by admin | Jun 17, 2024 | Compliance
PREPARE NOW TO PAY THE PCORI FEE
The Patient-Centered Outcomes Research Institute (PCORI) fee funds research that evaluates and compares health outcomes, clinical effectiveness, and the risks and benefits of medical treatments and services. Effective through 2029, the IRS treats this fee like an excise tax, applied to all covered lives, including employees, retirees, spouses, and dependents. The fee is due on July 31, 2024.
For plan and policy years ending between October 1, 2023, and September 30, 2024, the PCORI fee is $3.22 per covered life, reflecting a 7.33% increase.
For plan and policy years ending between October 1, 2022, and September 30, 2023, the fee was $3.00 per covered life.
Employers with self-funded medical plans or applicable health reimbursement arrangements (HRAs) must use Form 720 to fulfill their reporting obligations and pay PCORI fees.
Calculating the PCORI fee requires employers to determine the average number of lives covered under a self-insured health plan using one of the IRS-approved methods.
EMPLOYER CONSIDERATIONS
Employers should be prepared to file Form 720 and pay the fee by July 31. Refer to the IRS Form 720 instructions, FAQs, and chart of applicable coverage types.
IRS RELEASES 2025 LIMITS FOR HDHPS AND HSAS
The IRS released the inflation-adjusted amounts for 2025 health savings accounts (HSAs), excepted benefit health reimbursement arrangements (EBHRAs), and high-deductible health plans (HDHPs).
2024 and 2025 HSA and HDHP Limits
|
2024 |
2025 |
|
Self-Only |
Family |
Self-Only |
Family |
| HSA Maximum Contribution |
$4,150 |
$8,300 |
$4,300 |
$8,550 |
| HSA Maximum Catch-up Contribution |
$1,000 |
$1,000 |
$1,000 |
$1,000 |
| HDHP Minimum Deductible |
$1,600 |
$3,200 |
$1,650 |
$3,300 |
HDHP Maximum Out-of-Pocket Expense
(In Network) |
$8,050 |
$16,100 |
$8,300 |
$16,600 |
Maximum EBHRA Contribution Limits
2024 $2,100
2025 $2,150
EMPLOYER CONSIDERATIONS
Employers offering these benefits must update all plan communications, open enrollment materials, and other relevant documentation to ensure that participants and beneficiaries are adequately informed about the new limits.
HHS FINALIZES SECTION 1557 NONDISCRIMINATION REGULATIONS
The U.S. Department of Health and Human Services (HHS) released new regulations under Section 1557 of the Affordable Care Act (ACA), known as the “Final Rule” nearly two years after the proposed rule was published. The regulations are set to become effective on July 5, 2024, though some provisions will be phased in later. The Final Rule reinstates certain provisions from the previous regulations and introduces additional clarifications and guidelines.
Section 1557 of the ACA aims to prevent discrimination in health programs or activities receiving federal financial assistance. The new regulations under the Final Rule extend coverage to all products offered by a health insurance issuer if any of these products receive federal financial assistance. This expansion will bring a significant number of entities under the purview of Section 1557 for the first time. Those entities may include:
- Insurers offering qualified health plans through the health exchange marketplace, large group market plans, excepted benefit plans, self-insured group health plans.
- Third-party administrators (TPAs) and pharmacy benefit managers (PBMs) if any part of their business is operated by an insurer subject to Section 1557 or if they are sub-recipients of federal financial assistance.
- Insurance agents or brokers paid by a covered entity receiving federal financial assistance.
EMPLOYER CONSIDERATIONS
The Final Rule significantly broadens the definition of a covered entity under Section 1557, extending its reach beyond the scope of the 2020 Rule. Consequently, insurers, TPAs, PBMs, insurance brokers, and other related entities need to review their business models to determine if they are now subject to Section 1557. If covered, these entities must ensure that their practices, policies, and products comply with the new regulations.
HHS updated its Frequently Asked Questions to offer further guidance on implementing the Final Rule.
MEDICAL DEBT CANCELLATION ACT INTRODUCED
On May 8, legislators introduced the Medical Debt Cancellation Act (S.4289), a proposal aiming to eliminate current medical debt in the United States. The Act involves the federal government paying off medical-related debts under specific conditions. Its multiple components, which would be phased in over time, seek to eradicate existing medical debt and limit the ways consumers can incur future debt. Currently in draft form, the Act is subject to amendment and further clarification before moving to a congressional vote.
