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IRS Releases 2023 Inflation-Adjusted Amounts for HSAs and HDHPs

The IRS recently issued Rev. Proc. 2022-24, which sets the 2023 calendar year limits on (i) annual contributions that can be made to a health savings account (“HSA”) and (ii) annual deductibles and out-of-pocket maximums under a high deductible health plan (“HDHP”). The 2023 limits are as follows: Annual HSA contribution limits: $3,850 for self-only coverage ($200 increase from 2022) and $7,750 for family coverage ($450 increase from 2022); Minimum HDHP deductibles: $1,500 for self-only coverage ($100 increase from 2022) and $3,000 for family coverage ($200 increase from 2022); and HDHP out-of-pocket maximum limits: $7,500 for self-only coverage ($450 increase from 2022) and $15,000 for family coverage ($900 increase from 2022). Rev. Proc. 2022-24 is available here.

Service Providers May Allow Investment in Cryptocurrency, but Plan Administrators Should Proceed with Extreme Caution

Recently, one of the country’s largest retirement plan providers announced they were adding a digital assets account to their retirement plan platform that would allow employers to make cryptocurrency, such as Bitcoin, a potential investment option for plan participants.  As we previously reported here, prior to that announcement, the DOL had issued guidance cautioning plan fiduciaries to “exercise extreme care” before adding a cryptocurrency option to a retirement plan’s investment lineup or even through a plan’s brokerage window. The DOL guidance went so far as to say that it expected to investigate plans that offer “participant investments in cryptocurrencies and related products, and to take appropriate action to protect the interests of plan participants and beneficiaries with respect to these investments.” The DOL cautioned that plan fiduciaries who allowed cryptocurrency as a plan investment option “should expect to be questioned” about how their decisions to allow investments in cryptocurrency align with their… Continue Reading

Small Employer Deadline to Register under CalSavers Approaching

Employers that employ between five and 50 California-based employees (“Small Employers”) must either offer a retirement savings program or enroll as a participating employer in the CalSavers Retirement Savings Program by June 30, 2022. Small Employers that sponsor their own retirement savings program are required to register as exempt from the CalSavers program by June 30, 2022. Additional information about the CalSavers program and employer registration can be found on the CalSavers program’s employer website here. Failure to register may result in a penalty of $250 per employee for noncompliance within 90 days and $500 per employee if noncompliance continues for more than 180 days.  As a reminder, larger employers with more than 100 California-based employees were required to register as participating or exempt by September 30, 2020, and employers with 50 to 100 California-based employees were required to register as participating or exempt by June 30, 2021.

The OCR’s Resolution of HIPAA Matters Highlights Need for Compliance with Administrative Provisions

Recently, the Office for Civil Rights (the “OCR”) of HHS announced the resolution of three investigations and one matter before an Administration Law Judge (collectively, the “HIPAA Matters”) related to non-compliance with the HIPAA privacy rules (the “HIPAA Rules”) by certain covered entities. The OCR’s investigations and enforcement action regarding the HIPAA Matters generally stemmed from infractions of non-administrative provisions of the HIPAA Rules (including impermissible disclosures of PHI) by the HIPAA covered entity in question. Notably, however, the OCR also specifically identified certain violations of administrative provisions by the covered entities that triggered civil monetary penalties and follow up actions by the covered entities under formal corrective action plans with the OCR. The OCR’s published settlement agreements and notice of final determination regarding the HIPAA Matters (each, an “Agreement”) discussed the following administrative violations by one or more covered entities and imposed the associated remedial actions: 1. The failure to… Continue Reading

New Guidance is a Reminder to Employers about the Transparency in Coverage Rules for Group Health Plans

The DOL, HHS, and Treasury (collectively, the “Departments”) have jointly issued FAQs about the Transparency in Coverage Machine-Readable Files that must be posted online by July 1, 2022.  As we previously discussed in our blog post here, the Transparency in Coverage rules require non-grandfathered group health plans and health insurance issuers to disclose, on a public website, certain information regarding in-network rates, out-of-network allowed amounts and billed charges, and negotiated rates and net prices for prescription drugs through three machine-readable files. Enforcement of the requirement for disclosing in-network and out-of-network data was delayed until July 1, 2022. Enforcement of the prescription drug data disclosure has been delayed indefinitely while the Departments continue to evaluate the appropriateness of this requirement. Generally, in-network rates must be disclosed as dollar amounts; however, the recent FAQs provide an enforcement safe harbor for “percentage-of-billed-charges” contracts and other arrangements where the dollar amount cannot be derived… Continue Reading

