Cooking Up a Compliant Benefits Strategy March 2025

Okay. Let's go ahead and get started.

Good afternoon and good morning to our friends on the West Coast. Thank you for joining us today. We're we're going to take care of a couple of housekeeping items while while more for folks continue to join the webinar. This webinar is being recorded, of course, and we will share, the recording and the slide deck after the presentation.

The presentation has been approved for both one hour of SHRM and HRCI credit, and we will send those CE codes with the slide deck and recording to participants after the presentation is over. Those rules do state, though, that you must be present for the full hour of the live presentation.

So, unfortunately, if you're watching this recording at a later date, we're loving that you're doing that, but we won't be able to provide the credit.

We'd love for you to ask questions. There's a q and a box enabled, and we have compliance teammates on the line to help answer those questions that you send in in real time. If we have time at the end of the presentation, we can go over some of those questions. But, honestly, we have so much great content today. We probably won't have time to do that.

If you don't get your question answered, please follow-up with your McGriff benefits consultant or whoever invited you to this webinar, and we would be happy to follow-up.

And we are very much looking forward today to helping you prep the ingredients to to cook up a compliant benefit strategy.

Introductions first. I'm Anne Hensley. I'm the McGriff employee benefits compliance practice leader, and I'm joined by my teammate, Stacy Stewart, an attorney on the compliance team. We also have some of our other teammates on the call, Stephanie Rayborn, Christy Showalter, Richard Plumpton, and Laura Clayman, who are on the line to answer your questions that you send in through the q and a. Today's webinar is a part of a series that we're doing in twenty twenty five, so you can hear from all of them at Grif Insurance experts.

We're here today in March, but the compliance team will be back in November as we are going to help try to keep you up to date throughout the year because the only constant in our world of employee benefits compliance is that things are constantly changing. They're always changing. You can always get updates by reading our McGriff Friday benefits news clips and our monthly It Benefits You newsletter.

If you are not currently receiving those publications, please do reach out to your McGriff contact, and we'll try to get you added to those lists. We hope that you continue to listen to us and join us throughout the year. Be on the lookout for those monthly webinar invitations.

Quick disclaimer. Because things are constantly changing, I think we're all used to that by now, and guidance is constantly updated. Anything we talk about today is accurate as of March twentieth twenty twenty five.

So listen to the recording later. We'd love that, but please keep in mind that things might have shifted.

And, of course, nothing in this webinar is intended to be taken as legal advice.

McGriff is now part of the Marsh McLennan Agency family. McGriff is still bringing you, helping you with all of the tools and resources that we have previously to help maintain your benefit plans, successfully.

Okay. Today, we've chosen to cover topics that we feel are currently being asked frequently of us or are currently in the news or quite relevant right now. We're gonna start by prepping the dish, and we're gonna stay ahead of those compliance deadlines. We'll move on to mixing ingredients for inclusion, and I'll talk about the key compliance concerns with gender affirming care.

Stacy will help us with wellness program litigation updates. She'll also move into some fiduciary updates and concerns, things to watch out for.

I'll move into equal ingredients for mental and physical health and talk about mental health parity and what's going on in that space. And Stacy will close us out with the HIPAA security proposed rule and submit plan year amendment reminders for us. Those are always welcome and needed.

I'm not sure about you, and perhaps, you know, there are much better chefs in attendance today, but it helps me to prep the dish and gather my ingredients and plan before I start any cooking adventure.

And this really does translate to benefit plans by staying ahead of compliance deadlines. It seems as though there's always something coming up, a report or disclosure requirement, some new piece of legislation or regulation. And so that's what we're going to start with today. We're gonna start with what's coming up and a couple of deadlines that have just passed us by.

No real new information here, but general compliance reminders. March third was the deadline for furnishing ten ninety five b and ten ninety five c forms to covered employees and covered individuals.

What's new is on the screen, the paperwork burden reduction act. That was signed into law in December of twenty twenty four.

Not a huge surprise that that was coming. It did come at an inconvenient time as employers were pretty much fairly set in how they were planning to handle the reporting this year and already ready to provide those forms to their covered, individuals or employees. But employers are generally no longer required to send those, ten ninety five b or ten ninety five c forms to full time employees or covered individuals unless those forms are requested. There are some notice requirements, some timing requirements, and some retention requirements that you can see there on the screen. I think most clients right now have already, distributed those forms, but should definitely come in handy for the next time around.

March thirty first deadline for electronically filing forms ten ninety four c and ten ninety five c with the IRS.

We know that those smaller employers with fewer than fifty full time employees will file forms ten ninety four b and ten ninety five b with the IRS, and then the ALEs will form the c will file the c forms. But remember, and I think folks are pretty used to this by now too, that the IRS has lowered the two hundred and fifty return threshold for mandatory electronic filing, and reporting, from ten for from ten to ten returns. So this really does encompass the majority of our employers, and they are now required to complete the ACA reporting electronically.

Prescription drug data collection, not our first rodeo with this with with this either.

The prescription drug data collection program that's established by the consolidated appropriations act, you're gonna hear that more than once during today's presentation.

I'll refer to it by the CAA. That requires insurance companies and employers, to provide details about the prescription drug benefits and health care spending and cost to CMS.

And data for the twenty twenty four reference or calendar year is due by June first of twenty twenty five.

Reporting obligations apply to both self funded and fully insured groups. If you've not heard from your carrier or PBM, reach out as we're seeing those surveys really they've started to hit the desks of our plan sponsors. And if you've not received those, do reach out. The CORI fee for self funded health plan sponsors are required by the ACA every, July thirty first of every year.

So July thirty first of the calendar year following the plan year for which the fees are calculated.

So a fee for a plan ending in twenty twenty four is now due July thirty first of twenty twenty five, and this is via IRS form seven twenty that will likely be released in June.

