Recent Developments in Federal and State Regulation of Private Health Insurance
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Recent Developments in Federal and State Regulation of Private Health Insurance By: Jessica Sharpe Breanna Patterson Committee Staff Administrator Legislative Committee Analyst Banking and Insurance Banking and Insurance Legislative Research Commission Legislative Research Commission
What We Do Assist legislators in: Drafting legislation; and Obtaining information relating to banking and insurance issues Staff the General Assembly’s Banking and Insurance committees
Important Disclaimer Any views expressed in this presentation are the views of the presenters alone and do not necessarily reflect the views of the Legislative Research Commission.
Presentation Overview Health Insurance Generally State and Federal Regulation of Private Health Insurance Legislative Update Kentucky Selected Federal Note: For purposes of this presentation, Selected Caselaw Update private health insurance does not include Medicaid, CHIP, Medicare, TRICARE, the state employee health plan, or Workers’ Compensation
Regulation of Health Insurance Generally
What is health insurance? Black’s Law Dictionary (11th ed. 2019): “Insurance covering medical expenses resulting from sickness or injury – Also termed accident and health insurance; sickness and accident insurance” KRS 304.5-040: “‘Health insurance’ is insurance of human beings against bodily injury, disablement, or death by accident or accidental means, or the expense thereof, or against disablement or expense resulting from sickness, and every insurance appertaining thereto.” Note: Always check for definitions. Seemingly generic terms such as “insurer” or “health plan” often have specific meanings for a given requirement.
Are all health insurance plans subject to the same requirements? Private health insurance can be categorized in a variety of ways including but not limited to: Individual plans Based on the type of insurer offering the plan: Group plans Ex. Health Maintenance Organization (HMO), Small group Preferred Provider Organization (PPO), etc. Large group Based on the type of coverage: Employer-sponsored plans Ex. Comprehensive Self-funded Ex. Limited- dental only, vision only, etc. Fully-insured Ex. Coverage for a specific procedure or condition Private health insurance is sometimes regulated based on how the insurer/insurance is categorized and these categories are not always mutually exclusive.
Are all health insurance plans subject to the same requirements?
2019 Health Coverage Estimates in Kentucky Uninsured Military 6% 1% Medicare 16% Employer 47% Medicaid 26% Non-group 4% Employer Non-group Medicaid Medicare Military Uninsured This chart was created based on data from: Health Insurance Coverage of Total Population, Kaiser Family Foundation (last visited May 14, 2021) https://www.kff.org/other/state-indicator/total- population/?currentTimeframe=0&selectedRows=%7B%22states%22:%7B%22kentucky%22:%7B%7D%7D%7D&sortModel=%7B%22colId%22:%22Location% 22,%22sort%22:%22asc%22%7D
2019 EMPLOYER-SPONSORED COVERAGE IN THE PRIVATE SECTOR IN KENTUCKY Self-insured Fully-insured Fully-insured 37% Self-insured 63% This chart was created based on data from: https://meps.ahrq.gov/data_stats/summ_tables/insr/state/series_2/2019/tiib2b1.htm (Last visited June 1, 2021)
State and Federal Regulation of Private Health Insurance
State Constitutional Power “Under its police power and as the creator of the corporation, or its permission to do domestic business, as the case may be, the state may prescribe terms and conditions on which an insurance company may do business.” Kenton & Campbell Benev. Burial Association v. Goodpaster, 304 Ky. 233, 239-240 (1946)
Kentucky health insurance laws Note: Some statutes outside the insurance code may also be applicable to private health insurance.
