Recent legislation impacting group health plans

2021 Q3 Rx Newletter

October 2, 2021

If there’s anything that employers can be certain of, given the events of the past year and a half, it’s that uncertainty is the new normal and there doesn’t appear to be an end in sight.

President Biden’s Vaccination Mandate

On September 9, 2021, the Biden Administration announced rulemaking was underway for four separate COVID-19 vaccination mandates affecting U.S. workers. Specifically, employers with more than 100 employees, health care entities participating in Medicare or Medicaid, federal contractors, and federal government entities will all be required to ensure workers are vaccinated. Guidance is needed from the Occupation Safety and Health Administration (OSHA) for how to comply, and there seem to be more questions than answers, particularly now that the first Americans who were vaccinated may be considering whether to get a booster or not.

At this time, just over half of the U.S. is fully vaccinated, at 54.5%, with 63.6% of Americans having at least one dose of the vaccine1. Critics argue that penalties and mandates are not likely to convince those who have decided not to get vaccinated to change their minds. Those among the first to get vaccinated are now faced with the decision of whether or not to get a booster.

The Pfizer vaccine now has full FDA approval, while the Moderna and Johnson & Johnson vaccines are still under FDA Emergency Use Authorizations. The FDA’s Vaccines and Related Biological Products Advisory Committee voted against a broader FDA approval of the Pfizer booster for people who are at least 16 years old and vaccinated six months. They did recommend a booster for adults over age 65 and at-risk individuals. The CDC has endorsed the booster shots for adults over age 65 and for those ages 50 to 64 with underlying health conditions.

With so much uncertainty about the vaccines (e.g. emergency approval vs. full approval and booster status), until the FDA officially
weighs in, it may be difficult to enforce the President’s mandate. Many employers have already announced strict vaccination policies with penalties ranging from higher health plan premiums to termination of employment. Employers should carefully monitor emerging guidance and continue to consider existing regulations to determine how best to structure vaccination policies.

Transparency Rules – Background

The topic of transparency isn’t new…it began gaining traction with the ACA, which requires “transparency in coverage” cost-sharing disclosures
by most group health plans and insurers. It recently became a key issue in last year’s Presidential election, with each candidate releasing plans for how to tackle the rising cost of health care and prescription drugs specifically. There have been some recent regulations passed that outline requirements for group health plans and insurers, with very little, if any, guidance issued for how to comply with the regulations.

Key Legislative Activity

In October of 2020, there were regulations issued jointly by the IRS, DOL, and HHS requiring group health plans to disclose certain cost information to the public through machine-readable files. In addition, these rules require member cost share information to be available upon request, with a list of 500 specific services that must be available on an internet-based self-service tool.

The No Surprises Act, part of the Consolidated Appropriations Act of 2021 (CAA), also addresses transparency and surprise medical billing, requiring patient-friendly cost comparison tools and up-front cost estimates or EOBs, as well as prescription drug cost and utilization reporting to the DOL, HHS, and Treasury.

Impact on Group Health Plans and PBMs

Some of the above requirements were supposed to become effective as early as 12/27/21, but, as recently as earlier this month, have been delayed due to lack of clarity for how to satisfy the requirements. With little guidance available, health insurers and PBMs are not yet clear on what will be required and how they will support plan sponsors. Plan sponsors will need to work closely with their consultants, health plan TPAs, and PBMs to review and understand guidance as it becomes available and determine the steps to comply.

Industry Implications

There are many objectives to passing the transparency rules. One of the main goals is to encourage and facilitate competition, which should in turn drive lower costs. Another is to ensure that key cost information is readily available to the public, in a uniform and easy-to-understand format. Compliance with the rules is proving to be complex and administratively burdensome, particularly given the lack of clear guidance for how to comply. The availability of the information is still a long way off so the impact it may have on competition and costs is still unknown.

1. The Mayo Clinic, U.S. COVID-19 Vaccine Tracker,, September 16, 2021.