And finally, we've got the form fifty five hundred for calendar year plans. Remember that a form fifty five hundred has to be filed no later than the last day of the seventh month after the end of the calendar year end of the plan year for ERISA pension welfare benefit plans. So for calendar year plans, that's July thirty first.

Most folks know when those are going to be due and when those are triggered, but always good to remind folks of what's coming up.

We're gonna move on to a very important recent update.

There's no telemedicine relief for HDHPs and HSAs.

I know we've been asked about this. We've been monitoring things closely. President Trump signed a temporary spending bill recently authorizing current spending levels through September thirtieth of this year and preventing a government shutdown. There were no revisions to the proposed bill, which means that it doesn't restore the relief excluding general telemedicine benefits as disqualifying coverage for HDHP and HSA purposes.

And I think while this might technically be, it's not technically the last time, right, or the last opportunity for restoration of the relief. It was probably the last best opportunity we're going to have for a minute. There are a couple of other bills that have been proposed to extend this relief. We will definitely monitor this and provide updates as they become available to you all.

Okay. Let's move on to our to our, first big topic, gender affirming care. Again, we're asked about this quite frequently, and it's in the news a good bit, a lot right now, actually.

So we're gonna talk about the key compliance components to gender affirming care. And one common question we we are asked is whether or not employers are required to offer gender affirming care under the major medical group health plan. I wanna walk us through the legal landscape and things you should be thinking about when deciding whether or not to to cover these services.

And just from the outset, let's talk about what this might include. Right? It's hormone therapy. It's genital reconstruction. It's facial plastic surgery, breast reconstruction, etcetera, etcetera.

The list goes on. Employers are are allowed to provide coverage for all gender affirming care. Right? Fully insured plan sponsors have less discretion as compared to self funded plan sponsors who have a greater degree of control over their plan design and administration.

But there's appropriate laws we're going to talk about at a high level today.

I think before we enter in this, I want you to keep one thing in mind. Our current federal legal landscape does not require coverage for all gender affirming services or care. But as it stands right now, except for religiously affiliated organizations, we also do not think that an employer can exclude all coverage for gender affirming care and comply with applicable federal law. So let's keep that in mind as we navigate through our ingredients here.

Our first ingredient is title seven, which prohibits discrimination based on a protected class, race, age, national origin, and sex. That's what we're focused on here. It applies to employers with fifteen or more employees. And the key case here is a Supreme Court case, Bostock v Clayton County.

And the Supreme Court there said that title seven protection against employment discrimination, which includes benefits, right, right to back benefits on the basis of sex includes discrimination based on gender identity and sexual orientation.

So the employment, remember, we're talking also here about discrimination and benefits when we're talking about any kind of employment discrimination.

The case expanded that definition of sex. It includes discrimination based on sexual orientation or gender identity. And then we have this result. Some courts have found that blanket exclusions of gender affirming services are on their face discriminatory, right, under title seven because that treatment in question, would not be categorically excluded to non transgender individuals. If I have a group health plan that doesn't offer any any gender affirming services or would potentially limit those gender affirming services that are otherwise available to non transgender individuals who seek similar care, that could be a risk of a title seven claim for sex discrimination.

I think it's really key to note here, that most plans have been providing these services, to folks whose gender identity matches their sex assigned at birth for a very long time. Right? Breast reconstruction surgery, following a mastectomy for cancer, or hormone treatment replacement therapy for women going through menopause. The the controversy is over gender affirming care following a diagnosis of gender dysphoria, for example.

I wanna keep it in mind, though. Right? We're talking about a broad range of potential services that can be involved. It's not just surgery.

The Eleventh Circuit Court case right now, is being reheard. It's reflected there on your screen. That's being re heard. And so it's not it's not super, super solid right now. But even so, you can see the litigation post Boss Doc and ex as exemplified by those cases.

Title seven is one of the potential legal barriers here to to employers wanting to remove or exclude gender affirming care. It's probably, in my opinion, the most significant barrier we have right now.

Ingredient number two, section fifteen fifty seven of the ACA.

I won't go into the background of this rule, the back and forth legal mechanics of of how we've arrived here at our destination today, but it's it's really gone back and forth from the Obama administration, Trump administration, the first administration, Biden, and now the second Trump administration.

The rules about gender care just kind of keep flip flopping. But we did have final rules on this in twenty twenty four, and those rules confirmed the prohibition against discrimination on the basis of sexual orientation and gender identity, sex stereotypes, and pregnancy and other related conditions.

It relates to covered plans and covered entities. I'll say those words repeatedly.

The regs apply to employer provided medical coverage that receives direct or indirect federal funding.

And that very importantly, the twenty twenty four final rule attempts to clarify and to bring into focus and into scope who's affected by the rule, and that includes insurers and an insurer's TPA activities if they're a covered entity, which means those covered entities are generally health programs and activities that receive federal funding, assistance, insurers participating in the exchange, and any health program funded by HHS.

Most employers are not going to be covered entities under the rule unless they're a hospital, medical provider, health care provider, or receive federal financial assistance. They can have and be indirectly impacted, right, in their plan administration if they're they have a vendor partner that is a covered entity.

So for those self, insured plan sponsors who kind of across the board exclude insurance coverage and services for gender affirming care, that was at one point a significant concern under section fifteen fifty seven. Fully insured plans, have probably had to comply because their their carriers have had to comply for a number a number of years.

As of right now, in terms of the litigation update, this is all rife with litigation. There's a nationwide injunction preventing enforcement of the ACA's rule extending, this discrimination to include discrimination on the basis of gender identity. And there are a few other states that have additional injunctions relating to other parts of this rule as well.

Even if you're not covered or indirectly impacted by fifteen fifty seven, we still have to go back to that title seven slide previously, and and remember that that is still a potential legal barrier even if fifteen fifty seven is is not so much currently.

