Managing Plan Communication During a Time of Legislative Uncertainty
By: Corrie Cripps

For many employer-sponsored group health plans, this is open enrollment season.  This normally busy time of year, coupled with the general public’s uncertainty about potential health care policy changes, has produced a more stressful environment than usual.  

What’s happening at the federal level

While the congressional efforts to repeal and replace the Affordable Care Act (ACA) in 2017 have failed, the Trump administration is now taking executive and regulatory action to modify various aspects of the ACA. In addition, other guidance that may affect group health plans in 2018 is still pending. The following is a summary of the recent regulatory actions that will affect self-insured plans in 2018.

Accommodation/exemption from the ACA’s contraceptive mandate
On October 6, 2017, the Department of Labor (DOL) issued interim final rules (effective immediately) on religious and moral exemptions and accommodations to the ACA’s contraceptive mandate.^1,2

These interim final rules allow a much broader group of employers and insurers to exempt themselves from covering contraceptives such as birth control pills on religious or moral grounds. While the interim final regulations do maintain the existing accommodations process, the process is now optional. In other words, employers could choose not to request an accommodation, or choose to revoke their current accommodation and instead claim exemption status. The key difference in an accommodation versus an exemption essentially impacts the third party administrator (TPA). Under the exemption, the TPA would no longer be responsible for providing the contraceptive coverage. The rules outline the process if an employer now chooses to revoke its current accommodation (which includes notifying the TPA and plan participants).

DOJ memo on gender identity/orientation
In a memorandum issued on October 4, 2017, to agency heads and US attorneys, Attorney General Jeff Sessions issued guidance to agency heads and US attorneys concluding that transgender individuals are not automatically protected from discrimination under Title VII of the Civil Rights Act of 1964.³
 
It is important to note that the Department of Justice’s (DOJ) recent guidance conflicts with the Equal Employment Opportunity Commission’s (EEOC), an independent commission, stance that transgender employees are protected under Title VII.
 
The December 31, 2016, U.S. District Court injunction (applicable nationwide) on certain parts of the ACA Section 1557—the prohibitions against discrimination on the basis of gender identity and termination of pregnancy—is still in effect.⁴  The DOJ’s recent guidance does not specifically address ACA Section 1557. The U.S. Department of Health and Human Services (HHS) is expected to issue a new proposed rule on ACA Section 1557, which will likely include a religious exemption.
 
Disability claims and appeals rules may be delayed until April 1, 2018
Last December the Employee Benefits Security Administration at the DOL issued a final rule on disability benefit plans claims procedures changes, which are slated to become effective on January 1, 2018.⁵  There is now a proposed rule to move the compliance date to April 1, 2018 for these regulations.⁶ 

These regulations are applicable to all Employee Retirement Income Security Act (ERISA) plans that offer disability benefits. The regulations generally align procedures for disability claims with those for group health plans under the ACA.

HIPAA administrative simplification rules
On October 4, 2017, HHS withdrew the January 2, 2014 proposed rule that would have required a controlling health plan (CHP) to submit information certifying compliance with certain Health Insurance Portability and Accountability Act (HIPAA) electronic transaction operating rules and standards.⁷

The withdrawal of this proposed rule does not remove the requirements for covered entities to comply with any of those regulations codified at 45 CFR parts 160 and 162. The other HIPAA Administration Simplification requirement to obtain and use Health Plan Identifiers (HPIDs) has been delayed since October 2014, with no new guidance issued.⁸

ACA emergency room regulations
The American College of Emergency Physicians (ACEP) filed suit in May 2016 against the Departments of Health and Human Services, Labor and the Treasury (the Departments) regarding the ACA regulation for emergency services, applicable to non-grandfathered plans. Specifically, ACEP is concerned with the part of the rule that sets forth how much insurers/plans are required to pay out-of-network physicians for emergency health care services.

On August 31, 2017, a federal court ruled that the Departments acted arbitrarily and capriciously in adopting final regulations under the patient protections provisions for emergency services.⁹  The court stated that the Departments did not "seriously respond" to the transparency and manipulation concerns raised in comments by providers and advocacy groups to the interim final rules. The court’s ruling does not invalidate the final regulations; instead the ruling sends the regulations back to the Departments and requires them to respond to ACEP’s concerns and proposals in a substantive manner.

