On December 21, 2020, Congress passed the Consolidated Appropriations Act, 2021, which included a $900 billion COVID-19 relief and stimulus package and a new set of rules intended to address “surprise” medical billing. The No Surprises Act (the “Act”), which is part of the 2021 appropriations act, makes various changes to ERISA that are intended to ban the practice of “surprise” medical bills, which arise when a person covered by a group health plan unexpectedly receives emergency medical care from an out-of-network provider at an out-of-network facility or from an out-of-network provider at an in-network facility. In these instances, the out-of-network provider can bill the person for the difference between their charged rate and the amount an employer’s group health plan (or the insurer) agrees to pay, which is known as “balance billing.” The Act takes several steps to address this situation.
These new rules will go into effect in 2022 and will impose sweeping changes to the administrative processes for both self-insured and fully-insured group health plans. Provided there isn’t a delay in implementation, the Biden Administration’s regulatory agencies will need to issue a substantial amount of regulatory guidance during the next several months and the third-party administration firms and insurance companies will have to materially change their administrative processes. Given the very tight timeframe for these changes, and the impact they will have on plan participants and plan sponsors, we recommend that clients begin discussing these issues with their insurance agents, insurance carriers and third-party administrators during the next few months. We anticipate this will result in substantial changes to existing services agreements, summary plan descriptions and other participant communications materials.
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