COVID-19 has certainly impacted businesses worldwide in more ways than one. From business infrastructure (i.e., remote work) to operations (i.e., virtual processes, reliance on technology, on-premises safety protocols), businesses have had to revamp their processes or close their doors to business. One impact that has certainly changed in the face of COVID is healthcare benefits.
Explore how COVID has changed the trajectory of 2021 benefits, the final rule on healthcare transparency, employee benefits plan limits for 2021, and how the Biden administration may impact overall healthcare benefits.
How COVID Has Changed the Trajectory of 2021 Benefits
From addressing remote workplace policies and worst-case scenarios, such as an employee testing positive for COVID, general well-being of individuals and families alike has been the top priority for most employers. As employers continue to navigate the public health crisis, here are some interesting benefits trends that may be implemented into 2021 benefits healthcare packages.
According to Mercer, the most common changes to employee benefits that companies are considering include:
- Expanding virtual or telehealth services (32%)
- Strengthening mental health assistance, such as employee assistance programs or additional services (25%)
- Boosting cost-sharing programs for medical expenses, such as deductibles, premiums, and co-pays (20%)
- Increasing or improving voluntary benefits (16.5%)
- Expanding expensive claims management services, including specialty pharmaceutical claims (13.5%)
The final rule requires plans and insurers to publish:
- Price and cost-sharing information to participants, beneficiaries, and enrollees upon request:
- A list of 500 shoppable services made available through the Internet for plan years beginning on or after January 1, 2023.
- All remaining items and services must be available for plan years beginning on or after January 1, 2024.
- In-network provider-negotiated rates and historical out-of-network allotted amounts on their website:
- Detailed pricing information made public for plan years beginning on or after January 1, 2022.
The final rule also allows issuers that share savings with consumers to report the shared savings payments in medical loss ratio calculations.
2021 Employee Benefits Plan Limits
Most healthcare benefits are subject to annual dollar limits that are frequently updated to reflect inflation by the Internal Revenue Service (IRS). The dollar limits that will apply for the next calendar year are announced well in advance of the beginning of that year to allow employers an opportunity to update their plan designs and ensure compliance. While some plan limits will increase for 2021, most of the limits remain the same.
For plan years beginning on or after January 1, 2021, the following limits have increased:
- Health savings account (HSA) contributions:
- Single coverage—$3,600 (up $50)
- Family coverage—$7,200 (up $100)
- High deductible health plan (HDHP) out-of-pocket maximum limit:
- Single coverage—$7,000 (up $100)
- Family coverage—$14,000 (up $200)
- Tax exclusion for adoption assistance benefits—$14,440 (up $140)
The following limits will not change for 2021:
- Flexible spending account (FSA) salary reduction contribution limit
- HDHP minimum deductible
- 401(k) contribution limit
- Transportation fringe benefits monthly limits
As with any new presidential administration, new legislation will likely be passed changing current regulations on many benefits-related programs. Here are some of the benefits-related programs that may change 2021 benefits.
- Affordable Care Act (ACA): Depending on the outcome of a Supreme Court case, President-elect Joe Biden supports utilizing ACA’s infrastructure to expand a public health option similar to Medicare. Under this proposed model, everyone would have access even if employers offer qualified health plans. For small business owners, this may offer a cost-savings opportunity by having employees opt for public health coverage instead of funding it themselves.
- Medicare: Biden is looking to expand Medicare by proposing a lower eligibility age (60, down from 65). This allows eligible workers to start retiring earlier.
- Paid Leave: Biden is an advocate for increasing paid family and medical leave to 12 weeks. To expand that effort, the Family and Medical Insurance Leave Act would expand the qualified reasons for taking paid leave and extend eligibility to more workers. While Biden supports several elements of this Act, there will likely be some iteration of this legislation early in his administration.
- Cannabis Legalization: While there may not necessarily be direct support or endorsement for cannabis legalization, Biden has expressed decriminalization. Outside of federal government regulations defining it as illegal, many states have allowed for medical and/or recreational use of cannabis. Recently, five states legalized the use of cannabis: Arizona, Montana, and New Jersey (recreational only), Mississippi (medical only), and South Dakota (both recreational and medical).
Healthcare is a complex topic that requires frequent auditing for compliance and unique language that is oftentimes confusing for members. If you’re looking for a way to adequately educate your employees, find better benefits, and proactively approach 2021 with a benefits plan, contact VensureHR. Our team of benefits specialists can equip you with the latest compliance updates, address any benefits enrollment and administration questions or concerns, and offer industry-leading resources and tools to safeguard your employees’ well-being.