In 2023, employers will continue to focus on complying with transparency requirements designed to provide greater insight into the prices of prescription drugs and other healthcare. Other issues in the spotlight include health plan coverage of gender, family planning (including abortion) and behavioral health. With respect to gender and family planning, employer-sponsored health plans must comply with rapidly changing federal and state laws and regulations, assess litigation risks, and offer health coverage that aligns with employees’ needs and the employer’s diversity, equity and inclusion (DEI) goals. Employers may want — or have — to expand behavioral health coverage in response to the nation’s mental health crisis and tougher enforcement of the Mental Health Parity and Addiction Equity Act (MHPAEA).
This GRIST summarizes expected 2023 compliance and policy developments affecting health and leave benefits and suggests action steps for employers. Topics covered include:
A number of bipartisan proposals have a chance of making it into 2022 year-end legislation, despite midterm election tensions and Republican anger over the Inflation Reduction Act (IRA) (Pub. L. No. 117-169), the Democrats’ budget reconciliation bill recently enacted on party-line votes. While the new law makes big changes to Medicare prescription drug pricing and coverage, the act’s provisions generally don’t directly affect employer plans. The legislation also drops many employer-focused proposals contained in earlier, more expansive versions of the bill known as the Build Back Better Act.
Democrats’ nearly two-year focus on achieving their policy goals through the reconciliation process without Republican support has fueled pent-up demand for final action on several bipartisan priorities. Though Congress has gone home to campaign ahead of the midterm elections, lawmakers are actively considering the contours of a healthcare package that could hitch a ride on an omnibus year-end measure to keep the government running when current funding expires on Dec. 16. That package could include proposals on telehealth, mental health, same-sex marriage rights, insulin costs and kidney dialysis benefits.
Extension of telehealth flexibilities. Lawmakers want to extend a telehealth provision in the Coronavirus Aid, Relief and Economic Security (CARES) Act (Pub. L. No. 116-136) that allows:
Neither type of predeductible telehealth coverage will jeopardize an individual’s eligibility to make or receive HSA contributions while the temporary relief is in place. The relief originally applied for plan years starting on or before Dec. 31, 2021. Congress extended this relief in the 2022 Consolidated Appropriations Act (2022 CAA) (Pub. L. No. 117-103), but only from April 1 through Dec. 31, 2022 — not retroactively to Jan. 1, 2022. Bipartisan bills (HR 5981, S 1704) would make this relief permanent, although another temporary extension, perhaps for two years, appears more likely.
Congress may also extend the temporary PHE relief that treats stand-alone telehealth benefits and other remote care services for benefits-ineligible employees (e.g., part-time or seasonal workers) like an excepted benefit, exempt from many ERISA and ACA group health plan mandates. Unlike the temporary relief, the legislation (HR 7353) would let all employers, regardless of size, offer excepted-benefit stand-alone telehealth arrangements to all employees, not just those ineligible for benefits.
Mental healthcare. Mental health advocates are optimistic that Congress will include behavioral health reforms in a year-end package, as House and Senate committees have recently made progress on several related bills. A leading proposal in Congress is House-passed bipartisan legislation (HR 7666) that would reauthorize and expand a number of federal programs meant to support behavioral healthcare and workforce training. The bill wouldn’t directly affect private employers’ programs but would require self-funded, nonfederal governmental plans to comply with mental health parity laws. It would also require PBMs to report a wide range of data about their business practices to plan sponsors and the government at least every six months. Reportable data would include how the PBM sets rebates and discounts and what it pays for drugs. Those provisions have bipartisan support and backing from employers and stand a good chance of landing in any final mental health measure this year.
Another House-passed bill (HR 7780) from Democrats has potentially adverse implications for employers but faces headwinds in the Senate. Provisions would boost Department of Labor (DOL) funding for enforcement, expand the ability of DOL and others to sue plans and health insurers for mental health parity violations, and let DOL impose civil monetary penalties for MHPAEA violations. The bill would also ban arbitration clauses, class action waivers, and clauses granting discretion to determine benefits or interpret ERISA plan terms.