Kentucky Health Insurance Laws (cont.) KRS Chapter 304: Subtitle 12- trade practices and frauds Subtitle 14- contains contract requirements and laws relating to Medicare supplement insurance, long-term care insurance, & short-term nursing home insurance Subtitle 17- applies to individual plans (see KRS 304.17-020) Subtitle 17A- generally applies to health benefit plans Subtitle 17C- generally applies to limited health service benefit plans Subtitle 18- applies to group and blanket health insurance (see KRS 304.18-070) Subtitle 32- generally applies to non-profit hospital, medical- surgical, dental and health service corporations & self-insured employer plans Subtitle 38- generally applies to health maintenance organizations
Kentucky Health Insurance Laws (cont.) Kentucky law includes a variety of requirements for health insurance, including: Coverage mandates- examples include: Ex. Diabetes treatment (KRS 304.17A-138), emergency medical conditions (KRS 304.17A-580), colorectal cancer screenings (KRS 304.17A-257) Mandates can differ based upon the market (group or individual) and the scope of insurance (comprehensive or limited)
Kentucky Health Insurance Laws (cont.) Mandates were once duplicated in each subtitle to which the mandate applied. Ex. Coverage for treatment for mental illness. KRS 304.17-318; 304.18-036; 304.32-165; 304.38-193. In recent years, mandates have primarily been enacted in KRS Ch. 304.17A, applying to “health benefit plans” Ex. Coverage for autism spectrum disorder KRS 304.17A-142
Kentucky Health Insurance Laws (cont.) Regulatory Requirements Licensing, examination, and review of policies, rates, financial stability, and trade practices by the Department of Insurance See generally, KRS Ch. 304.2, 304.3, 304.6, 304.7, 304.8, 304.12, 304.13, 304.17A Disclosure and Contracting Requirements For insureds Ex. Provider directories (KRS 304.17A-254, 510), internal and external appeal rights when claims are denied (KRS 304.17.600 to 633) For health care providers contracting with insurers Ex. Notice of proposed material changes to contract (KRS 304.17A-235), Prohibition of certain gag clauses (KRS 304.17A-164, 254, 530), timely payment of claims (KRS 304.17A-700 to 730)
“Health benefit plan”- KRS 304.17A-005(22)
Federal Constitutional Power “No commercial enterprise of any kind which conducts it activities across state lines has been held to be wholly beyond the regulatory power of Congress under the Commerce Clause. We cannot make an exception for the business of insurance.” U.S. v. South-Eastern Underwriters Association, 322 U.S. 533, 553 (1944).
The McCarran Ferguson Act Enacted in reaction to decision in U.S. v. South- Eastern Underwriters Association, 322 U.S. 533 (1944) Provides that the business of insurance shall be subject to state law (Emphasis added)(15 U.S.C. § 1012(a)) Provides that federal law will not preempt state law unless the federal law acts specifically on the business of insurance (15 U.S.C. § 1012(b)) Provides exemption to anti-trust laws for insurance regulated by state law(15 U.S.C. § 1012(b)) 15 U.S.C. § 1013 was recently amended to eliminate exemption for health insurance (Pub. L. 116-327) Steven Plitt, Daniel Maldonado, Joshua D. Rogers & Jordan R. Plitt, Couch on Insurance, McCarran-Ferguson Act, generally, § 2.4 (3rd ed. 2020)
Federal Health Insurance Laws Since the McCarran Ferguson Act, several federal laws have been enacted to regulate private health insurance. The majority of the laws are located in: The Public Health Service Act, 42 U.S.C. ch. 6A § 201 et. seq.; The Employee Retirement Income Security Act of 1974, 29 U.S.C. ch. 18 § 1001 et. seq.; and The Internal Revenue Code, 26 U.S.C. Bernadette Fernandez, Vanessa C. Forsberg & Ryan J. Rosso, Federal Requirements on Private Health Insurance Plans, Congressional Research Service (last visited May 14, 2021) https://fas.org/sgp/crs/misc/R45146.pdf
Employee Retirement Income Security Act of 1974 (ERISA) Establishes standards for employee retirement and welfare benefit plans in the private sector “Employee welfare benefit plan” is defined in 29 U.S.C. § 1002(1) Includes “any plan, fund, or program… established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits or benefits in the event of sickness, accident, disability….”