EEOC wellness regulation review
On August 22, 2017, the U.S. District Court for the District of Columbia concluded that the U.S. Equal Employment Opportunity Commission’s (EEOC) interpretation of a “voluntary” wellness program in its regulations is arbitrary and capricious, and has sent the regulations back to the EEOC for reconsideration.¹⁰ 

In AARP v. EEOC, the AARP filed a lawsuit against the EEOC regarding its wellness program rules, which state that employers can cap incentives to participate in the wellness programs at 30% of an employee’s health insurance costs. The AARP argued that these incentives are so high that they are not truly “voluntary”, which means that older plan participants would have to incur financial penalties if they chose not to participate or divulge sensitive medical information in cases where the incentive requirement is that a health risk assessment be completed.

The court ruled in AARP's favor, determining that the EEOC did not justify its conclusion that the 30% incentive level is a reasonable interpretation of voluntariness. However, instead of vacating the regulations the court remanded them to the EEOC for reconsideration.

The EEOC has stated in its status report to the Court that it will need until August 2018 to reconsider its regulations on employer wellness programs and expects to issue a new final rule by October 2019.¹¹  AARP is expected to respond to the EEOC’s status report and argue that revised regulations should be issued sooner.

Executive order on health care
On October 12, 2017, the President issued an executive order on health care, which directs the Departments of Health and Human Services (HHS), Labor, and Treasury (the Departments) to develop regulations and guidance that could permit new health insurance options for employers and consumers.¹²

The executive order seeks to allow the Departments to look for ways to make it easier for small businesses to join Association Health Plans, expand on the availability and use of Health Reimbursement Arrangements (HRAs), as well as allow the sale of insurance across state lines.

The executive order does not specify a date in which a proposed rule from the Departments will be released.

IRS will reject individual tax returns that are silent on health coverage question
The Internal Revenue Service (IRS) announced it will not accept electronically filed tax returns, and may suspend paper returns, where the individual does not answer the health coverage question.¹³   Employers will need to ensure they are furnishing the Form 1095-B or the Form 1095-C, whichever is applicable, to certain employees by January 31, 2018.

What are the public’s concerns
Two recent studies show that Americans rank health care policy changes as one of their biggest concerns.^14,15 

The Transamerica Center for Health Studies study found that more than two-thirds (67 percent) of Americans reported having at least one chronic health condition, and 42 percent say losing health care because of a pre-existing condition is among their biggest fears.

The uncertain political environment around health care and the rising costs of health care undoubtedly cause stress, which ultimately affects the individual’s health status. In addition, many individuals are not taking advantage of the incentive programs and/or wellness programs offered by their employers, even though more employers are offering such programs.^16,17  

How to communicate plan changes and spread awareness of incentives
In order to neutralize the impact of uncertainty on plan participants, plans will need to engage more authentically with plan participants. For example, if a plan is removing coverage of a benefit, the plan administrator, or representative, should articulate the reason for the change, and be responsive to the plan participants’ feedback. And if new benefits or programs are being added to the plan, those should be communicated as well. As the results from the Transamerica Center study indicate, while employers might believe that their wellness and incentive programs are clear as day to their employees, many employees aren’t even aware that these programs exist in their employer-sponsored health plans.

In addition, there are notice requirements under ERISA and the ACA that plans need to follow when making plan changes. A recent lawsuit from the DOL reiterates the importance of complying with the ERISA documentation requirements. The DOL filed suit against Macy’s and two of its TPAs alleging violations of ERISA’s fiduciary duties.¹⁸   The DOL states that at some point the plan changed the formula to calculate reimbursement of out-of-network claims, but Macy’s did not update its plan documents to notify plan participants of this change. The lawsuit states that this caused plan participants to overpay on certain claims.

This lawsuit shows the continued importance of keeping ERISA plan documentation up-to-date and ensuring that plan administration is consistent with the written terms of the plan.

