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April 6, 2023
Health Policy Insights

When health policy issues arise – and affect self-funded employers – we will share insights into each issue to better educate employers. These emails will be sent occasionally throughout the year, but primarily during peak “legislative season.”

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At the State Level


Health Provisions in the Governor’s Budget

One of the first orders of business in any legislative session is the introduction of the Governor’s budget bill that, once approved, authorizes two years of state spending. After the governor introduces his bill, the legislature’s Joint Committee on Finance will spend approximately four months rewriting it until it can gain enough votes to pass both houses and be signed into law by the Governor.

With a Democratic Governor and a Republican-controlled legislature, this is no small feat, and we’re already seeing strong disagreements between the Governor and legislative leaders over the budget. Expect the Governor’s budget to change dramatically between now and June when it is typically passed.

In the meantime, here are some healthcare provisions that have been included in the Governor’s budget that may be of interest to self-funded employers:

  • There is a proposal that would require Pharmacy Benefit Managers (PBMs) to apply amounts paid by third parties for brand name prescriptions to any calculation of enrollees’ cost-sharing responsibilities. We explained this issue in more detail in last month’s newsletter because the proposal has also been introduced as standalone legislation (see SB 100 and AB 103 in the chart below).
  • There is a proposed grant of up to $900,000 to “an organization” for the purpose of conducting a data analysis of claims to identify low-value care. The grant recipient must report its findings, including any recommendations for providing effective and efficient care, to state agencies, healthcare providers, healthcare maintenance organizations (HMOs), and insurance companies.
  • There is a proposal to create a state-based exchange and a public option in Wisconsin.

A summary of the Governor’s entire budget can be found here.


At the Federal Level


What Employers Should Know About the End of the Public Health Emergency

The COVID-related public health emergency (PHE) will end on May 11. This means employer plans will have some decisions to make about how they cover COVID-related tests and vaccines.

Guidance continues to roll out, but it’s likely that plans will be required to cover COVID-19 vaccines at no cost to enrollees even after the public health emergency expires under the preventive care requirements of the Affordable Care Act. However, plans should be able to limit coverage to in-network providers and pharmacies.

Testing is another story. Upon expiration of the PHE and absent any future guidance to the contrary, plans may choose to discontinue coverage of COVID testing, or transition to another coverage design including but not limited to 1) treating COVID tests just as you would other lab tests, 2) imposing cost-sharing, or 3) covering only in-network. A 60-day notice of any plan changes is required, and employers will want to pay close attention to any guidance that ends the current flexibilities in place that allow COVID testing to be covered at no cost before deductible is met in Health Savings Account (HSA) eligible plans.

The end of the PHE also sparks the end of continuous eligibility under Medicaid which has allowed anyone that has qualified for Medicaid or BadgerCare Plus (BC+) over the past three years to continue their coverage without going through a renewal. As of May 11, Wisconsin will begin the 14-month-long process of systematically renewing everyone who is currently on Medicaid or BC+. That means thousands of Wisconsinites will be transitioning their coverage starting in July of 2023 and extending through the summer of 2024. If you have employees on Medicaid or BC+ who lose their coverage during this process, they will be eligible for a Special Enrollment Period if they qualify for employer-sponsored health benefits. Employers may wish to plan for added enrollment during this period.

It would likely be beneficial for eligible employees to keep Medicaid coverage for as long as possible, until they are informed they are ineligible, which could occur at any time during the transition period depending on their assigned renewal date. Employees will likely have 30 days to enroll in employer coverage, although they currently have an extended window due to a special enrollment provision that is in place through July 10. Stay tuned for additional guidance on this matter.

There are other provisions that also change with the end of the PHE. The organization we partner with on the federal level regarding health policy, the American Benefits Council, has worked with Groom Law Group to put together an informative checklist on the end of the PHE for health plans.

Guidance on Qualified Medical Expenses for Health, Nutrition and Wellness Issued

The IRS has released a list of Frequently Asked Questions answering questions impacting account-based plans such as HSAs, FSAs, HRAs and MSAs. The guidance covers services such as dental and eye exams, nutrition and mental health counseling, weight loss programs including food purchased for weight loss and gym memberships among others.

Guidance on Gag Clause Attestations Issued

The Consolidated Appropriations Act of 2021 prohibits employer plans from entering contracts with healthcare providers, TPAs or other service providers that would restrict the employer from providing, accessing, or sharing certain information about provider price and quality and deidentified claims. Employers must attest they are in compliance with this provision by Dec. 31, 2023, and every year thereafter.

