2023 Benefits Compliance Hot Topics

This article was updated on April 18 to reflect informal statements made by federal agencies stating they would stand by the previously communicated May 11 end date for the national emergency and the corresponding July 10, 2023, end date for the outbreak period. 

Now that we're arriving at the end of the COVID-19 emergency support, it’s time to regroup and review any remaining employer action items. We’ll outline compliance hot topics in this annual benefits legislative update.

End of COVID-19 Emergency Periods

President Biden signed a bill on Monday ending the COVID-19 National Emergency on April 10, 2023, a month earlier than expected. Previously, on January 30, 2023, the Biden Administration announced its intention to extend the COVID-19 National Emergency and the COVID-19 Public Health Emergency periods to May 11, 2023, after which they would expire. The end of the emergency periods will have several implications for health plans.

COVID-19 Testing Coverage

The Families First Coronavirus Response Act (FFCRA) and the CARES Act currently require health plans to cover COVID-19 diagnostic tests and related services without cost sharing, prior authorization, or medical management during the PHE. This mandate includes the requirement for health plans to cover over-the-counter (OTC) COVID-19 antigen tests at no charge, up to eight tests per member, per month.

As the PHE draws near its end, employers may need to review their plan documents, Summaries of Material Modifications (SMMs), and other member communications for any descriptions of COVID-19 testing coverage. Such documents may need to be amended if the descriptions of the benefits are open-ended rather than expressly tied to the PHE (i.e., if tied to the PHE, the amended changes would automatically terminate with the conclusion of the PHE). Employers and plan sponsors may also want to consider what coverage for COVID-19 testing the plan will provide after the PHE. Even those with self-limiting COVID-19 testing coverage language may need an amendment or SMM to ensure the continuation of any desired coverage beyond the federal PHE mandates.

COVID-19 Vaccine Coverage

During the PHE, the CARES Act also requires non-grandfathered (NGF) health plans to cover the COVID-19 vaccines at 100%, both in- and out-of-network, within 15 days of the recommendation for coverage by the Advisory Committee on Immunization Practices (ACIP). After the PHE, NGF plans will only be required to cover Affordable Care Act (ACA)-mandated preventive vaccinations recommended by the ACIP at 100% in-network.

The ACA’s preventive care mandates are effective for NGF plans on the first day of the plan year beginning on or after one year from the published recommendation. This timing will result in a gap in federally mandated coverage of COVID-19 vaccinations for NGF plans, given the dates the ACIP’s recommendations regarding the COVID-19 vaccine were published.

Employers and plan sponsors will want to consider their coverage of COVID-19 vaccines and whether they want to voluntarily continue coverage beyond the federal mandates, either in-network exclusively or both in- and out-of-network, and at what cost-share, after the PHE ends. Plan documents will need to be reviewed, and descriptions of COVID-19 vaccine coverage may need to be amended to accurately describe the plan’s intended vaccine benefit after the PHE ends.

National Emergency Deadline Extensions

The Department of Labor extended certain HIPAA Special Enrollment, COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985), and claim and appeal deadlines during the COVID-19 national emergency to the earlier of:

• One year from the original deadline, or
• 60 days after the end of the national emergency "or such other date announced by the agencies in a future notification (the 'Outbreak Period')" pursuant to the Joint Notice 85 FR 26351.

In addition, ERISA (Employee Retirement Income Security Act of 1974) plans were allowed the optional relief of ERISA disclosure deadline extensions. The agencies have made informal statements of their intention to stand by the previously communicated May 11 end date for the national emergency and the corresponding July 10, 2023, end date for the outbreak period.

Employers and plan sponsors should review any communications or plan documents describing these extensions. They may need to amend the documents if the extensions are open-ended (rather than expressly tied to the National Emergency period) because they will not automatically terminate with its expiration. Plans may also want to consider affirmative communications to participants to inform them of how their rights will be impacted, particularly to COBRA participants who may have received notice of the election or premium payment extensions with their COBRA election materials.

Employers and plan sponsors that have taken advantage of the ERISA disclosure extensions will also want to review their internal procedures to ensure they are ready to once again meet the ERISA disclosure deadlines when the National Emergency ends.

Telehealth Relief

Generally, in order to be eligible to make or receive contributions to a Health Savings Account (HSA), participants must be enrolled in a high-deductible health plan (HDHP) that does not provide benefits before the deductible is met (with limited exceptions for things like preventive services). With the COVID-19 pandemic’s effect on the ability of individuals to receive care from their providers, the CARES Act allowed (but did not require) HSA-qualified HDHPs to provide benefits for telehealth or other remote care services before plan deductibles were met. This relief was first extended to December 31, 2022.

