To wrap up 2020, states clarified employer reporting obligations, attempted to rein in prescription drug costs, and moved forward with state health plan initiatives, including updates to employer healthcare expenditures and changes to individual health plan options. Insurance laws and regulations addressed COVID-19 vaccine coverage, surprise medical bills, insulin cost sharing, mental health parity and telemedicine. States also updated or expanded paid and unpaid leave laws in the fourth quarter. Other benefit-related activity focused on employee status, pretax transportation fringe benefits, privacy and long-term care.
Download the 14-page print-friendly PDF for state-by-state details. Here are highlights of the coverage.
The broad range of state reporting requirements for employers took on new urgency at the end of 2020 as health plan sponsors geared up for submitting 2020 coverage reports in states that have imposed their own individual mandates. California, Massachusetts, New Jersey, Rhode Island and Washington, DC, require their residents to maintain a minimum level of health coverage and require plan sponsors to submit coverage reports. Reporting obligations for 2020 coverage in California and Rhode Island begin in 2021.
Group health plan sponsors’ state reporting obligations have grown over the past few years. While ERISA continues to preempt certain state regulation of private employers’ group health plans, some state reporting requirements for group health plan sponsors have moved forward. Four states — California, New Jersey, Rhode Island and Vermont — along with Washington, DC, have imposed individual health coverage mandates, and most require employer reporting on coverage. Group health plan sponsors also face other state reporting requirements, sometimes in conjunction with a covered-lives surcharge or employment-related health benefit. For a review of key state reporting mandates for group health plan sponsors, see States increase group health plan reporting obligation (Nov. 17, 2020).
A landmark US Supreme Court ruling allowing Arkansas to regulate pharmacy benefit managers (PBMs) could have broad implications for state initiatives on drug pricing and drug plan management going forward. States are also exploring other avenues for reducing drug costs. California will look into partnering with manufacturers and others to purchase generic drugs. Florida is pushing ahead on its plan to import drugs from Canada.
A few state and local health coverage initiatives garnered attention in the fourth quarter of 2020. San Francisco posted updates for employers’ required 2021 health expenditures. Georgia received federal approval to drop off the federally facilitated health insurance exchange, though the move faces a legal challenge. Washington initiated its version of a public option for state residents.
California insurance regulators posted guidance on COVID-19-related issues. Three more states — Maine, Michigan and Virginia — enacted surprise medical billing laws to protect consumers insured in the state, while other states continued existing efforts to end surprise medical bills. The federal restrictions on surprise medical billing enacted with 2021 appropriations legislation (Pub. L. No. 116-260) are expected to take effect in 2022 and appear to wrap around existing state insurance laws. Vermont and Washington joined the growing list of states curbing consumer cost sharing for insulin. Washington also announced new laws on telemedicine, mental health parity, PBMs and claim processes.
State paid and unpaid leave laws continue to expand. An October 2020 National Conference of State Legislatures (NCSL) report provides an overview of state efforts. Since then, Colorado voters approved a paid family and medical leave (PFML) program. Hawaii expanded unpaid, job-protected leave to care for more family members. Maine finalized rules for its accrued leave law now in effect. Massachusetts kicked off its PFML program benefits. New Jersey and Rhode Island updated amounts for their disability/paid family leave programs. New York clarified paid sick leave requirements. Local governments updated and expanded COVID-19-related leave.
As 2020 wound down, states grappled with benefit-related issues beyond healthcare and leave laws. California voters weighed in on employee status and privacy rights. Los Angeles and Massachusetts updated guidance on pretax transportation fringe benefits. Washington will soon move ahead with a state-sponsored long-term care program.