Category: Compliance and Legal Department

On September 9, 2021, President Biden announced that he ordered OSHA to develop an emergency temporary standard (ETS) that would require private employers with 100 or more employees to mandate that employees either receive one of the three available COVID-19 vaccines or submit to weekly COVID-19 testing.  On November 4, 2021, OSHA released an unpublished version of the COVID-19 Vaccination and Testing Emergency Temporary Standard.  The published version is set to be released on November 5, 2021.  A summary, fact sheet, and FAQs are also available.

Background

On August 23, 2021, the U.S. Food and Drug Administration (FDA) approved the Pfizer-BioNTech COVID-19 vaccine, one of the three COVID-19 vaccines approved for emergency use in the United States.  Due to this approval and the rampant spread of the COVID-19 Delta variant, on September 9, 2021, President Biden announced that OSHA will issue an ETS mandating employers with 100 or more employees to either be vaccinated or submit to weekly testing.  At that time, there were many unanswered questions about how the ETS would apply – how the headcount is determined, who pays for the testing, what type of documentation would be permitted to show proof of the vaccine, etc.  

On November 4, 2021, OSHA released its COVID-19 Vaccination and Testing ETS which is described more fully below.  We expect the ETS will be challenged, particularly in states where state law prohibits employers from mandating vaccines; however, the ETS is intended to preempt inconsistent state and local requirements relating to these issues, including requirements that ban or limit employers’ authority to require vaccination, face-covering, or testing, regardless of the number of employees.  In the meantime, employers should familiarize themselves with the ETS, begin developing their written policies, and communicate the requirements and expectations to employees.

Below summarizes the specific requirements of the ETS.

COVID-19 Vaccination and Testing ETS

With certain limited exceptions, the ETS requires employers with 100 or more employees to develop, implement, and enforce a mandatory, written COVID-19 vaccination policy, or a written policy requiring employees to either be vaccinated or elect to undergo regular COVID-19 testing and wear a face covering at work in lieu of vaccination.

If employers have employees who request a reasonable accommodation because they cannot be vaccinated and/or wear a face-covering due to a disability, as defined by the ADA, or if vaccination, and/or testing for COVID-19, and/or wearing a face-covering conflicts with an employee’s sincerely held religious belief, practice, or observance the employee may be entitled to reasonable accommodation.

Employers must begin complying with the requirements of the ETS within 30 days from the date of publication, which means employers will need to, among other things, develop their written policies by that time.  The deadline for employers to begin testing employees who are not vaccinated is 60 days from the date the ETS is posted in the Federal Register, which is January 4, 2022.

Essentially, this means employees must be fully vaccinated by January 4, 2022.  Fully vaccinated means the individual received the second dose (of a two-dose vaccine or combination of two doses of a vaccine) or the first dose (of a single-dose vaccine) 2 weeks prior to January 4, 2022.  For two-dose vaccines (Moderna or Pfizer), the doses must have been provided within at least the minimum recommended interval between doses, in accordance with the approval, authorization, or listing by the FDA or WHO, or administered as part of a clinical trial at a U.S. site (if the recipient is documented to have primary vaccination with the “active” (not placebo) COVID-19 vaccine).

The ETS requires employers to provide employees with time off for obtaining their vaccinations.  Specifically, the ETS requires employers to provide employees with a reasonable amount of paid time (up to 4 hours at their regular rate of pay) to travel to and receive their COVID-19 vaccine doses (first and second doses, as applicable).  To be clear, it is four (4) hours total that must be paid for a two-dose shot.  Further, employers are required to provide reasonable time and paid sick leave to employees who need the time to recover from the side effects of either dose, as applicable, of the vaccine.  

The ETS sets minimum standards within the workplace, though employers are permitted to implement additional measures (subject to collective bargaining for union employees).

Note the ETS does not apply to federal contractors (who must comply with the President’s Executive Order and the Safer Federal Workforce Task Force COVID19 Workplace Safety: Guidance for Federal Contractors and Subcontractors) or employees providing healthcare services or healthcare support services who are subject to the Healthcare ETS while the Healthcare ETS is in effect.

Exemptions from Vaccinations

Employers are not required to mandate employees receive the vaccine if:

• It is medically contraindicated;
• Medical necessity requires a delay in vaccination; or
• They are legally entitled to a reasonable accommodation under federal civil rights laws because they have a disability or sincerely held religious beliefs, practices, or observances that conflict with the vaccination requirement.

Covered Employers

The ETS applies to employers who have a total of 100 or more employees at “any time the ETS is in effect” regardless of where the employees report to work and applies for the duration of the ETS even if the employer’s headcount subsequently falls below 100 employees. For purposes of reaching the headcount, employees include part-time employees, remote employees, employees who do not report to the worksite, and employees working exclusively outdoors. 

Even if an employer does not have 100 employees as of the effective date of the ETS, if the employer reaches the 100-employee threshold while the ETS is in effect, it must comply for the remainder of the ETS even if the count later drops below 100. Further, the count applies to different corporate structures and settings as follows:

• For a single corporate entity with multiple locations, all employees at all locations are counted.
• In a traditional franchisor-franchisee relationship in which each franchise location is independently owned and operated, the franchisor and franchisees would be separate entities.  In such case, the franchisor would only count “corporate” employees, and each franchisee would only count employees of that individual franchise.  Therefore, if the franchisor has 100 employees, but none of the franchisees do, then only the franchisor must comply.
• Two or more related entities that handle safety matters as one company may be regarded as a single employer, in which case the employees of all entities making up the integrated single employer must be counted.
• Where employees of a staffing agency are placed at a host employer location, only the staffing agency would count these jointly employed workers.
• For a typical multi-employer worksite such as a construction site, each company represented – the host employer, the general contractor, and each subcontractor – would only need to count its own employees; however, each employer must count the total number of workers it employs regardless of where they report for work on a particular day. The ETS provides the following example:
  • If a general contractor has more than 100 employees spread out over multiple construction sites, that employer is covered under this ETS even if it does not have 100 or more employees present at any one worksite.

Workplace Definition

A workplace is defined as a physical location (fixed or mobile) where the employer’s work or operations are performed. It does not include an employee’s own home.

State or Local Government Employers

The ETS does not apply to state and local government employers in states without State Plans, because state or local government employers and employees are exempt from OSHA coverage under the OSH Act.  In states with OSHA-approved State Plans, however, the State Plans must adopt requirements that are at least as effective as the requirements in OSHA’s ETS.  Therefore, state and local government employers with 100 or more employees in states with State Plans will be required to comply with those state occupational safety and health requirements. 

