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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

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

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

IRS Increases Dollar Amount Basis of PCORI Fee

The IRS recently issued Notice 2022-4, which increases the dollar amount that is the basis of the fee established under the Affordable Care Act to help fund the Patient-Centered Outcomes Research Institute (the “PCORI Fee”). The PCORI Fee is imposed on plan sponsors of applicable self-funded health plans and issuers of specified health insurance policies. The PCORI Fee is based on a flat dollar amount multiplied by the average number of lives covered under the plan for the applicable plan year. The dollar amount for plan and policy years that ended on or after October 1, 2020 and before October 1, 2021, was $2.66. Notice 2022-4 increases the dollar amount for plan and policy years that end on or after October 1, 2021 and before October 1, 2022, to $2.79. IRS Notice 2022-4 is available here.

IRS Proposes Permanent Extension to Furnish Forms 1095 and Elimination of Good Faith Transition Relief

The IRS recently issued proposed regulations providing an automatic 30-day extension of the January 31st due date for furnishing Forms 1095-B and 1095-C to individuals, as required for compliance with the Affordable Care Act. In prior years, the IRS granted similar relief for employers to provide these forms to individuals; however, the proposed regulations would make this extension permanent, beginning with reporting due for the 2021 tax year. Consistent with prior IRS guidance, the proposed regulations do not extend the due date to file Forms 1094-B, 1095-B, 1094-C, or 1095-C with the IRS, which are due by February 28th (March 31st if filed electronically). In addition, the proposed regulations eliminate the good-faith transition relief from penalties that apply for incorrect or incomplete information reported on those forms, as furnished to individuals or filed with the IRS, for the 2021 tax year and subsequent years. The proposed regulations are available here.

Agencies Issue FAQs Clarifying Wellness Program and Other Health Plan Requirements Related to COVID-19 Vaccines

The DOL, Treasury Department, and HHS have jointly issued a set of FAQs that provide helpful clarifications regarding certain requirements under the CARES Act, the HIPAA nondiscrimination rules (the “Nondiscrimination Rules”), and the Affordable Care Act (the “ACA”) related to COVID-19 vaccines (“Vaccines”).  Wellness Programs under the Nondiscrimination Rules Among other items, the FAQs provide guidance under the Nondiscrimination Rules regarding an employer’s imposition of a premium discount under a wellness program for an individual’s receipt of a Vaccine. If the wellness program is itself, or is part of, a group health plan that is not otherwise exempt from the Nondiscrimination Rules, the FAQs confirm that a premium discount would constitute a “health-contingent, activity-only” wellness program that must, among other requirements, offer a “reasonable alternative standard” to qualify for the discount for individuals for whom it is unreasonably difficult due to a medical condition, or medically inadvisable, to receive the… Continue Reading

Departments Release FAQs about the No Surprises Act and Other Transparency Provisions for Group Health Plans

The DOL, HHS, and Treasury (collectively, the “Departments”) jointly released FAQs addressing the implementation of certain requirements under the No Surprises Act of the Consolidated Appropriations Act of 2021 (the “CAA”), which are generally effective for plan years beginning on or after January 1, 2022, and other transparency provisions of the Affordable Care Act (the “ACA”) and CAA. The FAQs address the following topics: Transparency in Coverage Machine-Readable Files, Price Comparison Tools, Transparency in Plan or Insurance Identification Cards, Good Faith Estimate, Advanced Explanation of Benefits, Prohibition on Gag Clauses on Price and Quality Data, Protecting Patients and Improving the Accuracy of Provider Directory Information, Continuity of Care, Grandfathered Health Plans, and Reporting on Pharmacy Benefits and Drug Costs. Notably, the Departments state in the FAQs that enforcement of the requirement that plans publish machine-readable files relating to certain in-network and out-of-network information will be deferred until July 1, 2022… Continue Reading

Keeping Your Wellness Program Healthy

For years, employers have used wellness programs with the hope they would help improve employees’ overall health while simultaneously reducing group health plan costs. The pandemic has presented challenges for wellness programs though, as employees have found it more difficult to meet the requirements for discounts because of lockdowns and fears of COVID-19. To address these challenges, some employers are considering modifications to their programs to allow employees to qualify for discounts if they obtain a flu or COVID-19 vaccine. Before adopting any changes, employers should use caution, as wellness programs are subject to numerous legal requirements, including requirements under the ACA, ERISA, HIPAA, and the Americans with Disabilities Act. By carefully evaluating changes and considering the myriad of legal requirements applicable to wellness programs prior to implementing any changes, plan sponsors can avoid jeopardizing the legal health of their wellness programs.  Our prior blog posts regarding wellness program compliance… Continue Reading

Supreme Court Rejects Challenge to the Affordable Care Act

On June 17, 2021, the U.S. Supreme Court in California v. Texas rejected a challenge to the Affordable Care Act (the ?Ç£ACA?Ç¥) by holding the plaintiffs lacked standing to bring suit. In 2018, Texas, along with a coalition of over a dozen states and two individuals, brought suit challenging the constitutionality of the individual mandate under the ACA after the penalty for failing to comply was set to zero dollars in 2017. The Supreme Court held that, because the individual mandate is unenforceable, the plaintiffs lacked standing because they had not shown a past or future injury that is fairly traceable. Notably, the Supreme Court did not rule on the constitutionality of the ACA. California v. Texas, 593 U.S. ___ (2021) is available here. 

HHS Announces Final 2022 Cost-Sharing Maximums under the Affordable Care Act

HHS recently issued its final ?Ç£Notice of Benefit and Payment Parameters for 2022?Ç¥ (the ?Ç£Notice?Ç¥), which includes the maximum annual limitations on cost-sharing that will apply to ?Ç£essential health benefits?Ç¥ in 2022 under non-grandfathered group health plans subject to the Affordable Care Act. For this purpose, cost-sharing generally includes deductibles, coinsurance, copayments, and other required expenditures that are qualified medical expenses with respect to essential health benefits available under the plan. The 2022 limitations are (i) $8,700 for self-only coverage and (ii) $17,400 for other than self-only coverage. The Notice is available here.

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