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…

The Biden Administration’s FY 2023 proposed budget requests increased funds to enforce the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Specifically, the budget would allot $125 million to the states for MHPAEA enforcement. Additionally, President Biden requested an additional $275 million for the Department of Labor (DOL) to perform MHPAEA audits of group health plans over the course of the next 10 years. The proposed budget would also grant authority to the DOL to turn enforcement efforts toward the vendors who design and apply quantitative and non-quantitative treatment limitations (QTL and NQTL) for self-funded group health plans. Currently, the DOL’s authority is limited to the group plan sponsors under ERISA. This shift would allow the DOL to zero in on the parties responsible for the creation and administration of the play provisions, which are typically the plan’s carriers, instead of limiting the audit to the plan sponsor,…

On August 16, 2022, President Biden signed the long-awaited Inflation Reduction Act which aims to reduce rising health care costs and greenhouse gas emissions, as well as raise taxes on corporations. The President’s signature comes after the House and Senate passed the bill last week along party lines following much debate and a deal negotiated between Senators Charles Schumer and Joe Manchin. Within the $430 billion dollar legislation there are several health care related provisions which target the prescription drug costs under Medicare, plan subsidies through the Marketplace, and as a result, a likely expansion for individual coverage health reimbursement arrangements (ICHRAs). A breakdown of the health care provisions is below. For a summary of provisions see here. Medicare Part D Prescription Drug coverage: Cost-sharing for insulin will be capped at $35 per month for Medicare Part D participants, and manufacturers will be required to pay Medicare a rebate if…

Around 30 million adults in the U.S. deal with some form of hearing loss, but only an estimated 1 in 5 have addressed the issue with the use of a hearing assistance device. On August 16, 2022, the U.S. Food and Drug Administration (FDA) issued a final rule that would allow Americans to access hearing aids over-the-counter (OTC). The final rule creates a new category for OTC hearing aids, which will allow individuals with perceived mild to moderate hearing loss to purchase hearing aids directly in-store or online without prescription, medical exam or fitting by an audiologist. Prior to this, insurance coverage for hearing aids has been limited, with Medicare offering no coverage for individuals. This final rule is a result of legislation passed in 2017 by Congress (FDA Reauthorization Act of 2017) which required the FDA to create a category of OTC hearing aids and an Executive Order signed…

The IRS announced a decrease in the ACA Affordability Contribution Rate from 9.61 in 2022 to 9.12 percent for the 2023 plan year, the most significant decrease since the ACA’s commencement. Under the ACA, Applicable Large Employers (ALEs), employers with 50 or more full time and/or full-time equivalent employees, are required to offer affordable minimum value coverage to all full-time employees and their dependents. The contribution percentage is used to determine whether the employer-sponsored health coverage is “affordable” under the ACA’s employer shared responsibility provisions. A plan will be considered affordable under the ACA if the employee’s contribution level for self-only coverage does not exceed the specified percentage of the employee’s household income. Failure to offer affordable coverage may result in employer shared responsibility penalties, which can be substantial. The IRS recognizes that it is difficult for an employer to determine an employee’s household income, so employers are able to…

The summer has seen a flurry of compliance-related activity, most notably the landmark decision issued by the U.S. Supreme Court to overturn Roe v. Wade. As we move into the second half of the 2022 employee benefits compliance calendar, there are a number of important issues to note.SCOTUS OVERTURNS ROE V. WADE; EMPLOYERS WEIGH BENEFITS RESPONSESAs forecast in a leaked draft opinion in May, the U. S. Supreme Court officially overturned Roe v. Wade on June 24. The official opinion specifically held that the U.S. Constitution does not confer a right to abortion; Roe and Casey (the two landmark abortion rights cases) are overruled; and the authority to regulate abortion is returned to the people and their elected representatives. Thus, each state will now have autonomy to decide how it will handle abortion rights within – and potentially beyond – its borders.Employers have been weighing what, if anything, they will do regarding abortion and abortion-related services and expenses under…

