It’s hard to believe that we are still under a national public health emergency because of the COVID-19 pandemic, but many are predicting that will finally come to an end later this year. From the perspective of the Centers for Medicare and Medicaid Services (CMS), this is what they are referring to as the “Great Unwinding.”

The Great Unwinding is how CMS refers to the undoing of several health coverage requirements that were implemented by legislation, regulation, and executive order because of COVID-19. Amongst many healthcare and coverage provisions that were implemented over the past 2.5 years, the following provisions are particularly noteworthy:

• Medicaid eligibility was expanded. States have been required to provide continuous eligibility for Medicaid to anyone who was enrolled in coverage as of March 18, 2020.
• Advanced Premium Tax Credits (APTCs) on Marketplaces were increased, and eligibility for APTCs expanded to additional individuals.
• Extensions to elect COBRA coverage and make COBRA premium payments have been provided. Extensions to make a special enrollment election for group coverage has also been provided.
• Cost-sharing for COVID-19 vaccines and testing was eliminated in many circumstances.
• Telemedicine coverage was expanded for Medicare, Medicaid, and CHIP beneficiaries.

These provisions expire when the national public health emergency is declared over, or by the end of 2022 as it relates to the changes to APTCs. The so-called Great Unwinding is expected to cause anywhere between 8-15 million people to lose coverage. Additionally, there is an expectation that some individuals may forgo certain medical care as some of the coverage provisions expire.

The national public health emergency is set to expire on July 15, 2022, but it is likely to be extended beyond that date. The Biden administration has told states that it would provide them with at least 60 days’ notice of the end to the national public health emergency. Congress could also act to extend some of the provisions and/or make them permanent. The Great Unwinding could be a topic of debate in the upcoming November elections.

Recently, a bipartisan bill was introduced in the House of Representatives (House) that would change the eligibility requirements to make contributions to a Health Savings Account (HSA).

Referred to as the Health Savings for Seniors Act, the House bill would let those individuals who are enrolled in a high deductible health plan (HDHP) and Medicare contribute to an HSA. Under current rules, anyone enrolled in Medicare coverage cannot make contributions to an HSA even if they also have coverage under an HDHP. With more and more people working beyond age 65, the bill aims to preserve HSA contribution eligibility for those who have an HDHP and Medicare Part A and/or B.

The House bill does come with some tradeoffs. The bill would eliminate the ability to use HSA funds tax-free for Medicare premium expenses. Currently, all Medicare premiums other than those for Medicare Supplement plans can be paid tax-free from an HSA.

The bill would also impose a 20% penalty when HSA funds are used for non-medical expenses by someone age 65 or older. That penalty is currently waived for people aged 65 or older.

This isn’t the first time this bill has been introduced by Congress, and numerous other bills have been introduced in the past that would make changes to various HSA rules and regulations. It’s unclear if this bill will earn enough votes in both chambers of Congress to become law, but it does have at least some bipartisan support. The bill is being co-sponsored by Ami Bera (D-CA) and Jason Smith (R-MO).

HSAs continue to be a valuable healthcare resource for individuals in the United States. It’s estimated that 32-33 million individuals have an HSA. HSAs let people set aside money tax-free for the future use of healthcare expenses. Unlike Flexible Spending Accounts (FSAs) or Health Reimbursement Arrangements (HRAs), HSAs let people invest their funds into stocks, bonds, exchange traded funds (ETFs), mutual funds, and other publicly traded vehicles with earnings accumulating tax-free. As long as the money is withdrawn and used to pay for out-of-pocket medical expenses, the funds are never taxed.

On June 7, 2022, the Centers for Medicare & Medicaid Services (CMS) issued guidance in the form of Frequently Asked Questions (FAQs) on broker compensation for the sale of plans in the individual health insurance market. The guidance is in response to some health insurance carriers who have eliminated or reduced commissions for health insurance plans that are sold during a Special Enrollment Period (SEP).

Of particular importance is the following FAQ and the response from CMS:

Is it permissible for an issuer to differentially compensate agents or brokers who assist consumers with enrollments in individual market coverage in the same benefit year based on whether the enrollment is completed during an SEP or during the applicable benefit year’s Open Enrollment period (OEP)?

