From fostering a workplace culture centered on supporting the physical, emotional, career and financial wellbeing of employees, to ensuring that benefit programs are compliant with local, state and federal requirements, effectively protecting the wellbeing of your employees connects directly to protecting the wellbeing of your organization overall.
Compliance Connections delivers actionable guidance designed to help you manage and optimize the connections between the compliance of your benefits and human resources programs to overall organizational wellbeing.
This edition focuses on compliance issues that will affect employer-sponsored health and welfare benefits in the year ahead.
Below, we explore your 2023 list of compliance action items.
1. Stay on top of prescription drug data collection (RxDC) and reporting
The Consolidated Appropriations Act, 2021 (CAA 2021) includes a number of provisions intended to increase transparency in healthcare costs, including a requirement that group health plans and insurers annually report certain information about prescription drug and healthcare spending. Specifically, group health plans (in connection with insurers, third-party administrators (TPAs), and pharmacy benefit managers (PBMs)) must report certain pharmacy and healthcare information to the Centers for Medicare & Medicaid Services (CMS). The first of these RxDC reports, with respect to calendar years 2020 and 2021, were due December 27, 2022, with a grace period through January 31, 2023. This reporting will continue as an annual process, with reports due June 1 of each year. While the Department of Health and Human Services, the Department of Labor (DOL), and the Treasury provided the grace period and good faith relief for the first sets of submissions, they have not provided the same relief for the June 1, 2023 submission. Plan sponsors should to work with their insurers, TPAs and PBMs on the timely submission of information. How have you prepared to annually gather and submit the required information?
2. Prepare for the end of the National Emergency and Public Health Emergency
Since 2020, we have anticipated the eventual end of two sources of COVID-19-related relief — the National Emergency (NE) and the Public Health Emergency (PHE). The NE requires employer-sponsored group health plans to modify certain deadlines relating to COBRA elections, notices and premium payments; HIPAA special enrollment elections; and claims filing, appeals and requests for external review. The rules require plan sponsors to extend these deadlines during an "Outbreak period," which began March 1, 2020 and will continue until 60 days after the announced end of the NE. During the PHE, group health plans are required to cover the cost of COVID-19 testing, including over-the-counter tests, at no cost to participants, whether provided in- or out-of-network. Since the NE and the PHE were first declared, the PHE has been repeatedly extended, at 90-day intervals, and the NE, which lasts one year, has been extended once. Recently, President Biden announced the coming end to both the NE and the PHE on May 11, 2023. The end of these emergencies means that plan sponsors will no longer be required to offer the relief mandated by each. Employers should prepare to modify their plans and communicate to participants about plan changes as a result of the end of these emergencies. What do you need to do in response to the end of the NE and PHE?
3. Be aware of continued telemedicine flexibility
In 2021, and in response to COVID-19, the CARES Act amended the Internal Revenue Code (Code) to provide relief for telemedicine services. Specifically, it allowed first dollar coverage for telehealth services under a qualifying high-deductible health plan (HDHP), without jeopardizing the individual's ability to contribute to an HSA. This change was to promote remote access to healthcare while social distancing recommendations applied during the pandemic. This relief was originally intended to end at the end of the 2021 plan year, but was extended for the period from April 1, 2022 through December 31, 2022. Recently, Congress passed the Consolidated Appropriations Act, 2023 (CAA 2023), which included a further extension of this relief for telemedicine services. Plan sponsors can continue to provide no-cost telemedicine services to HDHP participants on a pre-deductible basis without causing them to become ineligible to contribute to an HSA for plan years beginning after January 1, 2023 and ending on or before December 31, 2024. The patchwork of relief has caused some gaps for non-calendar year plans requiring careful administration and communication. What have you communicated with plan participants about telehealth flexibility?
4. Prepare for 1095-C disclosures, but with a permanently extended deadline
Applicable large employers and self-insured plans must report health coverage information to the Internal Revenue Service (IRS) annually on Forms 1095-B and -C, and transmittal Forms 1094-B and -C. The reports are due January 31 of each year, if filed electronically, and February 28 for entities filing by paper (generally, employers filing fewer than 250 forms with the IRS). In addition to filing with the IRS, the Forms 1095-B and -C must also be disclosed to responsible individuals (very generally, full-time employees and those covered by self-insured coverage). That disclosure was initially required to be given on the same dates as the IRS filing deadlines, but the IRS has continually provided an extension of up to 30 days. That extension is now permanent and the new date for disclosure is March 2. Have you modified your systems to reflect the differing filing and disclosure deadlines?
5. Continue working with vendors to meet the price comparison tool requirement
CAA 2021 includes a requirement to provide an online tool to enable individuals to estimate the cost of an item or service prior to obtaining that item or service. The first 500 services were required to be posted as of the first day of the plan year in 2023 (January 1, 2023, for calendar year plans). Thereafter, in 2024, all items and services should be available in the online tool. Plan sponsors have already begun to work with insurers, TPAs and PBMs on accomplishing this task for the first 500 services and should continue to work with their vendors for when the full requirement takes effect for plan years beginning in 2024. We may also see some additional guidance on this topic as we get closer to January 2024. What progress have you made on the price comparison tool requirement?
This is a preview edition of Compliance Connections, a publication produced by Gallagher's Compliance Consulting Practice. For five more action steps, contact your Gallagher representative or visit our Compliance Resources page to subscribe and receive the full version of this publication.
Compliance is a series of actions, not a final destination. As a trusted advisor, Gallagher has developed this Compliance Connections series to help you pursue a path through employee benefits compliance issues as part of an overall continuing compliance plan. Plan sponsors should carefully evaluate their health and welfare plans to determine if they are in compliance with both federal and state law. If you have any questions about one or more of the compliance requirements listed above, or would like additional information on how Gallagher constantly monitors laws and regulations impacting employee benefits in order to support plan sponsors in their compliance efforts, please contact your Gallagher representative.