Insights

Looking Ahead Part 4: What to Expect from The Biden Administration’s Focus on Healthcare Benefits

March 23, 2021

Employee Benefits

In our Looking Ahead Part 2: The Pace of Change Accelerates in 2021, we advised employers to stay tuned for “what’s next” as part of their 2021 action plan. “What’s next” is here, as the new Biden Administration acts rapidly to change existing programs. In this article, we will explain some of the recent changes on the table for employers and what next steps they should take.

Biden Administration Prioritizes Healthcare Reform

We expected 2021 to be a year of rapid change, and the Biden Administration is getting to work with new legislation that will impact healthcare in a big way.

The first year of a new presidential administration is usually an eventful year for legal and regulatory makeovers. There are changes afoot that are already in motion or will soon be set in motion through enactment of laws, issuance of executive orders, or rulemaking by federal agencies through the Administrative Procedures Act.

One of the key priorities that the Biden Administration will focus on in his first 100 days in office is with healthcare reform. The President has expressed his intention to (1) restore benefits and protections that were in place before the last administration, and (2) expand access to affordable healthcare to more Americans.

What’s Up First? Expanding ACA

President Biden will immediately work on his campaign promises about expanding and improving upon the Affordable Care Act (ACA). The Administration got the ball rolling by opening a 90-day special enrollment window from February 15th through May 15th for uninsured individuals to sign up for Marketplace coverage. The special enrollment window paired with additional advertising for Marketplace insurance should boost enrollment numbers to help stabilize the ACA Exchanges.

The $1.9 trillion American Rescue Plan, that was signed into law on March 11, 2021, will provide a $34 billion injection aimed at shoring up the ACA and making healthcare coverage affordable to more Americans during the pandemic:
  • Providing a temporary 100% subsidy for COBRA premiums for laid-off employees who are COBRA eligible from April 1st through September 30th, 2021 (6 months total).
  • Increasing the premium tax credit assistance for lower income individuals to pay for Marketplace coverage (e.g., free coverage if at 150% of the Federal Poverty Limit (FPL)).
  • Capping the cost for Marketplace coverage at 8.5% of an individual’s income.
  • Eliminating the 400% FPL disqualification cliff so that everyone will qualify for some type of Marketplace subsidy (thanks to the 8.5% premium cap).
  • Waiving the requirement to repay subsidies from the 2020 plan year (e.g., if individuals under-estimated their income and received more ACA premium assistance than they would have if income had been correctly calculated)

Even employer-sponsored group health plans would benefit from an enhanced and stabilized ACA Marketplace. When more and more individuals (especially healthy ones) enroll in ACA coverage, it puts downward pressure on healthcare costs by spreading risk across a larger pool of enrollees. Marketplace insurance providers should see a leveling out of costs for care, treatments, drugs, etc., which in turn should ease the pressure to shift costs from an unstable ACA marketplace to the more stable employer-sponsored group health plan space.

Employer Action 1

Older Americans will see the most significant reduction in the cost of coverage obtained through the Marketplace. For employers, this could mean that older employees who are considering early retirement could use coverage in the ACA Marketplace (which would likely be cheaper than COBRA) to bridge the gap until Medicare eligibility kicks in. Note that the ACA subsidy relief is good for two years, but there’s hope that this could turn into a permanent fix.

The Rescue Plan provides other tremendous benefits-related assistance as well, but that is a topic for another blog. Stay tuned!

Employer Action 2

HIPAA Reform and Mental Health Parity Audits

Department of Labor (DOL) Revamping Rules and Increasing Scrutiny of Plans

The DOL has also been busy behind the wheel, working diligently to revamp various outdated rules and increase scrutiny of certain employee benefit plans. Most notably, we anticipate significant changes to the HIPAA Privacy Rule and continued focus on enforcing mental health parity rules.

Last December (2020), the DOL proposed the first major modification to the HIPAA Privacy Rule in more than seven years. The modifications are intended to ease the administrative burden for providers for coordinating care without diminishing the protections over an individual’s personal health information.

Some of the most interesting DOL-proposed HIPAA Privacy Rule changes include:
  • The ability of covered entities to use or disclose PHI based on good faith belief that it is in the best interest of the individual.
  • The ability for individuals to direct the sharing of PHI among covered entities.
  • The broadening of the “healthcare operation” term to include care coordination and case management.
  • The ability for patients to inspect and take pictures of their PHI in person.
  • Changing the maximum time to provide PHI access from 30 days down to 15 days.

Most of the HIPAA Privacy Rule changes will have a more immediate impact on insurance carriers and service providers rather than on employers.

In addition to updating HIPAA, the DOL will continue to keep close watch over compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA). The DOL closed 183 investigations involving review of mental health parity compliance for both fully insured and self-insured health plans. The DOL just created a new national MHPAEA enforcement project for 2021 and will pay particular attention to claim denials involving autism spectrum disorder.

Employer Action 3

EEOC Proposes New Rules on Wellness Program Incentives

Not to be outdone by their peers, the Equal Employment Opportunity Commission (EEOC) has also been busy this year. In early January 2021, the EEOC issued new proposed rules regarding how wellness program incentives can comply with the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). In a nutshell, programs that are offered outside of a group health plan setting will comply with the “voluntary” standard under the ADA and GINA as long as the incentives are “de minimis” (e.g., a gift card worth less than $50). For wellness programs that are offered in conjunction with a group health plan, the incentive limits go back to the HIPAA standard—30% of the total cost of the coverage the employee is enrolled in, or up to 50% for tobacco-cessation incentives.

Employer Action 4

Expertise for What’s Next in Employee Benefits

Legislation is changing fast and impacts the significant investment you have made in your employee benefit plans.

Woodruff Sawyer Benefits consultants will help you review your current strategies in light of the changing economic environment and legislative impacts. Strategy, compliance, and cost all come together to ensure your employees receive the full value of your benefit plans.

For more information, contact your Woodruff Sawyer representative. If you’re interested in learning more about Woodruff Sawyer’s Employee Benefits services, email us at EB@woodruffsawyer.com

At our webinar, we answered many key questions, but those we could not get to, we have answered in this FAQ.

Click Here to Download the FAQ >>

ON-DEMAND WEBINARS

FEATURED VIDEO

Big Trends in Benefits: Data and Experience

 

Related Blog Posts

Was this post helpful?

See all articles by Jennifer Chung

All views expressed in this article are the author’s own and do not necessarily represent the position of Woodruff-Sawyer & Co.

Jennifer Chung, Esq.

Vice President, Senior Compliance Officer, Employee Benefits

As Senior Benefits Compliance Officer and Lead ERISA counsel, Jen manages the Benefits Compliance team and drives the strategy and development of our benefits compliance policies, processes, and training.

415.402.6577

LinkedIn

Jennifer Chung, Esq.

Vice President, Senior Compliance Officer, Employee Benefits

As Senior Benefits Compliance Officer and Lead ERISA counsel, Jen manages the Benefits Compliance team and drives the strategy and development of our benefits compliance policies, processes, and training.

415.402.6577

LinkedIn