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
IRS Employer Health Plan Coverage Affordability Considerations
- Recently, the Internal Revenue Service (IRS) significantly decreased the affordability percentage from 9.12% in 2023 to 8.39% in 2024.
- Under the Affordable Care Act (ACA) employers must offer coverage to employees that is “affordable” or risk facing penalties.
- Employers have the option to use one of three IRS affordability safe harbors to provide more predictability when determining whether the coverage will be considered affordable.
Mid-Year Annual Contribution Limits
- Spending accounts are governed by different contribution rules.
- The maximum annual contribution amount varies when an individual enters the plan mid-year.
Potential Change to California Balance Billing
- “Surprise Billing” or “Balance Billing” sometimes occurs when an insured consumer receives emergency care from a healthcare provider that is out-of-network. After a health plan or insurer reimburses the provider, the provider seeks the “balance” of what they want to be paid from the consumer. Since consumers often do not know that a provider working at their network hospital or an emergency response entity is out-of-network, these large bills are often a “surprise” out-of-pocket bill.
- Current state law in California explicitly allows balance billing for medical transportation to be applied to enrollees in Department of Managed Health Care and California Department of Insurance (CA DOI) regulated health plans and policies, though not Medi-Cal beneficiaries.
- The 2020 federal No Surprises Act does not directly apply to emergency ground medical transport.
- AB 716 is necessary to address the problem of surprise billing, also referred to as “balance billing” which is common practice for emergency ground medical transportation services. This bill would protect injured consumers from expensive out-of-pocket bills and would remove them from the middle of billing and contracting disputes between health plans and ground ambulance service providers. This bill would protect injured consumers from expensive out-of-pocket bills and would remove them from the middle of billing and contracting disputes between health plans and ground ambulance service providers, and would aid injured Californians who are often left in the middle of billing disputes for services.
Additional Updates & Resources
New Illinois Commuter Benefit Begins in 2024
Under Illinois Bill HB 2068, Illinois creates the Transportation Benefits Program Act (TBPA) which requires covered employers (defined as those with 50 or more covered employees) within a specific geographic area to provide a pre-tax commuter benefit to covered employees (defined as those individuals who perform at least 35 hours of work per week). Covered employees are allowed to use pre-tax dollars to purchase a transit pass on public transit via a payroll deduction, such that the costs for such purchases may be excluded from the employee’s taxable wages and compensation up to the maximum amount permitted by federal law. Covered employers may comply with the law by participating in a commuter benefits program offered by the Chicago Transit Authority or Regional Transportation Authority. A transit pass is any pass, token, fare card, voucher, or similar item entitling a person to transportation on public transit. Public transit is any transportation system within the authority and jurisdiction of the Regional Transportation Authority. The benefit must become available no later than the first regular pay period after 120 days of employment. Employers in Cook County Illinois are encouraged to review their current commuter benefit offerings to determine what changes are needed prior to the January 1, 2024, effective date.
Medicare Part D Creditable Coverage Notice Due Soon
Group health plans that offer prescription drug coverage are required to notify Medicare-eligible plan participants about the plan’s drug coverage status. The creditable coverage notice is due each year before October 15, which coincides with the first day of Medicare’s annual enrollment period. If mailing the notice, remember to get the notice in the mail in a reasonable time to ensure timely receipt. Medicare Part D notices must be postmarked by October 14 to be compliant with the distribution requirements. Employers may provide the notice electronically if distribution is in compliance with the Department of Labor (DOL) electronic disclosure safe harbor requirements.
Massachusetts Updates 2024 Minimum Creditable Coverage Standards
The Massachusetts Health Care Reform Law, also known as the Massachusetts Individual Mandate, requires that most residents over the age of 18 maintain minimum creditable health insurance coverage (MCC) or pay a penalty through their tax returns. While employers may face penalties for reporting failures, the MCC requirement applies to Massachusetts residents, not employers.
MCC can be provided through an employer-sponsored health plan or by purchasing a plan on the Massachusetts Health Connector and must maintain the minimum level of benefits that an individual needs to maintain to avoid a penalty. The Massachusetts Health Connector Board updates the minimum requirements to maintain MCC annually. In 2024, MCC includes:
- Coverage for a comprehensive set of services, including physician services, inpatient acute care, day surgery, and diagnostic procedures and tests
- Preventive care visits without a deductible
- Deductibles with a maximum limit of $2,950 for an individual and $5,900 for a family
- Out-of-pocket maximum limits of no more than $9,450 for an individual and $18,900 for a family
- No annual maximums on a particular illness
- No fixed dollar amount per day for hospital stays
- Separate prescription drug deductibles cannot exceed $360 for an individual or $720 for a family
Massachusetts considers these types of health coverage to be automatically in compliance with MCC requirements:
- Medicare Part A or B
- Any Qualified Health Plan purchased through the Massachusetts Health Connector or directly through an insurance carrier, including catastrophic plans
- A federally qualified high deductible health plan (HDHP)
- A Student Health Insurance Plan (SHIP) offered in Massachusetts or another state
- A tribal or Indian Health Service plan
- The U.S. Veterans Administration Health System
- A health insurance plan offered by the federal government to federal employees or retirees; or
- Peace Corps, VISTA, AmeriCorps or National Civilian Community Corps coverage Annually Massachusetts residents subject to the individual mandate will receive a Form MA 1099-HC on or before January 31.