Compliance News Week Ending August 2, 2024

Compliance News Week Ending August 2, 2024 

In this Article: 

1. 2025 Notice of Benefit and Payment Parameters
2. All Payer Claims Database (APCD)
3. Handling Level Funded Plan Surplus Returns

2025 Notice of Benefit and Payment Parameters 

The agencies released finalized 2025 Benefit and Payment Parameters regulations. The guidance generally focuses on the administration of the public Marketplaces, but also provides significant clarification on coverage requirements for prescription drugs. The regulations require that any prescription drugs covered in excess of the minimum number of drugs required to be covered under a state’s benchmark plan are required to be covered as essential health benefits (EHBs) unless the coverage is provided solely to comply with a state coverage mandate. This means that prescription drugs covered under a group health plan cannot be categorized as non-EHB subject to annual or lifetime dollar limits or excluded from maximum out-of-pocket limits. While the guidance is focused primarily on coverage requirements for non-grandfathered individual and small group fully-insured plans, a corresponding FAQ suggests additional guidance is coming that will extend similar rules to large fully-insured group health plans and all self-funded group health plans.

All Payer Claims Database (APCD) 

Employers may be receiving letters from their TPAs requesting that employers sponsoring self-funded plans opt-in or out of the All Payer Claims Database (APCD). This is not a federal requirement, but rather one that has been adopted by several states. Fully insured and non-ERISA plans must report plan eligibility and claims information to the applicable state database which is then used to gain better intel about healthcare costs, trends, etc. Self-funded plans are not required to participate, but can choose to. The major benefit of choosing to participate is that the employer is contributing to the effort to lower overall health care costs. Some potential negatives are the hassle of providing the information, especially if the TPA will charge additional fees for the administration, and privacy concerns both for individual participants as well as broader use of the shared data.

Handling Level-Funded Plan Surplus Returns 

It is recommended that plans treat these surpluses/refunds similar to how MLR rebates are handled for fully-insured group health plans. If there is plan document language specifically permitting the employer to keep any surplus/refund, some carriers are beginning to include more often in contracts, or if the plan document indicates that employee contributions will be used first to pay claims and claims exceed employee contributions for the plan year, then the employer may simply keep the surplus and use it as desired for any business expenses. On the other hand, if plan document language doesn’t clearly permit the employer to keep the surplus, it would be best to treat at least a percentage of the surplus (equal to the percentage of employee contributions to total premiums) as plan assets. The plan assets must be used solely for the benefit of plan participants, which may require a distribution to plan participants as a premium holiday or taxable cash within 90 days of receipt.

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