Executive orders. Those have been in the press lately, of course. Fast and furious release of these. Executive orders don't make any changes to the law. They're good predictors, though, right, as to what's coming in terms of rulemaking and how the government agencies will act in the future.

I think we can take away from the two executive orders on the screen a couple of things. This administration does seek to recognize only sex, not gender, and they seek to recognize two sexes, male and female.

I won't go into the into the details. You can see on the screen the two executive orders, but we've already seen, HHS, federal agency, take action based on these executive orders. It's that's exactly what we intend to see. Right? The executive orders tell us tell the agencies how to act. The agencies act in accordance with those executive orders.

They've rescinded HHS has rescinded some guidance that was related to this type of care in twenty twenty two, and we have newly proposed regulations from HHS also. I I think very recently proposed regulations, on this very same topic. So we are already seeing action being taken by our government agencies based on the executive order and their direction.

They have told those agencies to operate.

It, again, gives us a, an idea of what's to come with the administration.

Even if that HHS guidance that was just issued is limited.

Again, takeaway here is we know where this administration will go and how it will direct agencies to act. Let's whisk it all together. Why don't we?

What does this mean potentially for our EB worlds of health care and our our plan sponsors?

The rescission of the executive order, on Bostock. Remember, all the way back to that slide, there was an executive order that rescinded application of Bostock to extend a gender identity.

That shifts our agency interpretation. Right? HHS, etcetera.

And sex may no longer be considered to extend a gender identity. It it's most likely will not. It will not.

But unless the Supreme Court revisits Bostock, individuals protected by title seven can continue to file charges of discrimination relating to LGBT status under federal law. Right? Unless that's revisited by the court, I believe that you can still, bring a suit there. Section fifteen fifty seven will likely be revised without gender affirming care provisions. That would not be a surprise to me. Mental health parity doesn't require employers for to provide a particular set of benefits, but putting limits on behavioral health treatments for gender dysphoria could violate mental health parity if those limits are more restricted than limits for medical surgical benefits. And we're gonna go into mental health parity a bit later in the presentation.

It's also very possible that the characterization of treatments for gender dysphoria definitions could change in this space.

And we expect to see the government withdraw support in such cases within individual states where plaintiffs are challenging state laws to ban gender affirming care. Ultimately, all roads bleed to the Supreme Court. It'd be nice if they decided this title seven fifteen fifty seven and mental health parity altogether, not likely to happen, but, ultimately, we will receive, I believe, guidance from the Supreme Court on this.

Okay. I'm going to turn it over to Stacy now to talk about recent wellness program litigation.

Stacy?

Hey, thanks, Anne. And I'm so glad to be here with you today. It's getting spicy.

I love these, these cooking metaphors. But I really do think it's actually a quite apt one. On the next slide, we're seeing a recent wave of class action lawsuits that are targeting, wellness programs, particularly under self funded plans. And these suits are generally related to tobacco free wellness type programs with, you know, with some exception.

And what we're seeing here are lawsuits that are alleging violations of ERISA fiduciary duty rules, and put a pin in that because I'm going to talk about that a little bit later, and that, you know, they're violating HIPAA nondiscrimination rules. So remember, the HIPAA non discrimination rules prohibit discrimination based on health outcomes. And what they basically say, these rules basically say, is that you can't require participants to pay a higher premium than similar participants based on a health related factor. And then we've got this really useful wellness program exception that basically allows you to do so.

But of course, like so many other things in benefits, it puts strings on it. It. So there's, there's certain requirements that apply depending on the type of wellness program that you may have in place. And what we've seen under the regulations is that these programs are grouped into two different buckets, right?

We have participatory type programs, where there's either no reward or a reward for eligibility that's not conditioned on satisfying some sort of health factor related standard.

Put a lot of words, coming out of my mouth there. But what does that really mean? You know, these are things like attending a health education seminar or reimbursing for gym membership, that kind of thing. And then there's a second category of programs called health contingent programs.

And of course that's subdivided into two more kinds of programs because anyone who's ever heard me talk about wellness programs will know that I say, you know, never has there been a more simple subject, just made more complicated with requirements under the law. I mean, you know, we just want to help our employees, you know, to, to live a better life and be healthy. But, when you're rewarding them for doing so, there's just, there's a lot of different things that you've really got to take into account. So in this second category of health contingent programs, these are the kinds of programs that reward eligibility.

But in this case, it is conditioned on satisfying a health factor related standard. And within that larger bucket, we have activity only programs, which are programs where all you have to do is perform some sort of activity and then bam, you get the reward. That's it. You know, you don't have to pass go, you know, or well, you can pass go.

Collect two hundred dollars. These are things like, you know, walking program, a nutrition program, exercise program, but you don't actually have to satisfy a standard there. Contrast that with the second category of outcome based programs. And in this case, you actually do have to, you do actually have to achieve or maintain some sort of specific health outcome in order to get whatever, incentive that is, or in some cases avoid a surcharge.

Right? So what are we talking about here? We're talking about things like you have to attain certain results on, you know, biometric testing. You have to, you know, maintain tobacco free status.

You have to attain certain, certain weight goals, for example. So those are the kinds of programs that would fall into that category. And that's important because as we talk about on the next slide here, the recent wave of lawsuits that we're seeing are targeting this latter category here, these outcome based health contingent wellness programs. And so we put together this, this slide on the, it's the next slide from where you are on slide eighteen, which goes through the types of requirements that we have for being able to have your outcome based health, contingent wellness program considered nondiscriminatory.

So first of all, people, participants have got to be able to qualify for that reward once a year. You can't, you know, it can't be something like, hey, once a decade, you know, it's got to be once a year. The reward is limited to certain specified percentages, generally thirty percent unless the programs we're mostly talking about here. It can be up to fifty percent if it's tied to preventing or reducing tobacco use. You know, that's, the percent of total cost of coverage, generally self employed, self only type coverage.