Employee Retirement Income Security Act of 1974 (ERISA) See Ky. Ass’n of Health Plans, Inc. v. Miller, 538 U.S. 329 (2003) General Savings Clause Deemer Clause Preemption 29 U.S.C § 29 U.S.C. § 29 U.S.C. § 1144(b)(2)(A) 1144(b)(2)(B) 1144(a) “Our interpretation of the deemer clause makes clear Note: There is a significant amount that if a plan is insured, a State may regulate it of case law interpreting these indirectly through regulation of its insurer and its provisions and the scope of ERISA insurer's insurance contracts; if the plan is uninsured preemption. [self-funded], the State may not regulate it.” FMC Corp v. Holliday, 498 U.S. 52, 64 (1990)
Employee Retirement Income Security Act of 1974 (ERISA) “Thus, ERISA preempts state laws that (1) ‘mandate employee benefit structures or their administration;’ (2) provide ‘alternate enforcement mechanisms;’ or (3) ‘bind employers or plan administrators to particular choices or preclude uniform administrative practice, thereby functioning as a regulation of an ERISA plan itself.’” Penny/Ohlmann/Nieman, Inc. v. Miami Valley Pension Corp., 399 F.3d 692 (6th Cir. 2005)(internal quotation omitted)
Patient Protection and Affordable Care Act (ACA) Applies to almost all health insurers, including self-insured ERISA plans Requirements can vary based on whether plan is a large group, small group, individual, “grandfathered”, or “grandmothered” plan Some commonly known coverage provisions include: Prohibition on pre-existing condition exclusions (42 U.S.C. § 300gg- 3) Requirement for individual & small group plans to cover essential health benefits (42 U.S.C. § 18022) Requirement to cover certain preventive services without cost- sharing (42 U.S.C. § 300gg-13)
Patient Protection and Affordable Care Act (ACA) Other provisions: Prohibit lifetime and annual limits on coverage Guarantee issue and renewability Rating limitations Tax penalty for certain employers with 50 or more full- time employees that do not meet minimum health coverage requirements Individual exchanges Premium tax credits and cost-sharing reductions for qualified individuals purchasing coverage on the exchanges Kaiser Family Foundation, Summary of the Affordable Care Act (Last visited June 4th, 2021), https://files.kff.org/attachment/Summary-of-the- Affordable-Care-Act
Patient Protection and Affordable Care Act (ACA) Preemption language: “Nothing in this title shall be construed to preempt any State law that does not prevent the application of the provisions of this title.” 42 U.S.C. § 18041(d) “Subject to paragraph (2) and except as provided in subsection (b), this part, part D, and part C insofar as it relates to this part or part D shall not be construed to supersede any provision of State law which establishes, implements, or continues in effect any standard or requirement solely relating to health insurance issuers in connection with individual or group health insurance coverage except to the extent that such standard or requirement prevents the application of a requirement of this part or part D.” 42 U.S.C. § 300gg-23(a) “Subject to subsection (b), nothing in this part (or part C insofar as it applies to this part) shall be construed to prevent a State from establishing, implementing, or continuing in effect standards and requirements unless such standards and requirements prevent the application of a requirement of this part.” 42 U.S.C. § 300gg-62(a)
Other federal laws concerning health insurance: Consolidated Omnibus Budget Reconciliation Act (COBRA) Health Insurance Portability and Accountability Act of 1996 (HIPAA) Mental Health Parity and Addiction Equity Act of 2008 Note: This list is not (MHPAEA) intended to be The Genetic Information Nondiscrimination Act of 2008 exhaustive. (GINA) Newborns’ and Mothers’ Health Protection Act of 1996 (NMHPA) Womens’ Health and Cancer Rights Act of 1998 (WHCRA) Various provisions of the Internal Revenue Code contained in 26 U.S.C. Subtitle K
Federal Regulation of Private Health Insurance- Recap Congress’ Commerce Clause powers can apply to the business of insurance. Congress, through the McCarran Ferguson Act, has given states general authority to regulate insurance except when it acts specifically with regard to insurance, such as in the case of ERISA and the ACA. Under ERISA, states can be preempted from regulating self- insured employer sponsored plans. Under the ACA, states are generally permitted to regulate health insurance except to the extent that state law would prevent the application of the ACA.
Legislative Updates Kentucky
Note: Please consult the legislation and any other relevant authority to determine the effective date of any legislation or of specific provisions within legislation as the effective dates may vary.
