New ACA Guidance May Make It More Difficult for Employers to Reduce Health Care Costs

May 09, 2014

Late last week, the Department of Labor published new guidance that may ultimately limit the ability of employers to implement reference pricing features in their health plans, while also increasing the minimum coverage employers must provide for attempts to quit smoking.  Recently, the Employee Benefits Research Institute estimated that employers could save $9.4 billion if they all adopted reference pricing for just seven health care services.  Although DOL is allowing reference pricing for now, it is signaling that future guidance may not, raising concerns that "such a pricing structure may be a subterfuge for the imposition of otherwise prohibited limitations on coverage, without ensuring access to quality care and an adequate network of providers."  DOL recognizes that reference pricing aims to encourage plans to negotiate cost-effective treatments with high-quality providers at reduced costs, but it is seeking comment on what standards plans using reference-based pricing structures should be required to meet, and on how the ACA's out-of-pocket limitation applies when an individual uses a provider that does not accept that amount as payment in full.  The new guidance also highlights a serious cost problem with the ACA: the U.S. Preventive Services Task Force, without any review, can continue to increase employer health care costs by adding preventative care services to its A and B schedules.  Thus, under the DOL guidance, employers must now cover 100 percent of the cost for two attempts to quit smoking, including four counseling sessions and a 90-day supply of medication.  The "clarification" was triggered by a letter from public health groups on behalf of smokers who reported difficulty accessing services for free.  The Association plans to submit comments on the reference pricing guidance which are due on August 1, 2014.