Considerations for 2020 Health Benefits Planning

Employers and plan sponsors face no shortage of policy and compliance issues to consider when finalizing 2020 health and fringe benefit offerings, contribution strategies, vendor terms, plan operations and employee communications, Mercer says.

That’s why its Law and Policy group recently published “Top 10 Compliance Issues for 2020 Health and Fringe Benefit Planning.”

The top compliance-related priorities for 2020 health and fringe benefit planning, according to Mercer, include the following:

Ongoing ACA concerns for large employers. Mercer recommends that employers review 2020 coverage and eligibility terms in light of employer shared-responsibility (ESR) strategy, factoring in the 2020 affordability safe harbors and minimum value determinations. Evaluate ESR and minimum essential coverage (MEC) reporting processes, including the adequacy of records to respond to any IRS inquiries (e.g., Letter 226-J). Ensure employer-sponsored group health plan complies with Affordable Care Act (ACA) benefit mandates. Monitor ACA developments, including further Cadillac tax delay or repeal and litigation challenging the ACA.

State activity. Employers should appraise state laws raising concerns for group health plans. For insured plans, expect more activity on surprise medical bills, new health coverage mandates and association health plan (AHP) options. State initiatives that could affect all employers include health plan reporting mandates, prescription benefit manager (PBM) regulations, new or continuing health plan assessments, and telemedicine laws. Employers should also track state innovation waivers under ACA Section 1332 and state regulation of AHPs to identify any restrictions that may affect plan design. Employers should work with vendors to ensure compliance with these initiatives.

Data privacy and security. Evaluate each new tech vendor that has access to health and welfare plan data to determine whether HIPAA or other data-protection and privacy laws apply. Wellness and transparency tools, mobile apps, and artificial intelligence may implicate HIPAA and other laws. Regularly review vendor compliance, since any breach or violation could create plan sponsor obligations and liabilities. Monitor how HIPAA enforcement and guidance evolves to address apps and emerging technologies. Track whether changes to public-sector HIPAA rules have an impact on data sharing in the private sector.

Health savings accounts (HSAs) and health reimbursement arrangements (HRAs). Review employer-sponsored health benefits and programs that might provide HSA-disqualifying coverage, and determine if changes are warranted. This review should include stand-alone health-related benefits and programs available to all employees—regardless of high-deductible health plan (HDHP) enrollment—as well as benefits and programs available only to HDHP participants. Adjust plan design and administration, and update plan documents and other employee communications for 2020 HSA/HDHP inflation-adjusted amounts. Consider whether to offer either of the two new types of HRAs. Individual-coverage HRAs can be used to reimburse premiums for Medicare or individual health insurance chosen by the employee. Excepted-benefit HRAs, which qualify as HIPAA-excepted benefits, can be funded up to $1,800 annually (indexed) and used to reimburse a wide range of medical care expenses.

Mental health parity. In light of heightened focus on the Mental Health Parity and Addiction Equity Act (MHPAEA) and the opioid crisis, review benefit plans for compliance with parity guidance, Employee Retirement Income Security Act (ERISA) standards and best practices. Prepare to respond to disclosure requests.

Wellness programs. For wellness programs that include a health screening, evaluate the need for any design changes due to the removal of the Equal Employment Opportunity Commission’s (EEOC)’s incentive limit rules. Consider working with consultants and vendors to make adjustments that minimize litigation risk and program disruption. Keep in mind that the EEOC’s other Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA) rules for wellness programs still apply. If tied to a group health plan, wellness programs must also comply with HIPAA rules, including reasonable alternative standards for health-contingent wellness programs.

Paid leave. Assess employer-sponsored paid leave programs, including sick, disability and parental/family leave. Monitor state and local legislation for new and expanded mandates and programs. Evaluate processes for integrating state and local paid leave mandates with existing plans, and revise plans as needed to comply. Multi-regional or multi-national employers should consider developing a long-term strategy for equalizing leave benefits across jurisdictions and administering increasingly complex programs.

Prescription drug costs and coverage. Mercer suggests that employers monitor legal and other changes at the federal and state levels targeting the increasing cost of prescription drugs. Evaluate the impact of these changes on prescription drug benefits, and reassess health plans’ drug-purchasing strategies.

Cross-plan offsetting by ERISA plan service providers. Review whether third-party administrators (TPAs) or issuers are using a practice known as cross-plan offsetting to recoup overpayments to health care providers. Decide how to address this practice, if necessary. Comply with ERISA fiduciary standards when selecting and monitoring service providers, including reviewing fees for reasonableness.

Preventive services. Confirm non-grandfathered group health plans cover ACA-required in-network preventive services without any deductible, copay or other cost sharing. Modify preventive-care benefits for the 2020 plan year to reflect the latest recommendations from the U.S. Preventive Services Task Force (USPSTF), the Health Resources and Services Administration (HRSA), the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP) and ACA guidance. Adjust benefits for new or revised recommendations on skin cancer, HIV prevention, osteoporosis, cervical cancer, obesity, unhealthy alcohol use, perinatal depression and Vitamin D supplements for older adults. For employers with religious or moral objections to covering women’s contraceptives, watch for court or regulatory developments on this ACA requirement. Update plan documents, summary plan descriptions (SPDs), summaries of benefits and coverage (SBCs), and other materials as needed.

Download the 40-page print-friendly PDF for more detailed information and resources related to each compliance priority.