Same-sex marriage rights. A push to pass a bill establishing a federal statutory right to same-sex marriage stalled earlier this year but looks set to resume when lawmakers return in November. When the Supreme Court earlier this year ended the federal constitutional right to abortion (Dobbs v. Jackson Women’s Health Org., 142 S. Ct. 2228 (2022)), a concurring opinion by Justice Clarence Thomas suggested that the court should revisit past decisions undergirding same-sex marriage. In response, the House passed a bill (HR 8404) to mandate that states honor out-of-state marriages, regardless of a couple’s sex, race, ethnicity or national origin. The effort hit a roadblock in the Senate, where some Republicans raised religious liberty concerns. But the bill’s supporters, including several GOP senators, are optimistic about winning the 60 votes needed for passage once the election dust has settled and the political pressure on outgoing lawmakers has lifted.
Cap on insulin costs. Senators from both parties are eyeing the lame-duck session for action on capping consumers’ out-of-pocket costs for insulin in the commercial market, though the outlook is uncertain. A bipartisan Senate proposal floated earlier this year would cap consumer copays for insulin in the commercial market at $35 a month and incentivize drugmakers to lower list prices. However, the nonpartisan Congressional Budget Office projects that the bill’s curbs on insurers’ ability to negotiate net prices and potential increased spending on insulin products would raise premiums for Medicare and employer plans, dimming chances for final action this year.
Parity for kidney dialysis benefits relative to other chronic care benefits. Bipartisan House and Senate bills (HR 8594, S 4750) that could see action this year would amend the Medicare secondary payer (MSP) statute to require that employer plans cover kidney dialysis benefits in parity with benefits for other chronic medical conditions. The bills seek to undo the Supreme Court’s holding in Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc. (142 S. Ct. 1968 (2022)). The decision found that a health plan with limited dialysis benefits does not violate the MSP statute if the plan’s terms apply uniformly to all enrollees and don’t vary based on end-stage renal disease or Medicare eligibility or entitlement.
The legislation has triggered a fierce lobbying fight. Plan sponsors argue that legislation requiring parity between kidney failure and other chronic conditions is tantamount to an expensive in-network coverage mandate. Market concentration in the dialysis industry would make that mandate even more costly for plan sponsors. Dialysis providers and patient groups counter that letting the court decision stand will encourage plans to restrict dialysis coverage to cut costs, adding to Medicare’s financial burden. A CBO score of the bills could project major savings for the government, giving supporters of the bills a powerful talking point.
A likely divided government in 2023 means less ability for either party to push through major reforms. Nevertheless, Congress will have an opportunity to act on any bipartisan legislative leftovers from 2022 and find compromise on additional issues. Those issues include encouraging telehealth, enhancing transparency, barring anticompetitive contracting terms between providers and health plans, improving care for mental health and substance use disorders, and updating HSA/HDHP rules to better coexist with direct primary care arrangements and increase the flexibility to offer first-dollar coverage. While both parties support paid leave, the partisan divide in approach makes enactment of a federal mandate unlikely.
If Republicans win control of either/both the House and Senate, their power will be checked by the president’s veto. Overriding a veto requires a two-thirds majority of the Senate, something Republicans won’t have. In any case, the GOP has turned away from trying to repeal/replace the ACA and is not offering detailed healthcare policy plans. House Republicans’ recently released Commitment to America agenda, however, calls for expanded access to telehealth and “lower prices through transparency, choice, and competition.”
If Democrats keep control of both chambers and expand their 50-seat Senate majority, they may try to bring back proposals dropped from the 2021 budget reconciliation proposal, the Build Back Better Act. Those proposals include a federal paid leave entitlement, a lower ACA affordability threshold for employer plans and DOL’s ability to assess civil monetary penalties on employers for mental health parity violations. A major priority, however, would focus on helping the Biden administration implement the IRA’s extensive Medicare drug pricing and Part D reforms.
This list highlights 10 top compliance-related priorities for planning 2023 health, leave and fringe benefits and recommends general actions for each item. Download the 70-page print-friendly PDF to read the complete coverage.
Mercer’s Law & Policy US Health team