Compliance Updates

On May 16, 2023, the Internal Revenue Service released updates to the maximum annual 2024 contribution limits for health savings accounts (HSAs) under high deductible health plans (HDHPs). These limits, which have increased slightly from 2023, apply to both individual and family coverage. The updates also include deductible minimums and out-of-pocket (OOP) expense limits for HDHPs and an increase to the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs). Of note, the HSA, HDHP, and out-of-pocket thresholds apply for the 2024 calendar year, while the HRA maximum applies to the 2024 plan year.

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On April 10, 2023, President Biden signed H.J. Res. 7 into law, thereby ending the national state of emergency related to COVID-19 that was declared under the National Emergencies Act. Separately, the Biden Administration has announced that May 11, 2023 will be the last day of the National Public Health Emergency (the “PHE”) declared by the Department of Health and Human Services and its target date for wrapping up other COVID-19-related emergency actions. Furthermore, on April 1, 2023, state governments resumed conducting Medicaid eligibility determinations, a routine process that was halted in the spring of 2020 due to COVID-19. On March 29, 2023, the Departments of Labor, Health and Human Services, and Treasury issued FAQs explaining the impact that the end of these emergencies and the resumption of these Medicaid determinations will have on health plans. The key takeaways from this new guidance are outlined in the attached.

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Last Thursday, U.S. District Court Judge Reed O’Connor of the Northern District of Texas issued a final judgment that strikes down portions of the Affordable Care Act’s (ACA) preventive care coverage requirement. The ACA requires the following preventive care services be provided to participants without cost-sharing:

• Services with an A or B rating in the current recommendations of the U.S. Preventive Services Task Force (USPSTF);
• Preventive care and screenings for infants, children, and adolescents in comprehensive guidelines supported by the Health Resources and Services Administration (HRSA);
• Preventive care and screenings for women’s health specified in HRSA guidelines; and
• Immunizations recommended by the Advisory Committee on Immunization Practices (ACIP).

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The federal Centers for Medicare and Medicaid Services released the 2022 instructions for the prescription drug and health care spending data collection (RxDC) requirement on Monday, March 27, 2022. RxDC is the new federal health and prescription drug claims and plan spending reporting requirement that affects employer group health benefit plans of all sizes and funding structures. Calendar year 2022 reports are due by June 1, 2023. Notably, while “good faith” compliance was the standard applied to 2020 and 2021 RxDC reporting, we do not anticipate a similar standard to be adopted for the 2022 reporting year.

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The Affordable Care Act (ACA) requires applicable large employers (ALEs), meaning employers that averaged at least fifty full-time employees (including full-time equivalent employees) during the preceding calendar year, to offer at least 95% of their full-time employees and the children of those employees who are under age 26 medical coverage that qualifies as minimum essential coverage. The ACA also requires that ALEs offer all their full-time employees medical coverage that is both affordable and provides minimum value. Failure to comply with any one of these requirements can lead to employer shared responsibility (ESRP) or “employer mandate” tax penalties, which are adjusted annually for inflation. The Internal Revenue Service (IRS) just released the employer mandate penalty amounts for the 2024 calendar year.

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The new compliance obligations that the Consolidated Appropriations Act of 2021 (CAA, 21) created for employer-sponsored plans can seem endless at times. One of the lesser-known parts of the CAA, 21 is the prohibition on “gag clauses” within provider agreements that restrict access to price and quality information. Under the CAA, 21, these gag clauses have been prohibited since December 27, 2020, but they only gained prominence recently when federal guidance was issued on February 23, 2023 in the form of agency FAQs. The FAQs make it clear that: (1) gag clauses cannot be included in a health plan contract, and (2) attestations must be filed by or on behalf of the plans indicating that such gag clauses are not in place. The first Gag Clause Prohibition Compliance Attestation is due by December 31, 2023.

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On February 23, 2023, the Internal Revenue Service (IRS) issued a final regulation that requires electronic form filing for common employer form series, such as Form W-2, the Form 1099 series, and the ACA reporting Form 1094 and Form 1095 series. As of January 1, 2024, businesses that file ten or more of these returns during the applicable calendar year will need to file electronically, at which point paper filing will become largely unavailable to employers. For returns due in calendar year 2023, the mandatory electronic filing threshold will remain at 250 returns. Please note that there is no change to the existing requirement that all Forms 5500 be filed electronically.

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The federal No Surprises Act protects health insurance consumers from being billed for anything other than typical in-network cost-sharing when they receive emergency care from an out-of-network facility or when they are treated without notice from an out-of-network provider while at an in-network medical facility. In these cases, healthcare providers must work out any billing differences directly with the consumer’s group health plan and/or health insurance issuer, and if they cannot then federal arbitration may be an option. However, recent federal court action put a halt to part of the final rules governing the arbitration process for federal surprise billing disputes between healthcare providers and group health plans and health insurance issuers.

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The Administration recently announced its intention to end both the COVID-19 pandemic national emergency period and the public health emergency as of May 11, 2023. The end of each will bring about many public health developments, including very significant changes related to employer-sponsored health plans.

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The DC Omnibus Amendment Act of 2014 was amended to include the Transportation Benefits Equity Amendment Act of 2020, known as the “DC Parking Cashout Law”. The new rules require certain “covered” employers to offer benefit options that encourage commuting using sustainable transportation options instead of driving to work or meeting other statutory requirements to stay compliant. All covered employers with 20+ qualifying employees must also comply with reporting requirements to DDOT by January 15, 2023, and then biannually following this year’s report. This short statute guide will aid in determining your responsibilities under the new law and provide you with resources as you begin your compliance plan.

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