Human Resources

The Washington Report

July 14, 2021



President Biden Signs Executive Order Focusing on 72 Initiatives Promoting Competition
On July 9, 2021, President Biden signed an Executive Order meant to “reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to America’s consumers, workers, farmers, and small businesses.” The Order includes 72 initiatives by more than a dozen federal agencies, addressing the labor market, health care, transportation, agriculture, internet service, technology, and finance. The initiatives include, but are not limited to:

  • Banning or limiting non-compete agreements and some occupational licensing requirements;
  • Lowering prescription drug prices by supporting state and tribal programs that will import safe and less expensive drugs from Canada;
  • Directing the Health and Human Services Administration (HHS) to increase support for generic and biosimilar drugs;
  • Directing HHS to issue a comprehensive plan within 45 days to combat high prescription drug prices;
  • Allowing hearing aids to be sold over the counter at drug stores;
  • Directing HHS to standardize plan options in the National Health Insurance Marketplace so individuals can more easily comparison shop;
  • Banning excessive early internet termination fees and requiring clear disclosure of plan costs to facilitate comparison shopping; and
  • Increasing opportunities for small business by directing all federal agencies to promote greater competition through their procurement and spending decisions.

The Order also encourages the leading antitrust agencies to focus enforcement efforts on problems in key markets and coordinates other agencies’ ongoing response to corporate consolidation.

Note: This summary only provides a brief overview of the Executive Order. Please refer to the Order for specific details regarding provisions and implementation.

The White House Fact Sheet: “Executive Order on Promoting Competition in the American Economy” is available here.

The Executive Order is available here.



IRS Publishes Proposed Rule on Surprise Medical Billing; Follows Interim Final Rule Released Earlier by Departments
On July 6, 2021, the Internal Revenue Service (IRS) released a proposed rule meant to protect consumers from surprise medical bills for emergency services, air ambulance services furnished by nonparticipating providers, and non-emergency services furnished by nonparticipating providers at participating facilities in certain circumstances. This proposed rule corresponds to an earlier interim final rule issued by the Departments of Health and Human Services, Labor, and Treasury, and the Office of Personnel Management (the Departments) on July 1, 2021, to implement the No Surprises Act (enacted 2020). Among other provisions, the IRS proposed rule would make changes to tax laws corresponding to the interim final rule.

The proposed rule would apply on and after plan years beginning on or after January 1, 2022. Comments on the proposed rule are due by September 13, 2021.

The IRS proposed rule is available here.

Departments Announce Interim Final Rule on Surprise Medical Billing; First in Series of Regulations to Be Released
On July 1, 2021, the Departments issued "Requirements Related to Surprise Billing; Part I," an interim final rule that will restrict excessive out-of-pocket costs to consumers from surprise billing and balance billing. This announcement is the first in a series of regulations.

Among other provisions, the interim final rule:

  • Bans surprise billing for emergency services. Emergency services, regardless of where they are provided, must be treated on an in-network basis without requirements for prior authorization.
  • Bans high out-of-network cost-sharing for emergency and non-emergency services. Patient cost-sharing, such as coinsurance or a deductible, cannot be higher than if such services were provided by an in-network doctor, and any coinsurance or deductible must be based on in-network provider rates.
  • Bans out-of-network charges for ancillary care (like an anesthesiologist or assistant surgeon) at an in-network facility in all circumstances.
  • Bans other out-of-network charges without advance notice. Health care providers and facilities must provide patients with a plain-language consumer notice explaining that patient consent is required to receive care on an out-of-network basis before that provider can bill at the higher out-of-network rate.

The regulations are generally applicable for plan years (in the individual market, policy years) beginning on or after January 1, 2022. The Department of Health and Human Services (HHS)-only regulations that apply to health care providers, facilities, and providers of air ambulance services are applicable beginning on January 1, 2022. The Office of Personnel Management-only regulations that apply to health benefits plans are applicable to contract years beginning on or after January 1, 2022.

Comments on the interim final rule are due 60 days after publication in the Federal Register. This rule becomes effective 60 days after publication in the Federal Register.

The news release is available here.

A Fact Sheet (What You Need to Know about the Biden-Harris Administration’s Actions to Prevent Surprise Billing) is available here.

A Fact Sheet (Requirements Related to Surprise Billing; Part I Interim Final Rule with Comment Period) is available here.

The interim final rule is temporarily available here.
Federal Register disclaimer: This HHS-approved document has been submitted to the Office of the Federal Register (OFR) for publication and has not yet been placed on public display or published in the Federal Register. The document may vary slightly from the published document if minor editorial changes have been made during the OFR review process. The document published in the Federal Register is the official HHS-approved document.