Conclusion

For plans and TPAs, being well-informed on regulatory developments is always of the upmost importance, but is particularly important for this renewal and open enrollment season due to rapid changes in the regulatory landscape. In addition to keeping plan documents updated, employers and plans should also clearly communicate any changes to help ease the transition for plan participants and avoid liability landmines.

Corrie Cripps is a plan drafter/compliance consultant with The Phia Group.  She specializes in plan document drafting and review, as well as a myriad of compliance matters, notably including those related to the Affordable Care Act.  
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¹Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 26 CFR Part 54, 29 CFR Part 2590, 45 CFR Part 147, October 13, 2017, https://www.gpo.gov/fdsys/pkg/FR-2017-10-13/pdf/2017-21851.pdf, (last visited November 6, 2017).
²Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 26 CFR Part 54, 29 CFR Part 2590, 45 CFR Part 147, October 13, 2017,  https://www.gpo.gov/fdsys/pkg/FR-2017-10-13/pdf/2017-21852.pdf, (last visited November 6, 2017).
³Office of the Attorney General, Revised Treatment of Transgender Employment Discrimination Claims Under Title VII of the Civil Rights Act of 1964, October 4, 2017, https://www.documentcloud.org/documents/4067437-Sessions-memo-reversing-gender-identity-civil.html, (last visited November 6, 2017).
⁴Section 1557 of the Patient Protection and Affordable Care Act, https://www.hhs.gov/civil-rights/for-individuals/section-1557/index.html, (last visited November 6, 2017).
⁵Claims Procedure for Plans Providing Disability Benefits, 29 CFR Part 2560, https://www.gpo.gov/fdsys/pkg/FR-2016-12-19/pdf/2016-30070.pdf, (last visited November 6, 2017).
⁶Claims Procedure for Plans Providing Disability Benefits; Extension of Applicability Date, 29 CFR Part 2560, https://www.gpo.gov/fdsys/pkg/FR-2017-10-12/pdf/2017-22082.pdf, (last visited November 6, 2017).
⁷Administrative Simplification: Certification of Compliance for Health Plans; Withdrawal, 45 CFR Parts 160 and 162, https://www.gpo.gov/fdsys/pkg/FR-2017-10-04/pdf/2017-21424.pdf, (last visited November 6, 2017).
⁸HPID, https://www.cms.gov/Regulations-and-Guidance/Administrative-Simplification/Unique-Identifier/HPID.html, (last visited November 6, 2017).
⁹United States District Court for the District of Columbia, American College of Emergency Physicians v. Thomas E. Price, MD., https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2016cv0913-23, (last visited November 6, 2017).
¹⁰United States District Court for the District of Columbia, AARP v. United States Equal Employment Opportunity Commission, https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2016cv2113-47, (last visited November 6, 2017).
¹¹AARP v. United States Equal Employment Opportunity Commission, Defendant’s Status Report, https://gallery.mailchimp.com/582bc250bf108dcead582e3b8/files/c23461a4-8a49-4bad-b6b4-36e8f9fbb615/2017_09_21.EEOC_wellness_regs_status_report.pdf, (last visited November 6, 2017).
¹²Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States. https://www.whitehouse.gov/the-press-office/2017/10/12/presidential-executive-order-promoting-healthcare-choice-and-competition, October 12, 2017, (last visited November 6, 2017).
¹³ACA Information Center for Tax Professionals, https://www.irs.gov/tax-professionals/aca-information-center-for-tax-professionals, (last visited November 6, 2017).
¹⁴Transamerica Center for Health Studies, Healthcare Consumers in a Time of Uncertainty: Fifth Annual Nationwide TCHS Survey, https://www.transamericacenterforhealthstudies.org/docs/default-source/research/healthcare-consumers-in-a-time-of-uncertainty.pdf?sfvrsn=2, November 1, 2017, (last visited November 6, 2017).
¹⁵American Psychological Association, Stress in America™: The State of Our Nation, http://www.apa.org/news/press/releases/stress/2017/state-nation.pdf, November 2017, (last visited November 6, 2017).
¹⁶Transamerica Center for Health Studies, Healthcare Consumers in a Time of Uncertainty: Fifth Annual Nationwide TCHS Survey, https://www.transamericacenterforhealthstudies.org/docs/default-source/research/healthcare-consumers-in-a-time-of-uncertainty.pdf?sfvrsn=2, (last visited November 6, 2017).
¹⁷Fidelity Investments® and the National Business Group on Health®, Embracing a Broader Definition of Well-Being: Eighth Annual Employer-Sponsored Health and Well-being Survey,
https://workplace.fidelity.com/sites/default/files/NBGH%20Fidelity_2017_WellbeingWebinar_Presentation05022017.pdf, March 2017, (last visited November 6, 2017).
¹⁸Acosta v. Macy’s Inc., S.D. Ohio, No. 1:17-cv-00541
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Interim Final Rules Update
By: Krista Maschinot, Esq.