If you've got, you know, an employee and spouse coverage for, for preventing or reducing tobacco, you might be able to take that up to the cost of employee plus spouse coverage. What else? I mean, this one makes sense here. Right? It's gotta be reasonably designed to promote health and prevent disease. It needs to be designed to do what it is that you want for it to do. Right?

And then you have to make that full full reward available for participants, and this is an important one, including offering what is referred to as a reasonable alternative standard, or we like what we like to call the RAS, which which is a much sort of catchier acronym, than than probably a deserving of the case. But, yeah, this is employee benefits. And what do we love? We love our acronyms. So, you got to offer that RAS to participants who don't meet the initial standard for the reward.

And then the final requirement is that you have to disclose the availability of that RAS and all materials that reference the program.

And excuse me, you also have to disclose that when you have a participant who didn't meet that initial standard.

So moving on to the next slide, what are the key allegations in these lawsuits here? Well, not surprisingly, well, not surprisingly to us, but, maybe surprisingly supposed to be subject to the lawsuit. They are, centered around this reasonable alternative standard or RAS, right? So we've got cases where they're basically saying, well, there are premium reductions, but, you know, or surcharges, but they're they're only available or only removed on a prospective basis or that, you know, the existence of the RAS wasn't, you know, disclosed in all plan materials. So we didn't know it was out there, right? And that collecting, let's say, a surcharge, because like I said, most of these are related to, tobacco free type wellness programs, collecting the surcharge essentially results in an ARISA breach of fiduciary duty.

So what what's going on here? Well, we don't actually have a dispositive, court ruling yet, which means we don't have anything final out there where a court said, here's what we think. But we have had, you know, cases settle in here. We have one case settle where the employer agreed to pay back up sixty two percent of the surcharges. I think that was in Missouri gaming case.

More recently, we had Bass Pro Shops.

They settled for, I think it was almost six million dollars settlement there. So these are, you know, this is not, chicken feed. I mean, this is, this is, you know, some some real real dollars at stake here. And with that in mind, what are some practical steps that that that you can do to hopefully, you know, reduce your exposure here?

Well, keep in mind, you know, I think oftentimes, a lot of times we, we have folks who come to us and, you know, what they really wanna do is they just, they think it's reasonable, they think it makes sense that folks that are tobacco users, you know, should pay some sort of a different, premium from folks that, that, that, that do not because, you know, they may be larger consumers of those healthcare dollars. But it's just not as simple as that. It may feel like it should be as simple as that, but because of these HIPAA non discrimination rules and the requirements to meet that wellness exception, you really got to think through, obviously in the beginning, is a better time to think through it.

You know, how it is that you're gonna put those those programs in place. So you can do it. You can do it, but you gotta make sure that you that you're satisfying your requirements, that you're properly administering it like with the RAS, and that you're disclosing the RAS and your materials. Also need to make sure that you've got that full reward available as opposed to doing something just on a prospective basis.

Wanna make sure once again, and I said this several times and I repeat it because it's important.

Properly disclosed and all plan related materials, to close, to close, to close. I mean, compliance folks, and maybe your lawyers don't always say, tell it, tell it, tell it. But, you know, this is one of those cases where, you know, you really want to be sure that it's that it's out there. And then make sure that your staff and your vendor are also trained in, the availability of that RAS.

So a lot of folks will go out and they'll have a vendor that is, you know, that they that they engage with in order to, you know, run their wellness program. But you've got to be sure that when you're engaging in that relationship that the terms of the wellness program are meeting the HIPAA, the HIPAA, wellness exception requirements, then that they make sense and that they understand and can properly administer that for you. That's an that's an absolutely key thing for you to understand and for them to understand that it's important to you. So moving on from wellness, let's take a look here.

We're gonna look at what the right ingredients are.

And that's employer accountability and fiduciary duties. This is another area where we are, you know, we're really seeing, litigation.

But let's let's let's start at the very beginning. A very good place to start, as was said, and what was the what was the movie? The Sound of Music, right?

So let's talk about ERISA.

ERISA is, you know, obviously it's one of our, one of another one of our acronyms, I doubt that it's one that none of you have, have heard. But remember that ERISA sets minimum standards for employee benefit plans, the standards of conduct for things like plan fiduciaries.

And the whole purpose of the law really is to protect participants and beneficiaries.

Who does it apply to? It applies to most private sector employers. That's going to include your corporations, your LLCs, your LLPs, LLPs, your tax exempt. It's not gonna include governmental employers and church employers.

When we talk about what is an ERISA plan, we're talking about basically, you know, a plan, a program that's established to provide those ERISA covered benefits by an employer. What are those ERISA covered benefits? I mean, that could be, you know, a ten minute conversation right there. But, you know, not surprisingly, it's gonna cover things like medical, dental, vision, prescription drug coverage, which is often tied into your medical plan, and which has been a subject of some of the lawsuits, which I will discuss, very, very shortly. So we have exceptions there. You may have some plans that, you know, seem like they should be ERISA, but they're exempt.

You know, most of the time disability programs, for example, would seem like they would be covered by ERISA, but you might, you might pay out, let's say short term disability as a payroll practice, and that would exempt it. But that's just, you know, a kind of quick description of ERISA. But as I did mention, ERISA does actually apply standards of conduct for the people that they term to be planned fiduciaries. So that raises the question.

We're finally getting to the content of the slide here, I promise. Who is, who's the fiduciary under ERISA?

And so a fiduciary under ERISA, first of all, you've got to have at least one named fiduciary in your written plan.

And that person, you know, could be identified by the role that they have. It might be, you know, a committee that administers your plan. But it's got to be, you know, indicated and stated in the plan document. Sometimes you have vendors who will say, well, you know, I'll be a fiduciary for certain purposes, but not others. We see that often in terms of, you know, TPAs or carriers who will do things like manage your claims and appeals process. They may be a fiduciary for that purpose, but they're not, you know, the general overall fiduciary for all actions related to the plan.

