19 resources and materials, visit our Public Health Emergencies site.