2023 Healthcare Trends and Legislative Issues to Watch

While no one can predict the future with 100% accuracy, some healthcare trends and legislative issues are more likely to arise in 2023 than others. Continually rising healthcare costs, increased mental health services, Affordable Care Act tweaks, and the Consolidated Appropriations Act are all likely to play a significant role in the months ahead. 

Increased Healthcare Costs

Healthcare costs are rising, and this trend is expected to continue. Some experts have forecast as much as a ten percent increase in the costs of overall healthcare benefits over the next year. Other factors, such as prescription costs and supply chain issues, also are likely to impact overall healthcare costs. 

Increased Mental Health Services

The usage of mental health services has drastically increased over the past decade, and this trend will continue in 2023. In addition, transparency and parity legislation has made more people aware of and provided greater access to mental health services. Finding mental health services continues to be challenging, with extended wait times for appointments and steadily rising prescription drug costs.

The Affordable Care Act and the Family Glitch

In October 2022, the Treasury Department and the Internal Revenue Service (IRS) joined forces to amend the Affordable Care Act (ACA) regulations to fix the so-called “Family Glitch.” This glitch arose from the regulations determining affordability for an employee’s family members concerning employer-sponsored healthcare coverage. 

Under 2012 ACA regulations, the affordability of employer-sponsored healthcare coverage was based on the rate of self-only coverage. Depending on the employer’s plan, while self-only healthcare coverage might be affordable, family coverage might be unaffordable. Due to the Family Glitch, those family members would be ineligible to obtain subsidized healthcare coverage through the marketplace.  

The amended ACA regulations change this formula to consider the affordability of employer-sponsored healthcare coverage for family members and the employee. Under the new regulations, family members would be eligible for a premium tax credit in the marketplace, although the employee would not. These new rules went into effect for those participating in the open enrollment period in fall 2022 for 2023 coverage. Whether the correction of the Family Glitch will result in more employees with families seeking healthcare coverage from the marketplace is unclear at this point. 

New Cost-Savings from the Insurance Industry 

Some new models for managing healthcare costs have emerged in recent years, and this trend is likely to continue. For instance, health care sharing ministries (HCSM) have developed. These groups consist of people with shared beliefs who make regular financial contributions to reimburse health care costs for other group members. Individuals typically must be healthy and agree to a belief system, which may limit the types of medical care, procedures, and medications that are eligible for coverage.

Alternatively, individual coverage health reimbursement arrangements (ICHRA) allow tax-free reimbursement of health insurance premiums for all sizes of businesses. These formal group health plans allow the employer to reimburse employees for purchasing health care plans through the marketplace. The employees submit their receipts for qualified expenses or premium payments, and the employer reimburses them tax-free.

Finally, some self-insured employers use reference-based pricing (RBP) to eliminate the disparity between in-network and out-of-network pricing. RBP establishes benchmark pricing for services, usually concerning Medicare reimbursement rates. Employees may see any providers so long as they agree to accept RBP rates.

The Consolidated Appropriations Act 

Some elements of the Consolidated Appropriations Act (CAA) went into effect at the end of 2022, while some are being postponed until sometime in 2023. One provision that did go into effect is the No Surprises Act, which limits most surprise medical billing or unexpectedly large medical bills from out-of-network providers that go directly to patients. 

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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