The Consolidated Appropriations Act (the Act) was signed into law by the president on December 27, 2020, and includes significant health and welfare benefits provisions that affect group health plans and health insurance issuers. The Act is the most comprehensive single piece of legislation to impact group health plans since the Affordable Care Act.
During arguments in a case seeking to eliminate Obamacare, two of the US Supreme Court’s conservative justices signaled they would not strike down the landmark legislation. In a recent article by CNBC, McDermott partner Michael Kimberly discussed the significance of this case and the Court’s upcoming decision.
The SECURE Act—the most significant piece of retirement plan legislation in more than a decade—is now law. Plan sponsors should immediately start considering how changes included in the SECURE Act could impact their retirement and health and welfare plans in 2020 and beyond.
A decision in Texas v. United States was issued by a divided three-judge panel of the US Court of Appeals for the Fifth Circuit on December 18, 2019. This case presented once again the question whether the Affordable Care Act (ACA) is constitutional and sustainable, and questions of severability remain for the near future.
A growing number of medical organizations, courts and administrative bodies have stated that transition-related medical care is medically necessary and should be covered by employer-sponsored medical plans. Access to employer-sponsored healthcare coverage for transgender workers has become an issue of focus for civil rights advocacy groups such as Lambda Legal and the American Civil Liberties Union, and there has been an uptick in discrimination lawsuits filed against health plans and insurers denying such care.
These trends highlight the importance of weighing the legal and business considerations that come with providing (or not providing) comprehensive health benefits for transgender workers. Health plan sponsors and insurers should consider how the decision to provide or exclude transition-related medical coverage will affect their legal compliance, overall costs and workplace culture—all of which are discussed in this article.
Originally published in Benefits Magazine, August 2019.
The Departments of Labor, Treasury, and Health and Human Services have released final rules removing the prohibition on pairing HRAs with individual health policies. The final rules also allow certain HRAs and other account-based group health plans to qualify as limited excepted benefits. These rules are generally effective for plan years beginning on or after January 1, 2020.
The US Supreme Court declined to review a recent Ninth Circuit decision, blocking the interim rules that exempted employers with religious or moral objections from providing birth control coverage required by the Affordable Care Act (ACA). Until such time as this issue is clarified, it is prudent for employers with employees in certain states to comply with the ACA mandate and to cover contraceptives under their health plans.
Teal Trujillo, a summer associate in our Chicago office, also contributed to this article.
On Friday, March 24, 2019, the US Department of Health and Human Services issued a proposed rule (along with a related fact sheet) under Section 1557 of the Affordable Care Act (ACA) that would make significant changes to the final regulations issued in 2016. Section 1557, in effect since the ACA was enacted in 2010, provides that an individual shall not—on the grounds prohibited under Title VII of the Civil Rights Act of 1964 (race, color, national origin), Title IX of the Education Amendments of 1972 (sex), the Age Discrimination Act of 1975 (age) or Section 504 of the Rehabilitation Act of 1973 (disability)—be excluded from participation in, be denied the benefits of or be subjected to discrimination under any health program or activity, any part of which is receiving federal financial assistance, or under any program or activity that is administered by an agency established under Title I of the ACA.
The proposed rule addresses a broad range of changes to the previously issued rule. These changes would include eliminating the non-discrimination notices and “tagline” translation notices in significant communications and revising prior guidance on sex discrimination to no longer include gender identity and termination of pregnancy, among other changes. Interested parties are invited to submit comments on the proposed rule through the period ending 60 days after publication in the Federal Register.
On March 28, a District of Columbia federal court agreed with a New York-led challenge by a group of 11 states and the District of Columbia and found that the Department of Labor’s (DOL) 2018 association health plan (AHP) rule (the Final Rule):
The decision, penned by Judge Bates, may act to deal a significant blow to the Trump administration’s attempt to expand coverage for small employers. Crafted in response to the October 12, 2017, executive order directing the DOL to promote the availability of AHPs, the Final Rule materially relaxed the standards for qualifying as an AHP under ERISA.
As further described here, the Final Rule sets forth the criteria pursuant to which a “bona fide group or association of employers” may establish a single-employer AHP under ERISA. Under the Final Rule, employers, associations and sole proprietors (referred to as “working owners”) can participate in AHPs provided certain arguably subjective requirements are satisfied. The states challenged the Final Rule, arguing that the DOL unreasonably expanded ERISA’s definition of employer. Applying the Chevron standard, the court agreed with the states to hold that the DOL unlawfully expanded ERISA’s definition of employer by failing to provide a “meaningful limit on the associations that would qualify as ‘bona fide’ ERISA ‘employers.’” The court vacated the bona fide association and working owner provisions of the Final Rule, but also provided some specific critiques and ordered the DOL to determine whether any part of the Final Rule can be salvaged; for now, the Final Rule is in limbo.
In a set of Questions and Answers issued April 2, 2019, the DOL noted that it disagrees with the court’s decision, and is considering all available options in consultation with the Department of Justice (DOJ). The DOJ has until May 28 to file a notice of appeal. The Trump administration could seek a stay of the order pending resolution of any appeal. Unless a court issues a stay, the regulations in effect prior to the Rule would be in effect. Stay tuned for further guidance and developments.
Join us on March 7 in Chicago for our annual Benefits Emerging Leaders Working Group, which provides benefit professionals with tools to better serve employees in an ever-changing benefits landscape.
Our presentations will tackle the latest benefits hot topics and best practice solutions and will be supplemented with important networking opportunities aimed to connect tomorrow’s benefit leaders with a broad network of professionals.
Speakers from The Art Institute of Chicago, Alera Group Inc. and McDermott will lead interactive discussions around a range of topics, including:
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