So one of the interesting things about ERISA and the definition of a plan fiduciary is that, yes, you've got to have that name fiduciary, but that's not, that's not all of it. That's not the, that's not the full picture. And that's because under ERISA, it uses what I like to term as a functional definition of a fiduciary. So you're not kind of, you know, like in or out, right?

You are a planned fiduciary if you meet that functional definition. And what do I mean by that? I mean, it's determined based on whether or not you exercise discretion or control over the plan. And that's with regard to things like management of the plan, administration of the plan.

It can relate to investments, investments under the plan as well, though that typically comes into play more in the retirement plan space. But, you know, it's based on what you, you know, what you can do versus what you, you know, necessarily have, you know, sort of written behind your name, for example.

Who's not a fiduciary? Those folks that perform ministerial functions. And what do we mean by that? I mean, you know, the person who's putting together open enrollment materials, for example, or maintaining your service records, they're not going to be considered to be, a fiduciary because they're really just performing ministerial type functions.

So without further ado, we've talked about who's the fiduciary. Yeah. On this slide, let's talk about, well, what are the duties if you are a fiduciary? Well, I've got them sort of listed out here.

You've got the duty of loyalty and the exclusive benefit rule. And what does that mean? You have to act solely in the best interest of participants and beneficiaries for the exclusive purpose of providing benefits to them or defraying reasonable expenses of administering a plan. The duty of prudence, this is the key one, put a pin in it.

This is where we're seeing a lot of the lawsuits come down to. You have to act with the care, skill, and prudence and diligence of a prudent person.

Say that five times fast.

The diversification duty, that relates to diversifying investments to minimize large risk of loss. That's once again, again something we kind of see happen more in the retirement plan world. And then we have this one that's a very, very important and sometimes overlooked one. It's the duty to act in accordance with plan documents.

So you, you have to do, if you're a fiduciary, you need to run your plan in the way that your plan document says that you will. You have to follow the terms of the plan. And that begs the question, you know, obviously, do do you know what do you know the terms of your plan? Are you are you familiar with the terms of the plan?

When you're making decisions related to the plan, are you confirming that they're in line with the terms of that plan? And that's, you know, that's been hard to do, if you're, you know, not not familiar with them or where to find them, of course. So on the on the next slide, let's dig a little bit more into the the fiduciary duty of prudence. Because as I mentioned, the recent litigation we've seen has focused in large degree on violations related to this duty of prudence.

And, you know, as I mentioned on the last slide, you've got to act with a secure, skilled prudence and diligence under the prevailing circumstances of a prudent person. And I promise I'm stretching this out for a reason, who's acting in a similar situation, who is familiar with such matters. So that's a mouthful, but what that basically amounts to is a very high bar. It's what we refer to as the prudent expert test.

So what's important for you to understand and gain when thinking about what are my fiduciary duties, these are, these are, these are a high bar. They require a lot of these. They're not, you know, box checking type, type, type actions. So when it comes to, the, the, duty of prudence, you know, when it comes to making decisions related to your plan, this this means you need to make sure that when you're doing things like making decisions related to the plan that you're documenting, not just, hey, we did it, but, you know, here's what we did.

Here's why we did it. When you're hiring service providers that you are, you know, you're not just looking at one person, they look good, let's go. You know, you're actually digging into what it, what it is that they're going to do, how it is that they're going to do it. It makes sense.

Their procedures, their practices, their contractual terms make sense. And it's not just a one and done, right? So you have to monitor them, make sure they're doing what they said they were gonna do, and that their their practices are continuing to to make sense. And the last one, I feel like it kinda goes without saying, but but it it's important because oftentimes you get, you know, moving with the with the with the pace of life.

But it's important to remember, you've still got to make sure on an ongoing basis that you're complying with the applicable rules that apply to your plan, federal and state law. So on the next slide, we're finally getting to the litigation, which was the, the title of the slide. And so we've seen, you know, a number of cases listed on this slide. I'm not going to go through all the facts.

We don't have the time for that. But, you know, Lewandowski, for example, the Johnson and Johnson case, that's been in the news quite a bit. And it, it had to do with, you know, issues related to prescription drug pricing. They were able to some of the claims were dismissed and it wasn't necessarily, you know, we were wondering if they could we're gonna actually go back and amend their claims, you know, with respect to what was dismissed and they actually have.

They have amended one of the issues with the Johnson and Johnson case was that they weren't necessarily able with the plaintiff to show harm. And they've gone back and amended the claim to say, hey, you know, here's some more reasons why we've, you know, why we feel like we can prove harm. And then they actually added another, another, plaintiff, to the, you know, to the, to the lawsuit just to really sort of drive home the point.

So we'll see how that goes.

We, we have the Wells Fargo case, another, you know, unreasonable methodology and determining pricing on prescription drugs. Most recently, I think this was just last week, maybe We had one come out for, JPMorgan.

And that one, I mean, they they, you know, the the facts in that case were pretty interesting. They they were finding, you know, generic pricing on the drug that was, you know, was was they were paying more than, two hundred percent, of that was available at retail into the plan. So, interesting, interesting case law. What this is showing is this is ongoing.

This is significant and it is, it is something that we really, really need to pay attention to probably, is one of those things that makes you really want to think about as on the next slide. What are some things that you can do to set yourself up in a good position to be able to address these, right? So make sure you know who your fiduciaries are, right? I mean, that sounds like a kind of, you know, something that should already be things that, you know, but as I said, you've got that functional definition of fiduciary.

