Holiday Rush Brings Health Plans Eagerly Awaited RxDC Reporting Guidance and Relief

In FAQs Part 56, issued on December 23, 2022, the Treasury Department and the Departments of Labor and Health and Human Services (collectively, Departments) issued important guidance on prescription drug benefit and cost reporting required of health plans and issuers (collectively, health plans). The FAQ guidance includes good faith relief for the 2020 and 2021 submissions. Under the good faith relief, the Departments will not take enforcement action with respect to any health plan that uses a good faith, reasonable interpretation of the applicable regulations and instructions in making its submission. The Departments also provide a submission grace period through January 31, 2023 and will not consider a health plan to be out of compliance provided that the health plan makes a good faith submission of 2020 and 2021 data on or before January 31, 2023.

The required data submission is called prescription drug data collection, or RxDC reporting. Through RxDC reporting, health plans report certain detailed information related to prescription drug and other health care spending. Health plans are required to complete RxDC reporting annually beginning with 2020 information. Reporting for 2020 and 2021, the first years for which reporting is required, was previously delayed until December 27, 2022 and is now subject to the submission grace period through January 31, 2023. Starting with 2022 information, annual reporting is due by June 1 of the following year. While the submission grace period may have come after many health plans have already substantially completed RxDC reporting, the good faith relief is particularly good news for health plan administrators who have struggled to interpret and apply some of the requirements for the first submissions.

In addition to the good faith relief and submission grace period, the FAQs include clarifications and flexibilities to facilitate the submission process for 2020 and 2021 data only[1]:

  1. Reporting entities reporting on behalf of multiple health plans may create more than one submission for a year without the submissions being considered duplicate submissions.
  2. Multiple reporting entities may submit the same type of data file on behalf of the same health plan, which relaxes the existing requirement to consolidate a health plan’s data into a single data file for each type of data.
  3. The requirement for multiple reporting entities submitting the required data on behalf of one or more health plans in a state and market segment to aggregate required data to at least the aggregation level used by the reporting entity that submits the total annual spending data for the health plan(s) is suspended for the filings for 2020 and 2021. For 2020 and 2021 data, a reporting entity submitting the required data may, within each state and market segment, aggregate at a less granular level.
  4. A health plan or its reporting entity that is submitting only the plan list, premium and life-years data, and narrative response, but not any other data may submit the file by email to RxDCsubmissions@cms.hhs.gov instead of submitting in the Health Insurance Oversight System reporting system. The emailed submission must include the plan list file, premium and life-years data (data file D1), and a narrative response, and may include optional supplemental documents. The name of each file should include the reference year of the submission, the plan list or data file type (g. P2, D1), and the name of the group health plan sponsor.
  5. Reporting on vaccines through the National Drug Codes for vaccines that were added to the CMS drug and therapeutic class crosswalk on October 3, 2022 is optional.
  6. Reporting entities are not required to report a value for “Amounts Not Applied to the Deductible or Out-of-Pocket Maximum” in data files D2 and D6 and may leave the data fields blank in the applicable columns.

If you have questions about RxDC reporting, please contact a member of the Faegre Drinker Benefits & Executive Compensation team.

[1] The Departments will monitor compliance to determine whether to extend these flexibilities for future reporting deadlines. The Departments will communicate any such extensions.

The Annual Form 5500 Audit: DOL Broadens Criteria for Independent Qualified Public Accountants

 The Department of Labor (DOL) recently removed one regulatory hurdle for public companies that maintain employee benefit plans subject to the Form 5500 requirement. Specifically, the DOL has relaxed the criteria for who qualifies as an “independent qualified public accountant,” or “IQPA.” This matters to employers because it will open the market to new accounting firms that can issue the accountant’s report for the Form 5500 annual filing. IQPAs are the auditors who issue the annual accountant’s report. While not all Form 5500-filers are subject to the accountant’s report requirement, ERISA-covered retirement plans (except for certain small retirement plans) and funded welfare plans must provide the accountant’s report annually.

Revising and restating its 1975 Interpretive Bulletin on the Independence of Employee Benefit Plan Accountants with new Interpretive Bulletin 2022-01, the DOL has changed its guidelines for determining the “independence” of an IQPA. Previously, an auditor could not be an IQPA for a plan if they, the accounting firm, or certain other “members” of the firm owned any direct or indirect financial interest in the plan sponsor during the period covered by the financial statements that are the subject of the audit or during the period of the professional engagement.