Exclusion for Remote Employees and Employees Working Outdoors

While remote employees, employees working exclusively outdoors, and employees who do not report to a workplace where other coworkers or customers are present must be counted for determining the employer’s headcount, such employees are not required to be vaccinated.  This is different from the standards applicable to federal contractors and many employers with remote employees may find relief with this decision.  A list of occupations with workers who work outdoors is included in Table IV.B.1 of the ETS.

Obtaining Proof of Vaccination

Employers are required to determine the vaccination status of all employees.  Accordingly, the ETS provides that employers must require each vaccinated employee to provide acceptable proof of vaccination status, including whether they are fully or partially vaccinated. Acceptable proof of vaccination status include:

• The record of immunization from a health care provider or pharmacy;
  • A copy of the COVID-19 Vaccination Record Card;
  • A copy of medical records documenting the vaccination
  • A copy of immunization records from a public health, state, or tribal immunization information system; or
  • A copy of any other official documentation that contains the type of vaccine administered, date(s) of administration, and the name of the health care professional(s) or clinic site(s) administering the vaccine(s)

Note, employers should be cautious about using the approach in the third and final bullets, as this could result in the employer having access to medical diagnoses or genetic information protected by the ADA or GINA. If employers allow these approaches, at the very least, they should ask employees to redact any additional medical information included in the record before providing it to the employer.

If an employee is unable to provide acceptable proof of vaccination, then they must be required to submit a signed statement that includes an attestation:

• Of their vaccination status (fully vaccinated or partially vaccinated); and
• That they have lost and are otherwise unable to produce proof required by this section.

The signed statement must include this statement: “I declare (or certify, verify, or state) that this statement about my vaccination status is true and accurate. I understand that knowingly providing false information regarding my vaccination status on this form may subject me to criminal penalties.”

Further, the employee should, to the best of their recollection, include the following in their attestation:

• The type of vaccine administered;
• Date(s) of administration; and
• The name of the health care professional(s) or clinic site(s) administering the vaccine(s).

If an employee does not provide acceptable proof of receipt of the vaccine (or the signed statement meeting the above requirements), then they must be treated as not fully vaccinated.

How Does Paid Time Off Work

The ETS provides that the four hours of paid time off to receive the COVID-19 vaccine must be paid at the employees’ regular rate of pay and cannot be offset by any other leave the employee has accrued (i.e., other PTO, sick leave, or vacation time offered by the employer).  If more than four hours are needed, then the time is not required to be paid but is protected leave.

On the other hand, if an employee needs time off to recover from the COVID-19 vaccine side effects, then they may be required to use their accrued and unused sick leave (or PTO if the employer does not distinguish between sick leave and vacation time).  If they do not have sick leave or PTO time available, then the employer must provide the time and pay for it. Employers cannot require employees to accrue negative paid sick leave or borrow against future paid sick leave to recover from vaccination side effects.  The ETS does not provide a specific amount of time that must be provided to recover from the effects of the COVID-19 vaccine, though the employer must provide a “reasonable” amount of time.  OSHA suggests two (2) days of paid sick time is “reasonable.”

Paid time off is not required for employees who must be removed from the workplace for failure to be vaccinated or failure to submit to the required testing.  Paid time off is also not required by the ETS if an employee is removed from the workplace due to a positive COVID-19 diagnosis or test result, though employers would have to comply with any other applicable law, ordinance, regulation, or collective bargaining agreement that requires such time be paid.

Employers are not, however, required to retroactively provide PTO for the time used to receive the vaccine or recover from the side effects of the vaccine to employees who received the vaccine prior to the ETS.  Moreover, employers are not required to reimburse employees for transportation costs (e.g., gas money, train/bus fare, etc.) incurred to receive the vaccination, including the costs of travel to an off-site vaccination location (e.g., a pharmacy) or travel from an alternate work location (e.g., telework) to the workplace to receive a vaccination dose.

If an employee chooses to receive the vaccine outside of work hours, employers are not required to grant paid time to the employee for the time spent receiving the vaccine during non-work hours; however, the employee must still be provided reasonable time and paid sick leave to recover from side effects that they experience during scheduled work time.

How Must Testing be Administered

If an employer opts to allow employees to be tested in lieu of vaccination, then the testing applies to any employee who reports at least once every 7 days to a workplace where other individuals such as coworkers or customers are present.  In such cases, the employee:

• Must be tested for COVID-19 at least once every 7 days; and
• Must provide documentation of the most recent COVID-19 test result to the employer no later than the 7th day following the date on which the employee last provided a test result.

The following applies for employees who do not report during a period of 7 or more days to a workplace where other individuals such as coworkers or customers are present (e.g., teleworking for two weeks prior to reporting to a workplace with others):

• The employee must be tested for COVID-19 within 7 days prior to returning to the workplace; and
• The employee must provide documentation of that test result to the employer upon return to the workplace.

If an employee does not provide documentation of a COVID-19 test result, the employer must keep that employee removed from the workplace until the employee provides a test result.  The employer is not required to pay employees for this time.

If an employee is diagnosed with COVID-19 or receives a positive COVID-19 test, then they are not required to submit to weekly testing for 90 days following the positive test result of the diagnosis.

What Tests Can be Used

If the employer will allow employees to be tested in lieu of vaccination, the employer’s written policies must specify how testing will be conducted (e.g., testing provided by the employer at the workplace, employees independently scheduling tests at point-of-care locations, etc.), how employees should provide their COVID-19 test results to the employer, and what tests are permitted. 

Tests authorized by the employer must be, (1) cleared, approved, or authorized, including in an Emergency Use Authorization (EUA), by the FDA to detect current infection with the SARS-CoV-2 virus (e.g., a viral test, (2) administered in accordance with the authorized instructions; and (3) not both self-administered and self-read unless observed by the employer or an authorized telehealth proctor.

Examples of tests that satisfy this requirement include tests with specimens that are processed by a laboratory (including home or on-site collected specimens which are processed either individually or as pooled specimens), proctored over-the-counter tests, point of care tests, and tests where specimen collection and processing is either done or observed by an employer.  Therefore, the employer cannot accept an at-home test administered by the employee or his or her family member. 