The Department of Labor and CMS have created a website to facilitate attestations. They have also issued a list of Frequently Asked Questions and instructions to aid employers in complying with this requirement.

IRS Rev. Proc. 2023-17

The IRS has released their annual guidance describing the indexed amounts used to calculate “employer shared responsibility payments” otherwise known as the employer penalty for not providing affordable coverage to full-time employees. The amounts are increased for the 2024 plan year. Under this guidance, the 4980H(a) penalty amount is $2,970 per employee, which applies if an employer does not offer minimum essential coverage to 95% of its full-time workforce, while the Section 4980H(b) penalty amount is $4,460 per employee that accesses ACA tax credits.

New No Surprises Act Guidance Issued

Federal agencies have released new guidance related to the No Surprises Act for disputing parties and Independent Dispute Resolution Entities (IDREs) as a result of the recent court decision that found that the No Surprises Act may not place more emphasis on the Qualified Payment Amount (QPA) over other factors to settle payment disputes. The guidance may be found here.


Health Policy Issues We Are Following

State Issues
Bill or Issue The Alliance Position Summary and Implications for Employers Status
SB 100
AB 103
Drug Assistance Programs
We have concerns Pharma sponsored legislation that would require self-funded municipal plans and PBMs to count the value of drug coupons offered by drug manufacturers toward deductibles and maximum out-of-pockets, ensuring that anyone using drug coupons will satisfy cost-sharing requirements faster. Since this would apply to PBMs, it is uncertain as to whether the bill would be preempted by ERISA for non-municipal self-funded plans. Senate Bill has been referred to the Senate Insurance Committee, its Assembly companion has been referred to the Assembly Health Committee. No hearings have been scheduled at the time of writing.
SB 63
Assignment of Dental Benefits
No position yet Would impact self-funded government plans but not other self-funded employers. Allows an individual insured under a health benefit plan that includes dental coverage to assign reimbursement for dental and related services directly to a dental provider. The plan would then have to directly pay the provider the amount of any claim under the same criteria and payment schedule under which it would have reimbursed the insured. Insurer interests are pursuing an amendment to narrow the scope of this bill to dental-only plans which we would support. This bill was referred to Assembly Committee
on Insurance and Small Business. No hearings have been scheduled at the time of writing.

AB 43/SB 70
State Budget Bills

No position yet The governor’s budget includes several policy items that may be of interest to employers, including the inclusion of LRB 1933 as described above. Many of these items are likely to be removed, however, and we will communicate issues of concern as the bill moves toward final passage  around June 2023. Referred to the budget-writing
Joint Committee on Finance. Public hearings will be held through April.

SB 121
Advanced Mammography Mandate

We have concerns Would require health plans, including self-funded public employee plans, to cover advanced mammography at $0 for individuals with dense breast tissue or who are at higher risk for breast cancer. We are concerned mandated coverage will increase the cost of these screenings. Referred to the Senate Committee on Health, which is chaired by the bill’s author. No hearings have been scheduled at the time of writing.
Federal Issues
Pharmacy Benefit Manager Transparency Act of 2023
We have concerns Would prohibit “spread pricing” by PBMs and encourage full and complete disclosure of prices, fees, markups, rebates and discounts to plan sponsors, and require PBMs to file annual reports to the FTC. View the committee summary. National employer groups are working on amendments. Referred to the Senate Committee on Commerce, Science, and Transportation, Hearing held February 16, 2023
No Surprises Act Lawsuits N/A There are several lawsuits that challenge the No Surprises Act rules issued by HHS/Labor. Many of the lawsuits are challenging the rule’s direction that requires arbiters to consider the “Qualified Payment Amount” (QPA or median in-network amount) as the dominant factor when settling payment disputes. Since the No Surprises Act took effect on 1/1/22, the lawsuits create uncertainty for health plans. As of today, arbiters are not required to rely on the QPA as the dominant factor, which is likely to lead to more disputes and higher settlement amounts in the interim. A recent ruling in favor of challengers found that HHS may not place any emphasis on the QPA in regulations. HHS has issued updated guidance here.

* The information provided in this newsletter is for general informational purposes only and does not, and is not intended to, constitute legal advice.


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