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IRS Announces New 2023 Health and Welfare Plan Limits

The IRS recently announced the following inflation-adjusted limits for 2023 for certain health and welfare plans: Health flexible spending account limit: increased to $3,050. Qualified transportation fringe benefit monthly limits for parking and transit: each increased to $300. Adoption assistance program limit: increased to $15,950. Qualified Small Employer Health Reimbursement Arrangement limit: increased to $5,850 for individual coverage and $11,800 for family coverage. The above and other 2023 plan limits are available in Rev. Proc. 2022-38 here.

IRS Provides for a New Mid-Year Election Change Event under Cafeteria Plans

In its recent Notice 2022-41 (the “Notice”), the IRS has provided for a new, optional election change event, which may be adopted by Code Section 125 cafeteria plans that operate on a non-calendar year plan year. The Notice was issued in conjunction with final regulations recently promulgated by the Treasury Department under Code Section 36B (“Final Regulations”).  Final Regulations  Pursuant to Code Section 36B, which was originally enacted under the Affordable Care Act, applicable taxpayers who enroll in a qualified health plan through a Health Insurance Exchange (“Exchange Plan”) and are not otherwise eligible for coverage under an employer-sponsored group health plan (“ER Plan”) that provides “minimum value” and is “affordable” are generally entitled to a premium tax credit (“PTC”). Under the prior regulations regarding the PTC, the “affordability” of coverage under the ER Plan for an employee, as well as for each of the employee’s family members, was based… Continue Reading

New FAQs Address Issues Related to Contraceptive Coverage under Group Health Plans

The federal Treasury, DOL, and HHS (collectively, the “Agencies”) jointly issued a new set of FAQs to address various issues regarding the requirement for most employer-provided and other applicable group health plans to cover contraceptives without cost-sharing under the preventive care mandate of the Affordable Care Act (the “Contraceptive Coverage Mandate”). In particular, the FAQs are intended to (i) respond to reports that individuals continue to experience difficulty accessing contraceptive coverage without cost sharing; (ii) clarify application of the Contraceptive Coverage Mandate to fertility awareness-based methods and emergency contraceptives; and (iii) address the preemption of state law by the Contraceptive Coverage Mandate.  Specific issues addressed in the FAQs include the following:  The requirement for plans to cover items and services that are integral to the furnishing of a recommended preventive service, such as anesthesia necessary for a tubal ligation procedure; The requirement for a plan to cover, without cost-sharing, FDA-approved… Continue Reading

Department of Labor Releases Spring 2022 Regulatory Agenda

The DOL recently released its Spring Regulatory Agenda, and it contains several important retirement and welfare plan initiatives for this year. Below is a summary of some of the material items that plan sponsors should be aware of, along with the DOL’s proposed schedule of rulemaking:  Final Pension Benefit Statement Lifetime Illustrations Rule (Final Rule scheduled for August 2022). Note: Under the DOL’s previously issued Interim Final Rule, the inclusion of lifetime illustrations once per year on pension benefit statements became effective in June 2022. Revised procedures for granting prohibited transaction exemptions (the DOL is currently reviewing comments from its Proposed Rule from March 2022). Amendment and restatement of the DOL’s Voluntary Fiduciary Correction Program to expand the scope of eligible transactions and to streamline correction procedures (Interim Final Rule scheduled for July 2022). Amendment of the regulatory definition of the term “fiduciary” under ERISA for those persons who render investment… Continue Reading

Post-Dobbs Subpoenas for Protected Health Information Require Special Scrutiny under HIPAA

The landscape of laws governing the provision of abortion-related services, and coverage of such services under employer-sponsored group health plans, is rapidly changing in the wake of the U.S. Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization, which overturned Roe v. Wade. Prior to Dobbs, numerous states had enacted “trigger laws” prohibiting or restricting abortions, that were effectuated by Dobbs. Other states may now pass similar anti-abortion laws. Some states, such as Texas, have laws in effect that impose potential liability on parties that “aid or abet” abortions. As a result of the Dobbs decision and the fact that many state laws regulating abortions are now effective, compliance and enforcement investigations and lawsuits may arise. For example, plan sponsors of group health plans that provide coverage for abortion services, such as reimbursements for travel expenses incurred to obtain an out-of-state abortion (“Abortion Services”), could find themselves receiving subpoenas… Continue Reading

U.S. Supreme Court Rules Limited Coverage for Dialysis Does Not Violate Medicare Secondary Payer Statute

On June 21, 2022, the U.S. Supreme Court issued its decision in Marietta Memorial Hospital Health Benefit Plan v. DaVita Inc. In this case, an employer-sponsored group health plan paid limited benefits for outpatient dialysis, and DaVita Inc. (the dialysis provider) sued the plan for violating the Medicare Secondary Payer statute (the “MSP Statute”). Generally, the MSP Statute prohibits an employer-sponsored group health plan from (i) differentiating in its benefits coverage between individuals having end stage renal disease (“ESRD”) and other individuals, and (ii) taking into account that an individual is entitled to or eligible for Medicare due to ESRD. For individuals who have ESRD, the primary treatment is renal dialysis, which is very expensive. The U.S. Court of Appeals for the Sixth Circuit previously ruled that the MSP Statute permits disparate-impact liability and that the limited payments for dialysis treatment had a disparate impact on individuals with ESRD. However, in… Continue Reading

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

New Requirement for Group Health Plans and Insurance Companies to Cover At-Home COVID-19 Testing Costs Effective Saturday, January 15th

Beginning January 15, 2022, insurance companies and group health plans will be required to cover the cost of over-the-counter, at-home COVID-19 tests authorized by the Food and Drug Administration (“OTC Tests”) that are purchased on or after that date. Health plans and insurance companies must provide coverage for up to eight individual OTC Tests per month for each enrolled individual (e.g., a family of four will be covered for up to 32 OTC Tests per month). If the health plan or insurer sets up a network of preferred locations for participants to obtain OTC Tests with no up-front cost, then the health plan and/or insurer may limit the amount it reimburses for OTC Tests purchased outside such network to $12 per test (or the actual cost of the OTC Test, if lower). Otherwise, the health plan and/or insurer must reimburse the full cost of the OTC Test. FAQs issued by… Continue Reading

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