HB 48: AN ACT relating to reimbursement for Defines “insurer” pharmacist services. for purposes of Section 1 of the bill Requires insurers to reimburse a pharmacist for a service or procedure at a rate not less than that provided to other non-physician practitioners if the service or procedure: Is within the scope of the practice of pharmacy; Would otherwise be covered if provided by a physician, advanced practice registered nurse, or a physician assistant; and Is performed by the pharmacist in strict compliance with laws and administrative regulations related to the pharmacist’s license. 2021 Ky. Acts Ch. 30 sec. 1 Requires all insurers transacting health insurance in the state to use uniform claims forms for pharmacy services and procedures 2021 Ky. Acts Ch. 30 sec. 2 Applies to Kentucky Access, the state employee health plan, and workers’ compensation. 2021 Ky. Acts Ch. 30 sec. 4, 5, 6
Compare to 42 HB 50: AN ACT relating to mental health U.S.C. § 300gg-26; 26 U.S.C. § 9816; 29 parity. U.S.C. § 1185a (MHPAEA) Prohibits health benefit plans that provide coverage for treatment of a mental health condition from imposing: A nonquantitative treatment limitation (NQTL) for mental health condition benefits that does not apply to medical and surgical benefits in the same classification; and Medical necessity criteria or an NQTL for mental health condition benefits unless… any processes, strategies, evidentiary standards, or other factors used in applying the criteria or limitation… are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the criteria or limitation to medical and surgical benefits in the same classification 2021 Ky. Acts ch. 15 sec. 2
HB 50: AN ACT relating to mental health parity. Requires NQTL provisions to be construed to require, at a minimum, compliance with the requirements for NQTL set forth in the Mental Health Parity and Addiction Equity Act of 2008, 42 U.S.C. § 300gg-26, as amended, and any related federal regulations 2021 Ky. Acts Ch. 15 sec. 2 Requires insurers to submit an annual report to the Department of Insurance regarding the insurer’s compliance with mental health parity requirements (Similar to 42 U.S.C. § 300gg-26) 2021 Ky. Acts Ch. 15 sec. 2 Eliminates exemptions in Kentucky’s current mental health parity law (KRS 304.17A- 660 to KRS 304.17A-669) for: Individual health benefit plans Employer-organized associations as defined in KRS 304.17A-005 2021 Ky. Acts Ch. 15 sec. 3
HB 95: AN ACT relating to prescription insulin. Requires health benefit plans to limit cost sharing for a covered prescription insulin drug to $30 per 30-day supply of each drug regardless of the amount or type of insulin needed to meet the covered person’s insulin needs. 2021 Ky. Acts ch. 75 sec. 1 Exempts self-insured governmental plans other than the state employee health plan 2021 Ky. Acts ch. 75 sec. 1
HB 140: AN ACT relating to telehealth. Amends existing telehealth coverage mandate in KRS 304.17A-138: Utilizes a new definition of telehealth Requirescoverage of telehealth services provided by a home health agency Requires an originating site reimbursement to rural health clinics, federally qualified health centers, and federally qualified center look-alikes when certain conditions are met 2021 Ky. Acts ch. 67 sec. 10
HB 140: AN ACT relating to telehealth. Requires covered telehealth services to meet all clinical, technology, and medical coding guidelines for participant safety and appropriate delivery of services as established by the DOI or the provider’s professional licensure board Requires reimbursement for telehealth services provided by a provider licensed in another state if allowed under a recognized interstate compact Requires reimbursement of rural health clinic, federally qualified health clinics, and federally qualified health center look-alikes for covered telehealth services regardless of whether the provider was on the premises Permits health benefit plans to utilize audits for medical coding accuracy in the review of telehealth services specific to audio-only encounters Encourages providers and home health agencies to use audio-only encounters as a mode of delivering telehealth services when no other approved mode of delivering telehealth services is available 2021 Ky. Acts ch. 67 sec. 10
HB 140: AN ACT relating to telehealth. Requires certain agencies promulgating administrative regulations relating to telehealth to: Use terminology consistent with the glossary of telehealth terms established by CHFS Comply with minimum requirements for telehealth established by CHFS Comply with other requirements and limitations set forth in Act State agencies subject to provisions include Department of Insurance, Cabinet for Health and Family Services (includes the Department for Medicaid Services), and professional licensure boards. 2021 Ky. Acts ch. 67 sec. 3