Who Pays for the Testing

The ETS provides that the employer is not required to cover any costs associated with the testing, though employers may have to comply with other laws, ordinances, regulations, or collective bargaining agreements that mandate the employer pay for testing. Thus, depending on the facts, the employer may require employees to pay for their testing.  Note, testing that is not due to an employee having recent, known exposure to COVID-19, ordered by a health care provider, or due to an employee experiencing symptoms of COVID-19 would not be covered by the employer’s health plan.  If an employer chooses to pay for the testing, it would be at the employer’s own expense and not paid through the health plan.

Records Retention

Employers are required to maintain a roster of vaccinated employees, maintain a record of each employee’s vaccination status, and preserve the acceptable proof of vaccination for each fully or partially vaccinated employee.  Further, employers who offer testing in lieu of vaccination option must maintain a record of each test result provided by each employee or obtained by the employer’s own testing.  All of these records are considered medical records and, therefore, would need to be maintained separately from an employee’s personnel file and are not subject to further disclosure by the employer except as otherwise required under the ETS or other applicable federal law.  Records are only required to be preserved while the ETS is in effect.

Face Coverings/Face Masks

If the employer chooses to allow testing in lieu of vaccination, they must ensure that all non-fully vaccinated employees wear a face covering when indoors and when occupying a vehicle with another person for work purposes, unless the following apply:

• The employee is alone in a room with floor to ceiling walls and a closed door.
• The employee is eating or drinking (for a limited period of time) at the workplace or for identification purposes in compliance with safety and security requirements.
• The employee is wearing a respirator or facemask.
• The employer can show that the use of face coverings is infeasible or creates a greater hazard that would excuse compliance with this paragraph (e.g., when it is important to see the employee’s mouth for reasons related to their job duties, when the work requires the use of the employee’s uncovered mouth, or when the use of a face covering presents a risk of serious injury or death to the employee).

Face coverings must completely cover an employee’s nose and mouth and must be:

• Made with two or more layers of a breathable fabric that is tightly woven (i.e., fabrics that do not let light pass through when held up to a light source);
• Secured to the head with ties, ear loops, or elastic bands that go behind the head. If gaiters are worn, they should have two layers of fabric or be folded to make two layers;
• Fitted snugly over the nose, mouth, and chin with no large gaps on the outside of the face; and
• A solid piece of material without slits, exhalation valves, visible holes, punctures, or other openings.

Per the ETS, face coverings also include clear face coverings or cloth face coverings with a clear plastic panel that, despite the non-cloth material allowing light to pass through, and which may be used to facilitate communication with people who are deaf or hard-of-hearing or others who need to see a speaker’s mouth or facial expressions to understand speech or sign language respectively.

Face coverings must be worn by the employee to fully cover the employee’s nose and mouth and must be replaced when wet, soiled, or damaged (e.g., is ripped, has holes, or has broken ear loops). Face shields may be worn in addition to face coverings.

Employers are prohibited from preventing any employee from voluntarily wearing a face covering or facemask unless the employer can demonstrate that doing so would create a hazard of serious injury or death, such as interfering with the safe operation of equipment. Further, employers must permit employees to wear a respirator instead of a face covering whether required or not. In addition, the employer may provide respirators to the employee, even if not required. In such circumstances, the employer must also comply with applicable law. Finally, employers cannot prohibit customers or visitors from wearing face coverings.

Employers are not required to pay for the face coverings unless required by other applicable laws or regulations or collective bargaining agreements.

Written Policy Requirements

Employers’ written policies should address all of the applicable requirements in the ETS, including: (1) whether the employer will require the vaccine or whether there will be a testing/face covering option and any applicable exclusions that may apply for an employee due to medical contraindications, medical necessity requiring a delay in vaccination, or applicable reasonable accommodations; (2) information on how the employer will determine an employee’s vaccination status and how this information will be collected; (3) paid time off and sick leave for vaccination purposes; (4) notification of positive COVID-19 tests and removal of COVID-19 positive employees from the workplace; (5) how the employer will make required information available to as described in the next section, and (6) disciplinary action for employees who do not abide by the policy.

The written policy should also include all relevant information regarding the policy’s effective date, which employees are required to comply, deadlines for being vaccinated or submitting vaccination information, testing requirements and deadlines (if applicable), and procedures for compliance and enforcement.

Informing Employees

Employers must inform each employee, in a language and at a literacy level the employee understands, about (1) the requirements of the ETS as well as any employer policies and procedures established to implement this section, (2) COVID-19 vaccine efficacy, safety, and the benefits of being vaccinated, (3) protections against retaliation and discrimination, and (4) laws that provide for criminal penalties for knowingly supplying false statements or documentation.  The following document must be provided with their policy:   “Key Things to Know About COVID-19 Vaccines,” available at https://www.cdc.gov/coronavirus/2019- ncov/vaccines/keythingstoknow.html.

Records Disclosure

Employers must provide a copy of its written policy to OSHA as well as the aggregate number of fully vaccinated employees at the workplace and the total number of employees at the workplace within 4 hours of a request and must provide OSHA all other records required to be maintained by the end of the next business day.

Further, they must make available for inspection and copying any individual COVID-19 documentation and test results by the end of the next business day after receiving a request. The employee or anyone having written authorized consent may request this information.  Additionally, an employee or employee representative may request the aggregate number of fully vaccinated employees at the workplace and the total number of employees at the workplace, which the employer must provide by the end of the next business day after the request is made. 

Conclusion In conclusion, employers subject to the ETS must determine whether they will take a vaccine-only or combined vaccine and testing/face covering approach to compliance and must develop the required written policies and communicate those policies to employees, so they have ample time to receive their COVID-19 vaccines.  Employers should work with legal counsel to develop their written policies and to address any reasonable accommodation requests received by employees.

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About the Authors.  This alert was prepared by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act.  Contact Stacy Barrow or Nicole Quinn-Gato at sbarrow@marbarlaw.com or nquinngato@marbarlaw.com.

This notice is a service to our clients and friends.  It is designed only to give general information on the developments actually covered.  It is not intended to be a comprehensive summary of recent developments in the law, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion.

Benefit Advisors Network and its members are not attorneys and are not responsible for any legal advice.  To fully understand how this or any legal or compliance information affects your unique situation, you should check with a qualified attorney.

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The Internal Revenue Service (IRS) has released Rev. Proc. 2021-36, which contains the inflation-adjusted amounts for 2022 used to determine whether employer-sponsored coverage is “affordable” for purposes of the Affordable Care Act’s (ACA) employer shared responsibility provisions and premium tax credit program. As shown in the table below, for plan years beginning in 2022, the affordability percentage for employer mandate purposes is indexed to 9.61%.  Employer shared responsibility payments are also indexed.

