Innovative Benefit Planning Blog

The Internal Revenue Service (IRS) released Rev. Proc. 2023-17, which outlines the inflation adjustments for the employer shared responsibility payments (ESRP) under the Affordable Care Act (ACA). Under the ACA’s pay or play rules, applicable large employees (ALEs) must offer affordable minimum-value health coverage to their full-time employees or be subject to a penalty. There are two penalty types that may be assessed in the event of non-compliance. 4980H(a): The IRS issues a 4980H(a) penalty when an organization fails to offer Minimum Essential Coverage (MEC) to substantially all (at least 95%) of its full-time employees for any month during the year and has at least one employee obtain a Premium Tax Credit (PTC) / subsidy from the Exchange. This violation is assessed per employee. 4980H(b): The IRS issues a 4980H(b) penalty when an organization offers coverage to substantially all (at least 95%) of its full-time employees; however, the coverage was…

In early February 2023, Governor Phil Murphy signed the Temporary Workers’ Bill of Rights (the Bill) which expands the rights and protections afforded to temporary workers. The Bill is applicable to temporary laborers in a “designated classification placement,” which is defined as an assignment of a temporary laborer by a temporary help service firm to perform work in any of the following occupational categories: (1) food preparation and serving related occupations, (2) building and grounds cleaning and maintenance occupations, (3) construction laborers, (4) helpers, construction trades, (5) installation, maintenance, and repair occupations, (6) production occupations, (7) transportation and material moving occupations, (8) other protective service workers, or any successor categories as the Bureau of Labor Statistics may designate.Among other requirements, the Bill enhances certification requirements for temporary help service firms (which include registering with the Division of Consumer Affairs), additional recordkeeping obligations, creates new notification and wage statement requirements for…

Congress recently passed, through the Consolidated Appropriations Act, 2023, the PUMP for Nursing Mothers Act (the Act) which makes several changes to the Break Time for Nursing Mothers law, enacted in 2010. Under the Break Time for Nursing Mothers law, employers nationwide were required to provide reasonable break time and a private, non-bathroom space for lactating employees to utilize during the workday. The goal of the PUMP Act is to expand these protections and close some of the gaps. Under the Act, employers are required, up to one year after the child’s birth, to provide a reasonable break for an employee to express breast milk each time the employee needs to do so. Specifically, the Act states the requirement for the breaks to be provided “each time,” and anticipates the frequency and duration will depend on factors related to the employee/child.Employers subject to the requirements under the Fair Labor Standards…

On January 30 President Biden issued a statement of policy to Congress in which he announced that the administration plans to end both the National Emergency related to COVID-19 originally declared by President Trump in 2020 and the public health emergency (PHE) declared by the U.S. Department of Health and Human Services (HHS) also in 2020. The ongoing declarations currently are set to expire on March 1 and April 11, respectively. The President’s statement announces the administration’s plan to end both declarations effective as of May 11, 2023. The statement directly addresses two measures currently before Congress – H.R. 382 and H.J. Res. 7 – which call for an immediate end to the respective emergencies. Citing what the administration views as wide-ranging chaos and uncertainty throughout the health care system, for states, hospitals and doctors’ offices, and the general public, if the declarations were to end immediately, the President plans…

In recognition of the changing circumstances related to the COVID-19 pandemic, the EEOC has updated its guidance around conducting testing for on-site employees. Employers covered by the Americans with Disabilities Act must assess whether the current workplace circumstances within their organization justify COVID-19 testing, if they are continuing to test.In determining if they meet the “business necessity” standard for implementing screenings, employers will need to review all relevant facts in light of their current policies and procedures. The guidance provides the following factors for employers to consider:Degree to which breakthrough infections are possible for employees who are “up to date” on vaccinationsThe possible severity of the illness from the current variantThe level of community transmissionThe vaccination status of employeesWhat types of contacts employees may have with others in the workplace; andThe potential impact on operations if an employee enters with COVID-19Many employers have already shifted their COVID-19 policies and procedures…