A central provision of the Act is the establishment of a federal grant program administered by the Department of Health and Human Services (HHS) to fund the payment, or “cancellation,” of medical debts held by hospitals, provided the debt is out-of-pocket, unpaid, and owed for services rendered before the bill’s enactment. Excluded from the program are amounts covered by federal health care programs or other insurance plans. Hospitals would apply for these grants, with HHS prioritizing safety net hospitals that agree to cancel debts owed by low-income and vulnerable populations.
The Act also mandates that within one year of enactment, federally funded health care programs must eliminate medical debt collections. HHS would report annually to Congress on the progress of the debt forgiveness program, which would conclude once all eligible medical debt is canceled. Additionally, the Act proposes amendments to the Fair Debt Collection Practices Act, prohibiting the collection of pre-enactment medical debt and creating a private right of action for individuals harmed by violations.
While the Act aims to cancel existing medical debt, it does not ban future medical debt but imposes new billing and debt collection requirements on healthcare providers. These include assessing eligibility for charity care or financial assistance 45 days before the payment due date and providing related information to patients. The Act prohibits 501(c)(3) hospitals from charging uninsured patients more than generally billed amounts and bans interest on outstanding payments. Amendments to the Fair Credit Reporting Act would prevent credit reporting agencies from including medical debt information. The Act, still in the proposal stage, draws attention due to its potential broad impact.
GOVERNOR LAMONT SIGNS LEGISLATION EXPANDING CONNECTICUT PAID SICK DAYS LAWS
Governor Ned Lamont has signed new legislation expanding Connecticut’s paid sick leave laws to include a broader range of workers. The updated laws will ensure that more employees have access to paid sick leave, addressing gaps in the current system that covers only specific retail and service occupations. The goal of the legislation is to help retain young workers in the state, enhance employee productivity, and support economic growth by reducing the financial hardships of missing work due to illness.
Starting January 1, 2025, the law will apply to almost every occupation, excluding seasonal and certain temporary workers. The threshold for employer coverage will be reduced in phases: employers with at least 25 employees by January 1, 2025; those with at least 11 employees by January 1, 2026; and all employers by January 1, 2027. Additionally, the definition of a family member for sick leave purposes will be broadened, and the reasons for using paid sick leave will include public health emergencies.
EMPLOYER CONSIDERATIONS
Employers should prepare to update existing documents to reflect the new legislation.
QUESTION OF THE MONTH
Q: We have a client that never filed their 2022 plan year D1 and P2 files for RxDC reporting (assuming the carrier filed the D2-D8). Was the $100-a-day penalty in place for this filing in 2023?
A: There was penalty relief for 2020 and 2021, but not for 2022 filings. The penalty is found in Internal Revenue Code Section 4980D. The good faith relief came from the Departments of Labor, Health and Human Services, and Treasury in the form of FAQ 56 issued on December 23, 2022.
©2024 United Benefit Advisors
by admin | Jul 26, 2023 | Compliance
PCORI FEE DUE DATE APPROACHES
Employers offering self-funded medical plans, including health reimbursement arrangements (HRAs) must report and pay fees to the Patient-Centered Outcomes Research Institute (PCORI) by July 31. If the plan was fully insured, employers can rely on their insurance carriers to handle the fee payment.
The current annual fees are:
- For plan years that end on or after Oct. 1, 2021, and before Oct. 1, 2022, the indexed fee is $2.79.
- For plan years that end on or after Oct. 1, 2022, and before Oct. 1, 2023, the indexed fee is $3.00.
Self-funded plans have three options to determine the average number of covered individuals for reporting and paying the PCORI fee: (i) actual count method, (ii) snapshot method, or (iii) Form 5500 method. There are special rules for counting if employers offer multiple self-funded plans or have an HRA integrated with a fully insured plan. Additional information and payment instructions are available.
MHPAEA OPT-OUT EXPIRES
The Centers for Medicare & Medicaid Services (CMS) has issued guidelines regarding changes to the Mental Health Parity and Addiction Equity Act (MHPAEA) for self-insured non-federal governmental health plans.