*Section 4980H(a) and (b) penalties 2022 are projected.

**No employer shared responsibility penalties were assessed for 2014.

Under the ACA, applicable large employers (ALEs) must offer affordable health insurance coverage to full-time employees. If the ALE does not offer affordable coverage, it may be subject to an employer shared responsibility payment. An ALE is an employer that employed 50 or more full-time equivalent employees on average in the prior calendar year. Coverage is considered affordable if the employee’s required contribution for self-only coverage on the employer’s lowest-cost, minimum value plan does not exceed 9.61% of the employee’s household income in 2022 (prior years shown above). An ALE may rely on one or more safe harbors in determining if coverage is affordable: W-2, Rate of Pay, and Federal Poverty Level. 

If the employer’s coverage is not affordable under one of the safe harbors and a full-time employee is approved for a premium tax credit for Marketplace coverage, the employer may be subject to an employer shared responsibility payment.

Note that as of January 1, 2019, the individual mandate penalty imposed on individual taxpayers for failure to have qualifying health coverage was reduced to $0 under the Tax Cuts and Jobs Act, effectively repealing the federal individual mandate. A previous lawsuit challenging the constitutionality of the ACA due to this change to the individual mandate penalty was unsuccessful. The employer mandate has not been repealed and the IRS continues to enforce it through Letter 226J. The IRS is currently enforcing employer shared responsibility payments for tax year 2018, with enforcement of 2019 expected to begin this fall.

Next Steps for Employers

Applicable large employers should be aware of the updated, reduced affordability percentage for plan years beginning in 2022, and should consider it along with all other relevant factors when setting contributions.

On September 9, 2021, President Biden announced that he ordered OSHA to develop emergency temporary standards (ETSs) that would require employers with 100 or more employees to mandate that employees either receive one of the three available COVID-19 vaccines or submit to at least weekly COVID-19 testing.  Employers who do not comply with these requirements could be fined approximately $13,650 per employee.  The President also announced the OSHA ETSs will require employers to offer paid time off to employees to receive the vaccine, as well as any time necessary to recover from a reaction to the vaccine.

The President also issued executive orders requiring federal executive branch employees to be fully vaccinated (i.e., no weekly testing option) and federal contractor employees under new or newly extended/newly optioned contracts to comply with vaccine safety protocols.  He also announced (1) health care workers at certain facilities that receive Medicaid or Medicare funding must be fully vaccinated, (2) that the Department of Transportation will double its fines for individuals who refuse to wear masks on public transportation, and (3) increased testing availability for individuals either at home (through certain, chosen retailers who will sell the kits at cost) ^[1] and at pharmacies.

The pending OSHA ETSs, and approaches large employers (i.e., 100 or more employees) and small employer (i.e., fewer than 100 employees) can take to incentivize vaccines are the focus of this alert.

Background

On August 23, 2021, the U.S. Food and Drug Administration (FDA) approved the Pfizer-BioNTech COVID-19 vaccine, one of the three COVID-19 vaccines approved for emergency use in the United States.  Due to this approval and the rampant spread of the COVID-19 Delta variant, employers recently began implementing different approaches to encourage individuals to receive the COVID-19 vaccine.  Some implemented incentives for employees who are vaccinated, while others took a more aggressive approach by penalizing those not vaccinated with higher health insurance contributions or outright mandating the vaccine as a condition of employment. 

In the meantime, on September 9, 2021, President Biden announced that OSHA will issue ETSs mandating employers with 100 or more employees require employees to either be vaccinated or submit to weekly testing.  At this time, these rules have not been implemented, so there are no details about how “employees” are defined, how employer size will be determined, whether there will be exceptions for employees who work remotely, when the mandate is effective, how employers are required to implement testing, whether traditional reasonable accommodation requirements apply  for individuals with disabilities or sincerely held religious beliefs against vaccinations, and whether testing can be paid for through the employer’s group health plan or whether it must be paid directly by the employer.  We expect the OSHA ETSs will address these issues.

While the OSHA ETSs will likely provide significant cover for employers who mandate vaccines for employees, some large employers may still choose to incentivize employees to receive the vaccine in lieu of pursuing or implementing a potentially burdensome weekly testing requirement.  Moreover, employers with fewer than 100 employees may still consider mandating vaccines for their workforce, or incentivizing employees to get vaccinated.

As discussed below, any of the above approaches may implicate one or more federal laws and may also implicate state or local laws and regulations.

Until guidance from OSHA is released, employers can rely on recent guidance from the U.S. Equal Employment Opportunity Commission (EEOC) – What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws – related to the COVID-19 vaccine. 

Mandating the COVID-19 Vaccine as a Condition of Employment

Employers with fewer than 100 employees may choose to mandate that all employees receive the vaccine, while large employers will have to consider how they will implement the mandate.  There are a few different approaches employers can take.  They can: (1) contract with a provider to administer the vaccine onsite, (2) contract with a designated provider to administer the vaccine offsite, or (3) instruct employees to get the vaccine from a provider of their choice and provide proof of vaccination status to the employer.

Providing Vaccines Onsite or Through a Provider Contracted by the Employer

One key issue when administering a vaccine onsite or through an employer-contracted provider is whether the receipt of the vaccine itself amounts to a medical examination.  According to the EEOC, it does not; however, the analysis does not end there.  To administer the COVID-19 vaccine, a health care provider would need to familiarize themselves with employees’ medical history through a series of prescreening questions to ensure the vaccine is medically appropriate. These pre-screening questions could elicit information about a disability, which would implicate the ADA’s provisions regarding disability-related inquiries and could violate Title II of GINA, which prohibits employers from using, acquiring, or disclosing an employee’s or family member’s genetic information, to the extent the screening questions ask about/require the employee (or family members) to provide any genetic information.  

As such, to satisfy the ADA, the employer would need to establish the vaccine is both “job-related and consistent with business necessity.”  In other words, the employer would need to reasonably believe, based on objective evidence, that failing to receive the vaccine would pose a direct threat to the health or safety of other employees or individuals. Given the contagiousness of the Delta variant, this may not be difficult for employers to establish.

Vaccines Administered by the Employee’s Health Care Provider

If employees may choose the provider who administers the vaccine, such as their neighborhood pharmacy or own medical care provider, then the ADA’s provisions regarding disability related inquiries is not implicated.  Further, GINA is not implicated with this approach if the employer merely requires employees to provide proof of vaccination, because administration of an mRNA vaccine in and of itself does not involve the use of genetic information.

