Maximum Out-of-Pocket Amounts Released for 2022, ACA Penalties Proposed
On May 5, 2021, the Department of Health and Human Services (HHS) published a second Notice of Benefit and Payment Parameters (NBPP) for 2022 that finalized the remainder of the standards included in the proposed notice issued at the end of 2020. The first final 2022 NBPP was published Jan. 19, 2021.
This second NBPP describes additional benefit and payment parameters under the Affordable Care Act (ACA) that apply for the 2022 benefit year, including the following:
|Self-Only Max OOP||Other than Self-Only Max OOP||ESRP "A" Penalty||ESRP "B" Penalty|
|2022||$8,700||$17,400||$2,750 (est.)||$4,120 (est.)|
Additionally, it added a special enrollment period (SEP) for Exchange coverage to allow Exchange enrollees who lose premium tax credit eligibility to change to a new plan, allows individuals who were unaware that an SEP triggering event occurred to select a new qualified health plan within 60 days, and creates a SEP for those losing COBRA subsidies under ARPA.
Employers will want to make sure that their plan designs meet the new out-of-pocket requirements for 2022. Any employer still offering MEC-only plans (or unaffordable minimum value plans) to certain sectors of their employee population should also take note that the ACA’s “B” penalty, originally set at $3,000 per employee per year, is now well above $4,000 per year.
Mental Health Parity Updates Under the Consolidated Appropriations Act
The Consolidated Appropriations Act, 2021 (CAA) amended the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) to provide additional protections. In April the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) jointly issued FAQs to clarify these amendments.
In particular, the CAA requires group health plans and health insurance issuers to conduct comparative analyses of the non-quantitative treatment limitations (NQTLs) used for medical and surgical benefits as compared to mental health and substance use disorder (MH/SUD) benefits. The comparative analyses, and certain other information, must be made available upon request to applicable agencies. This requirement is retroactive, having taken effect Feb. 10, 2021.
The new law also requires regulators to review MHPAEA compliance from a sample of group health plans every year and requires health plans to take corrective action when noncompliance is found. The DOL and HHS must issue an annual report to Congress detailing the results of these reviews. Federal regulators are charged with issuing new guidance with respect to these requirements by June 27, 2022.
If, upon review of an employer’s/plan’s analysis, the Departments find that a plan is out of compliance with MHPAEA, corrective actions will be specified for the plan to come into compliance, which the plan will have 45 days to implement. If the plan is still not in compliance after those 45 days, the plan must notify all individuals enrolled in the noncompliant plan within seven days.
The DOL had already increased MHPAEA enforcement prior to now being subject to random employer sampling. Most fully-insured plans will receive compliance assistance from their carrier on providing the required documentation. Self-funded plans will need to work with their respective TPAs or a third party actuary/consultant to determine compliance. Employers may also use the updated DOL Self-Compliance Tool.
DOL Withdraws Independent Contractor Rule
On May 5, 2021, the DOL announced it will officially withdraw the Independent Contractor final rule. The withdrawal will be effective on the day the DOL’s official withdrawal is published in the Federal Register. The rule was originally published in January, but its effective date was delayed as the result of a freeze the Biden administration ordered on regulatory changes adopted late into the previous administration.
The independent contractor final rule would have required employers to use an economic reality test to gauge financial dependency in an employment relationship to determine whether workers should be classified as employees or independent contractors. After reviewing the rule, the DOL determined that the rule was inconsistent with the text and purpose of the Fair Labor Standards Act and that implementing the rule would have “a confusing and disruptive effect on workers and businesses alike."
The DOL is withdrawing this rule before its May 7, 2021 effective date. As a result, employers are not required to change any practices or policies to comply with any new requirements. Instead, employers should review their employee classification procedures to ensure they comply with existing DOL guidance.
Update on BCBS Settlement
We have received many questions regarding whether employers that are eligible for part of the BCBS settlement should choose the default settlement or alternative option. Choosing to utilize the Default vs. Alternative Option will be based upon your company’s contribution schedule and records.
When using the Default Option:
- 100 percent of premiums for employees who do not file claims are allocated to the claiming employer.
- If an employee does file a claim, then the allocation for that employee will be:
- For fully-insured plans:
- Single coverage – 85 percent employer/15 percent employee
- Family coverage – 66 percent employer/34 percent employee
- For self-funded/ASO plans :
- Single coverage – 82 percent employer/18 percent employee
- Family coverage – 75 percent employer/25 percent employee
- For fully-insured plans:
Based upon this information, if your company paid/contributed at, near or less than the percentage allocated to the employee above, you may be better off utilizing the Default Option, as no additional evidence or data in support of your claim should be necessary.
However, if your company paid/contributed significantly more than the schedules above, you may wish to utilize the Alternative Option. If you select this option, you must also provide data or evidence to support the percentages you list. For any time period for which supporting data or evidence is not provided, the above Default Option will be applied. Selection of the Alternative Option does not ensure a contribution percentage higher than or equal to the Default Option. Your percentage will be dependent on a review process that includes a review of all materials submitted pertaining to your premium.
Should you choose the Alternative Option, we will assist you with obtaining the required documentation. Additionally, most employer questions can be answered by reviewing the FAQs on the settlement website.
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