On February 28, 2022, the White House issued a fact sheet outlining several efforts aimed to increase safety, accountability, oversight and transparency in the senior services industry (Fact Sheet). Although the Fact Sheet’s initiatives have not yet been implemented, President Biden reiterated his administration’s focus on nursing home reform during his March 1, 2022, State of the Union address. Accordingly, the efforts described in the Fact Sheet provide stakeholders with a peek into the regulatory crystal ball of the governmental efforts that may be forthcoming, either through new laws, regulatory action, policy changes, enforcement activities or subregulatory guidance.
The Federal Civil Penalties Inflation Adjustment Act of 2015 directs the US Department of Labor (DOL) to make annual inflation adjustments to specified Employee Retirement Income Security Act (ERISA) violations. The increased penalties generally apply to reporting and disclosure failures if the penalty is assessed after January 15, 2022, and if the violation occurred after November 2, 2015.
Even though the US Supreme Court blocked the US Occupational Safety and Health Administration’s (OSHA) vaccinate-or-test mandate for most employers, there is still confusion around who covers the cost for employee COVID-19 tests. In this Law360 article, McDermott’s Dawn Peacock outlines what employers need to know.
The Biden administration’s January guidance that group health plans and insurers cover the costs of at-home COVID-19 tests has rattled insurers and employers. According to this SHRM article, insurers’ data processing systems have had difficulty paying for tests purchased by consumers at pharmacies, and self-insured employers have struggled to identify the best way to pay for tests. McDermott’s Jacob Mattinson, Teal Trujillo and Judith Wethall recently advised plan administrators to work with their third-party administrators to develop a process for coverage of over-the-counter COVID-19 tests and to develop procedures to reduce the risk of participant fraud.
In response to a directive from the White House, based on provisions of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security (CARES) Act that eliminated cost sharing for COVID-19 diagnostic testing, three federal government departments—the US Department of Health and Human Services (HHS), the US Department of Labor (Labor) and the US Department of the Treasury (Treasury)—issued guidance in the form of frequently asked questions (FAQs) that states group health plans and insurers must also cover over-the-counter (OTC) COVID-19 diagnostic testing. This guidance is effective beginning January 15, 2022.
In addition, the Health Resources and Services Administration (HRSA) updated the Affordable Care Act’s (ACA) comprehensive preventive care and screening guidelines for women and children to cover additional services and supplies without a copay or deductible, effective 2023.
COVID-19 AT-HOME TESTING COVERAGE
On January 10, 2022, HHS, Labor and the Treasury together issued FAQs that elaborated on prior guidance and indicated that group health plans and insurers are required to cover OTC COVID-19 diagnostic tests without cost sharing. Because of the recent spike in COVID-19 cases resulting from the rapid spread of the Omicron variant, the guidance will continue for the duration of the public emergency.
Most consumers with private health coverage will be able to buy OTC COVID-19 tests and either have the cost covered upfront or be reimbursed later by submitting a claim to their health plan. The new requirement only applies to “diagnostic” OTC COVID-19 testing. It does not include the treatment of COVID-19 or testing that is for employment purposes.
The guidance provides that health plans and insurers must cover at least eight OTC COVID-19 diagnostic tests per covered individual per a 30-day period. Insurers will be able to set up networks of preferred suppliers to provide OTC COVID-19 tests directly to participants without upfront costs. Insurers must still reimburse OTC COVID-19 tests purchased outside the direct coverage program, however, the reimbursable amount is limited to $12 per test if the health plan also provides tests through its preferred pharmacy network and through a direct-to-consumer shipping program without upfront costs.
Besides the risk of increasing the average cost of OTC COVID-19 tests, the new initiative raises concerns over fraud and abuse. For health plans and insurers to protect themselves, the FAQs provide several examples of permissible activities to prevent fraud and abuse, like requiring proof of purchase or an attestation that the test was purchased for proper purposes (i.e., is being used by the covered individual, is not being reimbursed by another source, is not being resold and is not for employment purposes).
HRSA UPDATES ACA PREVENTIVE HEALTHCARE GUIDELINES
On January 11, 2022, HRSA announced that it updated the preventive health and screening guidelines for women, infants, children and adolescents. Under the ACA, certain group health plans and insurers must provide coverage with no out-of-pocket costs for preventive health services within these HRSA-endorsed comprehensive guidelines.
HRSA accepted the updates recommended by the Women’s Preventative [...]
Throughout US President Joe Biden’s first year in office, the Biden administration reversed numerous Trump-era policies, including those concerning the US Equal Employment Opportunity Commission, federal contractors, wage data and LGBTQ bias. In this Law360 article, McDermott Partner Rachel Cowen offers insight into how the friction between religious and LGBTQ rights will continue to play out throughout employment law.
The Biden administration is no longer defending a Trump administration H-1B visa regulation that would have made it more challenging for international students to work in the United States. As noted in this Forbes article, McDermott Partner Paul Hughes recently successfully argued on behalf of plaintiffs that the H-1B rule violated current law.
Over the past year, the regulatory backdrop around environmental, social and governance (ESG) investing has shifted. As McDermott Partner Brian J. Tiemann explains in these slides, the US Department of Labor (DOL) under the Trump administration dropped ESG terminology and set a high standard for considering factors other than purely financial projections for investment alternatives. However, the Biden administration’s DOL has said that it will not enforce Trump-era regulations or pursue enforcement actions against plan fiduciaries for failure to comply with those regulations.
Missing participants and cybersecurity are among the top challenges for retirement plan advisors, according to participants at the National Association of Plan Advisors’ 2021 NAPA 401(k) Summit in Las Vegas. During the Summit’s opening day workshop session, McDermott Partner Erin Turley said advisors should make an effort to discuss cybersecurity with clients in advance of a US Department of Labor audit.
“The plan document says X, the recordkeeping agreement says Y, and maybe the (summary plan description) says something different—if it’s even addressed in the SPD,” Turley noted. “So make sure all those documents sync and your process actually matches your documents as equally.”
The US Department of Labor (DOL) is casting a skeptical eye on health insurance companies’ inconsistent coverage of mental health and substance use disorder benefits. The DOL recently commenced litigation against an insurer to require mental health and substance use disorder coverage be on par with regular physical care.
In an article in Bloomberg Law, McDermott Partner Judith Wethall said employers are usually unaware about these violations. Self-funded employers typically simply accept whatever their third-party administrator (TPA) is offering.
“Sometimes a TPA does things behind the scenes that might violate mental health parity and an employer might not even know it,” Wethall said.
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