In this case, the employer could require an employee to show proof of receiving the vaccine by an independent pharmacist or medical provider, such as by providing a copy of their vaccine card or executing an affidavit confirming they received the vaccine^[2], and this would not amount to a disability-related inquiry.

Note, however, similar to FMLA and ADA records, vaccine records are subject to general privacy protections, and must be stored separately from an employee’s personnel records.  Further, employees should be told not to provide any medical, disability, or genetic information in their documentation evidencing receipt of the vaccine, as receipt of that information may implicate the ADA or GINA. 

Termination Decisions for Employees Who Refuse the Vaccine

While the employer may satisfy the ADA and/or GINA using one of the above approaches, additional analysis is required before making the decision to terminate an employee who does not receive the vaccine pursuant to the employer’s mandate.  These other considerations are discussed in detail below:

ADA Qualification Standards and Reasonable Accommodation

If an employee is unable to receive a COVID-19 vaccine due to a disability, then the employer would need to have a qualification standard to ensure an employee does not pose a direct threat to the health or safety of the workplace. In essence, the employer would need to show the individual’s failure to vaccinate/be able to receive a vaccination due to such disability is a direct threat to other individuals because of a “significant risk of substantial harm to the health or safety of the individual or others that cannot be reduced or eliminated without reasonable accommodation.”  Therefore, before an employer could take any action, the employer would need to establish there is a direct threat by demonstrating:

• the duration of any risk;
• the nature and severity of potential harm;
• the likelihood that a potential harm will occur; and
• the imminence of the potential harm.

Even if a direct threat is found, the employer would still be required to determine whether a reasonable accommodation is possible, without undue hardship, which could eliminate or reduce the risk to the workplace.

It is possible an employer can exclude an unvaccinated employee from the workplace if there is a direct threat; however, this does not necessarily mean the employer can terminate the employee. Employees may have other rights under applicable EEO laws or other federal, state, or local laws. Further, when assessing the risk, employers need to consider the amount of their workforce that is unvaccinated, and the frequency or type of contact between vaccinated and unvaccinated employees or unvaccinated employees and customers or clients.

Outright termination without considering any reasonable accommodation could result in an ADA violation. Reasonable accommodation could include a telecommuting option for employees.  This would likely need to be a consideration if the employee was previously telecommuting prior to or during COVID-19 shutdowns.  If the employee’s job is such that it can be performed remotely, employers may need to consider this option depending on the other facts and circumstances. Further, employers must consider CDC guidance when assessing whether an effective accommodation that would not pose an undue hardship is available.

Ultimately, if a reasonable accommodation cannot be made without undue hardship, then termination may be permissible.  These determinations should be made on an individualized employee basis taking all facts and circumstances into consideration.

Sincerely Held Religious Beliefs Under Title VII

Employers also must consider whether religious accommodations may be necessary for employees who are not vaccinated.  Under Title VII, an employer must reasonably accommodate an employee’s sincerely held religious belief absent an undue hardship.  Without an objective basis for questioning whether the employee’s beliefs are religious in nature or sincerely held, the employer should not request supporting information or documentation regarding a sincerely held religious belief; however, even if the employee provides supporting information or documentation, the employer is not required to allow the employee in the workplace if a reasonable accommodation is not available or if accommodating the employee would cause an undue hardship to the employer. Specifically, an undue burden in this context means the burden is “more than a de minimis cost or burden.”

Again, this is facts and circumstances specific, and an employer should not automatically terminate an unvaccinated employee without considering whether an accommodation is possible or necessary. Per the EEOC, if an employee cannot receive the COVID-19 vaccine because of a sincerely held religious belief, practice, or observance, then the employee may be excluded from the workplace if there is no available or possible reasonable accommodation.

Mandating COVID Vaccine as Condition of Health Coverage Eligibility

While there have been no reports of companies taking this approach, some companies have inquired whether this would be a possibility.  This option is the most easily analyzed of the options, as it clearly is addressed by HIPAA nondiscrimination rules.  Specifically, under HIPAA nondiscrimination requirements, benefits must be available on a uniform basis for all “similarly situated individuals” and benefits cannot be limited or excluded based on a participant’s health factor, which includes “receipt of health care.”  Thus, an employee’s status as COVID-19 vaccinated or not vaccinated is a health factor.  Accordingly, an employer cannot exclude an employee from participating in the health plan because he or she did not receive the COVID-19 vaccine. 

Excluding Claims Incurred by Unvaccinated Participants

Some employers have questioned whether a group health plan could exclude COVID-19-related claims for an unvaccinated participant.  This approach is generally prohibited under HIPAA’s rules prohibiting restrictions based on the source of the injury.  Under HIPAA, if a group health plan provides benefits for a type of injury, the plan may not deny benefits otherwise provided for treatment of the injury if the injury results from a medical condition (including both physical and mental health conditions).  For example, a plan that otherwise covers hospitalization may exclude benefits for self-inflicted injuries or injuries sustained in connection with attempted suicide; however, if the self-inflicted injury was the result of a medical condition (depression), then the plan must cover the injury.  A plan may also deny hospital coverage if the participant engaged in certain dangerous recreational activities (e.g., bungee jumping); however, given that receipt of the COVID-19 vaccine is a health factor under HIPAA, excluding COVID-19-related hospitalization benefits for an unvaccinated participant on the basis that not receiving the vaccine is an inherently dangerous activity is not supportable based on existing guidance.  It may also violate the ACA’s prohibition on preexisting conditions. 

Employer-Provided COVID-19 Incentives

Despite the mandate, some large employers may still consider incentivizing employees to receive the vaccine to minimize the burden and cost of weekly testing requirements.  Further, some small employers may choose to incentivize vaccines for the safety of their workforce and customers/clients.

There are generally two approaches employers take with vaccine incentives: (1) providing monetary or other incentives to employees who show proof of receiving the vaccine, such as $100 bonuses, $50 gift cards, additional paid time off, or other items of value, or (2) increasing premium cost of coverage for employees who are not vaccinated.  For example, news sources reported that Delta Airlines intends to impose a $200 surcharge on health insurance premiums for employees who are not vaccinated. Under either approach, employers must consider implications under ERISA and regulations governing wellness plans (HIPAA, ADA, and GINA). 

HIPAA Nondiscrimination Considerations

As discussed above, HIPAA nondiscrimination rules prohibit employers from limiting or excluding benefits based on a participant’s health factor. Thus, employers cannot deny coverage to individuals based on whether they receive the vaccine, but they can incentive employees to receive the vaccine or charge a different premium amount to vaccinated employees if offered via a bona fide wellness program.  A bona fide wellness program must be reasonably designed to promote health or prevent disease. 

