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New FAQs Address Interaction of No Surprises Act’s Federal IDR Process with DOL Claims Regulations

A set of FAQs recently issued by HHS’s Centers for Medicare and Medicaid Services provide additional guidance regarding the federal independent dispute resolution process (“Federal IDR Process”) that was established under the “No Surprises Act” (the “Act”), enacted as part of the Consolidated Appropriations Act of 2021. The purpose of the Federal IDR Process is to resolve certain types of payment disputes between group health plans or health insurance issuers (each, a “Plan”) and out-of-network health care providers, facilities, and providers of air ambulance services (collectively, “OON Providers”). These disputes concern the out-of-network rates that Plans will pay for emergency, air ambulance, and certain other services subject to the Act that are furnished to plan participants by OON Providers. The Federal IDR Process generally applies to Plans effective for plan (or policy) years beginning on or after January 1, 2022, and to OON Providers beginning on January 1, 2022.  Among… Continue Reading

Reminder to Check Your Form 1094-C Before It’s Filed with IRS

Applicable large employers have until February 28th (March 31st if filed electronically) to submit their Forms 1094-C and 1095-C to the IRS for compliance with the ACA. The Form 1094-C is used, in part, to report to the IRS whether the employer has offered health coverage to at least 95% of its full-time employees. In our experience, most employers intend to meet this 95% threshold in order to avoid the extremely large penalty that otherwise is imposed under the ACA. However, some employers are reporting they did NOT meet this 95% threshold on their Forms 1094-C, even though they did, usually as a result of an error made by a service provider completing the form. This results in the IRS sending a notice of a proposed assessment of the employer shared responsibility penalty under the ACA. If an employer does not timely respond to the notice, the IRS will send… Continue Reading

FAQs Provide Additional Guidance Regarding At-Home COVID-19 Testing Coverage Requirements

As discussed in our prior blog post here, employer-provided group health plans, and insurers and other issuers, are required to cover the cost of over-the-counter, at-home COVID-19 tests (“OTC Tests”) authorized by the Food and Drug Administration (“FDA”). The DOL, HHS, and the Treasury Department (collectively, the “Departments”) previously issued guidance establishing a safe harbor that, if satisfied, allows plans and issuers to limit the reimbursement of OTC Tests to $12 per test (or the actual cost of the OTC Test, if lower). The Departments recently issued additional guidance in the form of FAQs clarifying how plans and issuers may comply with the safe harbor OTC Test coverage requirements. The FAQs clarify that whether a plan or issuer satisfies the safe harbor by providing adequate access to OTC Tests through its direct coverage program will depend on the particular facts and circumstances, but will generally require that OTC Tests are… Continue Reading

Small Perquisites Can Cause Big Trouble

Employers often provide employees with special rewards or prizes as a means to boost morale, recognize achievements, acknowledge long-term service, and retain employees. These special perquisites can take on many forms – anything from holiday turkeys to gift cards to allowing employees to take home the employer’s products for free or at a discount. While these small additional benefits may seem like “gifts” from the employer to the employee, what employers sometimes fail to realize is that there are no “gifts” in the employment context, regardless of the employer’s intent. Generally, anything provided to an employee by an employer is includable in the employee’s taxable income unless specifically excluded under the Code.   Common exclusions for perquisites to employees include: no-additional-cost services, qualified employee discounts, working condition fringes, and de minimis fringes. All of these exclusions have specific requirements and rules to qualify for the exclusion. For example, for a benefit… Continue Reading

Supreme Court Clarifies that Fiduciaries Must Monitor All Plan Investment Options

Participants in Northwestern University’s two defined contribution plans sued the university and other plan fiduciaries claiming that the plans’ investment lineups, which together contained over 400 options, were confusing to employee investors. According to plan participants, the fiduciaries breached their duties under ERISA (among other reasons) because the plan investment lineups contained imprudent investment options, including high-fee “retail” share class mutual funds and annuities. The district court dismissed the claims, and the Seventh Circuit upheld the dismissal, reasoning that because the plan contained a broad range of investment options from which participants could select, fiduciaries did not breach any fiduciary duty. In a unanimous decision, the Supreme Court rejected that reasoning as being directly inconsistent with the Court’s prior holding in Tibble v. Edison Int’l, 575 U. S. 523, 530 (2015) in which it held that ERISA imposes on the responsible plan fiduciary a duty to monitor all plan investments and remove… Continue Reading

DOL Finds No One Has a Compliant Mental Health Parity Comparative Analysis

The DOL recently posted its “2022 MHPAEA Report to Congress”, which highlights the DOL’s recent emphasis on greater MHPAEA enforcement and also discusses the significant resources dedicated to that effort. “MHPAEA” is the acronym for the Mental Health Parity and Addiction Equity Act of 2008; i.e. the mental health and substance use disorder rules that apply to employer-sponsored group health plans. The MHPAEA was amended by the Consolidated Appropriations Act of 2021 to require plans to provide a written comparative analysis of their nonquantitative treatment limitations on mental health and substance use disorder benefits to the DOL upon request. See our prior blog posts on this issue here, here, and here. Between April 9, 2021 and October 31, 2021, the DOL issued 156 letters to plans and issuers requesting comparative analyses: 141 to plans (7 to plans providing fully-insured coverage and 134 to plans providing self-funded coverage) and 15 to issuers. The DOL… Continue Reading

February 2022