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QUICK FACTS Failure to provide required COBRA notices or properly identify COBRA qualifying events are the top areas of non compliance. Employers should have processes in place to promptly and accurately identify the occurrence of QEs and offer of COBRA coverage within the required timeframe. Employers that fail to comply with COBRA can face IRS excise tax and statutory penalties under ERISA, lawsuits, attorney fees, and potential liability for expensive health claims. The excise tax on COBRA failures typically does not apply to failures that are corrected within 30 days after discovery. The Consolidated Omnibus Budget Reconciliation Act of 1985 …

QUICK FACTS The DOL, HHS, and Treasury have jointly issued FAQs to address group health plan concerns regarding the application of drug coupons towards annual cost-sharing limits under the ACA. The FAQs recognized potential conflicts with prior agency guidance. The agencies will address these inconsistencies in upcoming regulations in 2021. In the interim, the agencies have stated that they will not initiate enforcement against health plans or insurers for excluding the drug coupon amounts from the annual cost sharing limits, even in circumstances in which there is no medically appropriate generic equivalent available. The Department of Labor (DOL), Health …

QUICK FACTS It is permissible for an employer to terminate a QB’s COBRA coverage early when the QB becomes covered under another group health plan and certain other conditions are satisfied. If active employees are given the opportunity to change plan coverage options or covered dependents during an open enrollment, then QBs must be provided with the same opportunity. Employers may terminate a QB’s COBRA coverage if premiums are not paid on time, but a special rule allows QBs who fail to pay their premiums timely to avoid losing coverage if they pay the necessary premium before the …

QUICK FACTS COBRA provides certain individuals the right to continue health coverage under an employer sponsored plan when they experience specified events, called qualifying events (QE). When a qualified beneficiary (QB) experiences a QE due to termination of employment, COBRA requires a covered employer to offer continuation coverage unless it terminated the employee for gross misconduct. COBRA does not define gross misconduct; the term is defined by the courts. Employers should carefully weigh decisions to deny COBRA coverage due to gross misconduct and should consider consulting counsel. A spouse or dependent who loses health coverage due to divorce or legal …

… health insurance. INDIVIDUAL COVERAGE HRA Beginning January 1, 2020, employers can offer certain classes of employees an ICHRA as long as: The purchase of individual insurance is voluntary; An employer does not select or endorse any particular issuer or insurance coverage; The individual insurance does not consist solely of excepted benefits (e.g., dental or vision coverage); An employer receives no consideration in cash or other form based on an employee’s selection of individual coverage; and An employer notifies employees annually in writing (either no later than 90 days before the start of a plan year or no later …

… AHP in the large group market. The final rule responded to Executive Order 13813 (Order). Under the Order, President Trump urged the Secretary of the DOL to consider expanding the conditions that satisfy the commonality of interest requirements under existing DOL interpretations of the definition of an “employer” under the Employee Retirement Income Security Act (ERISA). On March 28, 2019, the U.S. District Court for the District of Columbia vacated the final rule’s provisions regarding who is an “employer” for purposes of who can sponsor an AHP, which left those who had established AHPs based on the final …

… employees on at least 50% of its typical business days in the prior calendar year. Employers must count full- and part-time employees – with each part-time employee counting as a fractional employee based on the number of hours he or she worked divided by the number of hours an employee must work to be considered full-time. COBRA applies to plans maintained by most private-sector and state and local governmental employers. The law does not apply to plans sponsored by the federal government or by churches and certain church-related organizations. ELIGIBILITY FOR COBRA BENEFITS A covered group …

BACKGROUND The IRS recently released Revenue Procedure 2019-25, which includes the 2020 inflation-adjusted amounts for health savings accounts (HSAs) and high deductible health plans (HDHPs). These limits include the maximum HSA contribution limit, the minimum deductible amount for HDHPs, and the maximum out-of-pocket expense limit for HDHPs. These limits vary based on whether an individual has self only or family coverage under an HDHP. The IRS limits for HSA contributions and HDHP maximum out-of-pocket limits will increase effective January 1, 2020, while the HDHP limits will increase effective for plan years beginning on or …