The newly enacted Consolidated Appropriations Act, 2021(if you have time to read) contains a number of provisions that will affect group health plans. With most changes aimed at helping insured workers with flexible spending accounts, cost transparency and surprise billing are addressed. Furthermore, some of the provisions are permanent while others are temporary, slated to run through the end of the COVID-19 pandemic. Here’s a look at the highlights that will affect employer-sponsored health benefits.

FSA carryover rules loosened

The new law authorizes employers to amend their cafeteria plans and FSAs to either:

• Allow participating staff to carry over unused amounts from the 2020 plan year to the 2021 plan year (and from 2021 to 2022 as well), or
• Provide a 12-month period at the end of the 2020 and 2021 plan years.

Under existing law, employers can only allow employees to carry over $550 from one plan year to the next. The law does allow employees who stop participating in their FSA because they were terminated, to continue receiving reimbursement from unused funds. They are allowed to use those unused funds through the end of the year they stopped participating.

Finally, under the CAA, employees can change how much they set aside into their FSA mid-year. Normally, they can only change their contribution levels ahead of a new plan year. In all of the above cases, employers must approve these changes and update them in their plan documents.

Health plan transparency

The CAA also bars “gag clauses,” which bar health insurers from entering into contracts that restrict a plan from accessing and sharing certain information. This is effective as of Dec. 27, 2020. The goal of these new rules is to increase transparency in pricing and quality information for health care consumers and plan sponsors. In addition, there are new requirements for health plan ID cards for enrollees, and they are required to include the following information starting with the 2022 plan year:

• Deductibles that are applicable to their coverage
• Out-of-pocket maximum limits
• Phone number and website address that enrollees can access for assistance.

Surprise billing

The Consolidated Appropriations Act also created the No Surprises Act. Starting in the 2022 plan year, this act will cap a plan enrollee’s cost-sharing obligations for out-of-network services. It caps it to the plan’s applicable in-network cost-sharing level for the following three categories of services:

• Emergency services performed by an out-of-network provider or facility, and post-stabilization care if the patient cannot be moved to an in-network facility;
• Non-emergency services performed by out-of-network providers at in-network facilities. This includes hospitals, ambulatory surgical centers, labs, radiology facilities and imaging centers; and
• Air ambulance services provided by out-of-network providers.

Consolidated Appropriations Act: The takeaway

With so many changes in the Consolidated Appropriations Act, employers who sponsor group health plans need to make sure their health plans comply with the law.

What to do now 

If you offer FSAs to your staff and want them to be able to carry over funds from 2020 to 2021, and the following year, you will need to make those changes to your plan documents. In addition, employers that sponsor group health plans should review their agreements with their health insurers. Make sure that your plan contractors include language indicating that the contract complies with the prohibition on gag clauses.

Consolidated Appropriations Act- What to prepare for

Starting with the 2022 plan year, employers should check with us or their insurer to make sure that the transparency changes are reflected in their plan documents. Also make sure your ID cards reflect the changes required by the Consolidated Appropriations Act.