By: Kelly Dempsey, Esq.
The last 7 years have been a wild ride and it’s not quite over yet. As noted in many other posts and articles, the rules will be changing under the new administration and in recent weeks we’ve seen a clearer picture of how the rules will be changing, but there are still more steps in the process before TPAs and employers can start making changes to their processes and health plans. Many are focused on the modifications to the requirements to offer and/or have coverage (i.e., the employer mandate and individual mandate) and it’s no doubt these provisions have had a large impact on how employers offer coverage and what they offer, as well as the costs to employers, individuals, and insurers.
To counteract the rising costs of healthcare due to ACA and other factors, like high medical and drug costs, many in the self-funded industry have explored other options and learned how to expand and better utilize the flexibility and dynamics afforded to self-funded plans in the cost containment realm. From telemedicine, to medical tourism, to other incentive programs, and exploring other provider payment options like direct primary care, employers with self-funded plans have more opportunities to explore cost containment options and implement the options that can help the plan and employer save money, while tailoring their health plans to the needs of their employees. Some cost containment programs, however, have added additional complications for a variety of reasons.
The birth of new cost containment programs includes reviewing current rules and applying those rules as we know them to the health plans. If these programs are offered outside of the self-funded health plan, do the programs themselves become stand-alone health plans? If yes, what rules are applicable? Can these new programs qualify as excepted benefits and be excluded from certain (or all) provisions of ERISA, HIPAA, ACA, and other federal laws? Are these programs compatible with IRS rules related to HSA qualified high deductible health plans (HDHPs)? Do the answers change if the programs are implemented within the self-funded health plan? Unfortunately, in many cases, the rules are not clear.
We know the new administration has big plans for modifications to current rules and creation of new rules and guidelines. In addition to the employer and individual mandates, another key change we’ve heard about repeatedly is the modification to HSA rules. If the new administration is modifying certain HSA rules to encourage employers and individuals to utilize HSAs, will the administration and agencies issue clarifying rules that address these questions? Sadly this is another unknown and we’re stuck in this holding pattern with more questions than answers.
In some ways it feels like we’re right back where we started back in 2010 – waiting to see what rules and changes actually make their way through the approval process. For time being, we have to buckle up and hold on until the ride comes to a complete stop. As such, until we have finalized new rules with effective dates and clear guidance, it’s best to keep things status quo and maintain compliance with the rules as we know them today until the rules are implemented, finalized, and effective.