HSA Eligibility Impacted by Third Party Drug Payments
May 10, 2022
The Commissioner of Insurance Donelon recently issued Bulletin 2022-01, which provides guidance on SB 94, which was enacted during the 2021 session. SB 94 requires all health insurers to “include any cost-sharing amounts paid by the enrollee or on behalf of the enrollee by another person” when calculating a participant’s deductible and out-of-pocket (OOP) maximum. In the recent bulletin, Commissioner Donelon provided guidance on the type of payments that must be included. For example, a group medical policy must include the amount of a prescription drug discount or third-party payment, such as a drug manufacturer’s payment, toward an individual’s deductible and OOP maximum.
This presents a qualification issue for high deductible health plans (HDHPs). Under federal law, for an HDHP to be qualified and its participants to be eligible for HSA contributions, only actual out-of-pocket amounts paid by the participant may be included in the deductible and OOP maximum. This means that policies issued in Louisiana must comply with the state insurance requirement, which will result in the coverage being disqualified for HSA contributions. The bulletin suggests that the only solution available to Louisiana participants right now is for HDHP participants not to use drug discounts or third-party payments.
The requirement was effective June 2021, so Louisiana insurers must send communication to HDHP participants to explain the issue. Employers should work with insurers and third-party HSA administrators to resolve eligibility issues for any impacted participant. This could include distributing excess HSA contributions for an individual for whom a third-party payment or drug discount went toward their deductible or OOP maximum.
This is a trending issue for employers nationwide as many states have enacted similar laws. We will continue to monitor this issue and report any developments in Compliance Corner.
SB 94 »
Bulletin 2022-01 »
Insurers Encouraged to Waive Certain Prior Authorization Requirements
August 31, 2021
Plans Must Cover Midwife Services
July 07, 2021
On June 11, 2021, Gov. Edwards signed HB 190 into law. The law requires health coverage plans delivered or issued for delivery in the state that provide benefits for maternity services to include coverage for healthcare services provided by a midwife. Plans may not differentiate between services performed by midwives within their lawful scope of practice and those performed by physicians with respect to copayment or annual deductible amounts or coinsurance percentages.
The law will be effective for all new health plans issued on or after January 1, 2022, and existing plans are required to conform by January 1, 2023.
Employers with plans regulated by the state should be aware of this development.
HB 190 »
Cost-Sharing Restricted for Certain Drugs
June 22, 2021
On June 1, 2021, Gov. Edwards signed Senate Bill No. 191 into law, providing that health insurance issuers (and their agents) cannot require participants to pay any other cost-sharing amount (or additional fees) beyond the applicable cost-sharing amounts imposed by plan terms for physician-administered drugs when provided by a participating provider.
The law specifically provides that “a health insurance issuer shall not condition, deny, restrict, refuse to authorize or approve, or reduce payment to a participating provider for a physician-administered drug when all criteria for medical necessity are met, because the participating provider obtains physician-administered drugs from a pharmacy that is not a participating provider in the health insurance issuer's network.” However, this law does not prohibit a health insurance issuer (or its agent) from refusing to authorize (or denying) coverage of a physician-administered drug due to failing to satisfy medical necessity criteria.
The goal of the new law is to ensure that patients' choice regarding providers furnishing physician-administered drugs is not impeded (and to make sure patients receive safe and effective drug therapies).
While this guidance does not impact employers directly, they should be aware of these developments.
Senate Bill No. 191 »
COVID-19 Insurance Update
July 07, 2020
On June 11, 2020, Gov. Edwards signed SB 426 into law. The law requires health plans delivered in the state or issued for delivery in the state to cover COVID-19 diagnostic tests, antibody tests and antiviral drugs when ordered by a physician for the purpose of making clinical decisions or treating a patient suspected of having COVID-19. This coverage must not be subject to annual deductibles, coinsurance, copayments, or any other out-of-pocket or cost-sharing expense provisions until after December 31, 2021.
Employers with health plans regulated by the state should be aware of this new statute.
SB 426 »
COVID-19 Insurance Updates
April 28, 2020
On April 8, 2020, the effective dates for Emergency Rules 36 and 37, as discussed in the March 31, 2020, edition of Compliance Corner, were extended to May 12, 2020. Emergency Rule 36 addresses cost-sharing requirements for COVID-19 testing, permits early prescription refills and prohibits the use of step therapy. Emergency Rule 37 expands access to telemedicine services.
The emergency rules are primarily directed at insurers. However, employers should also be aware of these developments.
Rule 36 »
Rule 37 »
Emergency Rules Regarding Insurance
April 14, 2020
On March 30, 2020, the Commissioner of Insurance amended Emergency Rule 40, which declares a moratorium on policy cancellations and nonrenewals for policyholders in the state during the COVID-19 outbreak. The emergency rule is effective from March 12, 2020 (the date of the original emergency rule) until May 12, 2020. It applies to all authorized insurers operating in the state, as well as approved unauthorized insurers, eligible unauthorized insurers, and domestic surplus lines insurers. It also applies to TPAs, HMOs and PBMs, and any and all other insurance entities licensed by the state.
