Health plan advisors will help employers meet new challenges for their plans in 2024. Employers had hoped to maintain the status quo after pandemic restrictions, but the necessary legislative and regulatory actions and then the obsolescence of those responses. employer health care plans in a continuous reactive mode during the last couple of years. However, the status quo in health care has never been maintained for long, and the industry must help employers adapt to an evolving market.
Weight loss drugs
The FDA recently approved another prescription drug to treat obesity, joining Wegovy (Ozempic’s weight-loss product) and others already on the market. Ozempic’s off-label use for weight loss led to a shortage due to its popularity, and strong demand is expected to continue in 2024.
Employers should examine the effectiveness of these prescriptions versus the cost of the drugs. If measured against the cost of avoiding diabetes, heart disease, or other diabetes-related conditions, these drugs may be worth the cost. However, there is currently no indication that weight loss can be maintained without the continued use of medications, which, like all medications, have side effects. Therefore, to the extent that employers can control their health plan’s provisions (fully insured plans are generally controlled by the carrier, while self-funded plans have more leeway), they must monitor the use of new drugs and determine the plan’s best outcomes.
Generally, if a doctor prescribes drugs to treat a specific condition, they meet the definition of a qualified medical expense under Section 213 of the Internal Revenue Code, and the employer plan can pay for the treatment tax-free. Many plans default to this general definition for most treatments to determine coverage.
Prescription drug monitoring has become more sophisticated over time, but employers want to explore their options and determine what makes the most sense for their employees and their company’s goals and culture. Health plan advisors are invaluable in helping employers understand the requirements of the rules and balance the rules in a way that best fits the company culture.
Mental health concerns in the workplace
The National Institute of Mental Health estimates that 18 percent of U.S. workers experience mental health problems in any given month. This means that psychiatric disability is one of the most common types of disability covered by the Americans with Disabilities Act. Whether or not they rise to the level of a disability covered by the ADA, 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 substantially limits one or more lives. Employers must protect the rights of the persons concerned by offering them reasonable adjustments to solve the problems caused by incapacity. The apartment should be individual, and it should start with the employee’s contribution. Accommodations may include additional or more frequent work breaks, vacation, flexibility in schedules, and additional technology.
Employers’ health care plans also have new obligations regarding mental health benefits. The Mental Health Parity and Addiction Partnership Act of 2008 prohibits employer plans that offer mental health or substance abuse benefits from less favorable benefit restrictions than medical/surgical benefits. The regulations require all plans to analyze both quantitative and nonquantifiable limitations to ensure that the limitations are not applied more strictly to MH/SUD benefits (unless recognized clinically appropriate standards of care permit a difference) than to medical/surgical benefits.
The new legislation directs federal agencies to analyze plans and Insurers’ limitations, particularly for plans’ NQTL. They have audited large insurance companies and self-funded plans in an effort to understand how these NQTLs may disproportionately affect MH/SUD benefits, even when the plans do not clearly show a difference.
Employers and their providers should be prepared to share any analysis that shows that NQTLs are substantially equivalent between the two types of care.
Other healthcare changes are on the horizon
Several other changes to health plans could potentially affect employer plans in 2024 or 2025:
- Telehealth flexibilities (which allow free or very low-cost access even with health savings account-specific contracts) will expire after 2024.
- New and more expensive cancer treatments are being prepared.
- Additional use of on-site or nearby clinics as an integral part of the employer’s health care plan.
Healthcare plans will continue to evolve next year and beyond. Employers preparing for these changes are in the right position to deal with them in a way that best benefits the company and its employees.
Jay Kirschbaum is vice president and director of benefits at World Insurance. He is a tax and ERISA attorney who focuses on employer health and wellness plan compliance. Contact him at[email protected].
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