Vol. XVIII, Issue 14

April 22, 2021

Blue Cross Blue Shield Association Lawsuit

The Blue Cross Blue Shield Association (BCBSA), which is the national association of 35 independent, locally-operated Blue Cross Blue Shield companies, recently agreed to settle a class action lawsuit alleging antitrust law violations. Blue Cross Blue Shield of Illinois (BCBSIL), one of HealthFlex's third party administrators, is a member of the BCBSA. The lawsuit alleged that, from 2008 through 2020, BCBSA companies entered into agreements that divided up the health care insurance and administration market to avoid competing with each other, resulting in higher prices for individuals and employers. The proposed settlement agreement includes a $2.67 billion settlement fund (or approximately $1.9 billion after deduction of attorneys' fees, administration expenses, and other costs) and requires BCBSA companies to stop certain practices that were alleged to be anticompetitive.

Wespath is reviewing the proposed settlement on behalf of HealthFlex and its participants. If we determine that HealthFlex is eligible to share in the settlement proceeds, we will submit a claim on behalf of the plan. We are also reviewing the settlement terms to determine whether individual participants in a group health plan, such as HealthFlex, have an independent right to file a claim. Some participants recently received a postcard or email communication regarding the proposed settlement from JND Legal Administration, the lawsuit's third-party notice and claims administrator. We understand that the postcard/email may have caused some confusion and are working on a participant communication to provide more information regarding the proposed settlement, including whether participants need to take any action.

The proposed settlement must be approved by the federal district court handling the lawsuit. The court is scheduled to hold a hearing on the fairness of the proposed settlement in October. Claims for settlement proceeds must be submitted by November 5, 2021. We will provide more information to HealthFlex plan sponsors and participants in HealthFlex's BCBSIL network as this lawsuit progresses.

Participant Communications

FSA Letter—Wespath will mail a letter to all participants who had over $550 in a health care FSA or any money in a dependent care FSA on April 1 to remind them about the new rules for FSAs allowing participants to carry over these funds in 2021 and 2022. This letter will be mailed the week of April 26.

Quest Qcard Letter—In the April 12 HealthFlex Express we announced Quest® was sending a letter to participants regarding an error in the Blueprint for Wellness® at home test kits (Qcard) results. In addition, Wespath is sending a follow-up letter to participants on April 27.

Health Check Postcard—Wespath will be sending out a postcard to participants (and covered spouses) who have not yet completed the Health Check to remind them that they can learn about their health risks—and avoid a higher deductible—when they complete the online health assessment by August 31. The postcard is scheduled to be sent the week of May 3.

American Rescue Plan's COBRA Subsidy

The American Rescue Plan Act of 2021 (ARP) passed in March provides a federal subsidy for certain health plan continuation coverage. Specifically, the federal government will subsidize 100% of the cost of COBRA coverage for certain employees and covered family members who lose coverage due to a reduction in hours or involuntary termination of employment. The subsidy is available from March 11, 2021 through September 30, 2021 (though the subsidy ceases earlier if an individual becomes eligible for certain other group health plan coverage or Medicare). Several HealthFlex sponsors have asked whether the ARP's subsidy applies to HealthFlex. Unfortunately, as explained in more detail below, the subsidy does not apply to continuation coverage in HealthFlex.

Continuation coverage for most non-church plans is commonly referred to as "COBRA," an acronym for the Consolidated Omnibus Budget Reconciliation Act of 1985, which created the continuation coverage mandate. Church plans are not required to provide COBRA coverage under federal law. However, it is common for self-insured church plans, such as HealthFlex, to provide continuation coverage that is very similar to COBRA coverage even though they are not required to do so.

The ARP's subsidy for continuation coverage applies only to plans that are required to provide coverage under COBRA or applicable state law.1 The Church Alliance, with Wespath's support, made significant efforts to educate members of Congress on continuation coverage provided by church plans and convince them that the ARP's subsidy should cover all church plan continuation coverage despite not being "COBRA" coverage. While several members of Congress were sympathetic to the Church Alliance's position, the complexity of the bill and the speed at which it was moving through Congress made it too challenging to convince members of Congress that there was sufficient time to thoughtfully amend the bill to cover church plan continuation coverage without delaying passage of the bill. As a result, unfortunately, the ARP's subsidy does not cover continuation coverage provided by HealthFlex.

1 These state laws are commonly referred to as "mini-COBRA" laws and apply to certain plans that are not covered by the federal COBRA law. State mini-COBRA laws generally do not apply to self-insured church plans, such as HealthFlex. However, some fully insured church plans may be required to provide continuation coverage under a state mini-COBRA law. The ARP's subsidy applies to such plans.


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a general agency of The United Methodist Church

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