Compliance Overview: Top Health Plan Compliance Issues for 2024

Employers should be aware of the top compliance issues that impact their health plan coverage for 2024. Some of these compliance issues are established requirements for employers, such as the expanded electronic reporting requirement under the Affordable Care Act (ACA). Other compliance issues are anticipated developments employers should monitor, such as new regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA).

Other top health plan compliance issues employers should be aware of in 2024 include:

• New health plan transparency requirements;
• Ongoing litigation regarding the ACA’s requirement to cover preventive care services without cost sharing;
• Possible expansion of the ACA’s contraceptive coverage mandate; and
• Proposed legislation at state and federal levels to regulate pharmacy benefit managers (PBMs). 

New Transparency Requirements

Group health plans and health insurance issuers are subject to many requirements designed to increase health care transparency and protect consumers against surprise medical bills. In general, most employers rely on their issuers, third-party administrators (TPAs) and other service providers to satisfy many of these requirements, including the obligations to provide machine-readable files (MRFs) and a cost comparison tool and submit detailed reports on prescription drug spending. Employers should confirm that their written agreements with their issuers, TPAs or other service providers have been updated to address this compliance responsibility. In addition, employers should monitor their service providers’ compliance with federal transparency requirements.

Employers should watch for additional transparency guidance in 2024, including guidance on the currently delayed requirement to provide advanced explanations of benefits (EOBs) and possibly new transparency legislation. In addition, employers should be aware of the following transparency requirements for 2024:

• Cost comparison tool: For plan years beginning in 2023, health plans and issuers were required to make an internet-based price comparison tool available for 500 shoppable items, services and drugs. For plan years beginning in 2024, the internet-based price comparison tool must be expanded to cover all covered items, services and drugs.
• MRFs: Non-grandfathered health plans and issuers must publicly post three MRFs regarding in-network provider rates, out-of-network allowed amounts and billed charges, and prescription drug rates and prices. Federal agencies have ended an enforcement delay for posting the prescription drug file. Future guidance will specify a timeline for complying with this requirement.
• Prescription drug reporting: Health plans and issuers must report information about prescription drugs and health care spending to the federal government annually. This reporting process is referred to as the “prescription drug data collection” (or “RxDC report”). The annual deadline is June 1, which means that the RxDC report is due by June 1, 2024, covering data for 2023. However, because June 1, 2024, is a Saturday, this deadline may be extended to the next business day, which is June 3, 2024.

·         Gag clause attestations: Health plans and issuers must annually submit an attestation of compliance with the federal prohibition on gag clauses. The gag clause attestation is due by Dec. 31 of each year. 

Mental Health Parity Compliance

MHPAEA generally prevents health plans and issuers that provide mental health and substance use disorder (MH/SUD) benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical coverage. MHPAEA’s parity requirements apply to health plans sponsored by employers with more than 50 employees. However, due to an ACA reform, insured health plans in the small group market must also comply with MHPAEA’s parity requirements for MH/SUD benefits. 

In recent years, the U.S. Department of Labor (DOL) has made MHPAEA compliance a top enforcement priority, with a primary focus being  MHPAEA’s parity requirements for nonquantitative treatment limitations (NQTLs). NQTLs are generally health plan provisions that impose nonnumerical limits on the scope or duration of benefits, such as prior authorization requirements, step therapy and provider reimbursement rates. MHPAEA requires health plans and issuers to conduct comparative analyses of the NQTLs used for medical/surgical benefits compared to MH/SUD benefits. These analyses must contain a detailed, written and reasoned explanation of the specific plan terms and practices at issue and include the basis for the plan’s or issuer’s conclusion that the NQTLs comply with MHPAEA. Plans and issuers must make their comparative analyses available to the federal government or applicable state authorities upon request.

In addition, a proposed rule was issued in August 2023 that, if finalized, would make extensive changes to MHPAEA’s requirements, especially those for NQTLs. To evaluate parity, the proposed rule would require health plans and issuers to collect, evaluate and consider relevant data on access to MH/SUD coverage relative to access to medical/surgical coverage instead of relying on descriptions of coverage. The proposed rule would also impose a special rule for NQTLs related to network composition and establish additional standards for comparative analysis.

Considering the DOL’s continuing MHPAEA enforcement efforts in 2024, employers should consider taking the following steps:

• Reach out to their issuers or TPAs to confirm that a comparative analysis has been completed for their health plan’s NQTLs and that it is updated to reflect terms and coverage for 2024;
• Monitor any new legislation or regulatory guidance on MHPAEA compliance in 2024, including the issuance of a final rule;
• Watch for warning signs of problematic NQTLs, such as fail-first protocols or written treatment plan requirements; and
• Consider MHPAEA’s parity requirements before making any changes to the plan’s coverage of medical/surgical benefits or MH/SUD benefits.  

Preventive Care Benefits

The ACA requires non-grandfathered health plans and issuers to cover a broad range of preventive care services without charging copayments, coinsurance or deductibles when the services are delivered by in-network providers. The scope of this coverage mandate changes somewhat from year to year as preventive care guidelines are updated. To prepare for each upcoming plan year, health plans and issuers should update their first-dollar coverage of preventive care services to incorporate any new guidelines.

In addition to these routine updates, employers should be aware of recent developments that may impact their preventive care coverage for 2024 and beyond. These developments include:

• The end of certain coverage requirements related to the COVID-19 pandemic;
• Ongoing litigation regarding a key part of the ACA’s preventive care mandate; and
• Signals from the Biden administration that it may expand access to contraceptive coverage.

Contraceptive Coverage

The scope of the ACA’s preventive care mandate may expand in 2024 as the federal government looks for ways to improve access to contraceptives. Federal agencies have indicated that they may expand the ACA’s preventive care mandate to include over-the-counter (OTC) preventive products. In July 2023, the U.S. Food and Drug Administration approved the first nonprescription daily oral contraceptive. This drug, called Opill, is expected to become available in stores and online in early 2024. Current guidance requires coverage for OTC preventive products without cost sharing only when they are prescribed by a health care provider. In 2024, employers should watch for any changes regarding coverage of OTC preventive products and make any necessary adjustments to their health plan coverage.

In addition, the Biden administration has indicated that it wants to expand access to contraceptives by narrowing the exemptions to the ACA’s contraceptive coverage mandate. Under the ACA, churches and houses of worship are not required to cover contraceptives. Also, current guidance exempts certain employers from covering contraceptives if they object to this coverage based on sincerely held religious beliefs or moral convictions. In January 2023, federal agencies released a proposed rule that would rescind the moral exemption to covering contraceptives but retain the religious exemption. Employers who rely on the moral exemption to cover contraceptives should monitor the release of a final rule in 2024 and adjust their health coverage going forward, if necessary.

This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2023 Zywave, Inc. All rights reserved.