Under a section titled the "No Surprises Act," the Act includes several provisions to regulate surprise medical billing—including companion provisions for emergency and air ambulance services. Under the Act, for example, plans or insurers that cover emergency room services in a hospital or independent freestanding emergency department must offer these services:

For services provided by out-of-network providers, the Act requires that (among other provisions):

The Act's surprise billing provisions also address coverage of non-emergency services performed by non-participating providers at certain facilities. In these situations, for example, a plan or insurer may not impose cost-sharing requirements on participants that exceed the cost-sharing requirements that would apply if a participating provider had delivered the service. As in the emergency services context, the plan or insurer must make an initial payment to the provider (or furnish a denial notice regarding the service) within 30 calendar days of receiving the provider's bill. The balance of the bill (that is, the out-of-network rate minus the plan's cost-sharing requirement) must then be paid, consistent with the Act's timing requirements. Also, any cost-sharing payments made by a participant for these services must count toward the plan's in-network deductible and out-of-pocket maximums as if the services were furnished by a participating provider.

(Div. BB, Title I, §§ 102, 105.)

The Act requires additional disclosures to inform participants of applicable health plan cost-sharing requirements. Specifically, plans and insurers must provide the following information, in clear writing, on any physical or electronic plan-related identification card issued to participants:

(Div. BB, Title I, § 107.)

The Act addresses the situation where a health provider is removed from a plan's network following termination of the network contract between the plan and provider. When this occurs, the plan or insurer must timely notify plan participants who are receiving care from the provider at issue that:

Participants in this situation must be given an opportunity to inform the plan that they need such transitional care from the provider. The plan must permit participants to elect to continue receiving plan-covered benefits:

(Div. BB, Title I, § 113.)

The Act requires plans and insurers to provide price comparison tools by telephone and through the plan's website. The tool must permit participants to compare their portion of cost-sharing under the plan for particular services and items for the plan year, keyed to specific:

(Div. BB, Title I, § 114.)

The Act prohibits "gag clauses" regarding price or quality information. Under the amendment, group health plans and health insurers may not enter into agreements with health providers (or a network of providers), third-party administrators (TPAs), or other service providers to directly or indirectly restrict the plan or insurer from:

However, health providers and service providers may place reasonable restrictions on this information.

The gag clause provision also requires group health plans to annually submit an attestation that the plan or insurer is in compliance with the gag clause requirements.

(Div. BB, Title II, §§ 201.)

Under the Act, for plan years ending in 2020, health flexible spending arrangements (health FSAs) and dependent care FSAs may permit participants to carry over any unused amounts or contributions from the 2020 plan year to the plan year ending in 2021. These carryovers will be allowed under rules similar to the existing carryover rules for health FSAs (see Practice Note, Cafeteria Plans: Use-or-Lose Rule Modified to Permit Health FSA Carryovers Up to $500). Similarly, health and dependent care FSAs with plan years ending in 2021 may permit participants to carryover unused amounts to plan years ending in 2022. For plan years ending in 2020 or 2021, health or dependent care FSAs with grace periods may extend the grace periods for these arrangements to 12 months after the end of the plan years.

A related provision under the Act addresses post-termination reimbursements from health FSAs. Specifically, health FSAs may permit employees who stop participating in the arrangements during 2020 or 2021 to continue receiving reimbursements from unused amounts through the end of the year in which the employee's participation ends. This provision:

Another provision contains a carry-forward rule for dependents who aged out of a dependent care FSA during the COVID-19 pandemic (see Article, Cafeteria Plan Election Changes and COVID-19 and Practice Note, COVID-19 Compliance for Health and Welfare Plans: Cafeteria Plan Elections and Carryover Limit (Notices 2020-29 and 2020-33)).

(Div. EE, Title II, § 214.)

The Act allows states to apply for a one-time grant to either establish or improve an existing State All Payer Claims Database. A State All Payer Claims Database is a database that may include medical claims, pharmacy claims, dental claims and eligibility and provider files that are collected from private and public payers. The databases can be used for research or for quality improvement or cost-containment purposes. Each grant of $2,500,000 will be paid over three years. Within one year, the DOL must establish a standardized reporting format for group health plans to voluntarily report information collected from private and public payers.

(Div. BB, Title I, § 115.)

The Act expands the ERISA Section 408(b)(2) service provider compensation disclosure rules to group health plans. The disclosure rules apply to any entity that expects to receive at least $1,000 in direct or indirect compensation for providing brokerage or consulting services to a group health plan. The service provider must provide the plan fiduciary with a description of the services to be provided and the type of compensation that it reasonably expects to receive before a service contract is entered into or renewed. The plan fiduciary should notify the DOL if a service provider fails to comply with the disclosure requirements.

Health insurers offering individual health insurance coverage must make similar disclosures to enrollees in the individual health insurance market. Specifically, they must disclose any direct or indirect compensation paid to an agent or broker associated with enrolling individuals in coverage. The information must be provided before the individual finalizes plan selection and in any enrollment confirmation notices.

The rules will apply to contracts executed after the one year anniversary of the Act's enactment date.

(Div. BB, Title II, § 202.)