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Employers Must Provide COBRA Subsidies to Assistance Eligible Individuals

The American Rescue Plan Act of 2021 (ARPA), which was signed into law by President Biden on March 11, 2021, includes COBRA subsidy provisions that are significant – both for the individuals who will become eligible for COBRA subsidies and for the employers who will be required to subsidize COBRA coverage. The key requirements of the COBRA subsidies, which are effective beginning April 1, 2021, are outlined below.

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FSA Relief and Significant New Health Plan Requirements Included in Consolidated Appropriations Act of 2021

The Consolidated Appropriations Act of 2021 (Act), enacted on December 27, 2020, contains a number of provisions that may impact the design and administration of employer-sponsored group health plans and flexible spending account (FSA) benefits. Below, we summarize the primary provisions. In the days and weeks ahead, Spotlight on Benefits will provide a series of blog posts that will address the provisions in more detail. We encourage health and FSA plan sponsors to review the blog posts and consider the preparations needed to comply with applicable changes in the law, including coordinating with insurers and third-party administrators, the various effective dates, and whether plan sponsors will have to amend their health plans or FSA plans to implement any applicable changes.

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Health Plan Transparency Final Rule Requires New Health Plan Disclosures

On October 29, 2020, the Department of Health and Human Services (HHS), Department of the Treasury (Treasury) and Department of Labor (DOL) issued the final rule on transparency in health plan coverage. The final rule imposes significant new requirements on group health plans, including all issuers of non-grandfathered individual and group health insurance coverage and self-insured plans (that are not account based plans), to disclose information on pricing and cost-sharing under their plans. Grandfathered health plans and excepted benefit health plans are not subject to the transparency rules.

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Reminder for 401(k) Plan Sponsors: Long-Term, Part-Time Employee Eligibility Requirements Take Effect in 2021 under the SECURE Act

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 changed a number of requirements for retirement plans in 2020 and beyond.

Certain changes under the SECURE Act already are in effect in 2020, including changes to the required minimum distribution rules for participants and beneficiaries, and changes to qualified automatic contribution arrangements under defined contribution plans, as discussed in more detail in our prior alert.

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Executive Order Revives HHS Proposed Rule on Prescription Drug Rebates

On July 24, 2020, President Trump signed four Executive Orders related to drug pricing that direct the Secretary of Health and Human Services (HHS) to take a number of actions aimed at lowering prescription drug prices. These HHS actions generally are not expected to apply directly to employer-sponsored group health plans. However, the Executive Order on “Lowering Prices for Patients by Eliminating Kickbacks to Middlemen” (the Order) could have an indirect impact on such plans, or provide an indication of things to come.

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COVID-19 Joint Agency Relief Part 3: COBRA and Special Enrollment Extensions

In light of the COVID-19 pandemic, the federal government recently issued guidance extending various benefits-related deadlines. The guidance includes a Notification of Relief that essentially tolls the timeframes associated with various rights until after the COVID-19 National Emergency. In this alert, we focus on what the tolling means with respect to plan sponsor obligations and participant rights under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA) special enrollment provisions.

For the full alert, visit the Faegre Drinker website.

Agencies Provide COVID-19-Related Extension for Numerous Benefit Plan Deadlines

On April 28, 2020, the U.S. Department of Labor (DOL) and the Internal Revenue Service issued a new final rule and additional guidance that together extend numerous deadlines under ERISA and the Internal Revenue Code (Code) that apply to group health plans, retirement plans, and participants in those plans (Extension Guidance). The extensions, which are being enacted in response to the COVID-19 pandemic and pursuant to the authority granted to the DOL by the CARES Act, promise to have a significant impact on employers’ administration of various benefit plan requirements, such as administration of benefit plan claims and appeals, COBRA continuation coverage and mid-year special enrollment in group health plan coverage.

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FAQs on COVID-19 Group Health Plan Coverage Implementation

The Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of the Treasury (collectively, “the Departments”) issued Frequently Asked Questions for health plans implementing coverage changes under the Families First Coronavirus Response Act (Families First Act) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

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