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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 2022 Health and Welfare Benefits Limits: In Time for Open Enrollment?

The IRS published increased limits for 2022 for various health and welfare benefits, including: Health flexible spending account limit increased to $2,850 (from $2,750); Qualified transportation fringe benefit limit for parking and transit each increased to $280 (from $270); Adoption assistance program limit increased to $14,890 (from $14,400); and Qualified Small Employer Health Reimbursement Arrangement limit increased to $5,450 for individual coverage and $11,050 for family coverage (from $5,300 and $10,700, respectively). An employer that wants to incorporate these increased limits into its plans should determine whether the plans are drafted to automatically reflect the increased limits or whether amendments would be required. If a plan (including a health flexible spending account) is drafted to automatically incorporate any increased limits, the plan sponsor should communicate the increased limits to participants to permit changes during open enrollment for the upcoming plan year. The list of 2022 plan limits can be found in… Continue Reading

Future Mental Health Parity Enforcement Efforts

As discussed in our blog post here, effective as of February 10, 2021, an employer-sponsored group health plan that imposes nonquantitative treatment limitations (?Ç£NQTLs?Ç¥) on mental health or substance use disorder (?Ç£MH/SUD?Ç¥) benefits must have documentation of a ?Ç£comparative analysis?Ç¥ that must demonstrate the NQTLs imposed under the plan for MH/SUD benefits are not more restrictive than the NQTLs that apply to substantially all medical/surgical benefits in a particular classification. Generally, an NQTL is a limitation on the scope of benefits for treatment that is not expressed numerically (e.g., a prior authorization requirement). Recent DOL FAQs state that, in the near term, the DOL expects to focus on the following NQTLs in its enforcement efforts: Prior authorization requirements for in-network and out-of-network inpatient services; Concurrent review for in-network and out-of-network inpatient and outpatient services; Standards for provider admission to participate in a network, including reimbursement rates; and Out-of-network reimbursement rates… Continue Reading

IRS Announces that Purchases of Personal Protective Equipment are Tax Deductible

In Announcement 2021-7 (the ?Ç£Announcement?Ç¥), the IRS clarified that the costs to purchase personal protective equipment (?Ç£PPE?Ç¥), such as masks, hand sanitizers, and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19, are tax deductible as a medical expense. Specifically, the amounts paid for PPE will be treated as amounts paid for medical care under Section 213(d) of the Internal Revenue Code. The costs of PPE are also eligible to be paid or reimbursed by health flexible spending arrangements, Archer medical savings accounts, health reimbursement arrangements, and health savings accounts. However, if the PPE expense is paid or reimbursed by such an arrangement or account, then the expense will not be tax deductible as a medical expense. The IRS also stated that group health plans may be amended to provide for the reimbursement of PPE expenses incurred for any period beginning on or after January 1, 2020… Continue Reading

Employee Benefits Regulations Potentially Impacted by the Biden Administration?ÇÖs Regulatory Freeze

On January 20, 2021, the Biden Administration issued a memorandum (the ?Ç£Memo?Ç¥) announcing a regulatory freeze on regulations that have not taken effect as of the date of the Memo. Specifically, the Memo recommends postponing the effective date of any regulation that has been issued, but has not taken effect, for 60 days from the date of the Memo. The Memo further directs that regulations not yet published in the Federal Register be immediately withdrawn for review. Listed below are some of the proposed and final regulations related to employee benefits that may be subject to withdrawal or postponement under the Memo: Prohibited Transaction Exemption 2020-02 ?Çô Improving Investment Advice for Workers & Retirees. Final Rule. Application of the Employer Shared Responsibility Provisions and Certain Nondiscrimination Rules to Health Reimbursement Arrangements and Other Account-Based Group Health Plans Integrated with Individual Health Insurance Coverage or Medicare. Final Rule. Pension Benefit Statements-Lifetime… Continue Reading

Before Cleaning Out Files, Brush Up on Record Retention Requirements

Our world is filled with paper and electronic records, and the HR departments at most companies are no exception. Enrollment forms, notices, plan documents, summary plan descriptions, benefit statements, and service records are just a few of the records that fill the HR department?ÇÖs file cabinets and computer storage. While it might be tempting to clean out files, plan sponsors should exercise care before disposing of any files relating to benefits under a plan. A clean desk today could create headaches tomorrow. Generally, ERISA requires an employer to retain plan records to support plan filings, including the annual Form 5500, for at least six years from the filing date (ERISA ?º107) and to maintain records for each employee sufficient to determine the benefits due or that may become due to such employee (ERISA ?º209), with no time limit on such requirement. In addition, HIPAA requires retention of the policies and… Continue Reading