Under applicable DOL wellness program regulations, there are two types of wellness programs, participatory and health contingent.  A participatory wellness program does not condition receipt of a reward on achievement of a health standard.  Health-contingent wellness programs condition receipt of an award on an individual’s satisfaction of a standard related to a health factor or attaining or maintaining a specific health outcome. Health-contingent wellness programs are divided into two categories, activity-based (i.e., individuals are required to perform or complete an activity that is related to a health factor before the individual can obtain a reward) and outcome-based (i.e., individuals must attain or maintain a specific health outcome to obtain a reward).  

In addition to meeting other requirements^[3], health contingent wellness programs must offer a reasonable alternative standard for employees to satisfy the requirements under the program for all outcome-based programs, and for individuals for whom it is unreasonably difficult to satisfy the original standard due to a medical condition or for whom it is medically inadvisable to try to satisfy the original standard for activity-based programs.

ADA Wellness Program Considerations for COVID-19 Vaccines

Wellness programs that are subject to the ADA (i.e., those that include a medical exam or disability related inquiry) must, in addition to offering a reasonable alternative standard, where applicable, be “voluntary.”  This means, the reward for participating in a wellness program must not be so great as to compel someone to participate.  Further, for a health-contingent wellness program, the reward cannot exceed 30% of the cost of employee-only coverage (if 30% of the cost of the family coverage if spouses and dependents can participate).  Rewards include financial rewards (e.g., premium discounts, rebates, or modifications of otherwise applicable cost-sharing amounts such as copays, deductibles, or coinsurance) and non-cash rewards (e.g., gift cards, electronic devices, etc.).  If tobacco use prevention is part of the program, the reward may be as high as 50% of the cost of coverage.  (Note that the reward for the non-tobacco use portion of the program cannot exceed 30% of the cost of coverage.)

For purposes of the COVID-19 vaccine, some employees are not eligible to receive the vaccine because they have certain health risks or other health factors.  In such case, the employer must offer a reasonable alternative standard for employees to meet.  Furthermore, if the employer intends to ask employees why they are not receiving the vaccine, this would be a disability related inquiry and the program must be “voluntary” for employees.  Whether a program is “voluntary” is a facts and circumstances determination and should be made in on an individualized basis.  Moreover, if the employer intends to apply a premium differential for employees who are not vaccinated, the program will have to comply with the 30% cap (or 50% if the program also includes tobacco cessation). 

Other Considerations

In addition to the above, GINA wellness program regulations may also be implicated if an employer receives too much information when substantiating that an employee received the vaccine, or employees must explain that they are not eligible to receive a vaccine due to health or risk factors.  Like under the ADA wellness program rules, wellness program participation must be “voluntary,” under GINA, which means the employer’s incentives for receiving the vaccine must not be so great as to make the employee feel compelled to participate. 

Unfortunately, at this point, it is unclear what amount of incentive would make participation involuntary given the EEOC’s recent withdrawal of the proposed wellness regulations, which limited incentives for certain wellness programs to a de minimis amount.  Until new regulations are implemented, if the ADA and/or GINA are implicated, employers should take a reasonable approach in evaluating their program to ensure the program is truly voluntary for employees.

Additionally, religious exemptions under Title VII may also apply if an employee must explain why they are declining the vaccine. 

For applicable large employers (ALEs), for purposes of the Affordable Care Act (“ACA”) a wellness incentive or surcharge may impact affordability, as wellness incentives (other than solely related to tobacco use) are treated as unearned for purposes of determining whether coverage is “affordable” under the Affordable Care Act, and employees are treated as having to pay the surcharge for “affordability” purposes.​

Finally, employers should consider any state or local privacy or other laws that may prohibit, limit, or impact any vaccine mandate or incentive program offered by the employer.

Conclusion

Large employers should be on the lookout for the OSHA ETSs and, in the meantime, discuss how they intend to implement the mandate once effective – whether the employer will offer a vaccine and testing blended approach to accommodate employee preference, or whether the employer will outright mandate the vaccine for all employees (taking into consideration any necessary, reasonable accommodations). Small employers may continue to evaluate the approach they intend to take, if any. 

If large or small employers intend to implement incentives, they should consider the EEOC’s guidance, applicable federal, state, and local laws, and any potential employee relations issues they may face as they evaluate their options. 

For purposes of a mandate, employers should be mindful of the ADA, Title VII, GINA, and applicable state or local laws, and should engage in an individualized analysis of the facts and circumstances of each unvaccinated employee with counsel. Further, small employers should ensure any vaccine requirements serves some business purpose.  For example, if an employer has a mostly remote workforce and remote employees do not engage in business travel or directly engage with clients, requiring the vaccine would not likely serve a business purpose.

If employers choose to incentivize receipt of the vaccine, either with cash or other gifts or by creating premium differentials for individuals who show proof of receiving the vaccine, they should ensure the program, or any incentives offered for receiving the vaccine, complies with all applicable laws and regulations and are offered through a bona fide wellness program meeting all wellness program regulations. We recommend employers work directly with counsel when designing or implementing wellness programs or making employment termination decisions (for those implementing a mandate).

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[1] COVID-19 at-home testing kits are used to “diagnose” COVID-19 and, therefore, are qualified medical expenses under §213(d) of the Code.  Thus, they can be paid for or reimbursed under a health FSA, HRA, HSA, or Archer MSA.

[2] Requesting a copy of the vaccine card would lessen the likelihood of fraud.

[3] Health-contingent wellness programs must meet several different requirements; however, this memorandum is not intended to fully address all compliance requirements for wellness programs.  If an employer has concerns about the design of a wellness program, they should work with counsel to ensure it is properly designed.

In October 2020, CMS Released its Transparency in Coverage Final Rules (the “TiC Final Rules”) which require non-grandfathered group health plans and carriers offering health insurance in the individual and group markets to: (1) make available to the public three separate machine-readable files (for in-network rates, out-of-network allowed amounts and prescription drugs) that include detailed pricing information for each available coverage option, and (2) release cost-sharing information to participants, including the underlying negotiated rates, for all covered health care items and services, including prescription drugs, through an internet-based self-service tool and in paper form (upon request).

The TiC Final Rules were intended to be rolled out over a three-year period beginning January 1, 2022; however, in August 2021, the DOL released FAQs that delay implementation until July 2022 or later. 