No. Arrangements that pay reduced (or no) commissions and other forms of compensation to agents and brokers who assist consumers with enrollment in individual market coverage during an SEP and pay higher amounts for OEP enrollments for the same benefit year violate the guaranteed availability provisions of the Affordable Care Act.

The guaranteed availability provisions in section 2702 of the Public Health Service Act (PHS Act), as added by the Affordable Care Act, generally require issuers to accept “every employer and individual in the State that applies for such coverage.” This requirement applies to issuers offering non-grandfathered health insurance coverage in the group or individual markets, through or outside of the Marketplaces. As implemented in the individual market, issuers are required to guarantee issue such coverage during the annual OEP to all individuals, as well as during an SEP to an eligible individual.

Issuers’ normal conduits for receiving applications and offering coverage must also be open to individual market consumers for OEP and SEP enrollments, as applicable. Issuers commonly use agents and brokers as an important part of their marketing and sales distribution channels. The way an issuer structures its compensation to agents and brokers influences the marketing to, as well as enrollment and retention of, individual market consumers. An arrangement that reduces or eliminates the commission or other compensation an agent or broker receives for SEP enrollments compared to the commission or other compensation received for OEP enrollments in the same benefit year discourages agents and brokers from marketing to and enrolling individuals eligible for an SEP. These practices therefore violate the guaranteed issue protections afforded to these individuals under the statute. Exceptions may be made for cases in which state regulators make specific recommendations for issuers to address solvency concerns or financial capacity limitations.

In a 2016 FAQ, CMS previously stated that payment of agent/broker commissions or other forms of compensation is a marketing practice covered under 45 CFR 147.104(e) and 156.225(b). Specifically, the 2016 FAQ explained that compensation arrangements structured to discourage agents and brokers from marketing to and enrolling consumers with significant health needs constituted a discriminatory marketing practice prohibited under §§ 147.104(e) and 156.225(b). Consistent with this previous guidance, to the extent arrangements which pay reduced or no compensation for SEP enrollments discourage agents and brokers from marketing to and enrolling consumers with significant health needs, the arrangements would also constitute a discriminatory marketing practice prohibited under 45 CFR 147.104(e) and 156.225(b).

As the latest FAQ guidance is still recent, we will now need to wait and see how the health insurance carriers who have altered their SEP commissions respond.

The Affordable Care Act (ACA) created a research institute known as the Patient-Centered Outcomes Research Institute (PCORI). The goal of PCORI is to help patients and those who care for them make better-informed decisions about healthcare choices. PCORI is funded in part by fees which are charged to health plans. The following information is designed to help employers understand their upcoming payment obligations.

Fee Amount: The upcoming fee amount depends on when the plan year ended:

• Plan years ending between January 1, 2021 and September 30, 2021 = $2.66 per covered person
• Plan years ending between October 1, 2021 and December 31, 2021 = $2.79 per covered person

Plan Year Ending Date: This is the last day of the plan year. As an example, a plan that had a July 1, 2020, effective date would have a plan year ending date of June 30, 2021. Alternatively, a plan that had an effective date of January 1, 2021 would have a plan year ending date of December 31, 2021.

Due Date: The fees are due by July 31, 2022 for plan years which ended in 2021.

Fully Insured Health Plans: The insurance company is responsible for paying the PCORI fee, though most employers with fully insured health plans are indirectly paying these fees through slightly higher premiums.

Self-Funded Health Plans (including Level Funded Health Plans): The employer is responsible for paying the PCORI fee. The fee is determined based on the average number of covered lives in the plan year ending in 2021. An easy way to calculate the average number of covered lives is using a snapshot method. Under this method, an employer picks one day during each quarter of the plan year (e.g., Jan 1, Apr 1, Jul 1, Oct 1), adds the total number of covered lives (including spouses and dependents) for those days, and divides that number by 4.

Non-Integrated HRAs: These are Health Reimbursement Arrangements (HRAs) which are not tied to a traditional group health plan and will generally include Qualified Small Employer HRAs (QSEHRAs), Individual Coverage HRAs (ICHRAs), and certain Retiree HRAs. The PCORI fee for these types of HRAs should be calculated the same way as the self-funded health plans referenced above. However, if the non-integrated HRA only reimburses dental and/or vision expenses, no PCORI fee applies to the HRA.