Don't forget, there can actually be personal liability under the, breach of fiduciary duty rules. So, you know, put put that in your in your cap and think about it. Well, you want to be sure that you're making that you're reviewing, you know, reviewing those service agreements, that you're, you know, sending sending, you know, RFPs out to multiple folks when you're doing it. You want to make sure you're formalizing your processes and procedures when it comes to making your decisions And that you can actually demonstrate that you're, that you're compliant.

When it comes to the duty of prudence, the important thing is that you're showing a prudent process. It's not necessarily the result. It's all about was the process that you went through in doing it a prudent one, which is one of the reasons why a lot of, a lot of folks are considering establishing a health and welfare benefits committee to handle plan administration and ERISA compliance. You may have something like that already on your retirement plan side.

A lot of folks are thinking about putting it in place on their health and welfare side, so that they can have a committee where they can show, hey, we had regular meetings. Here are the things we talked about. Here are the decisions that we made. Here are the reasons that we made them.

So going a long way to show that prudent process there. Okay. So I think we'll go ahead and Anne, I think I'll go ahead and turn it back over to you at this point.

Thanks, Stacy. Thanks so much. Really great information.

So we're gonna move on to mental health parity. And, as Stacy mentioned, one of the most important responsibilities is to make sure that plans are in compliance with the numerous, you know, all of the legislation and regulation impacting employee benefit plans. And one topic that has become an enforcement priority for the agencies and the largest area of enforcement activity for the DOL over the past several years and that has also strong bipartisan support in congress is mental health parity. And and really before we get into this, believe it or not, some form of parity law has been around since nineteen ninety six, if you can believe it. So, most of this stuff is kind of changed, and and congress has strengthened those original protections over the years in various ways.

But parity is something that's not necessarily altogether new or shouldn't be altogether new to us.

Okay. By way of background, or, you know, if you're new to mental health parity, I'm going to say mental health parity and addiction equity act as MHPAEA throughout the presentation today just to shorten a little bit and add to our acronym and alphabet soup here. But MHPAEA requires parity between a group health plan's medical surgical benefits and mental health and substance use disorder benefits. And the parity requirements, apply to financial requirements, deductibles, co pays, coinsurance, quantitative treatment limitations, like day or visit limits. These are things that are easily expressed or represented numerically with numbers, of course, and non quantitative treatment limitations and TTLs, which generally limit the scope or duration of benefits, such as network composition and adequacy, out of network reimbursement rates, formulary adequacy and design, and medical management, and prior authorization requirements.

And if you're if you're thinking to yourself, how would we ever compare apples and oranges? You know, parity analysis for mental health, and substance use disorder benefits have to be conducted within six classifications, inpatient, in network, inpatient, out of network, out of patient, outpatient, in network, outpatient, out of network, emergency care, and prescription drugs.

And, you know, if you want additional information, mental health parity is something that McGriff compliance folks have been talking about for years now. If you want more information or another a deep dive on mental health parity requirements, be sure to contact your McGriff consultant, and we can provide additional information.

Mental health parity is very important to remember. It doesn't actually require a plan to offer mental health or substance use disorder benefits. But once a plan does so, those benefits must be in parity with a medical surgical coverage, meaning that there can be no greater restrictions placed on mental health substance use benefits than for medical surgical benefits. They are in parity.

It applies to most major group health plans and issuers, fully insured, self funded, nonfederal government plans, that exception or exemption was in place.

It is now gone. So non federal governmental plans. Only, you know, self administered, self insured, small group health plans have an exception now to mental health parity requirements.

Hopefully, most of you know that an NQTL analysis is now due as required by the Consolidated Appropriations Act, CAA. We've been talking about this NQTL written analysis now, for a few years because it came due in twenty twenty one. But the CAA requires plans to make available to the secretary of labor upon request a non quantitative treatment limitation, comparative analysis, to assess whether an NQTL as written and in operation, actually showing how the plan operates, not just what the terms of the plan document are, complies with mental health parity requirements.

The final rule establishes minimum standards for developing that comparative analysis and added a new meaningful benefits requirement, a new two part test for NQTLs, and some specific content requirements for this comparative analysis.

The final rule generally applies, or apply to group health plans and group insurance coverage for plan years beginning on or after January first of twenty twenty five. And then there are provisions that implement, you know, the new testing requirements and certain related comparative analysis requirements. And those provisions apply for plan years beginning on or after January first of twenty twenty six.

We're going to focus today on, this portion of the final rules. For ERISA covered plans, the comparative analysis must also include a plan fiduciary certification that a plan sponsor has engaged or the fiduciary has engaged in a prudent process and monitored their service providers.

Sound familiar? Thank you very much, Stacy, for setting us up so well there. The final rules bring about several changes. We just talked about that fiduciary change.

So as of January first, planned fiduciaries have to certify that they've gone through a prudent process to choose an MQTL analysis provider and that they've satisfied their duty to monitor the provider during the NQTL testing process.

Thankfully, very thankfully, the final rule stepped back from the proposed rule, and the proposed rule would have required a plan fiduciary to certify that the comparative analysis of NQTLs actually comply with mental health parity, MHPAEA.

That's an incredibly high standard to meet, but they did kind of roll this back. They did adopt a new documentation requirement, which includes and requires a paper trail certifying that the plan did actually go through a prudent process to select an NQTL analysis provider, meaning that there was some sort of vendor selection process. Maybe there was an RFP process with a questionnaire. What questions did you ask to help select the vendor?

Did you review their qualifications and fees and performance guarantees?

Any other factors relating to how you went about choosing that provider, and monitoring the performance of the of the provider as we discussed earlier. So that certification should also include confirmation that the fiduciaries review the results of the analysis. And and, really, any back and forth questions asked during the process should be included here.

It's very important, as Stacy said, that the, plan fiduciaries are aware of and are trained on this new requirement.

There were also some final standardized definitions of what constitutes mental health benefits in the final rules, substance use disorder benefits, and medical surgical benefits. That really gets into the weeds, so we're not gonna go into those definitions today.