The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requires group health plans and health insurance issuers to ensure that financial requirements (such as co-pays, deductibles) and treatment limitations (such as visit limits) applicable to mental health or substance use disorder (MH/SUD) benefits are no more restrictive than the predominant requirements or limitations applied to substantially all medical/surgical benefits.
The new guidelines state that these health plans cannot choose to opt out of complying with the MHPAEA if they have not already done so by December 29, 2022. Additionally, any existing opt-out elections that expire 180 or more days after that date cannot be renewed.
However, there is a special rule for certain health plans that are collectively bargained. If a self-insured, non-federal governmental plan is subject to multiple collective bargaining agreements (CBAs) of different lengths and had an MHPAEA opt-out election in effect on December 29, 2022, which expires on or after June 27, 2023, the plan can extend the election until the last CBA expires. To do so, the plan needs to follow a specific process, including providing documentation of the effective date and duration of existing CBAs to CMS, obtaining CMS approval, and submitting a renewal opt-out election to extend the plan’s existing election.
The guidelines also emphasize that CMS has the authority to take enforcement action, such as imposing civil money penalties, against non-federal governmental health plans that do not comply with the MHPAEA requirements.
PREGNANT WORKERS FAIRNESS ACT GOES INTO EFFECT
Part of the Consolidated Appropriations Act, 2022, effective June 27, 2023, the Pregnant Workers Fairness Act (PWFA) requires employers with 15 or more employees to provide reasonable accommodations for job applicants and employees with known limitations related to pregnancy, childbirth and related medical conditions. The PWFA covers only accommodations and does not replace federal, state, or local laws that are more protective of workers. Existing laws enforced by the Equal Employment Opportunity Commission (EEOC) protect workers from discrimination or termination based on these conditions.
Reasonable accommodations must be made unless the accommodation would impose an undue hardship on the employer’s business operations.
Covered employers cannot:
- Require an employee to accept an accommodation without a discussion about the accommodation between the worker and the employer
- Deny a job or other employment opportunities to a qualified employee or applicant based on the person’s need for a reasonable accommodation
- Require an employee to take leave if another reasonable accommodation can be provided that would let the employee keep working
- Retaliate against an individual for reporting or opposing unlawful discrimination under the PWFA or participating in a PWFA proceeding (such as an investigation)
- Interfere with any individual’s rights under the PWFA
The EEOC will issue proposed regulations for comment before the final regulations take effect.
RXDC REPORT DUE TO CMS FOR 2022
The deadline for group health plans and plan issuers to submit information about prescription drugs and health care spending to the Department of Health and Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury was June 1, 2023, for the 2022 reporting year. Failure to comply with the reporting requirement may incur penalties of $100/day.
Although the reporting requirement is imposed on the group health plan, plan sponsors will certainly want to contract with the insurance carrier for fully insured plans and third-party entities such as their administrator for self-insured plans to provide the reporting on their behalf. Transferring the responsibility to an insurance carrier shifts the liability to the insurance carrier, but plan sponsors of self-insured plans remain liable for reporting assumed by a third-party entity.
FORM I-9 FLEXIBILITIES COME TO AN END
The COVID-19 flexibilities for employment eligibility verification through Form I-9 will end on July 31, 2023, according to U. S. Immigration and Customs Enforcement (ICE). The temporary flexibilities stated that employees hired on or after April 1, 2021, who worked exclusively in a remote setting due to COVID-19-related precautions were temporarily exempt from the physical inspection requirements of Form I-9 documentation. Employers will have until Aug. 30, 2023, to complete in-person physical document inspections for employees whose documents were inspected remotely. See I-9 Central Questions and Answers for more information.
QUESTION OF THE MONTH
Q: Is there a penalty for failure to file or pay the PCORI fee?
A: Although the PCORI statute and its regulations do not include a specific penalty for failure to report or pay the PCORI fee, the plan sponsor may be subject to penalties for failure to file a tax return because the PCORI fee is an excise tax. The plan sponsor should consult with its attorney about late filing or late payment of the PCORI fee. The PCORI regulations note that the penalties related to late filing of Form 720 or late payment of the fee may be waived or abated if the plan sponsor has reasonable cause and the failure was not due to willful neglect.
| This information is general in nature and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors. |
| ©2023 United Benefit Advisors |