Special Rules for Integrated HRAs: These are HRAs that are only available to employees who are also enrolled in a traditional group health plan. Employers that have a fully insured health plan coupled with an integrated HRA must pay the PCORI fee for the HRA, but they may treat each HRA participant as a single covered life. In other words, the fee generally does not apply to spouses or dependents covered under the HRA. Employers with a self-funded health plan and an integrated HRA may treat the coverage as a single plan assuming both plans have the same plan year.

FSAs: Flexible Spending Accounts (FSAs) are not subject to PCORI fees if they are considered an excepted benefit. To be considered an excepted benefit, employees must be offered a traditional group health plan, and if the employer contributes to the FSA, the employer may not contribute more than (the greater of) $500 or a dollar-for-dollar match of the employee’s contribution.

HSAs: Health Savings Account (HSAs) are not subject to PCORI fees.

Dental and Vision Plans: Stand-alone dental and vision plans are not subject to PCORI fees.

Making Payments: Employers should complete Form 720 to make payments. Be sure to use the form version that has a June 2022 revision date which can be located at this website.

Extension of PCORI Fees: At the end of 2019, Congress passed a spending bill which extended the payment of PCORI fees for 10 additional years. PCORI fees will continue to apply to applicable health plans through the fiscal year ending in 2019, with final payments now scheduled to be due in 2030.

Telemedicine Coverage and HSAs: A Recap

Many types of telemedicine coverage eliminate the ability for a person enrolled in a qualified high deductible health plan (HDHP) to make contributions to a Health Savings Account (HSA).

HDHPs have a minimum deductible threshold, and in 2022 that threshold is $1,400 for a person with single-only coverage and $2,800 for a person with family coverage. In addition, there can be no coverage for anything other than preventive care or excepted benefits (e.g., dental or vision coverage) until the minimum deductible threshold has been satisfied. This prohibition applies not only to the underlying HDHP, but also to benefits provided under another plan or program.

What does this mean?

This means telemedicine benefits that provide coverage with no copay or a low copay (provided through the HDHP or on a stand-alone basis) generally eliminates the ability to make contributions to an HSA; however, the CARES Act provided a temporary provision which allowed for telemedicine coverage without it impacting the ability to contribute to an HSA. The CARES Act enabled that provision for 2020 and 2021 plan years.

About the New Law

More recently, President Joseph Biden signed a spending bill into law. The new law permits telemedicine coverage of any kind between April 1, 2022 and December 31, 2022 without it impacting the ability for a person to make contributions to an HSA.

This does, however, mean there is a gap between January 1, 2022 and March 31, 2022 where some plans (generally, those plans that run on a calendar year) must apply the minimum deductible for telemedicine services in order a person to be considered HSA-eligible during the months of January through March.

Absent another law being passed, most telemedicine programs will eliminate HSA eligibility again starting in 2023.

Lifestyle Spending Accounts (LSAs) have become one of the hottest new employee benefit programs. LSAs are sometimes referred to by other names, such as Personal Spending Accounts or some even refer to them simply as Wellness Programs. There could be a slew of other names, but we refer to them as LSAs.

LSAs are employer funded programs that reimburse employees for certain personal expenses. Employers define what expenses are eligible, which employees are eligible to participate in the plan, and the maximum reimbursement limits. Employees generally have options on how to use the funds according to their lifestyle preferences. LSAs often promote wellness and wellbeing, but the sky is the limit as to what can be reimbursed, and every LSA is unique and customizable.

Some Popular LSA Plan Designs

• Health & Fitness LSAs – These could reimburse expenses such as gym memberships, yoga classes, home exercise equipment, personal training, or nutritional supplements.
• Personal Care LSAs – These could reimburse expenses such as spa services, salon services, foot and nail care, or meditation classes.
• Entertainment LSAs – These could reimburse expenses such as movie theatre tickets, sporting event tickets, concert tickets, museum entry fees, or art and music lessons.

