Impact of the CAA on Employers
The Consolidated Appropriations Act (CAA) was passed in 2021, and although it brought significant changes that will continue to impact employers offering group health insurance and their employees, many organizations still haven’t made changes to meet the mandates.
What are the key requirements of CAA legislation that employers need to act on?
Gag Clause
One provision of the CAA that remains applicable post-COVID is the prohibition of gag clauses in provider contracts. Previously, these clauses restricted healthcare professionals from discussing cost and quality information with patients, which kept patients from making informed decisions about their care.
What does the prohibition of gag clauses change?
Group health insurance participants now benefit from open communication with their providers to make the best decisions for their healthcare and budget.
Employers sponsoring group health benefits have the responsibility to ensure that their contracts with insurance companies comply with this provision and do not include any gag clauses that restrict provider-patient communication.
Fiduciary Requirements
Another provision of the CAA applicable post-COVID is the fiduciary obligations of the employers offering group health benefits. Employers have the responsibility to act in the best interests of their employees and ensure that their group health insurance plans provide quality coverage at a reasonable cost.
The theme of the story is “responsibility.” Employers will have to do more than go along with the status quo and trust that the insurance broker or carrier they’ve always used has their employees’ best interests at heart and blindly follow them into the next plan year.
Selecting insurance providers, negotiating terms, and making plan design choices that promote transparency and provide comprehensive coverage all rests on the shoulders of the employer.
Mental Health Parity
Employers also have the responsibility of making sure their mental health benefits are in line with general medical benefits. Although versions of mental health parity have been in place since 1996, the CAA created a six-step process to solidify it. The steps help provide some guidance for employers in making sure they’re meeting the requirements.
Pharmacy Reporting
Next on the list is pharmacy reporting. Every year, employers who sponsor group health plans must provide healthcare spending reports that include pharmacy benefits. A big question has been, how do prescription drug costs affect group healthcare premiums? Pharmacy reporting could eventually help provide better insight.
Employers can often rely on their insurance carrier or third-party administrator to assist to complete these reports. However, it’s still the employer’s responsibility to ensure completion of the report.
Broker Compensation Transparency
Under the CAA, employers must ensure transparency in broker compensation, including commissions and fees paid. This information should be disclosed to employees to help them make informed decisions.
As healthcare costs continue to rise, efforts to promote price transparency are becoming more important in managing costs for employers and employees alike, and efforts to enforce it will continue to grow stronger. It’s up to each employer to determine the best action plan for them and their employees.
For more information about the Consolidated Appropriations Act and expert insight, join the discussion with In-House Counsel, Donna Wilkinson, and Employee Benefits Practice Leader, Jason Andrade.