In keeping you abreast of the latest health and welfare benefits compliance activity, the following summarizes several recent compliance developments and forthcoming deadlines, specifically with respect to the following:
- Coverage of COVID-19 Over-the-Counter (OTC) Diagnostic Testing Kits
- Medicare Part D Reporting Reminder
- Release of updated CHIP Notice
- California COVID-19 Supplemental Paid Leave
- The Illinois’ Consumer Coverage Disclosure Act
- Important 2022 Compliance Deadlines
Departments Issue Guidance on Coverage of OTC Diagnostic COVID Tests
In response to President Biden’s directive on December 2, 2021 that Americans with private insurance receive at-home COVID-19 tests reimbursed by their insurance carrier, the Departments of Labor, Health and Human Services, and the Treasury have issued guidance in the form of Frequently Asked Questions (FAQs) that clarify how health plans and insurers must cover OTC COVID-19 diagnostic tests without an order or clinical assessment by a health care provider, and without cost-sharing, prior authorization, or other medical management requirements during the public health emergency. The FAQs also describe two safe harbors for meeting the direct coverage and monthly limitation requirements.
The first set of FAQs (available here) were issued on January 10, 2022 (see our Legislative Update), followed by an additional set of FAQs on February 4, 2022 (available here) that modified and clarified certain aspects of the first set of FAQs. These FAQs also addressed a couple of non-related preventive care issues, the coverage of colonoscopies pursuant to USPSTF recommendations, including the coverage of follow-up colonoscopies and the coverage of FDA-approved contraceptive products.
Medicare Part D Disclosures due by March 1, 2022 for Calendar Year Plans
Every year, group health plan sponsors are required to complete an online disclosure form with the Centers for Medicare & Medicaid Services (CMS) indicating whether the plan’s prescription drug coverage is creditable or non-creditable. Prescription drug coverage is considered creditable “if the actuarial value of the coverage equals or exceeds the actuarial value of standard prescription drug coverage under Medicare Part D, as demonstrated through the use of generally accepted actuarial principles and in accordance with CMS actuarial guidelines.”
This disclosure requirement applies when an employer-sponsored group health plan provides prescription drug coverage to individuals who are eligible for coverage under Medicare Part D. This disclosure is required regardless of whether the health plan’s coverage is primary or secondary to Medicare.
To determine whether the CMS reporting requirement applies, employers should verify whether their group health plans cover any Medicare-eligible individuals (including active employees, disabled employees, COBRA participants, retirees, and their covered spouses and dependents) at the start of each plan year. If an employer’s group health plan does not offer prescription drug benefits to any Medicare Part D eligible individual as of the beginning of the plan year, the group health plan is not required to submit the online disclosure form to CMS for that plan year.
The plan sponsor must complete the online disclosure within 60 days after the beginning of the plan year. Thus, for calendar year health plans, the deadline for the annual online disclosure is March 1, 2022.
Annual CHIP Notice Disclosure
An employer who sponsors a group health plan in a state that offers a premium assistance subsidy must provide their employees with the CHIP (Children’s Health Insurance Program Reauthorization Act) notice annually. Employers can create their own notice or use the model notice the Department of Labor (DOL) releases bi-annually. The most recent notice was just released with state information current as of January 31, 2022. If the notice is created, it should include the state contact information for employees who reside in a state offering the premium assistance. Most employers furnish the notice with their annual open enrollment materials, annual notice booklets, or when benefits are offered to newly eligible employees. English and Spanish versions of the most recently released model notice are available here.
California Extends COVID-19 Related Supplemental Leave
California recently passed a new supplemental paid sick leave law, SB 114, requiring employers with more than 25 employees to provide them with up to 40 hours of paid leave for specific COVID-19-related reasons, and 40 additional hours if an employee or their family member tests positive for COVID-19. The law takes effect February 19, 2022, but it is retroactive to January 1, 2022. California previously had a similar law in effect that expired on September 30, 2021. For more information see this comprehensive summary from Mineral/ThinkHR, available here.
Illinois’ Consumer Coverage Disclosure Act (CCEA)
The Consumer Coverage Disclosure Act (CCDA), which was signed into law on August 27, 2021, imposes new disclosure requirements on employers who provide group health insurance coverage to employees in Illinois. The CCDA applies to all Illinois employers, regardless of the type of insurance they provide, meaning that employers who provide self-insured plans and/or ERISA plans are subject to the new requirements.
Specifically, these employers must provide the following information to all employees upon hire, annually and upon request:
- A list of essential health insurance benefits regulated by the State of Illinois; and
- A comparison of which of those benefits are and are not covered by their employer-provided group health insurance plan.
The method of disclosure can be either in written form, email or posted on the intranet as long as the employee is able to regularly access it. Civil penalties may be assessed for noncompliance, taking into account the size of the employer, the good faith efforts made to comply and the gravity of the violation.
According to the Illinois Department of Labor, the CCDA does not impose coverage requirements on employers. It only requires certain disclosures to employees about the coverages the employer provides. The benefits that employers are required to cover may depend on plan type (e.g., self-funded or fully insured) and employer size.
Important 2022 Compliance Deadlines
To access our Compliance Timeline for 2022, reflecting significant deadlines for important federal and state requirements, including important notice requirements, please see here.
Please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or firstname.lastname@example.org.
Burnham Benefits does not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with the Patient Protection and Affordable Care Act and other applicable federal and state law requirements, and is based on Burnham Benefit’s interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.