In addition to the deadline extensions for the TiC Final Rules, certain other new transparency requirements authorized under the Consolidated Appropriations Act, 2021 (CAA) that were scheduled to become effective later this year are delayed pursuant to the FAQs.  The transparency requirements of the TiC Final Rules and the CAA, along with the deadline extensions, are summarized in more detail below. Additionally, the TiC Final Rules are currently in the process of being litigated in federal district court.  

Transparency in Coverage Final Rules

In October 2020, CMS released the TiC Final Rules, which require group health plans and health insurance carriers (“carriers”) to publicly post standard charge information and negotiated rates for common shoppable items and services in an easy-to-understand, consumer-friendly, and machine-readable format.  Regulations were also ordered to be implemented for hospitals to post (and regularly update) standard charge information for services, supplies, or fees billed to patients or provided by hospital employees.  The hospital requirements were effective beginning January 1, 2021, while the TiC Final Rules are effective for plan years beginning on or after January 1, 2022, except as delayed below.  The TiC Final Rules are summarized below, followed by the extensions.

Machine Readable Files

Under the TiC Final Rules, for plan years beginning on or after January 1, 2022, most non-grandfathered group health plans and insurance carriers offering non-grandfathered health insurance coverage in the individual or group markets are required to make available to the public, including stakeholders such as consumers, researchers, employers, and third-party developers, three separate machine-readable files that include detailed pricing information.  The information must be available on an internet website.  Specifically, three separate machine-readable files for “each coverage option offered by a group health plan or health insurance issuer” must be created – one for in-network rates, one for out-of-network allowed amounts, and one for prescription drugs.  The information required to be included in each machine-readable file for all covered items and services is described in the regulations.

The machine-readable files must be updated monthly (and clearly indicate the date the file was last updated) and must be available in a form and manner specified in any guidance issued by the IRS, DOL, or CMS.  Further, they must be publicly available and accessible to any person free of charge and without conditions, such as the establishment of a user account, password, or other credentials, or submission of personally identifiable information to access the file.

An aggregated allowed amount for more than one plan or insurance policy or contract is permitted for out-of-network (“OON”) allowed amounts where the group health plan or carrier contracts with a carrier, service provider, or other party to provide the information.  This may be hosted on a third-party website or posted by a third party; however, the group health plan or carrier must provide a link to the site hosting or post the information on its own website.

Release of Cost-Sharing Information to Participants and Beneficiaries

Additionally, for plan or policy years beginning on or after January 1, 2023, upon request, a plan is required to provide to participants and beneficiaries enrolled in the group health plan, cost-sharing information for the 500 covered items and services identified in Table 1 of the TiC Final Rules (all other covered items and services must be provided for plan or policy years beginning on or after January 1, 2024) in a format described in the regulation.

Plans and carriers must provide the required information on an internet-based self-service tool that meets certain requirements, or via hardcopy/paper format upon request.  There can be no cost for the information, and the information must be provided in plain language.  The plan or issuer may limit the number of providers to no fewer than 20 providers per request and meet certain timing, content, and delivery requirements.

Fully insured group health plans can contract (in writing) with the carrier to provide any of the above-described information (machine-readable files, paper files, or internet information to participants or beneficiaries) on behalf of the plan.  In those circumstances, the issuer, not the group health plan, is responsible for compliance and any compliance failures. Self-funded plans can contract with a third-party administrator or other party to assist the plan with compliance; however, the self-funded group health plan ultimately remains responsible for compliance and any compliance failures on the part of the TPA or other party. Additionally, group health plans and health insurance carriers are required to comply with any state or federal privacy laws when complying with any of the above-described disclosure requirements. 

Deadline Delays for Transparency in Coverage Rules

With many of the deadlines under the TiC Final Rules, as well as other transparency requirements under the CAA, fast approaching, the DOL released FAQ #49, extending certain deadlines. 

Machine Readable Files

The deadline for machine-readable files for in-network rates and OON allowed amounts and billed charges for covered items and services is extended from January 1, 2022, to July 1, 2022.  The agencies intend to release more guidance prior to the deadline.

Further, the deadline to provide machine-readable files for prescription drugs is delayed indefinitely.  This requirement has clear overlap with transparency requirements under the Consolidated Appropriations Act, 2021.  Accordingly, the DOL intends to consider whether prescription drug machine-readable file requirements are appropriate and will address this through notice-and-comment rulemaking. 

States are required to enforce the machine-readable file requirements for carriers, so the DOL encourages states to take a similar approach and delay enforcement of the machine-readable file requirements for in-network rates, OON allowed amounts, and prescription drugs using the same timeframes.

Release of Cost-Sharing Information to Beneficiaries and Participants

The CAA, 2021, which was passed after the TiC Final Rules, includes largely duplicative requirements for group health plans and insurance carriers to provide cost-sharing information to participants and beneficiaries and further requires price information to be provided via telephone upon request (in addition to online or paper requirements).  To address the duplicative nature of these requirements, the agencies intend to propose rulemaking to require the same pricing information available through the online tool (or by paper upon request) be provided by telephone (upon request) as well.  Further, the agencies will defer enforcement of any CAA requirements under the CAA until plan years beginning on or after January 1, 2023 (which is consistent with the first compliance deadline under the TiC Final Rules). 

States are required to enforce these requirements for carriers, so the DOL encourages states to take a similar approach and delay enforcement of these requirements until plan years beginning on or after January 1, 2023.

Other Transparency-Related Deadlines Extended

Pharmacy Benefits and Drug Costs Reporting Under the CAA

The CAA requires group health plans or carriers to begin reporting detailed information regarding the plan and its coverage of certain prescription drugs (the 50 brand prescription drugs most frequently dispensed and the 50 prescription drugs with the greatest increase in plan expenditures over the plan year) as well as other plan information beginning on December 27, 2021, and each June 1^st thereafter.  The DOL recognizes the significant operational challenges plans and carriers may encounter complying with these reporting requirements by the applicable statutory deadline and, therefore, the DOL has deferred enforcement of the first and second reporting deadlines by one year.  Therefore, plans will be required to file their first report on December 27, 2022, and each June 1^st thereafter.  The agencies encourage plans and carriers to amend contracts and put processes and procedures in place to ensure they can meet the initial December 27, 2022 deadline.