But in the past, there's been some confusion on how to classify certain benefits. And under the final rules, plans must now classify benefits based on a standardized definition, using specific reference materials in a specific order to establish those definitions.

First, the International Classification of a Disease, ICD, and or Diagnostic and Statistical Manual of Mental Disorders, DSM. That's that's a mouthful. Then state or federal guidance.

The final rules also outline certain changes for twenty twenty six, including a requirement that group health plans offering any benefits for mental health or substance use conditions in any classification have to offer meaningful benefits for that mental health, substance use disorder condition in every classification that mental, medical surgical benefits are provided.

It also updated highly technical standards required to evaluate data for purposes of testing.

I'm not gonna go into that meaningful benefits, requirement because we need further guidance to better understand what the department means by meaningful benefits.

But it's something that we're watching for, and we'll keep you updated on.

We we know that these rules have been challenged in court. ERIC, the ERISA industry committee has filed a lawsuit, and the District of Columbia are serving that the final regs should be invalidated or at least certain provisions, should be enjoined.

Eric is basically saying that regulars have exceeded their authority. They've gone beyond beyond what they are entitled to do and how they're entitled to act by mandating coverage beyond what the law requires, like that meaningful benefit standard. And that the regs are arbitrary and capricious, which are legal terms of art.

But it basically says that they've gone beyond the scope of their power. And while a number of experts predict that the court could validate, invalidate, or vacate certain portions of the final rule like that meaningful benefit standard. It's still too early to know what's going to happen.

But the key takeaway here, right, even if this lawsuit is successful and there are some things that are vacated, the requirement to have that MQTL analysis is likely here to stay because it's not only based in the statute. Right? The act itself versus solely in agency regulations.

It's based out of the Consolidated Appropriations Act and then these final regulations. So even if it's removed from the final regs, final rules, we have the CAA that tells us and requires us to perform that analysis.

It also has bipartisan support in congress. So it's definitely something that we're keeping an eye on. We do not take any what's on this slide to say that employers don't have to do that analysis.

We want employers to be proactive in complying with the requirement for an MQTL analysis.

We also know how the Department of Labor's latest mental health parity report to Congress. This is the third one.

It was published in January. It gave us a lot of things to think about. One key takeaway that will come as no surprise to any of you is that the agency discovered that many plan sponsors, aren't complaining the required analysis until it's requested.

If you leave this webinar with nothing else today, please leave with this. You need to have your NQTL analysis written and ready to go should you be asked for it. Right? You don't have very long. I think it's ten business days to provide a comparative analysis, for your NQTLs upon request by the relevant secretary of, you know, the Department of Labor, for example, and then and an additional ten days to provide additional info if that initial analysis is deemed to be insufficient.

We also don't wanna just make conclusory statements. Right? That was something else that was raised. We have to provide data, and supporting evidence.

The data has to be plan specific. We have plans that have identical benefits and plan designs. They may have the same test results when looking at how the plan is written, but we require this requires a deep dive into how the plan is actually operating. That requires digging into participant utilization and claims.

If you're relying on your TPA for your NQTL analysis, is that data just looking at their entire book of business, or does it address your specific plan's operation?

Very important.

There were many deficiencies that were found among the plans that were investigated. No final determinations of noncompliance were issued.

You may have heard that no plans have passed so far. That's true. This is not just a pass sale exercise. The regulators are really trying to work with plans and insurers to gather more information and fix deficiencies.

No plan is going to fail every element just as no plan passes every element. The analysis is here to identify areas of concern, take corrective action to bring those mental health and substance use disorder benefits into parity. So corrective action goes a long way.

There are several areas of focus that the agencies have continued to identify, including network adequacy and composition of health care providers.

I know that there's a valid concern from plan sponsors, that regulators expect them to have adequate networks of mental health and substance use disorder providers when plan sponsors, in actuality, have very little control over that element. I I think the DOL representatives actually understand this.

One thing they focused on, through a secret shopper survey is having providers listed in a directory that simply do not exist or are not accepting new patients. That's been, you know, raised in prior litigation.

But if a provider is listed, the provider needs to have availability.

Key takeaway two, agencies focus on impermissible exclusions. So let's remember ABA therapy for autism spectrum disorder, nutritional counseling for eating disorders, medication assisted treatment for opioid use disorder. Those are red flags and should be discussed with your carrier, etcetera. Focus on the red flags the DOL has given us for parity testing.

The DOL has limited staff, limited budget to do audits. I get that. The DOL can require corrective action, like reprocessing, re adjudication of claims, can do the public shaming method, by including an employer and its annual report.

We have heard, from some sources that it's secured over one billion dollars in direct payments back to beneficiaries in retroactive claims payments.

So the DOL might not audit a lot of plans in this area. It's still its enforcement priority, and when it finds an issue, it tends to trace that issue back to as many participants as it can saying that one TPA who is administering benefits incorrectly, you know, it it will dig into that data for all clients working with that TPA so they can impact as many participants as possible.

In our opinion, the biggest threat here is the private litigation and the expense that the private litigation can involve.

Participants have a right to request these analyses. And so even if the likelihood of the DOL come knocking on your door is low, there's a higher probability that we're worried about that a participant may ask for this analysis or their attorney might.

Okay. Very quickly here, I want to remind you that there are great resources here. There's some key takeaways. Remember the NQTL focus areas, network adequacy and composition, impermissible exclusions, the nutritional counseling, AB therapy, etcetera. Go check out those resource materials.

Talk to your TPA. Talk to your legal counsel.

It it again is a DOL enforcement area, and we don't see that necessarily going away. We certainly see, private litigation, participant litigation increasing in this area.

Stacy, I'm gonna turn it over to you.