LSAs do not currently have any preferential tax treatment under the Internal Revenue Code or state tax laws. That means the reimbursements to employees are included in their gross income and subject to taxes; however, the reimbursements can be written off as a business expense by the employer.

LSAs are popular amongst employees, and they’re usually perceived as a “cool” benefit. Employees generally love that they have flexibility and choice on how they spend the money in their LSA. Consider the Health & Fitness LSA as an example. Employees can use their LSA funds to pay for a membership at any gym or fitness center of their choosing. Alternatively, they may choose to exercise at home and purchase a Peloton bike or treadmill with their LSA funds. Other employees might want to purchase vitamins and supplements from GNC or a similar product provider.

The flexibility of LSAs creates desirability to have them as benefit. Employers looking to offer something new should give LSAs a consideration.

On April 22, 2022, the Centers for Medicare and Medicaid Services (CMS) proposed a rule to simplify and expand Medicare enrollment rules for Part A and B. In particular, new rules have been proposed which would change how effective dates are assigned, and new special enrollment periods would apply to individuals who meet exceptional conditions.

Enrollment Simplification for Medicare Part A & B

Under current rules, the date when an individual’s coverage becomes effective depends on when they enroll. There is a 7-month window to sign up for Medicare during an Initial Enrollment Period (IEP). It starts 3 months before turning age 65, includes the month an individual turns 65, and ends 3 months after turning age 65.

• If an individual enrolls during any of the first 3 months of their IEP, their coverage becomes effective on the first month of eligibility (i.e., the first of the month before turning age 65).
• If an individual enrolls during their IEP in the month they become eligible, their coverage will be effective on the first of the month after they sign up (i.e., the first of the month after turning age 65).
• If an individual enrolls during any of the last 3 months of their IEP, their coverage will be effective on the first of the month 2-3 months after they sign up.
• If an individual does not enroll during their IEP but enrolls during the General Enrollment Period (GEP), which runs from January 1st through March 31st of each year, coverage is effective on July 1st.

Under the proposed rule, coverage will become effective on the first of the month after enrollment for individuals enrolling in the last 3 months of their IEP or during the GEP. If finalized as proposed, these enrollment changes will be effective as of January 1, 2023.

New Special Enrollment Periods for Part A & B

Currently, there is only a Special Enrollment Period (SEP) for individuals who delay enrollment in coverage because they are covered by a group health plan due to their own active employment or a spouse’s active employment. An SEP is needed to avoid any potential late enrollment penalty. CMS is proposing to expand the SEPs available to individuals who meet exceptional conditions and who missed a Medicare enrollment period, without having to wait for the GEP and without having to pay a late enrollment penalty.

Specifically, CMS is proposing the following SEPs:

• An SEP for individuals impacted by an emergency or disaster that would allow CMS to provide relief to those beneficiaries who missed an enrollment opportunity because they were impacted by a disaster or emergency declared by a federal, state, or local government entity.
• An SEP for health plan or employer error that would provide relief in instances where an individual can demonstrate that their employer or health plan materially misrepresented information related to enrolling in Medicare timely.
• An SEP for formerly incarcerated individuals that would allow individuals to enroll following their release from correctional facilities.
• An SEP to coordinate with termination of Medicaid coverage that would allow individuals to enroll after termination of Medicaid eligibility.
• An SEP for other exceptional conditions that would, on a case-by-case basis, grant an enrollment period to an individual when circumstances beyond the individual’s control prevented them from enrolling during the IEP, GEP, or other SEPs.

On April 19, 2022, the Department of Labor (DOL), Department of Health and Human Services (HHS), and the Department of Treasury (DOT) issued some Frequently Asked Question (FAQ) guidance pertaining to the new Transparency in Coverage (TiC) rules that will start to be enforced beginning on July 1, 2022 (and applicable to plan years starting on or after January 1, 2022).

The TiC rules require health insurance carriers providing fully insured, non-grandfathered group and individual plans to disclose on a public website information regarding in-network rates for covered items and services and out-of-network allowed amounts and billed charges for covered items and services. This disclosure is also required of employers who offer a non-grandfathered level funded or self-funded group health plan. Disclosures are not required for dental-only or vision-only plans.

