Recent Executive Order on Transparency, Expansion of HDHPs, and Health FSA Carryovers

In an executive order dated June 24, 2019 (the “Order”), President Trump chose to focus on transparency in healthcare in general, as well as clarification of regulatory guidance on two types of health insurance programs, HDHPs and FSAs. The goal of the Order is to improve pricing and quality transparency and encourage agencies to create applicable guidance.

  • Healthcare Transparency: The Department of Health and Human Services (“HHS”), the Treasury Department, and the Department of Labor (DOL) are tasked with working together to issue a proposal and request comments on a requirement that insurers, self-insured health plans, and healthcare providers make information about out-of-pocket costs publicly available. This information must be made available to patients before they receive health care. HHS is to increase access to claims data from group health plans and taxpayer-funded healthcare programs, and this data must be de-identified to ensure patient privacy. The data will help researchers, innovators, and others are working to improve healthcare outcomes.
  • High Deductible Health Plans (HDHPs): Guidance from the Treasury Department is necessary to ensure HDHPs remain compatible with Health Savings Accounts (HSAs). While a plan must have a high deductible to be HSA compatible, it must also have a maximum limit on the annual deductible and no insurance coverage until the deductible is met (with a few minor exceptions). Additionally, the order provides that HDHPs need to cover healthcare related to chronic conditions for patients, which allows them to maintain their health before the deductible is applied
  • Medical Expenses: Pursuant to the Order, new regulations from the Treasury Department must focus on how to handle medical expenses related to direct primary care arrangements and health-care sharing ministries.
  • Carryovers: The executive order directs the Treasury Department to issue guidance on Flexible Spending Accounts (FSAs) and the amount that can be carried over at the end of the year. This guidance will specifically target health FSAs.

It is important to note that an Order does not change existing laws or regulations. Instead, it directs agencies to consider and amend existing regulations to meet the goals of the executive branch. Changing regulations takes time, but this order gives employers and plan administrators an indication of changes that are in the pipeline.

Much of the guidance will be appreciated by employers who are looking to manage plans in compliance with the law, particularly the guidance on HDHPs and FSA carryovers. Increased transparency in medical pricing and healthcare data will hopefully allow improvements in patient understanding of costs and healthcare outcomes.

The team of experienced ERISA attorneys at Hall Benefits Law pays close attention to executive orders and the direction the executive branch gives to federal agencies regarding health care and other benefits. The direction gives us a roadmap for where regulations are heading in the future, and it helps us plan for our clients today. To learn more, or for help with your employee benefits legal compliance needs, call 678-439-6236, or visit the Hall Benefits Law website.

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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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