Agencies Issue Guide for Disputing Parties under the CAA’s IDR Process

The DOL, HHS, and IRS jointly issued a guide for disputing parties, including employer-sponsored health plans and health care providers, concerning the independent dispute resolution (“IDR”) process that is required under the Consolidated Appropriations Act, 2021 (the “Guide”). Although the Guide does not implement any new or revised legal requirements or associated interpretations regarding the IDR process, the purpose of the Guide is to provide clarity regarding the requirements of the IDR process.  The Guide’s description of the IDR process and related requirements is presented in a user-friendly manner that is accompanied by charts and timelines that outline and highlight certain aspects of the IDR process. Health plan sponsors may have, in many cases, delegated responsibility for fulfillment of the IDR process requirements to third-party service providers such as their health plans’ claims administrators. The Guide serves as a helpful tool for plan sponsors that will need to collaborate with their… Continue Reading

Sixth Circuit Case is a Reminder for Employers to Review Their Voluntary Supplemental Benefit Programs

Many employers offer supplemental benefits, such as optional long-term disability benefits and life insurance, to their employees in addition to the base level of such benefits provided by the employer. Since these benefits are typically fully-insured, the administrative burden that falls on employers is usually minor, unless the employer elects to have a larger role in administering those benefits. However, employers should use care before agreeing to handle additional obligations with respect to those benefits. In a recent opinion of the U.S. Court of Appeals for the Sixth Circuit, the widow of a former participant in an optional term life insurance policy offered by the employer brought claims against the employer for a breach of fiduciary duty under ERISA after she was denied a death benefit payment under the policy. Among other claims, the suit alleged the employer breached its fiduciary duty by mishandling plan assets when the employer (i) collected… Continue Reading

Seventh Circuit Decision Highlights Importance of Understanding Insurance Policy Terms

Over Labor Day weekend in 2014, an employee suffered a heart attack and went to the hospital. The heart attack occurred on a Sunday, and the employee received a substantial raise effective as of Labor Day Monday. The employee briefly returned to the office on the following Wednesday but incurred additional medical complications and was re-hospitalized. Eventually, the employee applied for long-term disability income replacement benefits under the employer’s long-term disability (“LTD”) plan. The underlying LTD policy calculated benefits based on a percentage of an employee’s salary on his “Determination Date”, which is the last day worked just prior to the date the “Disability” began. The policy also had a separate definition of “Actively at Work” that provided, in relevant part, “[u]nless disabled on the prior workday or on the day of absence, an Employee will be considered Actively at Work on … a Saturday, Sunday or holiday that is not… Continue Reading

Case Serves as Reminder to Include Limitations Period in Denial Letters

A recent case from the U.S. District Court for the District of Utah serves as a useful reminder to sponsors of employee group health plans that benefits denial letters should contain the plan’s time limit for filing a lawsuit. In that case, the plan had a 180-day limitation period for bringing legal action, and the plaintiff filed suit after that deadline. The court noted that a number of other courts have interpreted ERISA regulations to require denial letters to include any plan-imposed time limit for filing suit. We previously discussed two such cases on our blog here and here. Finding the plan’s limitation period was unenforceable because it was not included in the final claim denial letter, the court applied the most closely analogous statute of limitations under state law. Employers are reminded to review their template denial letters to ensure the plan’s time limit for filing a lawsuit is… Continue Reading

Increase in Civil Monetary Penalties for Violations of HIPAA and ACA

HHS recently issued a final rule (the “HHS Rule”), which sets out the inflation-adjusted civil monetary penalty (“CMP”) amounts that HHS is authorized to assess or enforce, including for violations of HIPAA and the Affordable Care Act (“ACA”). The following adjusted CMP amounts are applicable to violations that occur after November 2, 2015, for which CMPs are assessed on or after March 17, 2022:   Prior Amount Adjusted Amount Violations under a “did not know/would not have known through exercising reasonable diligence” standard Minimum:Maximum:Calendar Year Cap: $120 $60,226 $1,806,757 $127 $63,973$1,919,173 Violations under a “reasonable cause/not willful neglect” standard Minimum:Maximum:Calendar Year Cap: $1,205 $60,226$1,806,757 $1,280 $63,973$1,919,173 Violations under a “willful neglect” standard, with timely correction Minimum:Maximum:Calendar Year Cap: $12,045 $60,226$1,806,757 $12,794 $63,973 $1,919,173 Violations under a “willful neglect” standard, with untimely correction Minimum:Maximum:Calendar Year Cap: $60,226 $1,806,757$1,806,757 $63,973$1,919,173$1,919,173 In addition, the maximum penalty for each failure by a health insurance… Continue Reading

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November 2022