Top 10 health, leave benefit compliance and policy issues in 2024

PBM reforms. Reducing drug prices by increasing transparency and reforming how PBMs do business is a top bipartisan priority this year. Reforms in an expected Senate healthcare package will likely draw from provisions in the Pharmacy Benefit Manager Reform Act (S 1339), including:

• Extensive new PBM annual disclosures to plan sponsors about rebates and fees received from drugmakers and other third parties, the amount of prescription drug copayment assistance funded by drug manufacturers, total out-of-pocket spending by plan beneficiaries, formulary placement rationale, a list of covered drugs billed under the health plan, and the total gross and net drug spending by the health plan
• A requirement to pass all rebates, fees, alternative discounts and other remuneration related to utilization through to the health plan
• A broad-based commercial market ban on “spread pricing” (a PBM charging a plan sponsor more than the amount reimbursed to the pharmacy dispensing the drug)

In addition, the measure would direct the Department of Labor (DOL) to conduct a study on whether PBMs should serve as ERISA fiduciaries to plans. Some plan sponsor groups are urging Congress to go further and make PBMs plan fiduciaries without conducting a study. These groups are also pushing back on an attempt by independent pharmacies to add language limiting ERISA preemption of expanding state PBM reforms, which can interfere with multistate employers’ ability to design pharmacy benefit programs.

Like S 1339, wide-ranging House legislation — the Lower Costs, More Transparency Act (HR 5378) — could soon see a floor vote. This measure would mandate extensive semiannual PBM reports to plan sponsors with detailed information on rebates, drug spending, total out-of-pocket spending and formulary placement rationale, among other things. Another provision would require PBMs and third-party administrators (TPAs) to disclose extensive information about their direct and indirect compensation to plan fiduciaries.

PBM reforms affecting public programs proposed in both chambers would:

• Delink list drug prices and PBM compensation in Medicare
• Increase transparency into PBM business practices related to Part D benefits
• Require a study of how vertical integration in the pharmacy space is affecting Medicare drug costs and spending
• Ban spread pricing in Medicaid

Speeding more generics to market and capping out-of-pocket costs for insulin are also bipartisan priorities in both chambers.

Increased transparency and provider competition. Another major bipartisan theme of bills in both chambers is to lower overall healthcare costs through transparency and competition.

The above-mentioned HR 5378, which combines separate bipartisan bills approved by several House committees, would implement more price and operational transparency in the healthcare industry. Proposals include codifying and strengthening current price transparency rules for hospitals, including enhancing the transparency-in-coverage (TiC) rules and requiring new price transparency for services like diagnostic lab tests, imaging, and ambulatory surgical centers owned by hospitals.

The bill also advances “site-neutral” Medicare payment policies that plan sponsor groups hope lawmakers will eventually extend to the commercial market. Provisions would require that Medicare and Medicare beneficiaries pay the same rates for physician-administered drugs in off-campus hospital outpatient departments and in physician offices. Other provisions would require that each off-campus outpatient department of a Medicare provider obtain and include a unique provider identifier on claims for payment.

The bill also would mandate a slew of new government reports on various topics, including how well current price-transparency requirements are working and whether adding quality-of-care metrics to those requirements would be feasible. Another provision would strengthen the No Surprises Act’s gag clause prohibition by ensuring that employer plan sponsors are not contractually restricted from obtaining cost or quality-of-care data related to their own plans from service providers.

The Senate, meanwhile, is forging its own path on transparency and encouraging more provider competition. A bill passed by the Health, Education, Labor and Pensions Committee (S 2840) would:

• Bar anti-competitive contract provisions that prevent plans from directing employees to higher-value, lower-cost providers
• Require off-campus hospital outpatient departments to provide a unique identifier on all bills, which would help employers determine whether charges are appropriate
• Ban hospital facility fees for telehealth and certain other services

Virtually all these transparency and PBM reforms have strong backing from the plan sponsor community. While drawing fire from PBMs and other providers, the measures have widespread bipartisan support, as shown in the often-overwhelming approval votes by House and Senate committees. That support suggests that, despite uncertainty about how the two chambers might reach agreement, some proposals could land in any final healthcare package that Congress might pass this year.

Extension of telehealth flexibilities. Bipartisan legislation to make permanent two temporary pandemic-related telehealth provisions have cleared House committees and are expected to see a full House vote this fall. The Senate outlook is clouded, however, by opposition from some Democrats and participant-rights groups.

The Telehealth Benefit Expansion for Workers Act (HR 824) would make permanent the pandemic-related relief that treats stand-alone telehealth benefits and other remote care services for certain employees like an excepted benefit, exempt from many ERISA and ACA group health plan mandates. The temporary relief, and the permanent extension proposed in HR 824, only extends that treatment to employees ineligible for any other group health plan offered by the same employer (e.g., part-time or seasonal workers). While this temporary policy is tied to the public health emergency (PHE) that ended on May 11, employers now offering this stand-alone telehealth benefit may continue to do so through the end of the plan year that began on or before May 11 (e.g., through Dec. 31, 2023, for calendar-year plans).