Ahead of the close of the 117th U.S. Congress, the House of Representatives, with a vote of 315 – 109, quietly passed the Speak Out Act (“The Act”). President Biden signed the bill a few weeks later. Under the new law, nondisclosure and non-disparagement clauses related to allegations of sexual harassment and/or sexual assault that were entered into prior to a dispute are unenforceable. The goal of the Act is to combat sexual harassment and assault in the workplace by ensuring victims feel empowered to come forward. The Act states, “in order to combat sexual harassment and assault, it is essential that victims and survivors have the freedom to report and publicly disclose their abuse.” The Act only applies to contracts that were signed prior to the dispute and does not account for other workplace misconduct, e.g., race and age discrimination.Previously, the federal government enacted another law addressing similar concerns.…

President Biden last week signed the Continuing Appropriations Act, 2023 (CAA 23) to provide funding for the federal government through the current fiscal year. But employers also should know there were some critical benefits-related provisions tucked into CAA 23. Though many of the benefits sections of CAA 23 related to qualified retirement plans, the law also provides some relief to employers with high deductible health plans (HDHPs) that provide telehealth services on a pre-deductible basis. CAA 23 will extend recent COVID-19 guidance that permits certain telehealth and remote service benefits to be provided on a first-dollar basis under an HDHP. CAA 23 will allow participants to receive such benefits without disqualifying them from being eligible for health savings account (HSA) contributions. Telehealth Coverage and HSAs General HSA eligibility rules prohibit anyone who has group health coverage other than under an HDHP – such as first-dollar coverage for telehealth services --…

The Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments) last week issued an FAQ that relieved filing entities from the December 27, 2022, deadline for providing certain information.The Departments understood many plans and carriers faced significant operational challenges in complying with the reporting requirements, including arranging and coordinating a plan’s submission across multiple reporting entities. The Departments also noted they were extending the deadline to allow filers to accurately classify, compile, and validate required submission data. The Departments will consider a plan or issuer to be compliant if they make a good faith submission of 2020 and 2021 data on or before January 31, 2023.Many interested parties also had expressed fears that the new and complex reporting requirements would inevitably lead to errors and other failures despite good faith efforts to comply.  So, for the 2020 and 2021 data submissions that were to have been…

Section 204 of the 2021 Consolidated Appropriations Act (CAA) outlined several requirements for group health plans and health insurers aimed at targeting rising prescription drug costs. In an effort to bolster transparency, the CAA created new obligations for plans to report specific prescription drug data to The Centers for Medicare & Medicaid Services (CMS). Effective December 27, 2022, employer health plans will need to report certain information to the federal government related to prescription drug and health plan costs. In addition to reporting general information regarding the plan or coverage, plan and issuers must also prepare to provide, among other things, detailed information regarding the 50 most frequently dispensed drugs, 50 most costly and 50 prescription drugs with the greatest increase in plan expenditures (RxDC reporting). The provisions also require the Departments to issue biannual reports on prescription drug reimbursements under group health plans, prescription drug pricing trends and the…

Cafeteria plans are governed by IRS Code Section 125 and allow employers to help employees pay for expenses such as health insurance with pre-tax dollars. Employees can choose between a taxable benefit (such as cash) and two or more specified pre-tax qualified benefits (health insurance, for example). Employees can select the benefits they want, much like an individual standing in a cafeteria line. IRS rules limit the types of benefits that can be offered through a cafeteria plan to:Coverage under an accident or health plan (which can include traditional health insurance, health maintenance organizations (HMOs), self-insured medical reimbursement plans, dental, vision, andHealth flexible spending arrangements (HFSAs)Dependent care assistance benefits (DCAPs)Group term life insurancePaid time off, which allows employees the opportunity to buy or sell paid time off days401(k) contributions (subject to certain restrictions)Adoption assistance benefitsHealth savings accounts (HSAs)Employers cannot offer scholarships, group term life insurance for non-employees, transportation and other fringe…