Regulations Provide for More Cost Transparency in Health Coverage

The federal Departments of Health and Human Services, Labor, and the Treasury (collectively, the ?Ç£Departments?Ç¥) have jointly issued final regulations that are intended to provide for more transparency in health coverage (the ?Ç£Regulations?Ç¥). The Regulations have important implications for employer sponsors of certain group health plans (?Ç£Plans?Ç¥) and health insurers. The Regulations do not apply to health plans that are grandfathered under the Affordable Care Act, health reimbursement arrangements, certain other account-based group health plans, or short-term limited duration insurance. The Regulations require two key forms of disclosures (collectively, the ?Ç£Disclosures?Ç¥) in order to provide for this improved transparency: Self-Service Disclosure. First, the Regulations require Plans and insurers in the individual and group markets to disclose certain cost-sharing information upon request to a participant, beneficiary, or enrollee (or his or her authorized representative), including (a) an estimate of the individual?ÇÖs cost-sharing liability for covered items or services furnished by a… Continue Reading

Payments for Certain Healthcare Arrangements are Tax Deductible

The IRS recently issued proposed regulations that?áaddress the treatment of amounts paid by an individual for a ?Ç£direct primary care arrangement?Ç¥ or a ?Ç£health care sharing ministry?Ç¥ (collectively, the ?Ç£Arrangements?Ç¥) as being tax-deductible ?Ç£medical care expenses?Ç¥ under Section 213 of the Internal Revenue Code (the ?Ç£Code?Ç¥). Under the proposed regulations, a direct primary care arrangement (?Ç£DPC Arrangement?Ç¥) is defined as a contract between the individual and one or more primary care physicians pursuant to which the physician(s) agree to provide medical care for a fixed annual or periodic fee without billing a third party. A health care sharing ministry (?Ç£Sharing Ministry?Ç¥) is defined as a tax-exempt organization under Section 501(c)(3) of the Code that meets specified requirements, including that its members share a common set of ethical or religious beliefs and share medical expenses in accordance with those beliefs. HSAs and the Arrangements. The preamble to the proposed regulations confirms… Continue Reading

COVID-19 Relief ?Çô Added Flexibility to 125 Cafeteria Plans

Prospective Mid-Year Election Changes IRS Notice 2020-29 allows employers to amend cafeteria plans to permit employees to make the following prospective mid-year election changes (including an initial election) for employer-sponsored health coverage, health flexible spending accounts (?Ç£FSAs?Ç¥), and dependent care FSAs during calendar year 2020, regardless of whether the basis for the election change satisfies the ?Ç£change in status?Ç¥ rules under Treas. Reg.  ?º1.125-4: Make a new election for employer-sponsored health coverage, if the employee initially declined to elect employer-sponsored health coverage; Revoke an existing election for employer-sponsored health coverage and make a new election to enroll in different health coverage sponsored by the same employer (including changing enrollment from self-only coverage to family coverage); Revoke an existing election for employer-sponsored health coverage, provided that the employee attests in writing that the employee is enrolled, or immediately will enroll, in other health coverage not sponsored by the employer; Revoke an… Continue Reading

EMPLOYEE BENEFIT/EXECUTIVE COMPENSATION CHANGES MADE BY THE CARES ACT

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the ?Ç£CARES Act?Ç¥). This historic $2 trillion relief package received bipartisan support and is part of the third wave of federal government support as the nation copes with the acute economic fallout from the coronavirus (COVID-19) pandemic.  Some of the key provisions of the CARES Act that apply to health and welfare plans, educational assistance programs, retirement plans, executive compensation programs, and employment and payroll taxes are outlined below. Health and Welfare Plans Q1.      What COVID-19 testing and treatment is our company?ÇÖs employer-sponsored group health plan required to cover? The Families First Coronavirus Response Act (?Ç£FFCRA?Ç¥) requires an employer-sponsored group health plan (including a grandfathered plan under the Affordable Care Act (?Ç£ACA?Ç¥)) (a ?Ç£Plan?Ç¥) to provide coverage for COVID-19 diagnostic testing and services related to the diagnostic testing without any cost sharing (including deductibles, copayments, and… Continue Reading

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