4-minute read
It’s been the law now long enough for most companies with an employee health plan to at least have heard of it. Compliance, however, is another matter.
We’re talking about the Consolidated Appropriations Act of 2021, which introduced new fiduciary obligations designed to bring more transparency in all things related to company-sponsored health benefits.
If you’re like most employers, a lot of this is still very fuzzy and you may be struggling to know where to start.
There are transparency provisions, gag clause prohibitions, mental health parity requirements, and more. Although certain vendors can help you with a lot of this, employers should know they cannot delegate away their fiduciary obligations. Compliance ultimately rests with you.
So how should you go about making sure you are, in fact, complying with the CAA? Here are four detailed steps to help:
1. Establish a Compliance Task Force: You’ll want a dedicated team within your organization to oversee compliance efforts. This task force should include members from HR, legal, finance, and any other relevant departments. Their goal will be to manage the compliance process, from data collection and analysis to implementing necessary changes in health plan offerings.
2. Audit Existing Health Plan Contracts and Operations: Employers now can get their hands on cost-sharing information, including in-network and out-of-network negotiated rates. In fact, they need to ensure this information is readily available to plan members. The law also prohibits gag clauses that prevent plan sponsors from accessing and sharing cost and quality of care information.
With that in mind, we’d begin with a thorough review of all health plan contracts, agreements, and operational practices. Identify any areas that may not meet the transparency requirements or that contain prohibited gag clauses. This step is crucial for setting a baseline for compliance efforts.
The point of all this isn’t merely transparency. It’s about ensuring the rates you and your employees pay for their health care is reasonable.
In that vein, employers now need to build a process for monitoring vendor performance, starting with a regular review of fees that includes benchmarking their vendors’ compensation against others in the market.
Speaking of compensation, employers also need to get details on the direct and indirect compensation their insurance brokers, consultants, pharmacy benefit managers and third-party administrators expect to receive.
The would include bonuses, referral fees, rebates, and commissions, as well as the source of that compensation.
3. Leverage Technology for Transparency and Data Management: Invest in technology solutions (or hire the right vendors) that can help manage and share health plan data effectively. Tools that facilitate the easy access and dissemination of cost-sharing information, in-network and out-of-network rates, and other required disclosures will be particularly valuable. Your third-party administrator should be able to help you with this. If not, we’d recommend a new TPA.
4. Review and Adjust Health Plans for Mental Health Parity: A detailed comparative analyses of your health plans is now what’s required, to ensure that mental health and substance-use disorder benefits are no less restrictive than the benefits for medical and surgical care. Documentation will need to be readily available upon request.
There’s more in the CAA but by taking these steps, employers can not only meet their fiduciary obligations but also demonstrate their commitment to the well-being and equitable treatment of their employees.
The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the U.S. For more information, visit our website or call 877-440-3304.
This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.