A Change Would Do You Good, But Do The Section 125 Cafeteria Plan Rules Permit It?

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by Elizabeth Nedrow

Inevitably, an employee will wake up from their holiday food coma and realize that they made a mistake in open enrollment. “But I didn’t mean to elect family coverage! My spouse is covering the kids this year!” Employers are allowed to set enrollment rules for their self-funded medical plans. One response to the employee is the hard line that the door was closed at the end of the enrollment period. But what if you want to be more flexible?

If the employee catches their mistake before the ball drops on New Year’s Eve, the IRS won’t care. But if the question comes up in January, it’s likely too late. The IRS’s rules on cafeteria plan elections don’t make any exception for mistake. Elections can only be changed if the employee has a change in status event like a divorce or new dependent. Read more

Signed, Sealed, Delivered … Have You Completed Your Plan’s “No Gag Clauses” Attestation?

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by Becky Achten

One of the many benefits-related provisions in the Consolidated Appropriations Act of 2021 prohibits the use of “gag clauses” in group health plan agreements. Before this law, medical plan service agreements would often include provisions preventing the employer from sharing data like pricing and health plan outcomes available to another party. Hopefully employers have worked to make sure that there are no such clauses in their agreements. But there’s one more step on the compliance ladder. Beginning in 2023, plans must annually attest to their compliance with the gag clause prohibition. Read more

The Time Has Come, A Fact’s A Fact: Consider Adding a Welfare Plan Committee

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by Brenda Berg

The time may have come to add a welfare plan committee to your company’s governance of employee benefit plans. New legal obligations and other developments impose fiduciary risks for welfare plans similar to what already exist for retirement plans.

Most employers that sponsor a 401(k) plan or other retirement plan set up a committee to administer and oversee the plan. This is generally a best practice to ensure that the plan is properly administered in compliance with employee benefits laws and, for plans subject to the Employee Retirement Security Act of 1974 (ERISA), to have a process for following ERISA fiduciary duties. Fiduciary duties include acting prudently and in the best interests of participants, such as in overseeing service providers and monitoring plan fees. Read more

Better Hide the Wine … Employer Considerations as the DOL Doubles Down on Mental Health Parity Compliance in New Proposed Regulations

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by Alex Smith

The Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of Treasury (collectively, the Departments) recently issued proposed Mental Health Parity and Addiction Equity Act (MHPAEA) regulations and their second joint report to Congress regarding their MHPAEA enforcement activities as required under the MHPAEA and the Consolidated Appropriations Act, 2021 (CAA).

In addition, the DOL issued Technical Release 2023-01P, requesting comments on potential data requirements related to non-quantitative treatment limitations (NQTLs) and network composition. The proposed regulations and Technical Release indicate that employers can expect increased compliance obligations related to NQTLs and the NQTL comparative analysis reporting and disclosure requirements established by the CAA. For additional information about the CAA’s MHPAEA NQTL comparative analysis reporting and disclosure requirements, please see our blog posts from 2022 and 2021. Read more

It’s a Roller Coaster … Employer Considerations After Court Invalidates ACA Preventive Care Mandate

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by Alex Smith

Since the Affordable Care Act (“ACA”) became law in 2010, numerous groups have attempted to invalidate the ACA or specific parts of the ACA through litigation. Even after a number of plaintiffs unsuccessfully attempted to invalidate the ACA over the past dozen years, a Federal district court judge in Texas recently invalidated the ACA’s requirement that non-grandfathered group health plans provide preventive care services with an “A” or “B” rating in the current recommendations from the United States Preventive Services Task Force (e.g., certain cancer screenings, depression screening, statins to prevent heart disease, etc.) with no cost sharing. In addition, the court ruled that the requirement that plans cover PrEP HIV medications cannot be enforced against plan sponsors with religious objections. The ACA’s other preventive care mandates remain in effect. Read more

It Doesn’t Have To Be That Way: Negotiating Good Service Provider Agreements Is More Important than Ever

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by Bret F. Busacker

It may be an understatement to say that compliance with benefit plan laws and regulations is becoming increasingly more complicated. In my experience, the COVID era has brought about some of the widest-sweeping changes on the burden of administering benefit plans in some time.

There has been major evolution around service provider fee disclosure, DOL reporting and disclosure on mental health parity and disclosure of plan costs, new claims procedure rights, expanded expectations around Cyber Security protections, and expansion of the use of ESG and crypto currency (and on-again, off-again regulatory efforts). Read more

Closing Time…for the COVID-19 National Emergency and Public Health Emergency

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by Benjamin Gibbons

The Biden administration announced on January 30 that the COVID-19 national emergency and the public health emergency will be coming to an end after May 11, 2023. The national emergency is currently set to expire on March 1, while the public health emergency is set to expire on April 11. The President intends to extend both of these emergency declarations through May 11, at which point in time he will issue a declaration to end the emergencies. Read more

I Want a New Drug…Prescription Drug Data Collection Reporting is Due December 27th

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by Becky Achten

Plan sponsors are ultimately responsible for compliance with the Prescription Drug Data Collection (RxDC) required reporting for their group health plans—and there’s no time to waste since the reporting is due by December 27, 2022. But information to complete one of the data files, the D1 (premium/cost information), may not be available to the Third Party Administrator (TPA) filing the report and, thus, may be incomplete. What’s a plan sponsor to do?

As background, the Consolidated Appropriations Act, 2021 (CAA) requires group health plans and health insurance issuers to submit certain information about health care and prescription drug spending to the Department of Health and Human Services, Department of Labor, and Department of the Treasury (collectively, the Departments) annually. The reporting consists of a plan identifier file, eight separate data files, and a narrative response. Read more

We Are Family – IRS Regulations Fix the “Family Glitch” in Connection with ACA Coverage

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by Elizabeth Nedrow

One of the key remaining features of the Affordable Care Act (ACA) is that certain employers must offer their employees medical coverage, or else pay a penalty. The details of that “employer shared responsibility payment” (ESRP) are many. One of those details is that the employer coverage must be “affordable.” Affordability looks at how much of an employee’s household income goes toward premiums.

As originally implemented, affordability was measured by reference to the premiums charged for employee-only coverage. The premium cost for family or other tiers of coverage wasn’t taken into account. Some critics called this the “family glitch.” Starting in 2023, that changes. New IRS regulations require that in 2023, affordability is measured by looking at the employee’s premium cost for family coverage. Read more

Gimme, Gimme, Gimme, My Required Notices

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by Leslie Thomson

Sponsors of self-funded group health plans are required to notify enrollees about the availability of the plan’s notice of privacy practices and how enrollees can obtain a copy of such notice. This must be done at least once every three years. However, many sponsors satisfy this obligation on behalf of their group health plans by including information regarding the availability of the notice in their plan’s annual enrollment materials. Read more