HHS Issues Proposed Rule on ACA; Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond
On June 29, 2021, HHS released a proposed rule announcing the revised 2022 user fee rates for issuers offering qualified health plans (QHPs) through federally facilitated Exchanges and state-based Exchanges as required by the Affordable Care Act (ACA). The rule also proposes the repeal of separate billing requirements related to the collection of separate payments for the portion of QHP premiums attributable to coverage for certain abortion services; proposes to expand the annual open enrollment period and Navigator duties; proposes a new monthly special enrollment period for qualified individuals or enrollees, or the dependents of a qualified individual or enrollee, who are eligible for advance payments of the premium tax credit and whose household income does not exceed 150% of the federal poverty level; proposes to repeal the recent establishment of a direct enrollment option for Exchanges; and proposes to modify regulations and policies related to Section 1332 waivers. HHS is also proposing to extend the ACA annual regular enrollment period one month, running from November 1 to January 15 (the current end date is December 15). Comments on the proposed rule are due by July 28, 2021.

The HHS proposed rule is available here.



PBGC Publishes Interim Final Rule Providing SFA to Financially Troubled Multiemployer Pension Plans
On July 9, 2021, the Pension Benefit Guaranty Corporation (PBGC) published an interim final rule implementing a new Special Financial Assistance (SFA) program for financially troubled multiemployer defined benefit pension plans. “The American Rescue Plan provides funding to severely underfunded pension plans that will ensure that over three million of America’s workers, retirees, and their families receive the pension benefits they earned through many years of hard work,” stated PBGC Director Gordon Hartogensis.

The American Rescue Plan Act (ARPA), enacted in March 2021, contains provisions to provide an estimated $94 billion in assistance to eligible plans that are severely underfunded. Additionally, it assists plans by providing funds to reinstate previously suspended benefits. The ARPA also addresses the solvency of PBGC’s Multiemployer Insurance Program, which was projected to become insolvent in 2026.

The interim final rule establishes what information a plan is required to file to demonstrate eligibility for SFA and the formula to determine the amount of SFA that the PBGC will pay to an eligible plan. ARPA authorizes the PBGC to prioritize SFA applications of plans in specified groups, and the interim final rule identifies the priority order in which such plans are permitted to apply. The interim final rule also outlines a processing system, which will accommodate the filing and review of many applications in a limited amount of time. In addition, it specifies permissible investments for SFA funds and establishes certain restrictions and conditions on plans that receive SFA.

The interim final rule became effective on July 12, 2021. Comments on the interim final rule are due no later than August 11, 2021.

The PBGC news release is available here.

The PBGC interim final rule is available here.

IRS Provides Guidance for Multiemployer Retirement Plans Receiving SFA From PBGC
On the same day of the release of the PBGC interim final rule (see above), the Internal Revenue Service (IRS) provided guidance in Notice 2021-38 for multiemployer qualified retirement plans that receive SFA from the PBGC and for participants and beneficiaries in those plans. The Notice provides guidance under provisions of the ARPA regarding special financial assistance paid by the PBGC to eligible multiemployer defined benefit pension plans that are financially at risk. The Notice provides direction for multiemployer plans, and specifically addresses three important areas regarding:

  • The reinstatement of previously suspended pension benefits, along with make-up payments, as a condition that eligible multiemployer plans must meet if they receive special financial assistance.
  • The individual income tax treatment of these make-up payments.
  • How a plan that receives special financial assistance must treat the plan’s special financial assistance account for purposes of the minimum funding requirements for multiemployer defined benefit plans.

The IRS news release is available here.

IRS Notice 2021-38 is available here.

Other HR/Employment


IRS Issues Notice Extending Tax Relief for Employer Leave-Based Donation Programs That Aid Victims of COVID-19
On June 30, 2021, the Internal Revenue Service (IRS) issued Notice 2021-42, which extends the tax relief provided in Notice 2020-46 for calendar year 2021 for employers whose employees forgo sick, vacation, or personal leave because of COVID-19. Notice 2021-42 provides that cash payments employers make to charitable organizations that provide relief to victims of COVID-19 in exchange for sick, vacation, or personal leave which their employees forgo will not be treated as compensation. Similarly, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer. Employers, however, may deduct these cash payments as a business expense or as a charitable contribution deduction if the employer otherwise meets the respective requirements of either Section.

The IRS news release is available here.

IRS Notice 2021-42 is available here.

IRS Notice 2020-46 is available here.

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