Final Rule on Health Care Transparency Issued
Final Rule Provides Greater Flexibility for Grandfathered Plans
Employee Benefits Plan Limits for 2021
COVID-19 Vaccine Distribution Begins Following Emergency Use Authorization by FDA
Final Rule on Health Care Transparency Issued
The Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a final rule that imposes new transparency requirements on group health plans and health insurers in the individual and group markets.
Specifically, the final rule requires plans and issuers to disclose:
- Price and cost-sharing information to participants, beneficiaries and enrollees upon request:
- A list of 500 shoppable services must be available via the internet for plan years beginning or after Jan. 1, 2023.
- The remainder of all items and services is required to be available for plan years beginning on or after Jan. 1, 2024.
- In-network provider-negotiated rates and historical out-of-network allowed amounts on their website:
- Detailed pricing information must be made public for plan years beginning on or after Jan. 1, 2022.
The final rule also allows issuers that share savings with consumers—resulting from consumers shopping for lower-cost, higher-value services—to take credit for those “shared savings” payments in their medical loss ratio calculations.
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Final Rule Provides Greater Flexibility for Grandfathered Plans
On Dec. 11, 2020, the Departments of Labor (DOL), Health and Human Services (HHS) and Treasury (Departments) announced a final rule that provides greater flexibility for grandfathered plans under the Affordable Care Act (ACA).
A grandfathered plan is a group health plan or health insurance coverage that was in existence on March 23, 2010 (the date the ACA was passed), that has not made certain prohibited changes to lose its grandfather status. Grandfathered plans are exempt from certain ACA requirements.
Overview of the Final Rule
The final rule provides the following additional flexibility for grandfathered plans under the ACA:
- First, the rule clarifies that grandfathered high deductible health plan (HDHP) coverage may increase fixed-amount cost-sharing requirements, such as deductibles, to the extent necessary to maintain its status as an HDHP without losing grandfather status.
- This provision is intended to ensure that participants and beneficiaries enrolled in that coverage remain eligible to contribute to a health savings account (HSA).
Second, the final rule provides an alternative method of measuring permitted increases in fixed-amount cost-sharing that is intended to allow plans and issuers to better account for changes in the costs of health coverage over time.
This additional flexibility may allow additional plans to maintain their grandfather status, despite certain changes being made to the plan. The Departments intend for these changes to benefit plan participants and beneficiaries, employers, employee organizations and other stakeholders.
Employee Benefits Plan Limits for 2021
Many employee benefits are subject to annual dollar limits that are periodically updated for inflation by the IRS.
The IRS typically announces the dollar limits that will apply for the next calendar year well in advance of the beginning of that year. This gives employers time to update their plan designs and make sure their plan administration will be consistent with the new limits. Although some of the limits will increase for 2021, most of the limits remain the same.
Increased Limits
For plan years beginning on or after Jan. 1, 2021, the following limits have increased:
- Health savings account contributions:
- Single coverage—$3,600 (up $50)
- Family coverage—$7,200 (up $100)
- High deductible health plan (HDHP) out-of-pocket maximum limit:
- Single coverage—$7,000 (up $100)
- Family coverage—$14,000 (up $200)
- Tax exclusion for adoption assistance benefits—$14,440 (up $140)
Unchanged Limits
Certain limits will not change for 2021, including the flexible spending account salary reduction contribution limit, HDHP minimum deductible, 401(k) contribution limit and transportation fringe benefits monthly limits.
COVID-19 Vaccine Distribution Begins Following Emergency Use Authorization by FDA
The U.S. Food and Drug Administration (FDA) has issued an Emergency Use Authorization (EUA) for drugmaker Pfizer Inc.’s COVID-19 vaccine, developed in partnership with German drugmaker BioNTech.
This EUA allows distribution of the vaccine to begin immediately in the United States, and some high-risk health care workers will begin receiving their first shot of the two-dose vaccine this week.
The authorization follows an endorsement from the FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC), composed of independent doctors, scientists and experts.
COVID-19 Vaccine Distribution
Prior to the FDA authorization for Pfizer’s COVID-19 vaccine, federal officials had planned for 6.4 million doses to be distributed initially, with future shipments following shortly after. As high-risk groups, including health care workers and long-term care residents, begin to receive the COVID-19 vaccine before the end of 2020, it will likely still be months before vaccine distribution reaches the general public.