These disclosures must be made available as machine-readable files. This means the files must conform to a non-proprietary, open standard format, such as XML or JSON. Formats such as PDF or DOCX are not acceptable file formats. The files also must be free to access, and there can be no conditions placed to access the files (e.g., no ID or Password or a requirement to submit personally identifiable information). The files must also be updated on a monthly basis.

In almost all instances, the health insurance company or third-party administrator will prepare these files for their level funded and self-funded group health plan clients even though the liability to provide these files rests with the employer. Although these files may be hosted on a third-party public website (e.g., the health insurance company’s website), it is currently unclear as to whether an employer must also post a link to these files on their own public website. The cautious approach would be to do so, and at least one major health insurance company is telling their level funded and self-funded clients to do this.

A third disclosure under the TiC rules has been delayed. A disclosure for negotiated rates and historical net prices for covered prescription drugs was initially required, but this has been delayed while the regulatory agencies determine if it is appropriate. Regulatory agencies are expected to issue additional guidance pertaining to this disclosure requirement (or lack thereof) at a later date.

It is “to-be-determined” on the value and usefulness of these new disclosures. The intent is to provide more transparency around healthcare costs, but the sheer volume of information that will need to be disclosed may make it difficult for the average person to decipher. However, the TiC rules also require online price comparison tools to be made available so that that a person can estimate their costs by services or provider.

President Jospeh Biden has issued an executive order instructing the Department of Treasury (DOT) to review regulations that pertain to subsidy eligibility on the Health Insurance Marketplace (Marketplace). The primary purpose of the executive order is to determine if regulatory changes can be made to fix the so-called “family glitch.”

In part, eligibility for subsidies on the Marketplace is based on whether a person has access to affordable health insurance coverage through an employer. In 2022, coverage is considered affordable if a person has to pay no more than 9.61% of their income for the lowest-priced group health plan available to them. If coverage is affordable from the employer, then that generally eliminates access to subsidies for a Marketplace plan.

This is where the family glitch comes into play. When determining if coverage is affordable, the employee-only premium rate is utilized. If coverage is affordable to the employee, then the employee, their spouse, and their children are ineligible for subsidized coverage on the Marketplace.

The family premium is not used to determine affordability of coverage, hence the terminology “family glitch.” An employer may contribute very little or nothing towards coverage for a spouse or child, and that spouse or child may lose eligibility for subsidies because coverage is affordable at the employee-only premium rate.

The executive order “directs the Secretary of the Treasury to review all existing regulations and other agency actions to determine whether the actions are consistent with the policy to protect and strengthen the ACA and, in particular, review policies or practices that may reduce the affordability of coverage or financial assistance for coverage, including for dependents.”

According to some estimates, as many as 5.1 million people could gain access to coverage if the family glitch is closed. It is believed by many experts that changing the rules for determining how coverage is affordable to family members of an employee is the most significant change to the Affordable Care Act (ACA) that the Biden administration can make without requiring action from Congress.

Non-grandfathered health plans (i.e., health plans issued on or after March 23, 2010) are required to cover in-network preventive services at 100% with no cost-sharing to a member. This is a requirement that was imposed by the Affordable Care Act (ACA). The preventive services that must be covered are specified by the Health Resources and Services Administration (HRSA), the United States Preventive Services Task Force (USPSTF), and the Centers for Disease Control and Prevention (CDC).

Recently, the HRSA updated its guidelines for preventive services that non-grandfathered plans must cover for women without any cost-sharing. These services must be covered at 100% for plan years beginning on or after January 1, 2023. The new services that must be covered include:

• Counseling to prevent obesity in women aged 40 to 60 years with a normal or overweight body mass index.
• Double electric breast pumps, pump parts and maintenance, and breast milk storage supplies.
• The full range of women’s contraceptives listed in the recently updated FDA Birth Control Guide.
• Screening for HIV infection for all adolescent and adult women aged 15 and older at least once during their lifetime, and risk assessment and prevention education beginning at age 13.
• Pre-pregnancy, prenatal, postpartum, and interpregnancy well-woman visits.

The HRSA maintains information about current and updated preventive care guidelines which can be found by clicking here.