Keenan Blog

Federal Actions on Health Insurance

October 07, 2020

Drug Reimportation

On October 1, 2020, the U.S. Department of Health and Human Services issued a final rule implementing Section 804 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) to allow importation of certain prescription drugs from Canada.

Under the new rule, States and Indian Tribes will be able to submit proposals for renewable two-year Section 804 Importation Programs (SIPs) to the Food and Drug Administration (FDA) for review and authorization.

While the FD&C Act has allowed drug importation since 2000, it was on the condition that the secretary of the Department of Health and Human Services (HHS) certify that it is safe. That did not occur until September 23, 2020, when Secretary Alex Azar delivered a letter to Congress certifying that the plan set forth in the regulations “poses no additional risk to the public’s health and safety and will result in a significant reduction in the cost of covered products to the American consumer.” HHS has noted, however, that it is unable to make any estimates about savings because it lacks information about the likely size and scope of the SIPs, the specific eligible prescription drugs that may be imported, the degree to which these imported drugs will be less expensive than non-imported drugs available in the United States, and which eligible prescription drugs are produced by U.S.-based drug manufacturers. This new rule will go into effect on November 30, 2020.

Relief for 2020 Health Coverage Reporting

On October 2, 2020, the Internal Revenue Service (IRS) released Notice 2020-76, which extends the due dates for furnishing the 2020 Form 1095-B and Form 1095-C to individuals from January 31, 2021 to March 2, 2021. Please note however that the California deadline for furnishing these forms to individuals remains January 31, 2021, regardless of the federal extension. For practical purposes, this means that the federal extension is meaningless for California employers. The federal deadlines for filing information returns with the IRS remain unchanged—February 28, 2021 if filing on paper, and March 31, 2021 if filing electronically.

Notice 2020-76 also announced that the IRS will not impose a penalty under IRC Section 6722 against reporting entities for failing to furnish a 2020 Form 1095-B to responsible individuals if two conditions are met: (1) the reporting entity posts a notice prominently on its website stating that responsible individuals may receive a copy of their 2020 Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that responsible individuals can use to contact the reporting entity with any questions; and (2) the reporting entity furnishes a 2020 Form 1095-B to any responsible individual upon request within 30 days of the date the request is received. This relief does not apply to the furnishing of Form 1095-C to full-time employees.

Finally, the notice extended transitional good-faith relief from penalties to the 2020 information reporting requirements under Internal Revenue Code Sections 6055 and 6056. This relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement. This is the last year the IRS intends to provide this relief.

California employers please note: The California deadline for filing Form 1094-C and 1095-C with the Franchise Tax Board (FTB) is March 31, 2021, but an automatic two-month extension is granted for employers that need an extension. Therefore, the final deadline for information reporting to the FTB is May 31, 2021.

Trump Executive Order

On September 24, 2020, President Trump issued an “Executive Order on An America-First Healthcare Plan.” The order sets forth one concrete action, requiring the Secretary of HHS to work with Congress to reach a legislative solution to surprise billing by December 31, 2020. Congress has been working on surprise billing legislation since 2019, but has not yet brought a bill over the finish line. Keenan’s most recent blog post on Congressional efforts on surprise billing can be found at https://www.keenan.com/Knowledge-Center/Blog/Details/congress-continues-its-attempt-to-address-surprise-medical-billing. Since that piece was posted, events have required Congress to turn its attention to the COVID-19 pandemic, and no further progress has been made. If a legislative solution on surprise billing is not reached, the executive order instructs HHS to update the Medicare.gov Hospital Compare website to inform beneficiaries of hospital billing quality by providing the following information: (a) whether the hospital is in compliance with the Hospital Price Transparency Final Rule, as amended (84 Fed. Reg. 65524), effective January 1, 2021; (b) whether, upon discharge, the hospital provides patients with a receipt that includes a list of itemized services received during a hospital stay; and (c) how often the hospital pursues legal action against patients, including to garnish wages, to place a lien on a patient’s home, or to withdraw money from a patient’s income tax refund.


About Amy Donovan
Amy is Keenan's Vice President of Legislative and Regulatory Affairs, authoring the firm's Briefings and position papers on legislation, regulation and litigation that have an impact on the firm and its clients.