Advanced Explanation of Benefits (Advanced EOBs)

Effective for plan years beginning on or after January 1, 2022, upon receiving a good faith estimate regarding certain items or services, the CAA requires group health plans and carriers to send (via mail or electronically) a participant, beneficiary, or enrollee an Advanced EOB in clear and understandable language that includes certain specified information, including (1) the network status of the provider or facility, (2) the contracted rate (for participating providers or facilities) or a description of how a participant can obtain information about participating providers or facilities, (3) good faith estimate received from the provider or facility, (4) a good faith estimate of the participant’s cost-sharing and the plan’s responsibility for paying for the items or services, and (5) information regarding any medical management techniques that apply to the items or services.  The Advanced EOB must clearly state it is only an estimate based on the items or services reasonably expected to be provided at the time of scheduling/requesting the item or service and is subject to change based on the items or services actually provided.

Due to the complexity of these requirements, the technological requirements involved, and the lack of agency guidance on these requirements, the DOL intends to engage in notice-and-comment rulemaking in the future to implement these requirements, including establishing appropriate data transfer standards.  Accordingly, the DOL will defer enforcement but did not specify a specific compliance date. 

HHS intends to explore whether interim solutions are feasible for insured consumers and encourages states to delay enforcement of these requirements for applicable plans.

Other Transparency-Related Guidance Addressed in the FAQs

In other instances, the DOLs FAQs do not extend the deadline to comply with certain transparency requirements under the CAA; they provide certain enforcement guidance or clarification.  This information is summarized below:

Insurance ID Cards

Effective for plan years beginning on or after January 1, 2022, the CAA requires plans and carriers to include on any physical or electronic plan or insurance identification card issued to participants, beneficiaries, or enrollees any applicable deductibles, out-of-pocket maximum limitations, and a telephone number and website address for consumers seeking consumer assistance.  The information is required to be provided in clear writing.

The agencies do not intend to issue rules related to this requirement before January 1, 2022, and, therefore, plans and carriers must begin to comply with these requirements by that date.   Plans and carriers are expected to determine how to represent plan and coverage designs in a compliant way on the ID cards using a good faith, reasonable interpretation of the law.  Reasonable methods may be varied, and agencies will consider whether the approach used by the plan or issuer is reasonably designed and implemented to provide the required information to all participants, beneficiaries, and enrollees.  Agencies will consider whether the specific data elements are included or, if not, whether it is made available through other information that is provided on the ID card and the mode by which any information absent from the card is made available when required information is made available.  Per the agencies, a compliant ID card could include the applicable major medical deductible and applicable out-of-pocket maximum, as well as a telephone number and website address for individuals to seek consumer assistance and access additional applicable deductibles and maximum out-of-pocket limits, the card could include a QR code or link (if the card is digital) to access additional deductible out-of-pocket maximum limits for the plan.

Gag Clauses

Pursuant to the CAA, since December 27, 2020, providers, networks, or associations of providers, TPAs, or other service providers have been prohibited from either directly or indirectly restricting (by agreement) plans or carriers from (1) providing provider-specific cost or quality of care information or data to referring providers, the plan sponsor, participants, beneficiaries, or enrollees, or individuals eligible to become participants, beneficiaries, or enrollees of the plan or coverage; (2) electronically accessing de-identified claims and encounter data for each participant, beneficiary, or enrollee; and (3) sharing such information (in compliance with any privacy regulations).  Further, plans and carriers are required to submit an annual report to the DOL, HHS, or IRS confirming compliance with these requirements. 

The DOL believes these requirements are self-implementing and does not expect to issue any regulations on these requirements, though they will release guidance regarding how to submit attestations of compliance beginning in 2022.  Therefore, unless and until any guidance is released, plans and carriers must comply with these requirements using a good faith, reasonable interpretation of the statute.

Provider Directory

The CAA established provider directory standards, which require plans or carriers to establish a process for updating and verifying the accuracy of the information in their provider directories, and establish a protocol for responding to telephone calls and electronic communications from participants, beneficiaries, or enrollees about a provider’s network participation status, and must honor any incorrect or inaccurate information provided to the participant, beneficiary, or enrollee about the provider’s network participation status.

While the DOL intends to initiate rulemaking on these requirements sometime in 2022, the deadline for compliance is not extended.  Plans and carriers must comply with these requirements, and will not be considered to be out of compliance if, (1) beginning on or after January 1, 2022, in situations where a participant, beneficiary, or enrollee receives items and services from a non-participating provider and the individual was provided inaccurate information by the plan or issuer via the provider directory or response protocol indicating the provider was participating, and (2) the plan or issuer imposes only a cost-sharing amount that is not greater than the cost-sharing amount that would be imposed for items and services furnished by a participating provider and counts those cost-sharing amounts toward any deductible or out-of-pocket maximum.  Once implemented, the final rules will have a prospective effective date. 

Balance Billing Disclosure Requirements

The balance billing disclosure requirements of the No Surprises Act are effective for plan years beginning on or after January 1, 2022.  In the preamble to its interim final rules addressing balance billing, the DOL indicated that it intends to address balance billing disclosure requirements in more detail in the future; however, that may not occur before January 1, 2022.  Accordingly, plans and carriers must comply with these requirements using a good faith, reasonable interpretation of the statute for plan years beginning on or after January 1, 2022.  Once implemented, the final rules will have a prospective effective date.  In the meantime, the DOL issued a model disclosure notice that may be used to satisfy the disclosure requirements regarding the balance billing protections.

Continuity of Care Requirements

The CAA requires group health plans or carriers to establish certain continuity of care protections when there are changes in provider or facility networks under the plan effective for plan years beginning on or after January 1, 2022.  While the DOL intends to initiate rulemaking on these requirements sometime in 2022, the deadline for compliance is not extended.  Plans and carriers must comply with these requirements using a good faith, reasonable interpretation of the statute for plan years beginning on or after January 1, 2022.  Once implemented, the final rules will have a prospective effective date. 

What’s Next for Employers?

While employers have been given an extension for complying with many of the provisions of the Transparency in Coverage regulations and transparency-related provisions of the CAA, plans should follow the DOL’s suggestion and ensure they update any contractual provisions with their TPAs or carriers and identify which parties are responsible for preparing any machine-readable files or other deliverables under these new statutory and regulatory requirements.  Group health plan sponsors, including sponsors of grandfathered health plans with regard to the No Surprises Act and other applicable requirements, should continue to monitor additional rulemaking or guidance issued by the agencies related to any transparency provisions.

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About the Authors.  This alert was prepared by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act.  Contact Stacy Barrow or Nicole Quinn-Gato at sbarrow@marbarlaw.com or nquinngato@marbarlaw.com.

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