Health care plan advisors will be integral to helping employers address new challenges in their plans in 2024. Employers were expected to maintain the status quo following the disruptions of pandemic lockdowns, but the necessary legislative and regulatory responses, then the expiration of those responses, put employer health care plans in a perpetually reactive mode over the past few years. However, the status quo in health care has never held for long, and the industry needs to help employers keep pace with the evolving marketplace.
weight loss drugs
The FDA recently approved another prescription drug for the treatment of obesity, joining Vegovy (a weight-loss formulation of Ozempic) and others already on the market. Off-label use of Ozempic for weight loss led to its popularity, and strong demand is expected to continue into 2024.
Employers should examine the effectiveness of these prescriptions compared to the cost of the drugs. If this is measured against the cost of preventing diabetes, heart disease, or other diseases associated with diabetes, these drugs may be worth the expense. However, there is currently no long-term indication that weight loss can be maintained without continued use of the medications, which like all medications have side effects. Therefore, to the extent that employers have control over their health care plan provisions (fully insured plans will generally be controlled by the carrier while self-funded plans will have more design leeway), they should be able to monitor the use of new drugs. and determine the best outcome for the plan as a whole.
Generally, if medications are prescribed by a physician to treat a specific condition, they will meet the definition of a qualified medical expense under Section 213 of the Internal Revenue Code, and the employer plan will deduct taxes for that treatment. Can make payment on free basis. Many plans default to using that general definition for most treatments when determining coverage.
More screening for prescription drugs has evolved over time, but employers will want to examine their options and determine what best suits their employees and their corporate goals and culture. Health care plan consultants will be invaluable in helping employers understand the requirements of the regulations and balance those regulations in a way that best suits the corporate culture.
Mental health concerns in the workplace
The National Institute of Mental Health estimates that 18% of American workers have a poor mental health condition during any given month. This means that mental disability is one of the most common types of disability covered under the Americans with Disabilities Act. Whether rising to the level of ADA-covered disability or not, mental health issues appear to be on the rise and will be a major factor in 2024.
The ADA applies to employers with 15 or more employees, and a covered disability is defined as a physical or mental impairment that limits one or more major life activities. Employers are required to protect the rights of affected individuals by offering them reasonable accommodations to work around any difficulties caused by the disabling condition. Accommodations should be individualized and begin with employee input. Accommodations may include additional or more frequent breaks from the job, vacation, scheduling flexibility, and additional technology.
Employer health care plans also have new obligations regarding mental health benefits. The Mental Health Parity and Addiction Equity Act of 2008 prohibits employer plans that offer mental health or substance use disorder benefits that have less favorable benefit limits than medical/surgical benefits. The regulations require all plans to analyze both quantitative and non-quantitative limitations to ensure that the limitations do not apply more strictly to MH/SUD benefits than to medical/surgical benefits (unless that recognized clinically appropriate standards of care do not permit differences).
The new law directs federal agencies to analyze restrictions on plans and insurers, particularly with respect to NQTLs in plans. They are auditing large insurers and self-funded plans in an effort to understand how they may disproportionately impact NQTL MH/SUD benefits, even when the plans do not explicitly indicate any discrimination.
Employers and their service providers should be prepared to share any analysis that would demonstrate that NQTLs are essentially equivalent between the two types of treatments.
Other health care changes are on the horizon
Several other changes to health care plans will potentially impact employer plans in 2024 or 2025 including:
- Telehealth flexibility (allowing access at no or very low cost even with Health Savings Account-eligible plans) is scheduled to expire after 2024.
- Newer and more expensive cancer treatments are in the pipeline.
- Additional use of on-site or near-site clinics as an integral aspect of the employer health care plan.
Health care plans will continue to evolve over the next year and beyond. Employers who are prepared for those changes will be in the right position to address them in a way that is to the best benefit of the company and its employees.
Jay Kirschbaum is Senior Vice President and Director-Benefits Compliance at World Insurance. She is a tax and ERISA attorney who focuses on compliance with employer health and wellness plans. contact him at[email protected],
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