With the calendar year coming to a close, plan sponsors and plan administrators had been breathing a sigh of relief that renewal season will go smoothly as Congress failed to pass any major legislation affecting the Affordable Care Act this year.  As with years past, however, a last-minute curveball was thrown at them that proves this year will be no different than previous years.  
 
On October 6, 2017, the Trump Administration issued two Interim Final Rules (IFR) related to the Affordable Care Act’s (ACA) contraceptive mandate.  These rules apply to all employers and create additional considerations for employers sponsoring self-funded plans and their third-party administrators (TPAs).  These new Department of Health and Human Services (HHS) regulations, the “Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act” and the “Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act,” allow for an exemption to the contraceptive mandate for a broader spectrum of companies and organizations.  Specifically, the rule expands the types of entities that can claim an exemption or an accommodation from the contraceptive mandate on the grounds of religious beliefs or for moral reasons.  

Background
This is not a new discussion.  In 2012, the contraceptive mandate in the ACA required all employers to provide contraceptive coverage to participants on a no cost-sharing basis, in-network.  Religious employers, such as churches, were exempt from the mandate and were not required to file any documentation with the government.  There was also an accommodation process put into place for religious organizations that opposed covering contraceptive services for their employees and students. In 2013, a self-certification form, EBSA Form 700, was created and required for self-funded health plans claiming a religious accommodation from the mandate.  Multiple lawsuits were filed during this time resulting in a split among the circuits as to which entities could claim exemption from the mandate.  

In 2014, the Supreme Court weighed in and, in Burwell v. Hobby Lobby, held that requiring closely-held corporations to abide by the HHS regulations requiring no-cost access to contraceptives being made available to female employees violated the Religious Freedom Restoration Act (RFRA) in situations where the owners’ religious beliefs were contrary to the regulations.¹   In addition to Hobby Lobby, there was another Supreme Court case, Zubik v. Burwell, regarding the accommodation process.  The Supreme Court decided not to issue a decision in the consolidated cases challenging the accommodation process for the contraceptive mandate for employers with religious objections to contraceptives.

Under the Trump Administration’s new rules, the pool of employers that will be able to opt out of the contraceptive mandate is greatly expanded as the rules allow for employers that have a sincerely-held religious or moral objection to the provision of all or a subset of contraceptives or sterilization items, procedures, or services, or related patient education and counseling, to opt out of the women’s preventive care mandate.  The expanded group of entities with religious objections includes:

•    Churches, integrated auxiliaries, and religious orders;
•    Nonprofit organizations;
•    For-profit entities;
•    Non-governmental employers;
•    Institutions of higher education;
•    Individuals with employer sponsored or individual market coverage; and
•    Issuers that provide coverage to plan sponsors or individuals that are exempt.²

As you can see from the list, this change will permit a much larger pool of companies to carve-out certain women’s preventive care benefits under their health plans.

While these interim final rules allow a much broader group of employers and insurers to exempt themselves from covering contraceptives such as birth control pills on religious or moral grounds, they do not alter the rules regarding the TPA’s/insurer’s role once the employer has opted out of providing the contraceptive coverage.  In other words, the regulations still require TPAs who administer the self-funded medical plan for those entities who opt out of the mandate to otherwise arrange for these women’s preventive benefits. While the interim final regulations do maintain the existing accommodations process, the process is now optional. Employers could choose not to request an accommodation, or choose to revoke their current accommodation, which would mean that the TPA would no longer be responsible for providing contraceptive coverage. The rules outline the process if an employer now chooses to revoke its current accommodation (which includes notifying the TPA and plan participants).

