Background. Individuals have often found it difficult to keep track of their cost-sharing obligations and to obtain consumer assistance regarding their health coverage.
New Rule. The Consolidated Appropriations Act, 2021 (CAA) requires health plan and health insurance identification cards to include clear information about the following:
- Any applicable deductible
- Any applicable out-of-pocket maximum limitation
- A telephone number and an internet website address through which the individual may seek relevant coverage information, such as the in-network status of a hospital or urgent care facility.
The new rules apply to physical and electronic identification cards and to individual insurance policies as well as group health plans and insurance.
Citations. ERISA section 716(e); Internal Revenue Code section 9816(e); and Public Health Services Act section 2799A-1(e); FAQs About Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 49.
Effective Date. The new rules apply to plan years (or policy years) beginning on or after January 1, 2022.
Enforcement. For health plans that are subject to ERISA, the U.S. Department of Labor and plan participants and beneficiaries may enforce compliance with these rules. Plans not subject to ERISA may be subject to enforcement by the U.S. Department of Health and Human Services (HHS). HHS shares responsibility with state agencies for enforcing compliance by insurers. In addition, the Internal Revenue Service may impose an excise tax of $100 per day per affected individual under section 4980D of the Code for any failure to comply.
Pending future rulemaking, health plans and issuers are expected to implement the ID card requirements using a good faith, reasonable interpretation of the statute. The relevant government agencies have offered guidance on factors to be considered on an interim basis, including (1) the specific data elements on the ID card; (2) whether any data element required but not included on the face of the ID card is made available through information that is provided on the card and how it is made available; (3) the date by which a plan or insurer makes required information available on the ID card; and (4) for insurers that offer plans through a public health insurance exchange, whether the ID card complies with applicable accessibility standards for people with disabilities and people with limited English proficiency.
Example: Before new regulations are issued, a physical or electronic ID card will not be deemed to violate the new requirements if it includes (i) the applicable major medical deductible and out-of-pocket maximum; and (ii) a telephone number and a website address from which to seek information about other deductibles and out-of-pocket maximum limits and other relevant coverage information.
An ID card could make certain information on a website accessible through a Quick Response (QR) code or, in the case of a digital ID card, through a hyperlink.
Plan Considerations. Health plan sponsors typically rely on vendors to produce (and often distribute) applicable ID cards. Added information may pose particular challenges for vendors with regard to physical cards that are designed to fit into a wallet. Many vendors will (or should) have a plan for addressing the new rules on an interim basis and on a longer-term basis.
Plan sponsors may consider whether, in view of the size limitations of physical ID cards, the demographics of their workforce, and other factors, digital ID cards would be a practical option.
Recommended Steps. Plan sponsors should consider the following actions:
- Confer with plan vendors about their readiness to comply with the new rules, including whether they will be prepared to issue ID cards that are compliant with the new rules at least on an interim basis and how they plan to address any period before new ID cards are issued.
- Review relevant provisions in provider contracts to determine if they require vendors to issue ID cards that comply with applicable law and make adjustments to contracts, as appropriate.
- Evaluate the viability of furnishing ID cards in an electronic format.
