IRS Proposes Regulations to Permanently Permit Remote Witnessing of Participant Elections and Spousal Consents
CAA Pharmacy Benefit and Healthcare Spending Reporting Deadline Approaching
Under the CAA, Section 204, insured and self-insured group health plans are required to report significant information regarding prescription drug and healthcare spending to the government. The 2020 and 2021 calendar year data submissions are due by December 27, 2022. However, under recently announced relief, a submission grace period is available to employers who make a good faith submission of the 2020 and 2021 data on or before January 31, 2022.
The data must be submitted to the Health Insurance Oversight System (HIOS) in files and formats specified by CMS. As applicable, employers should work closely with their carriers, third-party administrators, pharmacy benefit managers and other vendors to ensure the required information is timely and accurately provided. In some cases, employers that sponsor self-insured plans may need to submit data directly to HIOS.
Detailed information regarding the reporting requirements, including instructions, FAQs and a HIOS portal user guide, is available on the CMS website.
Price Comparison Tool Requirements Begin to Take Effect
Effective for plan years beginning on or after January 1, 2023, the Transparency in Coverage Final Rule (TiC) requires most group health plans and carriers to make personalized out-of-pocket cost information available to participants through an internet-based self-service tool or in paper format (upon request). The self-service tool is designed to provide participants with real-time, accurate estimates of their cost-sharing liability for healthcare items and services from different providers prior to receiving care.
The TiC provided phased-in effective dates for the internet self-service tool requirement. An initial list of 500 “shoppable” items and services must be made available through the tool for plan years beginning on or after January 1, 2023. For plan years beginning on or after January 1, 2024, all items and services, including prescription drug and durable medical equipment, must be made available.
Employers should consult with their carriers or third-party administrators (TPAs) to ensure timely implementation of the self-service tool. Fully insured plans can contract with their carrier to assume liability for the requirement. Self-insured plans can contract with TPAs or other vendors but remain responsible for satisfying the requirements.
For further information regarding the TiC and self-service tool requirements, please see our December 22, 2022 FAQ, the Transparency in Coverage Final Rule, Transparency in Coverage Final Rule Fact Sheet, and our November 12, 2020 article.
Form W-2 Cost of Coverage Reporting
Annually, large employers must report the aggregate cost of group health coverage provided to employees on Form W-2. The coverage must be reported on a calendar-year basis, regardless of the ERISA plan year or policy year. The reporting is intended for informational purposes for employees.
This ACA requirement applies to employers that filed 250 or more Form W-2s in the prior calendar year. Employer aggregation rules do not apply for this purpose. In other words, the number of Form W-2s is calculated separately without consideration of controlled groups. Self-insured plans that are not subject to COBRA (including church plans), multi-employer plans and Indian tribal governments are currently exempt from the Form W-2 reporting requirement.
To assist with the reporting, PPI Clients that had an active, fully-insured medical plan in 2022 and have access to view their PPI invoices online, can download their 2022 Cost of Coverage Report by logging into ppibenefits.com. The PPI report displays medical cost information by month, based on each member's medical plan enrollment.
For further information, view our ACA: Form W-2 Reporting Requirement publication.
Upcoming ACA Reporting Deadlines for Forms 1094/1095
Annual ACA reporting deadlines for employers that sponsored group health plans in 2022 are approaching.
Applicable large employers (ALEs) with 50 or more full-time equivalent (FTE) employees in the prior year who sponsored group health plans (whether insured or self-insured) must comply with IRC Section 6056 reporting in early 2023. Specifically, ALEs must complete and distribute Form 1095-C to full-time employees by March 2, 2023. The form should detail whether the employee was offered minimum value, affordable coverage during 2022. The forms may be mailed, electronically delivered or delivered by hand (although proof of delivery in some manner is recommended).
Employers who sponsored a self-insured plan during 2022 must comply with Section 6055 reporting in 2023. Self-insured employers with 50 or more FTEs must complete Section III of Form 1095-C detailing which months the employee (and any applicable spouse and dependents) had coverage under the employer’s plan. If the self-insured employer has fewer than 50 FTEs, it must complete and distribute a Form 1095-B with such information. Again, the forms must be delivered to employees by March 2, 2023.
If the self-insured employer has fewer than 50 FTEs, an alternative is available to distributing Form 1095-B to individuals. Such a small employer is permitted to post a clear and conspicuous notice on their website of the availability of the document and the necessary contact information to request it. Any such request must be fulfilled within 30 days. No such alternative is available for Form 1095-C.
Employers must also file the forms with the IRS by February 28, 2023, if filing by paper, and March 31, 2023, if filing electronically. The filing must include the transmittal Form 1094-C (if filing Forms 1095-C) or Form 1094-B (if filing Forms 1095-B).
2023 Temporary Disability Insurance Weekly Maximums Announced
January 04, 2023
The state’s Department of Labor and Industrial Relations recently announced the 2023 Temporary Disability Insurance (TDI) maximum weekly benefit and contribution amounts.
The weekly benefit amount remains 58% of an employee’s average weekly wages. However, the maximum benefits amount was increased to $765 per week in 2023 from $697 per week in 2022.
Further, an employer may withhold TDI contributions of one-half the premium cost but not more than 0.5% of the employee’s weekly wage, with the maximum not exceeding $6.59 per week in 2023. (2022: $6 per week.)
Employers with employees in Hawaii should consult with their payroll vendors and disability insurers to ensure that the appropriate contributions will be withheld starting January 1, 2023, and that the new maximum weekly benefit is reflected for the claims paid in 2023.
Amendment Requires Prescription Drug Financial Assistance to Apply to Participant Cost-Sharing
January 04, 2023
On December 23, 2022, Gov. Hochul signed into law Assembly Bill No. 1741-A, which amends the prescription drug coverage requirements regarding the calculation of an insured individual's contribution to any cost-sharing or out-of-pocket maximum. The amendment applies to individual and group policies delivered or issued for delivery in the state that provide coverage for prescription drugs.
Specifically, the amendment requires any third-party payments, financial assistance, discount, voucher or other price reduction instrument for out-of-pocket expenses made on behalf of an insured individual for the cost of prescription drugs to be applied to the insured's deductible, copayment, coinsurance, out-of-pocket maximum, or any other cost-sharing requirement when calculating such insured’s overall contribution to any out-of-pocket maximum or any cost-sharing requirement. However, the requirement applies to the deductible of a qualified HDHP only after the statutory minimum deductible is met, except with respect to items and services that are disregarded as preventive care. Accordingly, the amendment does not negatively impact HSA eligibility for individuals enrolled in qualified HDHPs.
Employers that sponsor insured plans that provide prescription drug coverage should be aware of this amendment. The amendment is effective January 1, 2023, and applies to all policies and contracts issued, renewed, modified, altered or amended after such date.
New Law Prohibits Copayments for Opioid Treatment Program
January 04, 2023
On December 23, 2022, Gov. Hochul signed into law Assembly Bill No. 372, which amends the insurance laws to prohibit copayments during treatment at an opioid treatment program.
Under the amendment, every policy that provides coverage for treatment at an opioid treatment program cannot impose a copayment fee during treatment on any insured for such treatment. An “opioid treatment program” is defined as a program or practitioner engaged in opioid treatment of individuals with an opioid agonist treatment medication.
Employers that sponsor insured plans should be aware of this amendment, which is effective January 1, 2023, and applies to group and individual policies and contracts issued, renewed, modified, altered or amended on and after such date.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.