Process
Under Burwell, closely-held corporations that chose to opt out of contraceptive coverage could send a letter to HHS stating that they objected to offering contraceptive coverage in their health plans or they could complete EBSA Form 700, if they preferred.  Under the new rules, the accommodation is now an optional process and employers can choose whether or not to provide any sort of notice or self-certification in order to inform the government of their intent to no longer provide coverage under the mandate.  Employers are still responsible for notifying plan participants of any changes in coverage.

Pending Action
Upon issuance, the rules were questioned.  For example, Maura Healey, the Attorney General for the Commonwealth of Massachusetts, filed a lawsuit in federal court on Friday, October 6th, in an attempt to block the new rules from taking effect.  According to the Complaint, the IFR will result in thousands of women in Massachusetts being substantially harmed should the contraception mandate of the ACA be nullified by allowing employers to block contraceptive care and services based upon the employers’ religious and moral objections to contraception.³   The Complaint further states that implementation of the IFR will “jeopardize the health care of women in Massachusetts and nationwide, promote the religious freedom of corporations over the autonomy of women, and leave the states to bear additional health care costs both with regard to contraceptive and prenatal care as well as other services associated with unintended pregnancies and related negative health outcomes for both women and their children.”⁴   As of the date of this article, an Answer has not been issued by HHS.  This creates questions and confusion for how to apply to the IFR.

Next Steps
With plan renewal season just around the corner, the applicability of this rule for self-funded plans and their TPAs needs immediate clarification.  Under Burwell, the regulations required TPAs who administered the self-funded medical plan for those entities who could opt out of the mandate (via an exemption or accommodation, etc.) to otherwise arrange for these women’s preventive benefits.  According to the interim final regulations, the accommodations process is still applicable but is now optional.  TPAs will want to be on the look-out to ensure they have processes and procedures in place to address this accommodation process, or a revocation of a current accommodation, internally.

Should a plan decide to no longer offer contraceptives, the plan must still abide by the reporting and disclosure rules of the Employee Retirement Income Security Act (ERISA).   As this would be a reduction of benefits, the Summary of Material Reduction (SMR) rules would apply. A plan has to disclose a material reduction sixty (60) days after the adoption of the change.  However, this post-change notification may not necessarily align with fiduciary duties and it is best to give as much warning about a change as possible. The Summary of Benefits and Coverage (SBC) rules also include distribution requirements and, in short, if a change to the plan creates the need to change or update the SBC and the change is made mid-plan year, the plan must give sixty (60) days’ advance notice.  When changes are made at plan renewal, the SBC distribution requirement for open enrollment is generally thirty (30) days’ notice before the start of the plan year.   These requirements may create a significant amount of administrative work and potentially be costly for the plan. Plans will need to consider the administrative burdens that will arise if coverage is no longer available, the notification requirements, and how changes could possibly affect their stop loss coverage.

As a result of this regulation, there are many questions that we hope to have resolved with future guidance.  Employers considering the exemption and/or accommodation will need to take into consideration the lack of guidance provided and the potential effect these unanswered questions may have on the plan and the plan participants.  Employers and interested parties can submit their comments to HHS regarding the new rules throughout the comment period, which closes on December 5, 2017.
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¹Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 22 (2014)
²Departments of Health and Human Services, Fact Sheet: Religious and Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act (2017), https://www.hhs.gov/sites/default/files/fact-sheet-religious-exemptions-and-accommodations-for-coverage.pdf.
³Commonwealth v. U.S Dep’t of Health and Human Services et al., No. 1:2017cv11930 (D. Mass. Filed Oct. 6, 2017). 
⁴Id.
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The Future of Self-Funding - An Insider's Take
By: Adam V. Russo, Esq.

According to the 2016 Milliman Medical Index, the typical family of four costs $25,826 annually in premium and out of pocket expenses and 57% of costs are borne by the employer. Self-funding the right way can reduce these figures significantly and we as an industry must focus on this. At our company, a single employee pays $127.62 for health insurance a month. This compares to the $554 average in the state of Massachusetts, based on the 2017 UBA survey.

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