Recently, the Internal Revenue Service (IRS) announced (See Revenue Procedure 2023-23) cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs), high-deductible health plans (HDHPs) and excepted benefit health reimbursement arrangements (HRAs) for 2024. All of the dollar limits currently in effect for 2023 will change for 2024, with the exception of one limit. The HSA catch-up contribution for individuals ages 55 and older will not change as it is not subject to cost-of-living adjustments.
The end of the COVID-19 public health emergency also means the end of coverage of self-administered, over-the-counter COVID tests. In this MedTech Dive opinion article, McDermott+Consulting’s Amy Kelbick and Eric Zimmerman argue that insurers, including Medicare, should continue to cover COVID tests at no cost and without requiring a prescription even after the public health emergency ends.
Numerous states—including North Dakota, Hawaii, Indiana, Texas and New Hampshire—have been busy finalizing rulemaking and legislation impacting healthcare providers, telehealth and digital health companies, pharmacists and technology companies that deliver and facilitate virtual care. What have these states been up to over the last month?
On April 20, 2023, McDermott’s Alden Bianchi was a speaker at the ERISA Industry Committee’s 2023 Annual Spring Policy Conference, which was held at the National Press Club in Washington, D.C. The panel in which he participated was entitled “From Clinic to Courtroom – Legislation and Litigation Limiting Prescription Practices,” and it covered three main topics: state regulation of telehealth; the regulation of specialty pharmacy supply chains and delivery measures (“brown bagging,” “white bagging” and “clear bagging”); and state-level efforts to regulate pharmacy benefit managers (PBMs) following the US Supreme Court’s 2020 Rutledge decision, which held that an Arkansas law regulating the costs of prescription drugs was not preempted by the Employee Retirement Income Security Act of 1974 (ERISA).
Here are some of the program’s key takeaways and predictions:
While telehealth is here to stay, the high cost of Medicare reimbursements presents an immediate barrier to widespread adoption, and the particulars of how telehealth will be regulated will be left largely to the states.
The battle over the delivery of specialty prescription drugs is heating up as PBMs seek to capture some of the margins previously available only to providers. State laws regulating pharmacies and pharmacists will be at the center of the battle, and future legislative efforts will likely be subject to challenge.
State legislatures have read the Rutledge decision broadly in ways that virtually guarantee a good deal of future litigation. It might take as long as a decade, and it may well take more than one trip to the Supreme Court before plans, issuers, providers, state legislators and regulators, and other stakeholders have a reliable understanding of the contours of ERISA preemption in the pharmacy context.
Accompanying this post are copies of Mr. Bianchi’s panel materials, including:
The Biden administration has announced that the federal government will wind down its remaining COVID-19 vaccination mandates (including those for federal workers, contractors and international air travelers) effective May 11, 2023. This action coincides with the conclusion of the COVID-19 public health emergency (PHE). Additionally, the US Department of Health and Human Services (HHS) will initiate steps to terminate the vaccination prerequisites for healthcare facilities that are certified by the Centers for Medicare & Medicaid Services (CMS).
The US Departments of Labor, Health and Human Services, and the Treasury (the Departments) have released a series of Frequently Asked Questions (FAQs) in response to Braidwood Mgmt. Inc. v. Becerra, a recent case that invalidated a portion of the Affordable Care Act (ACA) preventive services mandate. The FAQs aim to address inquiries from stakeholders, while also emphasizing the Departments’ opposition to the Braidwood ruling. The Departments urge plans and issuers to continue providing coverage for preventive services at no additional cost to patients.
There has been a flurry of activity in Congress focused on healthcare issues over the last two weeks. Committees in both the US House and Senate held hearings on legislation focused on increasing transparency and competition in the healthcare system that could have significant impacts for certain healthcare providers, healthcare plans and pharmacy benefit managers.
The Biden administration originally announced its intent to end the COVID-19 National Emergency (NE) and the COVID-19 Public Health Emergency (PHE) on May 11, 2023 (read our prior article for more information). Although the end date of the NE was subsequently advanced to April 10, 2023, by Congressional resolution, the US Departments of Labor, Health and Human Services, and the Treasury (the Departments) have given no indication that the change will affect employee benefits plans. Plan sponsors should continue to treat May 11 as the end of the NE until the Departments say otherwise.
During the COVID-19 pandemic, certain permissive practices were allowed by high-deductible health plans (HDHPs) and health savings accounts (HSAs). This article explores whether these benefit offerings can be continued at the end of the PHE and NE.
HDHPs AND HSAs
IRS Notice 2020-15 temporarily permits the coverage of COVID-19 testing with no cost-sharing for HDHPs. It provides that an HDHP will not fail to be an HDHP merely because the plan covers expenses related to COVID-19 testing and treatment prior to satisfying the applicable minimum deductible. This guidance was not directly tied to the NE or the PHE, meaning that it will eventually lapse. The eighth question/answer of the FAQs indicates that individuals covered by an HDHP who have purchased items related to COVID-19 testing or treatment prior to meeting the applicable minimum deductible can continue to contribute to an HSA until further guidance is issued. The Departments also assured plan sponsors that future changes will generally not require HDHPs to make mid-year changes for covered individuals to remain eligible to contribute to an HSA.
Thus, individuals covered by an HDHP may continue to contribute to an HSA following the end of the PHE. COVID-19 vaccinations also continue to be considered preventive care under Section 223 of the Code for purposes of determining whether a health plan is an HDHP.
ACTION ITEMS
Once the PHE and NE have ended, employers can continue their practice of allowing individuals covered by an HDHP plan to contribute to an HSA. Employers need to also consider whether they will continue to cover COVID-19 tests as required by a doctor or OTC without cost-sharing. Employers should strategize what effect this might have on the HDHP. This might also require an amendment to the health plan or its summary plan description. Employers should continue to watch for further guidance from the Departments on this issue.
The My Health My Data Act in Washington State (the Act) is expected to be signed into law by Governor Jay Inslee this year, after being passed by both the Washington Senate and House in different versions. Unlike recent state privacy laws, the Act specifically targets consumer health data that is not covered by the Health Insurance Portability and Accountability Act (HIPAA). It includes provisions that apply to processors and third parties who may handle a broadly defined set of consumer health data, beyond healthcare-adjacent businesses. The Act could have a significant impact on various entities, including advertisers, mobile app providers, wearable device manufacturers, healthcare companies and their data processors who handle non-HIPAA-regulated health information.
As summer approaches and the clocks are set forward, April marks an increase in the National Minimum Wage, compensation for unfair dismissal and other payments required by UK employment laws.
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