Group Health Plan Considerations

As part of a substantial set of stipulations aiming to minimize billing surprises for participants and improve plan accountability and transparency overall, the CAA clarified the role of the plan sponsor as fiduciary, with four key requirements:

Remove service provider gag clauses.
Plan sponsors must attest that they have full contractual access to cost and quality information that service providers traditionally have limited.

Report prescription data.
Plan sponsors must report detailed information about prescriptions, including costs, how frequently drugs are dispensed and the impact of rebates, fees and other forms of renumeration on employee premiums.

Disclose service provider compensation.
Plan sponsors are required to obtain a comprehensive list of any direct or indirect compensation over $1,000 received by service providers in connection with their work for the health plan.

Achieve parity in substance abuse and mental health benefits.
Plan sponsors must demonstrate that mental health and substance abuse benefits are not subject to more non-quantitative treatment limitations (NQTLs) than are medical or surgical care benefits. Examples of NQTLs could be care restrictions based on provider type or requirements for prior authorization.

Together with other elements of the CAA, these provisions are expected to ensure that group health plans are structured to benefit participants. However, compliance with the new CAA provisions is a substantial undertaking — with the burden placed squarely on plan sponsors. FNB’s Insurance team is working closely with clients while they execute a four-step process:

• Acknowledge fiduciary responsibilities. Businesses need to understand the scope of the ERISA requirements, the responsibilities for employers as fiduciaries and the serious implications for failure. In undertaking this process for the first time, determine how to stay on top of emerging guidance and deadlines that, while largely still being finalized, will likely come into play in 2022.
• Gather the information required by CAA. Gathering the information required by the CAA will be challenging because parties in the value chain have not been required to report or release this information in the past. Fiduciaries must make strategic decisions based on how partners respond and act with urgency to establish the necessary processes.
• Analyze the information and apply it to health plan design and structure. The significant effort to secure information required by the CAA can yield a beneficial return in the form of data analytics. Studies estimate that approximately one quarter of the $4 trillion spent on healthcare each year is waste. Employers will have greater visibility into what they are paying, what they are paying for and what benefits employees actually use, so they can benchmark performance, minimize wasteful spending and lower employee costs.
• Establish a fiduciary process. Develop internal frameworks to track, store and present the influx of information, especially in the event of an audit.

In any environment, shifting regulatory requirements can pose significant risk for businesses that lack mechanisms to stay current and compliant. A knowledgeable partner can be key to a company’s success.

Contact an FNB Insurance expert at 1-800-252-4850 to discuss strategies to navigate the CAA legislation and improve outcomes for your teams.