Temporary Flexibilities for Remote Document Examination for Form I-9 Extended Again In March 2020, the Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) instituted a temporary policy which allowed employers with a remote workforce to defer physical presence requirements associated with Form I-9 and Section 274A of the Immigration and Nationality Act. Initially applicable only to employers with an entirely remote workforce, the flexibilities were extended in April 2021 to include all employers who hire remote employees on or after April 1, 2021, if such employees were hired to exclusively work remote due to the employer’s COVID-19 policy. Under this guidance, exclusively remote employees are exempt from the physical inspection requirements until non-remote employment is undertaken, or new guidance around the requirements has been issued. Once normal operations resume or the National Emergency ends, employees that were onboarded using remote verification will need to report to…

Published October 13, 2022, The Department of Treasury released finalized regulations that make the premium tax credit (PTC) for Marketplace health coverage available to more individuals starting in 2023. Under the Affordable Care Act (ACA) regulations, employer-based health insurance is deemed “affordable” if the employee’s contribution for self-only coverage does not exceed the affordability threshold in a given year (9.12% in 2023). Those who do not have access to affordable employer-based coverage may qualify for a PTC through the healthcare marketplace. As a result of the previous definition of affordability, an estimated 5 million people fell into what is known as the “family glitch,” which prevented them from receiving a subsidy through the marketplace as the determination of whether the coverage met the affordability threshold is focused on self-only coverage, not family. Under the new rule, affordability of employer-sponsored coverage for an employee’s spouse or tax dependents will be based…

Under the Affordable Care Act (ACA) transparency-in-coverage (TiC) rules and provisions of the Consolidated Appropriations Act, 2021 (CAA), group health plan sponsors must both disclose and report detailed information regarding a plan’s prescription drug coverage and costs. There is significant overlap under the two sets of disclosure rules, which has led to confusion regarding compliance. The confusion is even greater since the rules impose two required components for prescription drug cost disclosure – an annual report (Report) to the Centers for Medicare & Medicaid Services (CMS) and a mandatory machine-readable file (MRF). The Report deadline was originally set for last year, but the Departments that enforce the rules delayed the deadline until December 27, 2022. Also, because there is significant overlap in the rules regarding prescription drug costs, the Departments delayed the prescription drug MRF requirement indefinitely pending further regulation and guidance. Recent CMS guidance provided some technical clarifications to…

The U.S. Departments of Health and Human Services, Labor, and the Treasury (the “Departments”) recently released final rules regarding the No Surprises Act. The rules specifically address required independent dispute resolution (IDR) of certain claims and expenses and finalize prior interim final rules relating to information that group health plans must disclose. Federal IDR Process The No Surprises Act required regulators to develop an IDR process to resolve conflicts between payers and providers regarding out-of-network expense amounts. Any disputes unresolved after 30 days of negotiating can be referred by either side to binding arbitration from a certified IDR entity. The IDR entity will consider the qualified payment amount (QPA) – the insurance plan's median contracted rate for the same or similar service in an area – and other relevant submitted information, and then select one side’s suggested payment amount. Under interim final rules issued in October 2021, certified IDR entities…

Per the Kaiser Family Foundation, an estimated 8.2 million Americans will be due rebates for 2022. Further the analysis states that health insurers are expected to pay a total of $1 billion to policyholders.  In light of this, plan sponsors should be prepared to handle any Medical Loss Ratio (MLR) rebates they receive from their insurance issuer in a manner that aligns with applicable rules. The Affordable Care Act (ACA) outlines the requirements private health insurance issuers must follow, including obligations related to premium spending. The ACA requires health insurers to spend at least 80% to 85%, depending on the size of the market, of premium dollars on medical care. The remaining 20% to 15% is reserved for administration, marketing expenses and profit. If these requirements are not met, plans are required to provide annual rebates to the policyholders, the Medical Loss Ratio (MLR) Rebates. These refunds or rebates are…