SB 44: AN ACT relating to access to Similar to 45 C.F.R. § 156.1250, except health care. adds certain non- profit entities Requires health benefit plans to accept, and count towards the insured’s contributions to any applicable premium or cost-sharing requirement, premium and cost-sharing payments made on behalf of an insured from the following: A state or federal government program, including payments made by programs operating in accordance with the Ryan White HIV/Aids Program An Indian tribe, tribal organization, or urban Indian organization A program conducted by an organization that certifies that the organization is: Exempt from taxation under 26 U.S.C. sec. 501(a), as amended; Described in 26 U.S.C. sec. 170(b)(1)(A)(i) to (vi); and Operating in compliance with applicable federal laws, including the False Claims Act, 31 U.S.C. secs. 3729 to 3733. 2021 Ky. Acts ch. 133 sec. 1
SB 44: AN ACT relating to access to health care. Exceptions: If the application of the requirements would be the sole cause of a health benefit plan’s failure to qualify as a high deductible health plan under 26 U.S.C. § 223, then the provision does not apply until the minimum deductible has been satisfied. Does not apply to payments from nonprofit organizations referenced under Section 1(2)(c) of the bill that receive funding in any form from a health care provider as defined in KRS 304.17A-005. Expressly permits health benefit plans, to the extent permitted by federal law, to accept, and count towards the insured’s contributions to any applicable premium or cost-sharing requirement, premium and cost-sharing payments made on behalf of an insured from any person not referenced in the bill. 2021 Ky. Acts ch. 133 sec. 1
SB 45: AN ACT relating to prescription Defines “health plan” for purposes of Section 1 of drugs. the bill Prohibits insurers of health plans from excluding cost-sharing amounts paid by an insured or on behalf of an insured by another person for a prescription drug when calculating an insured’s contribution to any cost-sharing requirement Prohibition does not apply to prescription drugs in which there is a generic alternative, unless the insured has obtained access to the brand prescription drug through prior authorization, step therapy protocol, or the insurer’s exceptions and appeals process Exempts the state employee health plan 2021 Ky. Acts ch. 134 sec. 1
SB 51: AN ACT relating to addiction “Prospective review” & “concurrent review” treatment. are defined in KRS 304.17A-600 Prohibits health benefit plans from requiring or conducting a prospective or concurrent review for a prescription drug: That: Is used in the treatment of alcohol or opioid use disorder; and Contains Methadone, Buprenorphine, or Naltrexone; or That was approved before January 1, 2022, by the U.S. Food and Drug Administration for the mitigation of opioid withdrawal symptoms 2021 Ky. Acts ch. 201 sec. 1
SB 51: AN ACT relating to addiction treatment. Requires insurers to report annually to the Commissioner of the Department of Insurance (DOI), for claims made during the preceding plan year, the number and type of providers that have prescribed medication for addiction treatment to its insureds in conjunction with and not in conjunction with behavioral therapy 2021 Ky. Acts ch. 201 sec. 3 DOI is required to report to the General Assembly, State Board of Medical Licensure, and the Kentucky Board of Nursing concerning the information reported to the Commissioner. 2021 Ky. Acts ch. 201 sec. 3
SB 51: AN ACT relating to addiction treatment. Requires a treating facility to, prior to discharging a patient that has received medication for addiction treatment, submit a written discharge plan to the patient and a patient’s third-party payor, if any, describing arrangements for additional services needed following discharge. 2021 Ky. Acts ch. 201 sec. 5 Bill also contained sections relating to the review of medication for addiction treatment under Medicaid 2021 Ky. Acts ch. 201 sec. 2, 4, 5, 6
SB 154: AN ACT relating to home health care and declaring an emergency. Amends existing coverage mandates for home health care to include home health care prescribed and supervised by an advanced practice registered nurse or physician assistant 2021 Ky. Acts ch. 59 sec. 2, 3, 4, 5 Amends existing coverage mandates to permit an advanced practice registered nurse or physician assistant to certify that hospitalization or confinement in a skilled nursing facility would be required if home health care was not provided 2021 Ky. Acts ch. 59 sec. 2, 3, 4, 5
Legislative Updates Federal
Note: Please consult the legislation and any other relevant authority to determine the effective date of any legislation or of specific provisions within legislation as the effective dates may vary.