The Consolidated Appropriations Act of 2023 now extends this relief once again to plan years beginning after December 31, 2022, and before January 1, 2025 (e.g., 2023 and 2024 calendar year plans). This timeline enables plans to continue to waive the deductible and/or cost-sharing for telehealth services in their 2023 and 2024 plan years if they choose. Employers and plan sponsors wanting to take advantage of this relief will need to review their plan documents and prepare any amendments or SMMs necessary to implement the relief for the 2023 and 2024 plan years. Employers and plan sponsors with non-calendar year plans should be aware there will be a gap in relief availability for their plans from January 1, 2023, until the first day of the 2023 plan year.

Consolidated Appropriations Act and Transparency in Coverage

For 2023, employers and plan sponsors will need to be prepared to address some new and ongoing requirements imposed by the Consolidated Appropriations Act of 2020 (CAA) and the Transparency in Coverage (TiC) Final Rule.

• RxDC Reporting: The first reporting deadline for prescription drug information for plan sponsors and issuers was December 27, 2022. Plans must report this information by June 1 of each subsequent year, beginning in 2023.
• Price Comparison Tool: A self-service price comparison tool is required for plan years beginning on or after January 1, 2023. The price comparison information must be available for 500 items and services identified in the TiC Final Rules. In addition, the CAA also requires plans and issuers to provide cost comparison information over the phone upon request.

• Gag Clause Attestation: The CAA requires plans and issuers to attest annually that they have not entered into any agreements containing gag clauses prohibiting the sharing of information required by the CAA. Plan sponsors and issuers will need to begin submitting the required attestation by December 31, beginning in 2023.
  
   

  Review this alert for further details: Compliance Alert: Agencies Release FAQs in Advance of the Upcoming Gag Clause Attestation Filing Deadline

• Advanced Explanation of Benefits (EOB): The advanced EOB requirements continue to be delayed indefinitely, pending release of further guidance.
• Independent Dispute Resolution: The Centers for Medicare & Medicaid Services announced the suspension of payment determinations under the independent dispute resolution (IDR) process for items/services furnished on or after October 25, 2022. This process was established by the No Surprises Act, which states that providers and plans that do not agree on the fee for the services or supplies provided can have an independent third party determine the appropriate amount. The suspension was announced as a result of a court decision in the Eastern District of Texas vacating certain provisions of the IDR process.

Employers and plan sponsors should confirm their vendors are prepared to meet compliance deadlines, and any responsibilities that have been delegated are adequately reflected in contracts. They will also want to begin preparations for the June reporting of RxDC information, especially if the PBM/insurer is not reporting on the employer’s behalf. Plans will also need to update their websites to ensure they include links to vendor resources for the price comparison tool.

Finally, employers and plan sponsors will need to continue to monitor for future guidance on Advanced EOB, IDR, and gag clause attestation, which is expected to be forthcoming.

Affordable Care Act Update: Family Glitch and ALE Reporting

Family Glitch

The ACA provides for a premium tax credit (PTC) for Marketplace coverage if individuals were not offered affordable, minimum-value coverage through their employer-sponsored group health plan.

Previously, the IRS based affordability on the lowest cost, self-only coverage offered to the employee, resulting in family members being determined ineligible for the PTC even if the cost of family coverage was too expensive. For example, an employer may pay 100% of the premium for employee self-only coverage but pay 50% of the premium for family coverage. Thus, although the employee’s offer of coverage for self-only would be affordable at the 9.61% ACA calculation (for 2022), the family coverage would far exceed the 9.61% rate.

This interpretation of the ACA that renders family members ineligible for subsidized coverage is referred to as the “family glitch.” To remedy this issue, on October 13, 2022, the IRS released a Final Rule revising the method of determining affordability for employer-sponsored coverage for family members. Effective December 12, 2022, the affordability for family members is determined based on the employee’s share of the cost of family coverage.

In light of this change, many families may now find it more affordable to enroll in Marketplace coverage than employer-sponsored dependent coverage. To account for this scenario, the IRS is allowing a new optional change event to enable employees to prospectively revoke Section 125 Cafeteria Plan elections for family coverage on or after January 1, 2023. Such change events must correspond with the family member’s enrollment in a Marketplace plan, and coverage must become effective no later than the day after the termination of the revoked employer coverage.

Employers that want to allow this new mid-year election change event must update their cafeteria plan documents and communicate the plan change to employees. Amendments must be adopted no later than the last day of the 2024 plan year. However, employers should consider the impact this permitted election change might have on the group health plan if family members decide to drop employer coverage and opt for subsidized coverage in the Marketplace.

Applicable Large Employer (ALE) Reporting

Effective for all returns due on or after January 1, 2024, most employers will now be required to file electronic ACA information returns. Under the new Final Rule, all employers filing 10 or more returns must now file Forms 1094 and 1095, among others, electronically.

Previously, employers filing less than 250 of the same ACA reporting forms were allowed to choose whether to file by paper or electronically. Affected employers will want to review their reporting processes and may consider hiring a vendor to assist with their new electronic filing obligations. Employers may be able to seek a waiver from the IRS for undue hardship.

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