As we come to the end of the year, it is a good time for employers with January 1st health plan renewals to review their plan documents and get ready for open enrollment. The following is a checklist that lists some of the items employers may want to review and/or prepare in anticipation of the 2024 Plan Year.
Affordable Care Act
✔ Employers who have hovered around fifty (50) full-time employees, including full-time equivalent employees, should determine whether they will be considered an Applicable Large Employer in 2023, and therefore required to provide health coverage in 2024 under the ACA’s employer-shared responsibility provisions (sometimes referred to as the “Employer Mandate” or “Pay or Play”).
✔ Applicable Large Employers should have a process in place to generate Forms 1094-C and 1095-C, provide these forms to employees no later than March 1, 2024, and file them with the IRS by March 31, 2024. Employers of any size that offer a self-insured health plan, including a level-funded plan, should be ready to provide Forms 1094-B and 1095-B on the same schedule.
✔ The IRS is requiring electronic filing of ACA reporting forms this year—no more paper forms for employers with fewer than 250 returns. Employers who have relied on paper filings should make it a priority to find an ACA reporting vendor with the technological capabilities to use the complex IRS Affordable Care Act Information Returns (AIR) system.
✔ Employers are reminded of the ACA’s new health plan affordability threshold that requires Applicable Large Employers to offer at least one affordable, minimum-value health plan that costs the employee no more than 8.39% of a full-time employee’s household income. See our previous article regarding this change here.
Maximum Deductibles and Cost Sharing
✔ Group health plans that are not designated high-deductible health plans (HDHPs) must limit annual out-of-pocket maximums for essential health benefits (EHB) to $9,450 for a single enrollee and $18,900 per family.
✔ High-deductible health plans (HDHPs) must have a minimum deductible of $1,600 for a single enrollee and $3,200 per family. The HDHP out-of-pocket maximum may not exceed $8,050 for a single enrollee, $16,100 per family.
✔ Individuals with an HDHP may contribute $4,150 toward an employee-only Health Savings Account (HSA). A family may contribute $8,300. Individuals age 55 and over may increase their contribution by $1,000. Members of a married couple who are both over age 55 can save up to $10,300 in their HSA in 2024. (Congress is currently considering legislation to increase HSA contribution limits substantially in 2025.)
✔ The federally declared public health emergency has ended (for now), which means health plans are no longer required to cover diagnostic tests and related services without cost sharing. This may come as an unwelcome surprise to employees when they visit a healthcare provider for a PCR test in early 2024. Employers may want to clarify their insurer’s COVID testing policy and communicate it during open enrollment.
✔ Along these lines, any HDHP plan that renews after January 1, 2024 cannot waive the deductible for COVID-19 testing or treatment. This is not applicable to plans that have a January 1, 2024 renewal date.
✔ Thanks to the Consolidated Appropriations Act, 2023, HDHPs may, but are not required to, continue to provide telehealth and other remote care services on a pre-deductible basis for all plan years beginning prior to January 1, 2025. Employers may want to check with their health insurers to see whether the insurer has chosen to continue to offer this free benefit.
✔ COVID-19 immunizations are still considered a recommended preventive service and therefore covered by the ACA requirement that preventive services be free to the participant. However, due to the end of the public health emergency, health plans are not required to cover out-of-network vaccinations, and this should be communicated during open enrollment to prevent sticker shock if employees get vaccinated at a non-network clinic or pharmacy.
|Speaking of preventive care, we continue to watch the major litigation of Braidwood Management, Inc. v. Becerra decision. The plaintiff Christian organization claims the requirement to cover certain preventive services violated the Religious Freedom Restoration Act. It asserts that the agencies tasked with making preventive care recommendations had no authority to do so, therefore all preventive care mandates should be held unconstitutional. The Texas district court agreed, and on March 30, 2023 announced that effective immediately, the ACA’s preventive service requirement was struck down nationwide. The federal government appealed, and the decision is now subject to an administrative stay pending appeal to the Fifth Circuit.|
Flexible Spending Accounts
✔ Next year’s flexible spending account limits have not yet been released. The 2023 limit is $3,050.
✔ Employees should be reminded about new strict substantiation requirements for FSA reimbursements. Administrators are no longer allowed to rely on self-certification, waiver of substantiation of claims from favored providers, or not having to verify expenses below certain dollar amounts. Plans that fail to substantiate all claims may be disqualified by the IRS, resulting in adverse tax consequences for the employer and all participating employees.
One thing the various agencies that regulate health plans have in common is that they excel at creating requirements for annual notices. The list gets longer every year. The Department of Labor provides samples of many of the following notices in their Compliance Assistance Guide.
✔ Medicare Part D Notice of Creditable/Non-Creditable Coverage: see our previous alert here
✔ Summary of Benefits and Coverage (SBC): this standard template notice must be provided to all group health plan applicants and enrollees; best practice is to provide one annually at open enrollment
✔ Children’s Health Insurance Program (CHIP) Notice: annual notice requirement to inform employees they may be eligible for premium assistance through CHIP or Medicaid
✔ Women’s Health and Cancer Rights Act (WHCRA) Notice: must be provided upon enrollment and annually thereafter to inform employees of the availability of coverage for reconstructive surgery following a mastectomy
✔ HIPAA Special Enrollment Notice: must be provided when giving employees the opportunity to first enroll in your health plan; best practice is to provide it annually
✔ Primary Care Provider Patient Protection Notice (for plans that require the designation of a PCP, such as an HMO plan): must be provided whenever a Summary Plan Description or other similar description of benefits is provided; best practice is to provide it annually
✔ ADA Wellness Program Notice (if a wellness plan includes medical exams or medical questionnaires): must be provided to employees before they supply any health information, and with enough time to decide whether to participate; best practice is to send it annually
✔ Newborns’ and Mothers’ Health Protection Act Notice: must be provided in the health plan’s Summary Plan Description
✔ ACA Exchange Notice: must be provided to all new hires within 14 days of employment; best practice to include this in standard new-hire packets
✔ HIPAA Notice of Privacy Practices (for self-insured health plans): must be provided by employer upon enrollment and within 60 days of any material changes to the notice, and must also be provided at least once every three years
✔ Initial COBRA Notice: must be provided to employees and spouses within 90 days of initial enrollment
✔ Notice Regarding Patient Protections Against Surprise Billing: Employers that maintain a public website for their group health plan must post this notice on that site. If an employer does not have a public group health plan website, the employer should make certain the insurance carrier or third-party administrator makes the notice available on their websites.
✔ Summary Plan Description: must be provided to new health plan participants within 90 days and also be updated and redistributed every 5 years if benefits have changed—otherwise, every 10 years
✔ Grandfathered Plan Notice: If the employer has maintained a grandfathered plan, this notice must be included in the SPD and “any plan materials provided to a participant describing the benefits under the plan” (such as open enrollment materials).
Finally, employers that wish to implement an Individual Coverage HRA (ICHRA) must provide this Notice at least 90 days prior to implementing the ICHRA.
This Compliance Checklist is not intended to be exhaustive, nor should it be construed as legal advice. Each employer’s situation is unique. If you are unsure of your health plan compliance responsibilities, you should contact legal counsel.
This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.
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