The climate spending and tax legislation President Joe Biden is expected to soon sign into law contains provisions that could affect employers that sponsor group health plans. Also, the legislation's increase in IRS auditors could impact employer-sponsored retirement plans.
The House passed the legislation, which Democrats named the Inflation Reduction Act (IRA), with a party line vote on Aug. 12 following earlier Senate passage.
Below are some of the provisions that group health plan sponsors should keep in mind.
Prescription Drug Costs
The IRA seeks to reduce the cost of prescription drugs under Medicare Part D by allowing the Centers for Medicare and Medicaid Services to negotiate lower costs with pharmaceutical companies. It also caps insulin costs under Medicare Part B, among other provisions.
"Because all the bill's drug pricing reforms apply only to Medicare, however, the legislation is raising worries that it could … result in significant cost-shifting to commercial market plans, meaning higher drug prices and costs for the millions of Americans and their families who get their health coverage through employer-sponsored plans," wrote Geoff Manville and Dorian Z. Smith, partners in HR consultancy Mercer's law and policy group in Washington, D.C., and New York City, respectively.
Others also expressed concerns that lower payments for drugs purchased through Medicare could result in higher costs for non-Medicare plans. "We are alarmed that employer plan...
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