March 22, 2022
Recovering losses from the State of Russia – Investment Treaties
Russia’s invasion of Ukraine has caused large scale suffering and destruction. While businesses lend a hand to humanitarian relief efforts, they are also having to grapple with questions about how they might potentially recover the financial losses to their businesses arising from Russia’s invasion of Ukraine. The situation is changing quickly, but The Council has is tracking the likely causes of financial losses to business, and the assets affected. Please see the attached memo from Steptoe & Johnson outlining these considerations for our members. And take a sneak peak at the online feature in Leader’s Edge Magazine where Chief Legal Officer Scott Sinder elaborates more on this issue.
President Signs Omnibus Government Funding Measure with Telehealth Expansion
On March 15, 2022, President Biden signed the $1.5 trillion Consolidated Appropriations Act of 2022. Of note, the package includes an extension of a recently expired provision allowing for first-dollar coverage of virtual care under health savings account (HSA)-eligible high deductible health plans. This extension, which lasts from April 1 through December 31, 2022, allows all Americans to access telehealth services on a pre-deductible basis.
The provision is not retroactive, which raises practical questions about how the reinstated rules would be implemented.
The Council broadly supports increasing the ability to offer telehealth to employees and in this case, for telehealth services to be provided more readily in high-deductible health plans. We will continue to monitor any potential forthcoming guidance on the implementation of this provision.
Biden Administration Moving to Close ACA “Family Glitch”
The Biden administration is reviewing a regulation that would help close the Affordable Care Act’s “family glitch,” according to a recent notice.
The ACA loophole stipulates premium subsidy eligibility by defining affordability for a single beneficiary – the employee – as lower than a certain percentage of family income. It is one of the most widely identified issues with the law. The regulation could help over five million people get more affordable coverage.
Addressing the family glitch is one of the more significant steps the Biden Administration could take without Congress to make headway on more affordable health coverage.
National Association of Insurance Commissioners (NAIC) Financial Stability Task Force
In December, National Association of Insurance Commissioners’ (NAIC) Financial Stability Task Force voted to expose, for a 30-day comment period, a list of “Regulatory Considerations Applicable (But Not Exclusive) to Private Equity (PE) Owned Insurers.” The Task Force assigned to its Macroprudential Working Group the role of coordinator of the ongoing evaluation of these considerations.
The exposure contains 13 enumerated topics. Key elements, among others, are as follows:
- Understanding control issues, which may exist among entities with less than the traditional 10-percent ownership interest at which control is presumed
- Identifying insurer affiliates in a private equity-controlled holding company structure
- Analyzing material provisions of investment management agreements to determine whether they are arm’s length and reasonable to the insurer
- Determining whether possible short-term interests of private equity ownership are properly aligned with the long-term nature of insurance liabilities, particularly with respect to life insurance
- Evaluating affiliate investment arrangements, including the use of offshore reinsurers and sidecar vehicles, and
- Assessing operational, governance and market conduct practices of private equity entrants into the insurance market without prior industry experience and the possible over-reliance on TPAs by PE owners without insurance expertise.