Although HR 824 is sponsored by lawmakers from both parties, it passed out of committees over the objections of some Democrats. They expressed concern that continued relief from many ACA and ERISA requirements for stand-alone telehealth could encourage smaller employers to offer telehealth instead of major medical benefits. The practice could create confusion among workers, causing some to think they have more comprehensive coverage.

The bipartisan Telehealth Expansion Act (S 1001, HR 1843) would make permanent the pandemic-related relief that allows high-deductible health plans (HDHPs) qualifying to work with health savings accounts (HSAs) to cover telehealth and other remote care services on a pre- or no-deductible basis. The temporary relief also permits an otherwise HSA-eligible individual to receive pre- or no-deductible telehealth coverage from a stand-alone vendor outside of the HDHP. In both cases, the individual would remain eligible to make or receive HSA contributions. Originally provided in the 2020 Coronavirus Aid, Relief and Economic Security (CARES) Act (Pub. L. No. 116-136) for plan years starting on or before Dec. 31, 2021, this relief was most recently extended by the 2023 CAA (Pub. L. No. 117-328) for plan years beginning after Dec. 31, 2022, and before Jan. 1, 2025. Without a permanent or another temporary extension, the relief will expire on Dec. 31, 2024, for calendar-year plans (and during 2025 for noncalendar-year plans).

Similar legislation has been introduced in the Senate. Democrats have concerns that the policy might discriminate against communities facing obstacles to telehealth, such as a lack of broadband, and that HSAs favor more affluent individuals. Those concerns make the prospect of any extension uncertain.

Eased employer ACA reporting duties. Two bipartisan passed by the full House would make some relatively minor but welcome changes to employer reporting requirements under the ACA’s employer shared-responsibility (ESR) provisions.

The Paperwork Burden Reduction Act (HR 3797) seeks to codify existing IRS rules allowing the use of the alternative method for furnishing Forms 1095-B and some Forms 1095-C. The bill would also expand those rules to allow the alternative method for furnishing Forms 1095-C to all employees (not just nonemployees and employees not considered full-time under the ACA, as limited under current IRS guidance). The method, implemented by IRS after Congress reduced the ACA’s individual mandate penalty to $0, excuses an employer from having to mail paper copies of the forms if its website contains a “clear and conspicuous notice” that employees may receive paper copies on request.

The Employer Reporting Improvement Act (HR 3801) would make other amendments to the ACA’s employer reporting rules. Those changes would allow substituting any covered individual’s birthdate for the person’s taxpayer identification number (TIN) if the reporting entity has been unable to collect that TIN. Current IRS rules allow substituting birthdates for TINs if reporting entities have been unable to collect individuals’ TINs through “reasonable efforts,” which generally include three attempts. In addition, the bill generally would codify current IRS rules on electronic delivery (which requires individuals’ affirmative consent) of Forms 1095-B and C to employees. Another provision would give employers more time —90 days instead of the current 30 days — to respond to proposed IRS assessments (via Letter 226-J) for alleged violations of the ESR rules. Finally, the bill would set a six-year statute of limitations for ESR assessments. IRS’s current position is that no statute of limitations applies to ESR assessments.

These noncontroversial ACA reporting changes have a decent chance of becoming part of any House-Senate deal on final healthcare legislation.

Mental health parity and access. Bipartisan legislative efforts on these issues — particularly to strengthen provider networks and extend telehealth flexibilities — are ongoing. However, lawmakers and agencies also will continue to focus on parity enforcement, with DOL’s proposed overhaul of MHPAEA regulations set to dominate the policy agenda.

A Senate Finance Committee hearing earlier this year on inaccurate mental health provider directories and network access problems in Medicare and Medicaid suggests employer plans could face the same scrutiny from Democrats. Committee Chair Ron Wyden, D-OR, may reintroduce a new version of “ghost network” legislation from last year. That bill aimed to increase reporting accuracy, strengthen enforcement and create civil monetary penalties for employer plans found out of compliance with parity rules. Like last year’s bill, however, a reintroduced measure is unlikely to draw any support from Republicans.

HSA reforms. Bills advanced by the House Ways and Means Committee would expand access to HSAs but are unlikely to be taken up by the Senate. The Bipartisan HSA Improvement Act (HR 5688) would allow using HSA funds to pay for “direct primary care (DPC) service arrangements” and care provided by work site medical clinics, without jeopardizing an individual’s HSA eligibility, among other things. Another measure, the HSA Modernization Act (HR 5687), includes proposals to increase contribution limits and broaden the types of services that individuals can use HSAs to reimburse before reaching the deductible.