Let our team help you navigate the ever-changing benefits compliance landscape each month. Check out this month’s latest alerts, additional updates, and resources – hot off the press:
Employee Benefits Compliance Alerts
Review of Medicare Secondary Payer Requirements
- Medicare Secondary Payer (MSP) rules significantly limit any differentiation in benefit offerings for individuals who are eligible for Medicare coverage and determine rules that dictate which plan is the primary payer for individuals enrolled in both Medicare and employer-sponsored coverage.
- When the employer’s group health plan is the primary payer to Medicare the MSP rules prohibit the group health plan from “taking into account” the Medicare entitlement of a current employee or the employee’s spouse or family member.
- Employers should be cautious not to differentiate benefits design or eligibility due to Medicare entitlement or eligibility, nor should employers incentivize employees to take Medicare over the group health plan.
Special Alert: IRS Releases 2024 FSA Limits
- On November 9, 2023, the Internal Revenue Service (IRS) released updated limits for health flexible spending arrangements (FSAs) and commuter benefits.
- These limits are adjusted annually for inflation.
- Limits for Dependent Care Assistance Programs (DCAP) are set by statute and not adjusted annually for inflation.
Considerations for Compliant Family-Building Benefits
- Family-building programs, also commonly referred to as fertility or infertility benefit programs, are becoming a common component of employer-sponsored benefit packages. While these programs provide important benefits to employees, they have unique compliance issues particularly surrounding taxation, that employers should consider prior to implementation.
- Services that are “qualified medical expenses” as defined in the Internal Revenue Code (IRC) §213, are available on a tax-favored basis.
- Employers commonly use health reimbursement arrangements (HRAs) to provide fertility benefits to employees, but fertility-specific HRAs have explicit compliance requirements.
- Employers may provide reimbursement for certain qualified expenses tax-free to employees through an adoption assistance program, while benefits offered through an employer-sponsored surrogacy program must be included in taxable income.
Additional Updates & Resources
Pricing Transparency Tool Expands in 2024
As of January 1, 2023, the Transparency in Coverage Act (TiC) requires employers to make a price comparison tool available to plan participants containing information for a list of 500 items and services as specified by the Centers for Medicare and Medicaid Services (CMS).
Starting January 1, 2024, a list of all covered items and services must be made available. The intent is that plan participants will be provided with real-time estimates of their healthcare financial obligations from various providers for covered items and services.
Many employers will be able to rely on their carrier or third-party administrator (TPA) to create and maintain the price transparency tool. Fully insured employers should confirm with their carriers that the tool is online and will be updated by January 1, 2024 to include all covered items and services. Self-funded employers may rely on their TPAs to create and maintain the tool, but the responsibility to provide the tool remains with the employer.
IRS Updates ACA Reporting Forms and Instructions
Instructions for completing and submitting Forms 1094 and 1095 for 2023, due in 2024 were finalized with only a few changes from prior years’ requirements. The instructions confirm that forms must be received by the Internal Revenue Service (IRS) no later than February 28, 2024, for those submitted by mail and by April 1, 2024, for those submitted electronically. Copies of Form 1095 must be provided to individuals by March 1, 2024. The fee for failure to timely report accurate information increases this year to $310 per form (previously $290 per form). It is important to note that the requirement to submit the forms electronically has changed and will require almost all employers to submit the forms to the IRS electronically. Beginning with 2023 reporting, employers who file 10 or more tax forms must file the returns electronically (previously only those filing 250 or more forms were required to file electronically).
Eleventh Circuit Upholds BCBSA $2.67 Billion Settlement
The 11th Circuit has upheld the $2.67 billion settlement in the massive class action lawsuit against the Blue Cross Blue Shield Association (BCBSA). See our previous Alert, Blue Cross Blue Shield (BCBS) Antitrust Settlement Update. Barring some other unforeseen development, this means employers who previously filed claims for their share of the settlement proceeds should start receiving payments sometime in the first part of 2024.
Employers who receive such settlement proceeds should be aware that a portion of those funds may be plan assets under the Employee Retirement Income Security Act (ERISA) if employees contributed towards the cost of the health plan during the time period covered by the settlement, and the employer may need to share the proceeds with health plan participants. Following the Department of Labor’s (DOL’s) guidelines for handling medical loss ratio (MLR) rebates should ensure the employer satisfies its obligations under ERISA with respect to these settlement funds.
Massachusetts HIRD Due December 15
Since 2018, Massachusetts has required employers with six or more employees in the state to file a healthcare coverage form called the Health Insurance Responsibility Disclosure (HIRD) that provides information to the state about employer-sponsored health coverage, including information about employee cost, benefits offered, cost-sharing, and employee eligibility. The form does not require employers to submit employee-specific information or protected health information (PHI). The state uses the information collected on the HIRD form to assist MassHealth in identifying its members with access to qualifying employer-sponsored coverage through the MassHealth Premium Assistance Program, a program that helps eligible individuals pay for employer-sponsored coverage. The HIRD form will often eliminate the need for employers to complete a separate Premium Assistance Application for the employee.
Information required to submit the form can be found in plan documents such as summary plan descriptions (SPDs), summary of benefits and coverage (SBCs), and open enrollment materials. Examples of information required for submission include the employee’s monthly contribution, in-network deductible and in-network out-of-pocket maximum, benefits waiting periods, hours worked per week to qualify for health insurance, and other benefits eligibility criteria.
Plans with plan years ending prior to December 31, 2023, should submit the HIRD form using upcoming plan year information for the health plan(s) instead of using the current plan year information. If health plan information such as rates or plan designs is not available before the filing deadline, employers may submit the HIRD form using the current plan year information for the health plan(s).
The 2023 HIRD submission deadline is December 15, 2023, and the form must be filed through the Mass Tax Connect website. Employers with multiple Federal Employer Identification Numbers (FEINs) should file a separate HIRD form for each FEIN. You may access screenshots of the HIRD form and form completion frequently asked questions (FAQs). If you have questions about filing the HIRD, please call the HIRD information line at (617) 466-3940.
California Implements Workplace Violence Program Requirements
California Governor, Gavin Newson (D), recently signed a new law requiring employers to adopt a workplace violence protection plan and to maintain records of incidents of workplace violence. Additionally, the new law requires employers to provide effective workplace violence training to employees. The training portion of this new requirement begins January 1, 2025. EPIC is currently working with our vendor partners to provide our clients with a solution for workplace violence training. We will provide more information on how to access assistance in 2024.