In 2010, the ACA included a provision prohibiting group health plans and health insurers that offer group or individual coverage from discriminating, with regard to participation under a plan or coverage, against any health provider that acts within the scope of its license or certification under applicable state law (PHSA § 2706 (42 U.S.C. § 300gg-5); see Article, Nondiscrimination in Health Care Providers Under the ACA). Although the Departments issued FAQ guidance addressing this provision, they have not (to date) issued implementing regulations in this space.

The Act requires the Departments to issue proposed regulations under PHSA Section 2706 on or before January 1, 2022. Following a 60-day comment period for the Departments' proposed regulations, the Act directs the Departments to finalize their regulations within six months of when the comment period closes.

(Div. BB, Title I, § 108.)

As a general rule, the Code permits a maximum 50% deduction for otherwise allowable food and beverages expenses (see Practice Note, Fringe Benefits: Entertainment Expenses and Meals: Business Meal Expenses Under the TCJA and Implementing Guidance). For a limited time, however, the Act permits a full deduction for food or beverage expenses provided by a restaurant that are paid or incurred after December 31, 2020, and before January 1, 2023 (that is, for 2021 and 2022). (Div. EE, Title II, § 210.)

The Code contains an exclusion from employee gross income for amounts paid or expenses incurred by an employer for certain types of "educational assistance" that are provided as part of an educational assistance program (26 U.S.C. § 127). The CARES Act expanded the definition of educational assistance under Code Section 127 to include an employer's payment, whether to an employee or a lender, of principal or interest on any qualified education loan (as defined under Code Section 221(d)(1)) incurred by the employee for the employee's education (see Practice Note, Fringe Benefits: Educational Assistance Programs: Exclusion of Employer Payments for Student Loans (CARES Act and COVID-19)). The Code's educational assistance program rules establish a maximum annual exclusion of $5,250 (see Practice Note, Fringe Benefits: Educational Assistance Programs: Maximum Exclusion Allowed). The CARES Act provision applied to payments made after the CARES Act's enactment date (March 27, 2020) and before January 1, 2021. The Act extends this provision for an additional five years—that is, for payments made before January 1, 2026. (Div. EE, Title I, § 120.)

Tax reform legislation enacted in December 2017—the Tax Cuts and Jobs Act (TCJA)—added a provision to the Code under which some employers may claim a general business credit based on wages paid to qualifying employees who are on family and medical leave, subject to conditions (26 U.S.C. § 45S; see Practice Note, Employer Credit for Paid Family and Medical Leave Under the TCJA (Code Section 45S)). Government funding legislation enacted in December 2019 extended the Section 45S credit for one year—that is, until December 31, 2020.

The Act extends availability of the Section 45S for an additional five years; as extended, the Section 45S credit will be available for wages paid in tax years beginning before January 1, 2026 (26 U.S.C. § 45(i)). The Act's extension applies to wages paid in tax years beginning after December 31, 2020. (Div. EE, Title I, § 119.)

The Act permits certain employees in the building and construction industries who are age 55 or older and who are receiving retirement benefits from multiemployer plans, to work and receive such benefits. (Div. EE, Title II, Subtitle B, § 208.)

The Act provides for temporary relief from the partial plan termination rules under Code Section 411(d)(3) during any plan year which includes the period beginning on March 13, 2020, and ending on March 31, 2021, if the number of active participants covered by the plan on March 31, 2021, is at least 80% of the number of active participants covered by the plan on March 13, 2020 (26 U.S.C. § 411(d)(3)).

(Div. EE, Title II, Subtitle B, § 209.)

For more information on partial plan terminations, see Practice Note, Partial Terminations of Qualified Retirement Plans.

The Act includes a temporary extension for retirement plan distributions and loans for individuals who reside in an area declared a disaster by the President after December 31, 2019. A qualified disaster area is defined as:

This legislation is similar to other disaster relief bills that previously have affected distributions and loans from retirement plans.

Plan amendments for the distribution and loan changes are due by the last day of the first plan year beginning on or after January 1, 2022 (January 1, 2024, for governmental plans).

(Div. EE, Title III, Subtitle C, § 302.)

The Act clarifies that money purchase pension plans qualify for coronavirus-related distributions and loans under the CARES Act (Div. N, Title II, Subtitle B, § 280).

For more information on coronavirus-related distributions and loans, see Standard Clauses, SPD Language, Coronavirus-Related Distributions and Loans and Plan Language, Coronavirus-Related Distributions and Loans.

The Act permits employers to make an election in 2020 and 2021 to stop the transfer period of a "qualified future transfer" under Code Section 420 (26 U.S.C. § 420) if certain conditions are met.

A qualified future transfer is a transfer under Code Section 420 which permits an employer with an overfunded pension plans to transfer excess assets to an account under Code Section 401(h) within the pension plan to fund retirement retiree medical or retiree life insurance benefits.

Under the Act, the employer can elect to terminate the existing transfer period as of any taxable year that begins after the date of election. Any assets that are not used as of the effective date of the terminated transfer period must be transferred back to the pension plan within a reasonable period of time. Those amounts will be treated as an employer reversion unless an equivalent amount is transferred back to the retiree medical or life account within five years after the original transfer.

(Div. N, Title II, Subtitle B, Section 285.)