H.R. 133: Consolidated Appropriations Act of 2021 Division BB- Private Health Insurance and Public Health Provisions Title I: No Surprises Act Title II: Transparency Title III: Public Health Provisions
H.R. 133: Consolidated Appropriations Act of 2021: No Surprises Act Applies to almost all health insurers, including self-insured ERISA plans Some provisions apply to grandfathered plans (See 42 U.S.C. 18011(a)(5)) Requires coverage for the following services, without regard to whether the provider/facility is a participating provider: Emergency services (if the plan covers services in an emergency department or independent free-standing emergency department) Covered nonemergency services at a participating facility, if certain notice and consent criteria are not met by the provider Covered air ambulance services Sets forth requirements for initial reimbursement to providers Allows independent dispute resolution process to dispute initial reimbursement Pub. L. 116-260; 42 U.S.C. § 300gg-111; 42 U.S.C. § 300gg-112 ; 26 U.S.C. § 9816; 26 U.S.C. § 9817; 29 U.S.C. § 1185e; 29 U.S.C. § 1185f.
Prohibition applies H.R. 133: Consolidated Appropriations to “ancillary services” regardless Act of 2021: No Surprises Act of notice/consent criteria Prohibits providers from balance billing for covered services (except nonemergency services when notice and consent criteria have been satisfied) Provider can bill for applicable cost-sharing Pub. L. 116-260; 42 U.S.C. § 300gg-131 (emergency services); Pub. L. 116-260 42 U.S.C. § 300gg-132 (nonemergency services) Requires the following information on physical or electronic plan or insurance identification cards: Plan deductibles Out-of-pocket maximum limitations Consumer assistance telephone number Consumer assistance website address Pub. L. 116-260; 42 U.S.C. § 300gg-111(e); 26 U.S.C. § 9816(e); 29 U.S.C. § 1185e(e)
H.R. 133: Consolidated Appropriations Act of 2021: No Surprises Act Requires an advanced explanation of benefits for items or services to be provided, including but not limited to the provider’s network status, good-faith estimates of what the plan will pay, and good-faith estimates of the insured’s cost- sharing. Pub. L. 116-260; 42 U.S.C. § 300gg-111(f); 26 U.S.C. § 9816(f); 29 U.S.C. 1185e(f) Compare to: KRS 304.17A-527(1)(b); Sets forth requirements relating to continuity of care with KRS 304.17A-643 respect to changes in provider network status. Pub. L. 116-260; 42 U.S.C. § 300gg-113; 26 U.S.C. § 9818; 29 U.S.C. § 1185g
H.R. 133: Consolidated Appropriations Act of 2021: No Surprises Act If designation of a primary care provider is required, plans are required Compare to KRS 304.17A-520 to allow the designation of any participating primary care provider available to accept the insured Pub. L. 116-260; 42 U.S.C. § 300gg-117(a); 26 U.S.C. § 9822(a); 29 U.S.C. § 1185k(a) If designation of a primary care provider is required for child, plans are required to allow the designation of a participating provider that is a physician specializing in pediatrics as the child’s primary care provider Pub. L. 116-260; 42 U.S.C. § 300gg-117(b); 26 U.S.C. § 9822(b); 29 U.S.C. § 1185k(b)
H.R. 133: Consolidated Appropriations Act of 2021: No Surprises Act If designation of a primary care provider is required and the plan provides coverage for obstetric or gynecologic care, plans are prohibited from requiring authorization or referrals for participating providers specializing in obstetrics or gynecology Pub. L. 116-260 ; 42 U.S.C. § 300gg- 117(c); 26 U.S.C. § 9822(c); 29 U.S.C. § 1185k(c) Requires plans to maintain a database, verification process, and response protocol relating to network-status of providers Pub. L. 116-260; 42 U.S.C. § 300gg-115; 26 U.S.C. § 9820; 29 U.S.C. § 1185i
