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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  Final Regulations  Pursuant to Code Section 36B, which was originally enacted under the Affordable Care Act, applicable taxpayers who enroll in a qualified health plan through a Health Insurance Exchange (“Exchange Plan”) and are not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

DOL Responds to Texas Court Invalidating Portions of the No Surprises Act Regulations

The United States District Court for the Eastern District of Texas recently invalidated portions of an interim final rule (the “Rule”) issued by the Departments of Health and Human Services, Labor, and the Treasury (the “Departments”) relating to aspects of the federal independent dispute resolution process under the No Surprises Act (the “Act”). Generally, the court vacated the portion of the Rule that creates a rebuttable presumption that the amount closest to the qualifying payment amount (generally, the average contracted rate) is the proper payment amount. The court found those portions of the Rule conflicted with the Act. In response, the DOL issued a memorandum emphasizing that all other rulemaking by the Departments under the Act has not been affected and thus all such other rulemaking is still in force. Only guidance documents that are based on, or refer to, the portions of the Rule that were invalidated were withdrawn… 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

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

IRS Provides Further Clarification Regarding COBRA Deadline Extensions

Last year, the DOL and IRS issued joint guidance providing that certain plan related deadlines, including the 60-day deadline to elect COBRA continuation coverage and the 45-day deadline to make COBRA premium payments, would be suspended during the “COVID-19 outbreak period” (i.e., the time period from March 1, 2020 until 60 days after the end of the national emergency or other date announced by the government) for up to one year. The DOL released other guidance earlier this year clarifying that the one-year deadline suspension is applied on an individual basis (see our prior blog post on that guidance here). Recently, the IRS issued Notice 2021-58 (the “Notice”), which clarifies that the extended timeframes for an individual to (i) elect COBRA continuation coverage, and (ii) make initial and subsequent COBRA premium payments, generally run concurrently. The Notice provides that if an individual elects COBRA coverage after the 60-day election period… 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

Departments Solicit Comments regarding Consolidated Appropriations Act of 2021 Prescription Drug Reporting Requirements

Under the Consolidated Appropriations Act of 2021 (the ?Ç£CAA?Ç¥), employer-sponsored group health plans will be required to submit to the DOL and/or Treasury Department a new annual report containing information pertaining to plan participation and prescription drug coverage provided under the plan during the previous plan year (the ?Ç£Rx Report?Ç¥). Among other items, the Rx Report must include information regarding (i) claims paid under the plan for the 50 most frequently dispensed brand prescription drugs (?Ç£Claims Paid Items?Ç¥), (ii) annual spending for the 50 most costly prescription drugs (?Ç£Spending Items?Ç¥), and (iii) rebates, fees, and other remuneration paid by drug manufacturers to the plan, its administrators, or service providers (?Ç£Rebate Items?Ç¥).  The first Rx Report is due by December 27, 2021, and each subsequent Rx Report is due by each June 1. Recently, the DOL, Treasury Department, and HHS (the ?Ç£Agencies?Ç¥) jointly issued a ?Ç£request for information?Ç¥ (the ?Ç£RFI?Ç¥) seeking public… Continue Reading

Final 2022 ACA Cost-Sharing Limits are Lower Than Proposed Limits

The DOL, HHS, and Treasury recently published FAQs About Affordable Care Act Implementation Part 46 (the ?Ç£FAQs?Ç¥). The FAQs specify that the maximum annual limitations on cost-sharing for the 2022 plan year are (i) $8,700 for self-only coverage, and (ii) $17,400 for other than self-only coverage, which we previously discussed in our blog post here. These final limitations reflect a reduction in the amounts originally proposed by HHS (i.e., $9,100 for self-only coverage and $18,200 for other than self-only coverage), and the FAQs provide an explanation of why the finalized limits are different from the proposed limits. The FAQs are available?áhere.

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

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