Health plans

Group health insurance plans subject to new regulations


Under the Consolidated Appropriations Act 2021 (the “CAA”), group health insurance plans and health insurance issuers are required to submit certain information relating to prescription drugs and other health care expenses to the Department of Health. Labor, the Department of Health and Human Services, and the Department of the Treasury (the “Departments”).1 (For more information on CAA requirements and related regulations applicable to group health plan sponsors, see Foley’s employer checklist for new health plan pricing transparency rules and the available CAA. here.) The ministries released draft final rules with a request for comment titled “Prescription Drug and Healthcare Expenses” on November 23, 2021 (the “IFR”).2

Who should report?

Under the IFR, a group health insurance plan (including a grandfathered plan) must submit an annual report to ministries on specified prescription drugs and health expenses. The reporting requirements do not apply to HRAs, other account-based group health plans, or excluded benefits.

Departments expect that it will be rare for a group health plan to self-report the required information, and that reporting will generally be the responsibility of insurance issuers, third-party administrators (“TPAs”), and managers. pharmaceutical benefits (“PBM”). , and other plan service providers. The IFR allows a fully insured group health insurance plan to enter into a written agreement with an insurance issuer whereby the issuer agrees to provide the report to departments and accepts responsibility for failure to do so. -respect. However, although sponsors of self-funded group health plans may enter into similar agreements with other entities, such as APTs and PBMs, the ultimate responsibility for reporting will rest with the sponsor of a self-funded plan, regardless of the nature of the plan. ‘OK. Therefore, plan sponsors should ensure that their underlying agreements with PTAs, PBMs and other non-insurer entities cover reporting flaws in their indemnification provisions.

When are reports due?

The declaration will take place on the basis of a calendar year, a declaration year being called the “reference year” (ie the preceding calendar year). The ministries have postponed the application of the reporting deadlines for the reference years 2020 and 2021 to December 27, 2022. Subsequently, the declaration will have a deadline of June 1 of the year following the end of the reference year. (for example, the reference year 2022 report is due June 1, 2023).

What data should be included in the reports?

The data to be included in the reports fall into two categories: (1) information that cannot be aggregated and must be provided for each plan, and (2) information that can be aggregated between plans in the same state and from the same market segment.3 Reports should list individualized information falling under category (1) separately for each plan or coverage before providing aggregate information falling under category (2).

Articles in the first category include:

  • general plan and identifying information of the reporting entity,

  • the start and end dates of the plan year,

  • the number of participants on the last day of the reference year, and

  • a list of each state in which the plan is offered.

Articles in the second category include:

  • some lists of the 50 best prescription drugs,

  • total annual expenditure on health services by the plan broken down into smaller categories, i.e. hospital, primary provider / clinic, specialty provider / clinic, drugs covered by pharmacare, drugs covered by insurance – illness and other costs (such as welfare services),

  • specific information on the expenditure and use of prescription drugs,

  • information on the amount of the premium (including the total amount of the premium broken down between the costs of the plan sponsor and members), and

  • discounts on prescription drugs, fees and other compensation information (including the impact of discounts on premium amounts and cost sharing).

How does the report work?

A separate report must be submitted for each state and for each market segment4 in which group health coverage has been provided. Report data can be aggregated by state and market segment. The experience with each fully insured policy must be included in the report of the state where the contract was issued. The experience with each self-funded group health insurance plan must be included in the report of the state where the plan sponsor has its principal place of business. As an example, if TPA X manages 30 large self-funded health care plans for plan sponsors located in a specific state, it can submit a single report for the self-funded large groups market segment in that specific state, aggregating data from all 30 regimes.

Reports can be made by multiple entities. If multiple reporting entities are submitting the required data relating to one or more plans in a state and market segment, the data should be aggregated at least as granularly as the data submitted in the report covering total annual expenditure on health services on behalf of plans .

As an example, suppose there are 60 self-funded large group health plans in a specific state, which use three different APRs to report total annual health care data expenditure (20 plans use APR # 1, 20 plans use TPA # 2, and 20 plans use TPA # 3). All 60 plans use the same PBM, which does other reports related to prescription drug spending. Each of the three TPAs ​​can submit a single aggregated report out of its 20 covered plans, but the PBM must submit three separate reports, aggregating data from the plans covered by TPA # 1, TPA # 2, and TPA # 3 separately. Further guidance is forthcoming on data aggregation and data submission by multiple reporting entities.

Take away food

Given the provisional nature of the rule and the fact that departments have requested comments on the IFR, the requirements for the IFR are subject to change. However, the reporting requirements are substantial and employers who sponsor group health insurance plans should start preparing now so they can meet the extended reporting deadline for the 2020 and 2021 reference years. Employers should discuss these reporting requirements with their TPAs ​​and PBMs and, if insured, with their insurance issuers, to confirm that they will assist the employer in preparing and filing these required reports. Ideally, employers will enter into agreements regarding this reporting, and these agreements will include indemnification clauses for failure to report.

FOOTNOTES

1 See Article 204 of section BB of the CAA; codified in the PHSA at 42 USC § 300gg-120, ERISA at 29 USC § 1185n and the Internal Revenue Code at 26 USC § 9825.

2 The IFR can be viewed here.

3 The ministries have indicated that they intend to create a data collection system that will allow multiple reporting entities to submit different subsets of the required information regarding the same plan or the same issuer.

4 The IFR defines “market segment” to include seven different types of hedging. The market segments applicable to plan sponsors are: (1) self-funded plans offered by large employers, (2) self-funded plans offered by small employers, (3) the fully insured large group market, and (4) market for small groups insured.