H.R. 133: Consolidated Appropriations Act of 2021: Transparency Requires price comparison guidance by telephone and access to an online price comparison tool Pub. L. 116-260; 42 U.S.C. § 300gg-114; 26 U.S.C. § 9819; 29 U.S.C. § 1185h Prohibits entering into agreements with providers that impose certain restrictions on the disclosure of specified information, including price and quality information Pub. L. 116-260; 42 U.S.C. § 300gg-119; 26 U.S.C. § 9824; 29 U.S.C. § 1185m
H.R. 133: Consolidated Appropriations Act of 2021: Transparency Establishes reporting requirements with respect to pharmacy benefits and drug costs Pub. L. 116-260; 42 U.S.C. § 300gg-120; 26 U.S.C. § 9825; 29 U.S.C. § 1185n Requires plans to perform, document, and in certain Compare to 21 RS HB 50 circumstances submit, comparative analyses of the design and application of NQTLs Pub. L. 116-260; 42 U.S.C. § 300gg-26(a); 26 U.S.C. § 9812(a); 29 U.S.C. § 1185a(a)
H.R. 1319: American Rescue Plan Act of 2021 Provides premium assistance for COBRA coverage Pub. L. 117-2 Temporarily expands access to premium tax credits Pub. L. 117-2; 26 U.S.C.36B Temporarily removes requirement to reconcile premium tax credits Pub. L. 117-2; 26 U.S.C. 36B
H.R. 1418: Competitive Health Insurance Reform Act of 2020 Amends 15 U.S.C. § 1013 to: Add the following: “Nothing contained in this Act shall modify, impair, or supersede the operation of any of the antitrust laws with respect to the business of health insurance (including the business of dental insurance and limited scope dental benefits).” Specifies activities relating to health insurance that continue to be exempt from anti-trust laws Adds a note to the statute relating to new language’s relationship and applicability to certain aspects of the Federal Trade Commission Act. Pub. L. 116-327; 15 U.S.C. § 1013
Selected Caselaw Updates
Rutledge v. Pharmaceutical Care Management Association, 141 S. Ct. 474 (2020) In 2015, the Arkansas legislature passed Act 900 regulating pharmacy benefit managers by: Requiring “PBMs to tether reimbursement rates to pharmacies’ acquisition costs” Id. at 479. Requiring PBMs to “provide administrative appeal procedures for pharmacies to challenge MAC reimbursement prices that are below the pharmacies’ acquisition costs” Id. Permitting “a pharmacy to decline to sell a drug to a beneficiary if the relevant PBM reimburses the pharmacy at less than its acquisition cost” Id.
Rutledge v. Pharmaceutical Care Management Association, 141 S. Ct. 474 (2020) Issue: “Whether the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et. seq., pre-empts Act 900.” Id. at 487. Holding: Act 900 had “neither an impermissible connection with nor reference to ERISA and is therefore not pre-empted.” Id. “In sum, Act 900 amounts to cost regulation that does not bear an impermissible connection with or reference to ERISA.” Id. at 483.
California v. Texas, 19-840, 19-1019, consolidated Pending challenge to the Affordable Care Act, U.S. Supreme Court heard oral arguments on November 10, 2020. The 2017 Tax Cuts and Jobs Act (TCJA) zeroed out the shared responsibility payment for the individual mandate to purchase health insurance. Pending issues include: 1. The constitutionality of the individual mandate in light of TCJA amendment; and 2. Severability of the remaining provisions of the ACA. California v. Texas, 945 F.3d 355, (5th Cir. 2020), cert. granted, 140 S.Ct. 1262 (U.S. March 2nd, 2020) (No. 19-840, 19-1019, consolidated)
Conclusion Both state and federal law regulate health insurance Many state and federal laws are duplicative or similar Federal preemption determination depends on the language in each law Updates to state and federal health insurance laws continue to change the landscape of health insurance regulation
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