Compliance has always been a top priority for brokers out of necessity. If you are selling health insurance plans to employers, you have to do things by the book. Unfortunately, things have gotten a bit more complicated in the wake of coronavirus. So much so that compliance is even more important to brokers in the post-COVID era.
Some long-standing compliance issues haven't changed all that much as a result of COVID. But the pandemic ushered in additional issues that brokers now need to worry about. How are you doing? Are you fully aware of the new compliance issues?
At the top of the broker compliance list is all the paperwork rules related to the Employee Retirement Income Security Act (ERISA). Throw in ACA mandates along with ALE filing requirements and you have a paperwork mess. That says nothing of how COVID has complicated special enrollment, COBRA plans, and general administration.
Speaking of COBRA plans, there are some temporary changes that may expire later in 2021. COBRA subsidies are among them. Through September 30, certain COBRA patients are eligible for subsidized benefits as a result of involuntary termination or reduction of hours. There are obvious restrictions to the free COBRA coverage.
For example, employees cannot be part of another health plan. They also cannot be Medicare eligible. The amount of time an employee is eligible to remain on COBRA is still limited to no more than 18 months from the first date of eligibility. As for employers, they can file the appropriate federal forms to recoup their COBRA costs.
Some of the new compliance issues relate to transparency. One that immediately comes to mind is a new prohibition against surprise billing. The rule is set to take effect in 2022. It will mean good things for patients who will still pay in-network prices for certain types of care provided at an in-network hospital by out-of-network providers. As for the hospitals and providers, they will have to decide among themselves who gets paid what.
Another good news item for patients is that health plans are now required to publicly disclose negotiated rates for all of the products and services they cover. They are also required to detail any payments made to out-of-network providers. Disclosure rules will kick in beginning in 2022.
Carriers are not the only ones now required to offer full disclosure. Brokers and consultants are included as well. As a broker, your future disclosure will go way beyond Form 5500. You will be required to report both direct and indirect compensation, even that derived from bonuses and employment perks.
The point here is to eliminate any questionable business practices that compensate brokers and consultants in ways deemed unethical. The government will be taking a very close look at disclosure forms to ensure that everything stays on the up and up.
Prescription Drug Disclosures
Finally, the new emphasis on disclosure even reaches as far as the prescription drug coverage offered by employee-sponsored health plans. Beginning this December, employers will have to start filing reports relating to prescription drug plan claims and pharmacy costs. Doing so will require data obtained from several different sources. Unfortunately, employers still don't have all the details of how it's supposed to work.
As a broker, compliance is more important than ever before. We recommend you plan for a hectic six months or so. Just as the first year of ACA reporting was complicated, we could be in for a rough ride thanks to all the new and temporary compliance issues now on the table.