AP Blog

With the annual Patient-Centered Outcomes Research Institute (PCORI) fee deadline rapidly approaching on July 31, 2020, we have certainly received an influx of inquiries regarding the IRS’ plans for that since, for an albeit brief time, the PCORI fees were thought to have gone the way of the...
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By Brock Baldwin, 06/02/2020
Let’s assume you’re a federal contractor and you’ve found the perfect job to bid. You’re capable and competitive so it should be a cake walk. Not so much. The only issue is that the solicitation says that performance and payment bonds will be required. If you’ve never been bonded...
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By Guy Sansom, 05/27/2020
Ever since ship owners first started meeting at Edward Lloyd’s coffee house over 300 years ago, insurance in London, particularly Lloyd’s, has been conducted on a face-to-face basis. In truth, this has provided London underwriters and brokers a distinct advantage. No matter the size or complexity of a...
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By Cathy Knopf, 05/26/2020
The 2020 monthly webinars focus on best practice approaches, regulatory updates, operational and risk management techniques to help senior living communities better care for their residents and staff while protecting their business. We invite you to join our specialists at these upcoming exclusive...
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05/20/2020
Earlier this week, the Department of Health and Human Services (HHS) published finalized 2021 Benefit Payment Parameters with an $8,550 out-of-pocket maximum for self-only coverage and $17,100 for family coverage for health plans beginning in 2021. See the 5/14/2020 Federal Register publication here. Under the...
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By Alyssa Blake, CPRIA, 05/19/2020
When looking at coverage limits, you may question why your home’s value is so much higher than the current construction cost or that of purchasing a new home of like kind and quality. The difference between the market value and the insured value/reconstruction costs are due to the difference in costs that...
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By Ashley Johnson, Lisa Salter, 05/18/2020
While COVID-19 continues to impact our economy, business income coverage, sometimes referred to as business interruption coverage, has become a widely popular topic in the insurance industry. As many business owners struggle to keep their businesses afloat, several questions have emerged on how insurance policies...
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Under normal circumstances, maintaining appropriate nursing staff levels to deliver quality resident care is a daily struggle. Add in severe weather, flu outbreak or a pandemic and the scales are tipped. Traditionally, senior living healthcare communities shy away from utilizing agency nursing staff due to high...
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By Greg Stock, 05/12/2020
2020 has been a year the aviation community will not soon forget, and we’re not even halfway through. In January, we started hearing about something called the coronavirus, though even through February we weren’t entirely sure what to make of it. Then came March roaring in like a lion, tearing through...
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By Kelly Hagan, 05/06/2020
We are all looking forward to the day that we can reopen our businesses to our employees and customers following the COVID-19 virus. As we begin to think about bringing employees back to work, we need to consider how to re-onboard employees. While the decisions we make will include health and safety issues and...
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CARES Act - Impact on HSAs, HCFSAs, and HRAs
03/31/2020

This advisory summarizes key provisions in the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") applying to employee benefit plans.

Over-the-Counter (OTC) Drugs and Menstrual Care Products (optional)

The CARES Act states that consumers can purchase OTC drugs and medicines with funds from their Health Savings Account (HSA), Health Care Flexible Spending Account (HCFSA), or Health Reimbursement Arrangement (HRA). Consumers may also receive reimbursement for OTC purchases through those accounts. In addition, menstrual products are now considered a qualified medical expense, meaning consumers can pay for or be reimbursed for these products through an HSA, HCFSA or HRA. This provision is effective for purchases made after December 31, 2019, and for reimbursements of expenses incurred after December 31, 2019. It does not have an expiration date.

Implementation Tips:

  • No changes are necessary to implement these changes to a Health Savings Account. HSA participants are responsible for tracking their own reimbursements and spending habits. However, please see the final bullet (below) about delays for debit cards.
  •  HCFSA - the employer/plan sponsor will need to amend their plans to permit these changes and implement them with the HCFSA vendor and debit card provider.
  • HRAs - likewise, the employer/plan sponsor will need to amend their plans to permit these changes and implement them with the HRA vendor and debit card provider. Many HRAs will choose not to implement these changes because the HRA's purpose was to cover portions of the medical or prescription drug out-of-pocket costs and not OTC medicines.
  • Inventory Information Approval System (IIAS) is updated with SKUs (Stock-Keeping Units - the bar codes on products) and once programmed, debit cards will permit these purchases. The update is expected to happen rapidly nationwide for the OTC expansion, whereas the addition of menstrual care products may take longer for nationwide programming to take effect with all vendors and merchants.

Telehealth Changes (temporary - only for plan years beginning on/before 12/31/2021) - also optional

The CARES Act states that "telehealth and other remote care services" below the deductible will be permitted in an HSA-compatible high-deductible health plan (HDHP). This provision is effective immediately and will expire December 31, 2021. The bill does not specify what "telehealth and other remote care services" entails, but you can expect updates from us as we learn more either through regulations or DOL/Treasury FAQs.

Implementation Tips:

  • The employer/plan sponsor will need to amend their plans to permit this change. They will also need to coordinate the change with the bank (aka "vendor") and any debit card provider (if that is offered by a third party).

Remember, this "safe harbor" guidance is only available for a limited time. Given the importance of telehealth in the COVID-19 crisis this will come as a relief, enabling employers to temporarily remove safeguards put into place to ensure HDHP/HSA compatibility for telehealth, such as charging fair-market value until participants meet the statutory minimum deductible. However, unless this relief is extended for plan years beginning on or after January 1, 2022, employers will need to revert to their current safeguards. 
 

Health and Welfare Plans in general - these changes are NOT optional

  • Plans must cover all testing for COVID-19, without cost-sharing, even for those tests that have not yet received an emergency use authorization from the FDA. In addition, plans must cover all qualifying preventive items, services or vaccines for COVID-19 once developed, without cost-sharing. 
  • The sole exception to the cost-sharing rules is for church groups and government-sponsored health plans. All other plans (fully insured or self-funded) need to comply. This includes private companies and both for-profit and not-for-profit companies.
  • A group health plan or a health insurance issuer will pay the provider either the negotiated rate or, if no negotiated rate is in effect because the provider is out-of-network, the lesser of the cash price for the service as posted by the provider on a public website or a different negotiated rate. Any provider that attempts to charge more than these set costs is subject to civil monetary penalties of up to $300 per day.
  • Preventive Services Note  (once a vaccine is available) - Private group and individual health insurance plans (all plans governed by ERISA) will be required to cover all qualifying preventive items, services or vaccines for COVID-19 once developed, without cost-sharing, within 15 days after the service or vaccine has received a qualifying recommendation from either the United States Preventive Services Task Force or the Advisory Committee on Immunization Practices.

After an HCFSA or HRA plan is modified, by the ER (in writing), this will apply to claims incurred and paid after December 31, 2019. No modifications are necessary to permit this OTC change to HSAs.

Please speak with your Account Manager or Sales Executive for assistance with any of these changes.

Links:

  • Full CARES Act (Final)
  • Additional details about the other provisions in the CARES Act may be found here, on the blog hosted by Keenan & Associates, An AssuredPartners Company
  • Full legal analysis by the Steptoe Firm