Okay. Great. Thank you, Anne. Alright. So is the dish done? Well, in this case, no, it's not.

We're still gonna talk about it. We're gonna we're gonna talk about we're gonna talk about it because it's a big deal. We have, some proposed regulations out related to the HIPAA security rule.

And, I'll start by saying, you know, we're in the area of HIPAA privacy and security.

And, you know, typically when we think about HIPAA privacy, oftentimes we're thinking about those service providers, we're thinking about, you know, our doctors, our dentists, those folks that have got that protected health information of ours. But remember that a group health plan is also a covered entity under the HIPAA privacy and security rules, which is why we're having the conversation that we are in this particular, you know, presentation for you. So, you know, just to kind of bottom line it for you, this would constitute probably the first big changes to the HIPAA security rule in, gosh, I mean, over a decade.

The goal of the rules here is to really strengthen the cybersecurity protection for electronic protected health information, you know, affectionately known as EPHI.

And, it would really strengthen the security rules basically. And it would require a lot of changes for plan sponsors, even though you as a plan sponsor are not directly subject to the HIPAA privacy and security rules, because it's your plan. You know, you're typically the one who's, you know, who's dealing with this. And so, again, some of these changes are things like, you know, including a more in-depth, security risk analysis.

If you're familiar, with the the HIPAA security rules, maybe you're more familiar than you wanna be, then, then, you know, you know what I'm talking about here. It's the first thing that if the DOL were to audit you in this area, which they they are auditing folks in this area, Then that's the first thing that they're gonna ask for is whether you've done the security risk analysis with which to, you know, oversimplify things is basically just, you know, how how secure and how safe is your is your ePHI.

You know, so some of the changes include making that a more in-depth, analysis potentially.

You know, obviously this is not a new thing, but it is more robust. For example, in looking through your security risk analysis, there are certain things that you have to do that are currently required, but there are other things that are what they call addressable. Right? And I don't know.

To me, I always think of, you know, I think of someone sitting down to, you know, like a calligrapher to, you know, well, I don't I don't need to address that one. But, that's obviously not what they're talking about. They're talking about, the types of things that you may need to do that make sense for you and your particular plan that's reasonable in your situation. And what the what the rule the what the proposed rule would do was basically make most of these, all of them, required with, you know, with with with some exception.

So in all So it also does things like, you know, require more attention to, you know, downstream business associates. These rules apply to business associates, which are entities that do, perform certain functions on behalf of the covered entity or the group health plan. So we'll, we'll see where this comes out. The potential impact would be to require things like, you know, amending a plan would be one thing that would be necessary to include certain provisions.

It would also include things like a written contingency plan. Once again, if you're familiar with the security risk analysis, it's not necessarily new, but it's really making it a much more robust, process, if you will. And And then it would require things like updating your business, associate agreements. If these rules are finalized, then we'll have about eight months to to get, get everything up and running.

That sounds like a long time, but one thing about growing older has taught me is that, you know, time tends to move pretty, pretty quickly. When it comes to updating those business associate agreements, you may have a little bit more time.

We had public comments come in, they were due on March seventh. They generally focus on, you know, the potential burden and cost associated with, complying with this rule. Okay. All right.

That's HIPAA. We're going to finish up this presentation with a bit of a, a practical piece here, put some finishing touches on our dish. So on the next slide, you know, we're in March. A lot of times, you know, folks start thinking about, well, you know, maybe there's some changes you want to make, you've implemented a particular strategy for your health plan for the year, but maybe there are reasons why you would want to change it or you need to change it.

So here are things to keep in mind. You always want to make sure that you actually do have the ability to amend your plan for the desired change. We see that as an issue more often in things like retiree health, health plans, where you have to make sure that, you know, you can do it with certain benefits that are vested or earned by participants, but it is one of those things that you need to check. Always remember to consider the feasibility of your of your of your strategy.

I mean, do you have things like, union employees with a collective bargaining agreement that you may have to to deal with? Don't forget about, you know, the fact that you may need to necessarily lead necessary lead time when it comes to your service providers. Yes, we really want to do this, but can they do it? And can they do it within the timeframe that we really want to do it?

Consider those, those plan design changes. Is it going to require something like, you know, you needing to to do a, run another open enrollment, for example, ACA consideration. Do you have a grandfathered plan? Is this change gonna impact your grandfather status?

Non discrimination testing is, this is a tax code requirement. I don't mean to introduce a dirty word by talking about taxes here, but, you know, a lot of the health benefits that you provide do have tax advantages. When the IRS gives things like that, they generally want something in return. And that, that is making sure through the testing process, that you are using that plan, not just to benefit your highly paid, but also you're not using it to the detriment of your rank and file.

So, for example, if you want to do things like have different employer contributions based on employee class, that can be a red flag for testing. Not that you can't do it, but it's something you need to think about ahead of time. Maybe there's a workaround.

Notice your participants. Oftentimes things affecting their benefits is important to them, right? So best practice is to make sure that they're notified, you know, as soon as possible. If it impacts the content of their, of your summary of benefits and coverage or SDC, you may have a sixty day advance notice requirement.

And don't forget those formalities, and I'm not just saying this because I'm a compliance person, but they matter, right? You got to follow the terms of your plan, which typically require that you're going to have to have a written plan amendment that's approved by the, by the, the committee or the or the person who is authorized to act on behalf of the plan, maybe your board of directors. But, just wanna let you guys know as we're as we're concluding this presentation here at McGriff, if you if we've mentioned something that kind of, you know, puts up a flag in your head and you wanna talk about it more, make sure you reach out to your McGriff advisors.

They'll bring us in as needed. Happy to help you out. We have your back. And I think that's all the content we have for today.

Do you have any closing thoughts?

No. Thanks for that. And thank you all for joining us very much today, and be on the lookout for future webinar invitations. And we will see you next time. Thanks so much.

Thank you.