July 1, 2022, marks the effective date for plans and issuers to begin posting two Machine-Readable Files (MRF) links to a public website so individuals can readily learn their in-network group health plan costs, as well as historical paid amounts for out-of-network services. Ahead of this deadline, plans and issuers should have communicated with plan sponsors the location of the link and how they can access the information associated with the link. Each MRF must use a non-proprietary, open format to be identified in technical implementation guidance, i.e., JSON, XML, etc. Carriers providing files in PDF format are not in compliance with the required standards.Below are some highlights and next steps for plan sponsors that may be helpful as they continue to navigate this new requirement and make efforts to ensure compliance.Purpose and IntentThe machine-readable files requirement is part of a broader effort to achieve overall pricing transparency in healthcare.…

Employers likely have questions about abortion-related employment protections and healthcare benefits after Friday’s SCOTUS controversial decision that overturned Roe v. Wade. Given the ruling, people in states with strict abortion limitations may end up traveling to other states to receive abortion-related care. Can employees take job-protected leave to obtain such services? What other rights might employees have under federal employment laws? Here are a few points you should keep in mind in light of the June 24 Dobbs v. Jackson Women’s Health Organization decision. Anti-Discrimination Laws Protect Abortion-Related Decisions Employers should understand the workplace protections employees have under existing federal anti-discrimination laws and how they apply to an employee’s decision whether to have an abortion. The Interplay of Employment Discrimination Statutes Title VII of the Civil Rights Act of 1964 bans employment discrimination based on color, national origin, race, religion, and sex. Additionally, in 1978, Congress enacted the Pregnancy Discrimination…

In a 7-2 decision, the U.S. Supreme Court has issued its opinion in Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc., ruling in favor of Marietta Memorial Hospital's health plan. In the Court's opinion, drafted by Justice Brett Kavanaugh, the Court held the plan did not violate a federal statute which obligates private insurers to cover the first 30 months of dialysis following a patient's end-stage renal disease diagnosis. In the opinion, which reversed the judgment of the U.S. Court of Appeals for the Sixth Circuit, Justice Kavanaugh opined, "The question in this case is whether a group health plan that provides limited benefits for outpatient dialysis - but does so uniformly for all plan participants - violates the Medicare Secondary Payer statute. We agree with petitioner Marietta and the United States as amicus curiae that the answer is no."In 2018, DaVita, Inc. sued Marietta Memorial Hospital’s health…

The month of May again brought relatively little major employee benefit compliance guidance from federal agencies. However, there was plenty of activity in the courts to provide useful insight into steps employer plan sponsors can take to safeguard against benefits litigation. DEPARTMENT OF LABOR PROVIDES MENTAL HEALTH CONDITION GUIDANCE UNDER FMLA The U.S. Department of Labor (DOL) released Fact Sheet #280 as well as Frequently Asked Questions (FAQs) about how the Family and Medical Leave Act of 1993 (FMLA) accommodates mental health-related leaves. The DOL’s Wage and Hour Division issued the guidance as part of Mental Health Awareness Month to provide employers additional information on how to handle leave requests for mental health concerns. Among the notable provisions in the guidance – especially given the ongoing COVID-19 pandemic, incidents of gun violence, and news regarding the economy – is a reminder that an FMLA-eligible individual working for an employer subject to FMLA may take…

June 1, 2022 As of July 1, 2022, group health plans must clear one of the first major compliance hurdles required by the Affordable Care Act’s (ACA) Transparency in Coverage (TiC) Final Rules. By that date, plans and insurance carriers must have prepared and posted two machine-readable files (MRFs) to a public website so individuals can readily learn their in-network group health plan costs as well as historical paid amounts for out-of-network services. (A third MRF relating to prescription drugs will be required later and is not subject to the July 1, 2022, deadline.) There is still some confusion surrounding the MRF requirement, so this Advisor is designed to provide important context and actionable steps for plan sponsors to understand their transparency obligations as they cope with the new TiC disclosure requirement. Background The ACA contains numerous provisions requiring medical care and services to be delivered more transparently. The TiC…

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.Previously, this guidance was set to expire April 30, 2022, but has now been extended again until October 31, 2022. DHS has taken steps to evaluate if this policy should be made permanent.…

