Consolidated Appropriations Act of 2021: Overview
Director of Employee Benefits Compliance
The Consolidated Appropriations Act of 2021 was approved by both chambers of Congress and signed into law by President Trump on Sunday, December 27, 2020. This omnibus bill includes normal government appropriations and legislation designed to address challenges created by the COVID-19 pandemic.
Included in the legislation were the following provisions of note:
The Act does NOT extend the paid leave provisions of the Families First Coronavirus Relief Act (FFCRA) beyond December 31, 2020. However, employers may voluntarily allow employees to take any remaining FFCRA leave through March 31, 2021 and continue to receive the applicable tax credits for such leave. The Act does NOT provide additional amounts of paid leave under the FFCRA and if employees have already exhausted all FFCRA paid leave employers are not mandated to provide additional leave.
Surprise Medical Billing
The Act includes a “No Surprises Act” which is effective on January 1, 2022. It is anticipated that there will be an extensive rule-making process in 2021 regarding the application of the provisions of the Act, leaving many details in the hands of regulators. Here are the key components of the Act:
- Patient Balanced Billing Protections: Cost-sharing is capped for patients that receive out-of-network care for emergency services, post-stabilization care after emergency services if the patient cannot be moved, non-emergency services performed by out-of-network providers at in-network facilities, and air ambulance services provided by out-of-network providers. There is an exception for non-emergency services provided by out-of-network providers at in-network facilities if ancillary services are not provided.
- Amounts Plan/Insurer Must Pay to Out-of-network Facility/Provider: Payments will be determined by State law (if applicable), the All-Payer Model Agreement (adopted by Maryland and Vermont), or law that lays out a process for determining the appropriate out of network rate (if no State law applies). A process for states for which no state law exists will include negotiation and Independent Dispute Resolution Process (IDR). Initial payments must be the “qualifying payment amount” for that item or service within the same geographic location.
- Other provisions include:
- In and out-of-network deductibles and the out-of-pocket maximums that apply to such plan or coverage along with contact information must be on any plan document or ID cards.
- Advance explanation of benefits must be provided to a requesting health care provider or facility or to a requesting plan participant, beneficiary or enrollee that states whether the provider or facility is in-network for the item or service to be provided, the contracted rate for that item or service and a description of how the individual may obtain the item or service in-network.
- Price comparison guidance.
- Update and verify provider directory information at least every 90 days; respond within 1 day to enrollee questions about providers’ in-network status; maintain on a public website a database of all in-network providers and facilities and directory information for each.
The Act also requires several studies to be conducted and several advisory committees to be established. There are also transparency requirements included which include broker/consultant compensation disclosures (direct or indirect compensation) and group health plan/issuer reporting on pharmacy costs and benefits of other health care services.
Finally, there are several changes to the Paycheck Protection Program (PPP) in the Consolidated Appropriations Act of 2021.
All changes apply retroactively to March 27, 2020 and include:
- Businesses may deduct forgiven business expenses under the PPP from gross income for taxable years after March 27, 2020.
- Allowable uses of PPP dollars and forgivable expenses are expanded.
- “Covered period” for forgiveness period now means the period between the date of the loan origination and a date selected by the PPP recipient between 8 weeks after origination and 24 weeks after origination.
- Loans of $150,000 or less are forgiven with appropriate certification.
- Payment for the provision of group life, disability, vision or dental insurance counts as “payroll costs”.
- Eligibility for PPP loans is expanded to include 501(c)(6) organizations with 300 or less employees with certain qualifications.
- PPP loan proceeds may NOT be used for lobbying activities or for expenditures designed to influence any legislation, regulatory or administrative action at the federal or local level.
- “Second draw” PPP loans are added.
While many of the provisions of the Act will take effect immediately, the Surprise Medical Bill portion of the law will be implemented in January of 2022. During this time, we should expect to learn more from federal regulators on the specifics of this new legislation.