Roundup of selected state health developments, third-quarter 2020

Roundup of selected state health developments, third-quarter 2020

States scrambled in the third quarter of 2020 to address health coverage and quality, prescription drug costs, COVID-19 testing, paid and unpaid leave, and other benefit-related issues. Download the 17-page print-friendly PDF for state-by-state details. Here are some highlights from the article.

Individual health coverage mandates

Two states — California and Rhode Island — where individual health coverage mandates took effect this year have proposed regulations for employer reports due in 2021. Both states require residents to carry minimum essential coverage (MEC) or face a state tax penalty.

State and local healthcare initiatives

State and city leaders continue to look for ways to expand health coverage and improve quality through assorted local initiatives. San Francisco regulators have updated health coverage standards for employees of the city’s contractors and set expenditure rates for 2021. Seattle’s health coverage law for hotel workers has survived an initial court challenge and will move ahead with rates updated for 2021 as litigation continues.

With unprecedented expansion of telehealth services during the COVID-19 outbreak, Colorado, Nevada, Oregon and Washington are collaborating to identify best practices that support telehealth services even after the pandemic ends. The state leaders see telehealth as a way for patients to connect with healthcare providers while mitigating virus exposure risks.

Healthcare studies

As the 2020 presidential election nears, the Commonwealth Fund examines voters’ views on healthcare issues. Another Commonwealth Fund report evaluates state healthcare systems. The Kaiser Family Foundation has issued state-by-state fact sheets and a national summary reviewing the impact of COVID-19 on mental health.

Drug prices

As prescription drug prices continue to rise, states have sought to hold manufacturers, pharmacy benefit managers and insurers responsible for limiting costs and reporting and justifying price increases. A ruling in a lawsuit heard by the US Supreme Court on Oct. 6 (Rutledge v. Pharm. Care Mgmt.) may clarify the extent to which states can exercise this authority. Ahead of that decision, which is expected by June 2021, Minnesota and New Hampshire have enacted drug price reporting obligations. In addition, New Hampshire has set a cost-sharing limit for insulin and moved ahead with plans to purchase prescription drugs from Canada.

Health plan assessments

In 2021, employers with insured health plans issued in New Jersey may see insurers pass along a premium excise tax enacted to support the state’s reinsurance program. New York has again extended its Health Care Reform Act assessments and surcharges for insurers and self-insured health plan sponsors to support indigent care and graduate medical expenses.

Health insurance mandates, billing reforms

A mix of insurance laws will take effect in 2021. California has fortified its regulatory authority over certain Affordable Care Act provisions. Colorado has enacted pre- and post-HIV-exposure drug obligations for pharmacists and insurers. Georgia and Virginia have adopted surprise healthcare billing restrictions. Illinois is actively enforcing mental health parity compliance in the state, while Massachusetts has affirmed its contraceptive law’s requirements. Some states have imposed new or updated COVID-19 coverage requirements. Several states have clarified gender nondiscrimination provisions. These insurance laws don’t apply to self-insured ERISA plans.

COVID-19 coverage

COVID-19 continues to spread. While federal lawmakers have taken some steps to alleviate diagnostic testing costs, states like California and New York have imposed additional COVID-19 cost-sharing restrictions on insured plans. Michigan regulators have announced potential premium refunds or credits for plan sponsors with insured policies, since nonessential health and dental services were often unavailable due to the pandemic.

Gender nondiscrimination in insured plans

As gender nondiscrimination questions arise at the federal level, four states — Illinois, Michigan, New Hampshire and Wisconsin — have issued guidance clarifying state-law coverage obligations for insured plans. Two recent federal developments have spurred state regulators to clarify their stance: First, a decision by the US Supreme Court held that federal protections against workplace sex discrimination extend to gender identity and sexual orientation (Bostock v. Clayton County, 140 S. Ct. 1731 (2020)). Second, a revised federal rule under ACA Section 1557, issued in June, in part eliminates certain federal protections against discrimination in healthcare on the basis of gender identity provided by a previous iteration of the rule. Select  portions of the revised final rule are currently on hold due to nationwide preliminary injunctions in ongoing litigation.

Leave

The COVID-19 pandemic has highlighted gaps in leave benefits, leading states, cities and counties to implement and expand  paid and unpaid leave benefits for employees. While many paid leave mandates are specific to COVID-19 needs, some jurisdictions have enacted permanent changes. California has expanded its unpaid, job-protected leave provisions. Connecticut, Massachusetts and New York have updated and clarified paid family and medical leave requirements. New York City has amended its paid sick and safe leave law to better align with a recently enacted state law. Puerto Rico has expanded its maternity leave law for certain adoptive mothers.

Gig work, commuter benefits

Certain state and local employment laws could affect employee benefits, including whether an employee is classified as an employee or independent contractor. Though a proposed US Department of Labor rule aims to simplify the distinction under the Fair Labor Standards Act, California has imposed stricter parameters. Pretax transit benefits have also received attention in New Jersey and Washington, DC.

Related resources

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Catherine Stamm
by Catherine Stamm

Principal, Mercer’s Law & Policy Group

Katharine Marshall
by Katharine Marshall

Principal, Mercer's Law & Policy Group

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