After several very quiet months this year, April saw renewed compliance activity. The IRS provided guidance on transportation fringe benefits unused due to COVID-19 workplace changes and announced inflation-adjusted amounts for HSAs and HRAs. The Centers for Medicare & Medicaid Services (CMS) announced Medicare Part D rates and the parameters and thresholds for qualified retiree prescription drug coverage. The Department of the Treasury and the IRS issued a proposed rule to base Marketplace premium tax credit (PTC) eligibility on the cost of family health insurance coverage rather than individual coverage to fix the “family glitch” related to PTC eligibility.Treasury Reminds Employers that Unused Transportation Fringe Benefits Cannot Be Cashed Out or Deposited in FSAThe Department of the Treasury released Information Letter 2022-0002 in which the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes) reminded employers the Internal Revenue Code (Code) prohibits cafeteria plans from offering qualified…

The IRS issued Revenue Procedure 2022-24, to announce the 2023 inflation adjusted amounts for health savings accounts (HSAs) under Section 223 of the Internal Revenue Code (Code) and the maximum amount employers may contribute for excepted benefit health reimbursement arrangements (HRAs). Significant increases to the limits are a result of the recent spike in inflation seen in the U.S. HSA Limits For calendar year 2023, the HSA annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,850. The 2023 HSA annual limitation on deductions for an individual with family coverage under a high deductible health plan is $7,750. The IRS guidance provides that for calendar year 2023, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,500 for self-only coverage or $3,000 for family coverage, and the annual out-of-pocket expenses (deductibles, copayments,…

The U.S. Equal Employment Opportunity Commission (EEOC) has announced that the 2021 EEO-1 Component 1 data collection portal is now open. Eligible employers have until May 17, 2022, to submit data to the portal. The EEO-1 Component 1 report is a mandatory annual data collection that requires all private sector employers with 100 or more employees, and federal contractors with 50 or more employees meeting certain criteria, to submit demographic workforce data, including data by race/ethnicity, sex and job categories. The filing by eligible employers of the EEO-1 Component 1 Report is required under section 709(c) of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-8(c),  and 29 CFR 1602.7-.14 and 41 CFR 60-1.7(a). Employers can find additional eligibility information here. In an effort to modernize the filing process, the EEOC has rolled out additional self-service options for filers, as well as provided a…

Under the current 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 (9.61% in 2022). Those who do not have access to affordable employer-based coverage may qualify for a premium tax credit through the healthcare marketplace. As a result of the current definition of affordability, an estimated 5 million people fall into what is known as the “family glitch,” which prevents them from receiving a subsidy through the marketplace as the determination of whether the coverage meets the affordability threshold is focused on the employee’s coverage, not the family member’s. On April 5, 2022, the Treasury Department and Internal Revenue Service (IRS), released a proposed rule that, if enacted, would address this policy loophole in the ACA. This proposed rule is a result of an Executive Order President Biden signed in…

In a 414-5 bipartisan vote, the House of Representatives has passed a bill that, if enacted, is said to improve the retirement savings system in the United States by expanding coverage and increasing retirement savings. The Securing a Strong Retirement Act, colloquially known as Secure Act 2.0 builds on the Setting Every Community Up for Retirement Enhancement Act (SECURE), which was signed into law in December 2019. Some highlights from Secure Act 2.0, include: Most employers would be required to automatically enroll eligible workers in NEW 401(k) plans with an initial 3% contribution rate. The contribution rate would then increase on an annual basis until the contribution reaches 10% of the employee’s salary. Eligible employees would have the opportunity to opt out of enrollment or select a different contribution rate Increase in the age for mandatory distributions to begin. Starting January 1, 2022, the age would increase from 72 to…

In May 2020, the Department of Homeland Security (DHS) instituted a temporary policy which allowed employees to present expired List B identification documents for I-9 purposes. As a reminder, Form I-9 is used to verify the identity and employment authorization of individuals hired for employment in the United States. This relief was temporary and initiated as a means to lessen some of the burdens imposed on issuing authorities as they struggled to timely renew documents in the early stages of the COVID-19 pandemic.Starting May 1, 2022, employers will no longer be able to accept expired identification documents when verifying employee work eligibility for Form I-9. Employers who accepted expired documents between May 1, 2020 and April 30, 2022 will be required to update the Form I-9 of current employees with an unexpired document by July 31, 2022. Acceptable documentation includes a renewed version of the previously presented expired List B…