The emergency rule:
- Permits insurers to issue notices of cancellation for nonpayment of premiums but they cannot cancel until after the emergency rule expires. Exceptions exist when an insured requests cancellation in writing.
- Suspends the conditions for the renewal of insurance until the emergency rule expires, so that the insurance remains in full effect during that time.
- Exempts policies issued on or after March 12, 2020, from the emergency rule.
- Suspends claim notification procedures.
- Allows insurers to offset claim payments with delinquent premiums.
- Suspends physician credentialing for licensed physicians until the expiration of this rule.
- Suspends or defers rates that were to take effect after this rule.
- Requires the option for the continuation of coverage for policyholders.
On April 1, 2020, the Commissioner issued Emergency Rule 41, relating to the surge in patient transfers between health care facilities in order to maximize beds and supplies available to treat COVID-19 patients. The rule applies to all HMOs, MCOs, PPOs, PBMs and TPAs acting on behalf of an HMO, MCO, PPO, and any and all other insurance related entities licensed by the commissioner or doing business in the state, as well as their insureds, policyholders, members, subscribers, enrollees and certificate holders. The rule is effective from March 31, 2020, through May 12, 2020.
To facilitate necessary transfers between health care facilities, the emergency rule:
- Waives network adequacy requirements for specialist and primary care provider-to-insured ratios and nonemergency access where daily inpatient bed occupancy at acute care hospitals exceed 85%.
- Prohibits insurers from imposing prior authorization, utilization, medical necessity or any related review requirements on the transfer of patients from an acute care hospital to a step-down facility.
- Requires insurers to cover the remainder of the inpatient stay needed after the transfer from an acute care hospital to a step-down facility under terms and at a cost sharing rate no less favorable to the insured than those that would have applied had the insured remained at the acute care hospital.
The rules are primarily directed at insurers. However, employers should also be aware of these developments.
Emergency Rule 40 »
Emergency Rule 41 »
COVID-19 Insurance Updates
March 31, 2020
Insurance Commissioner Donelon issued two emergency rules in response to the COVID-19 pandemic. The rules are promulgated under the authority of the statewide public health emergency declared by Gov. Edwards on March 11, 2020. They apply to all insurance regulated by the state of Louisiana.
On March 18, 2020, the Commissioner issued Emergency Rule 36. This emergency rule waives cost sharing for COVID-19 testing and prohibits imposing prior authorization requirements for that testing. It also permits early refills, except for drugs in certain drug classes like opioids, and enhances access to mail-order pharmaceuticals. It prohibits the use of step therapy and continues to ensure network adequacy in the face of increased demand.
On March 23, 2020, the Commissioner issued Emergency Rule 37. The rule expands access to telemedicine services and permits telemedicine visits conducted through the patient’s phone or personal device. It also requires insurers to cover mental health services via telemedicine, except for treatment that is not appropriate for remote delivery. The rule waives restrictions requiring patients to only conduct telemedicine visits with providers in the insurer’s telemedicine network. Finally, the rule requires insurers to evaluate their out-of-network cost sharing to ensure patients are not unreasonably charged extra cost sharing amounts under their insurance policy if in-network access becomes limited during the COVID-19 outbreak.
Employers with policies regulated by Louisiana should be aware of these developments.
Emergency Rule 36 »
Emergency Rule 37 »
Military Leave and Re-Employment Rights Poster Updated
February 04, 2020
This month, Louisiana released an updated version of its military leave poster, describing USERRA rights applicable to employees who are part of the National Guard, military reserves, or on active duty.
Employers should make an effort to utilize the updated version of the poster.
Louisiana Workforce Commission Poster Page »
Review of State and Federal Regulation of Association Health Plans
September 05, 2018
On Aug. 30, 2018, Commissioner of Insurance Donelon issued Advisory Letter 2018-03 (“the Letter”). The Letter discusses the state and federal regulation of association health plans (AHPs), after the DOL’s final rules on AHPs were issued this summer. As background, AHPs are MEWAs and can fall under the jurisdiction of both federal and state law. The Letter identifies the different types of AHPs and how Louisiana law applies to them.
The Letter essentially confirms that Louisiana still has the same regulatory authority over MEWAs and AHPs as it did before the DOL published its final rule. Specifically, Louisiana still requires self-insured AHPs to be licensed under Louisiana state law. While fully insured AHPs don’t have to be licensed, the insurer that issues the policy must file the association’s constitution, by-laws, membership application, agreement and brochure for review when filing for a health insurance contract.
The Letter also includes a chart that lists some of the laws and regulations applicable to MEWAs and whether or not the different types of MEWAs have to comply. It ends by listing the applicability dates of the DOL’s final rule.
While this Letter doesn’t necessarily provide any new information, it’s a reminder to entities that might want to establish an AHP for Louisiana employers that they must comply with Louisiana law.
James J. Donelon. “Advisory Letter 2018-03.” Laws and Bulletins, www.ldi.la.gov »