On June 1, New Jersey Governor Phil Murphy signed legislation that imposes new disclosure obligations on state healthcare providers and insurers, and changes the way healthcare providers can charge for out-of-network services. The new law, titled the Out-of-network Consumer Protection, Transparency, Cost Containment and Accountability Act, also has an impact on self-insured health plans subject to ERISA and their participants. As explained below, self-insured health plans subject to ERISA that cover individuals who obtain healthcare in New Jersey will need to determine by the end of August whether to elect to be subject to the act.

In broad brush, the legislation addresses “surprise” out-of-network medical charges, such as charges for services administered during an emergency from providers who are not part of the patient’s network. For nonemergency patients, the statute requires healthcare facilities and professionals to provide information—before the patient receives services—as to the in-network or out-of-network status of the providers, and a disclaimer regarding the responsibility of the patient to pay any additional out-of-network fees. The statute also requires providers to supply each patient, upon request, an estimate of fees, and requires facilities to establish public postings regarding standard charges. Health insurance carriers are required to provide written notice of changes to their network, and provide detailed information about out-of-network services, including the methodology used to determine the allowed amount for out-of-network services.

Congratulations to our partner Lisa Barton who has been named to The Business Journals’ list of 100 executives making an impact on business and legal matters in the communities in which they live and practice across the United States. Read more about Lisa and this recognition.

Whether due to an upcoming contract expiration, change in leadership, decline in service quality, regulatory issues, or any of the other many events that occur during an outsourcing engagement, invariably, the original agreement with the service provider must be modified. Please read this post from our Tech&Sourcing @ Morgan Lewis blog to learn about issues that should be considered before entering into such renegotiations.

President Donald Trump on May 24 signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act), which principally addresses amendments to the Dodd Frank Act affecting financial institutions. However, the Act also contains several provisions with respect to the federal securities laws. Section 507 of the Act directs the US Securities and Exchange Commission (SEC) to amend Rule 701 under the Securities Act of 1933 (the Securities Act) by increasing, from $5 million to $10 million, the amount of securities that an eligible company can sell under the rule during a 12-month period. (The Act also calls for an inflation adjustment to this amount every five years.)

Two cases decided on May 23 by Judge Esther Salas in the US District Court for the District of New Jersey (Univ. Spine Ctr. v. Aetna, Inc. and Univ. Spine Ctr. v. United Healthcare – both unpublished decisions) reiterate the importance of including clear anti-assignment language in health plans to prevent healthcare providers from circumventing plan terms to obtain payment.

In this age of skyrocketing health costs, plan sponsors typically work with their advisors and insurers to craft reimbursement structures for services under their health plans. This often includes a lower reimbursement rate for certain out-of-network services. In recent years, many plans have had more claims from out-of-network providers trying to circumvent these design decisions and seek full reimbursement from the plans.

The US Supreme Court ruled on May 21 in Epic Systems Corp. v. Lewis that class and collective action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA). The court sided with employers, rejecting arguments that class and collective action waivers were unenforceable because they violated the National Labor Relations Act (NLRA).

The employees argued that the FAA’s saving clause provided a basis for courts to refuse to enforce arbitration agreements that also include a waiver of the right to bring a class or collective action, because such waivers violate the NLRA. The employees also argued that the NLRA itself reflected a clearly expressed and manifest congressional intention to displace the FAA and bar class and collective action waivers, because the NLRA guarantees workers the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. The Supreme Court rejected each of these arguments, finding that the NLRA does not contain a conflicting congressional command, and instead can be harmonized with the FAA to permit class and collective action waivers in employment arbitration agreements.

We previously reminded you about the deadline for the new Pennsylvania non-resident withholding and reporting requirements which apply to anyone who makes payments of Pennsylvania source non-employee compensation or business income to a non-resident individual or a disregarded entity that has a nonresident member. The effective date of this rule was delayed from January 1, 2018 to July 1, 2018, but is quickly approaching. There are current challenges to the rule that may further delay or invalidate its enforcement. To learn more about this rule and the necessary compliance, please read our recent LawFlash.

Legend has it that this was Mark Twain’s response to a newspaper publishing his obituary when he was very much alive. In reality, it appears his response was not quite as pithy, but why let the facts get in the way of a good story?)

The quotation (actual or embellished) oddly applies to the current situation in which we find ourselves with the fiduciary rule. For those of you who may have somehow missed the earlier installments of this saga, the US Department of Labor (DOL) proposed a change in an over-30-year-old definition of “fiduciary” in the context of providing non-discretionary investment advice. The rule was initially proposed, then retracted, and then re-proposed before it ultimately became final and went into effect in June 2017. The overall impact of the rule was to cause more parties to be ERISA fiduciaries than under the old definition. Fiduciary status is important because it affects the types of compensation that the advice provider can receive.