Medical Debt Reform; How It May Impact Employer Group Health Plans

Cory Jorbin, Esq.

With over a million ballots cast so far statewide, Arizona voters are already making their voices heard in the 2022 mid-term election. In addition to Arizona's more obvious races in the national spotlight, Arizona has a measure on the ballot that may also interest those living outside the state.
 
Known as Prop 209, this measure would reduce the maximum interest rate allowable on medical debt from 10% to 3% and expand the assets exempt from medical debt collectors.

If it passes, it may prompt other states to move in this direction, especially those more progressive states or those states with significant populations in medical debt.

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Topics: Compliance, Cost Containment, Arizona

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Complete List of 2023 IRS Contribution Limits For Tax-Advantaged Employee Benefit Programs

David Rook

The IRS has finally announced adjustments to 2023 contribution limits on various tax-advantaged health and dependent care spending accounts, retirement plans, and other employee benefits such as adoption assistance and transportation benefits. Many of these contribution limits, though not all, are indexed to cost-of-living adjustments.

Together, these combined announcements by the IRS detail 2023 adjusted limits to the amounts employees can tuck away pretax into Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), transportation benefits, and retirement plans such as 401(k)s.

While IRS limits for HSAs and HDHPs are required, by law, to be announced by June 1st, limits for these other pretax savings vehicles always seem to come so late in the year that many employers have already completed their employee benefits open enrollments.

Employers who have already completed open enrollment for 2023 have two choices when it comes to communicating these updates; 1) they can do nothing, since there isn't an obligation to make the maximum election amounts available to employees, or 2) they can reopen the enrollment process and let employees who want to increase their elections do so before December 31st, for calendar year plans.

What follows is a consolidated summary of the new IRS limits;

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Topics: Compliance, Employee Communications, HSAs, Retirement Planning, HDHPs, FSAs

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IRS Extends ACA Affordability to Other Tiers of Coverage

Cory Jorbin, Esq.

Earlier this year the IRS announced proposed regulations extending ACA affordability to other tiers of employer-sponsored group medical coverage (employee + child/spouse, family, etc.). Today the IRS released final regulations.  

Previously, ACA affordability was based solely on the employee-only tier of coverage. If an employee was offered affordable, minimum-value coverage, the spouse and dependent children would not be eligible to purchase subsidized coverage on the exchange.

Under this new rule, if the family tier of coverage is not affordable, spouses and/or dependent children will now be eligible to purchase subsidized coverage on the exchange, provided they don’t have their own offer of affordable coverage.

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Topics: Compliance, ACA, PPACA

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Understanding FMLA Leave for Mental Health Conditions

Jeff Griffin

Mental health is a growing concern in the workplace. Over the past few years, many employees have experienced mental health issues, such as burnout, depression, anxiety, and substance abuse.

Employers have responded by expanding mental health benefits, including adding mental health programs, increasing schedule flexibility, offering telemedicine options for mental health, and providing more mental health education.

Despite the amplified focus on mental health, employees’ mental health issues are still commonly overlooked, especially since they may not be as readily apparent as physical ailments. However, in reality, employees may sometimes be unable to work because of their mental health issues.
 
While employers pursue various ways to support employees struggling with mental health issues, it’s also important to be aware of and offer appropriate leave under the Family and Medical Leave Act (FMLA).

The U.S. Department of Labor (DOL) recently issued a fact sheet relating to an employee’s ability to use FMLA leave for their own or a family member’s mental health condition.

Today we'll provide an overview of the FMLA, the DOL’s guidance, FMLA assistance for employees struggling with mental health issues, and ways employers can support their employees.

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Topics: Compliance, Workforce Absence Management

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Employer Reporting on Prescription Drug Pricing Due By 12/27

Jeff Griffin

Among the various transparency rules contained within the Consolidated Appropriations Act is a requirement for employers to provide certain plan information about prescription drugs. The deadline for that reporting is December 27 of this year, but preparations are beginning now.

Employers, particularly those with self-funded plans, should start working with their health and prescription drug providers now, if they haven't already, to ensure their program’s reporting readiness capability.

Background
As we previously reported, interim final rules released last year provided initial detail about the reporting requirements. More recently, and specifically regarding prescription drugs, the Centers for Medicare and Medicaid Services (“CMS”) has provided additional detail on what information must be included.

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Topics: Compliance, Price Transparency

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SCOTUS Overturns Roe v. Wade: Implications for Employers

Jeff Griffin

As has been widely reported, the Supreme Court has overturned the 1973 decision Roe v. Wade. In Dobbs v. Jackson Women’s Health Organization, the Supreme Court concluded there is no directly embedded Constitutional right to an abortion. Instead, the Court ruled that individual states can now regulate abortion.

So what will this mean for medical plan sponsors?

STATE REGULATION

Some states have already passed laws restricting abortion, while others have enacted “trigger laws” that ban or restrict abortion when Roe is overturned. (Laws regarding abortion vary by state and a complete rundown of these laws is beyond the scope of this initial write-up.) Additionally, it is likely that further legislative changes at the state level will be made in response to this decision, so this is a highly fluid situation.

That said, the immediate impact for a state like Arizona can be summed up in one word - uncertainty. Experts predict an immediate challenge to Arizona's anti-abortion laws as well as a fight to determine which of two anti-abortion laws will take precedence. One law was written 158 years ago while one is practically brand new.

The old law, created in Arizona’s territorial days, is a strict ban on providing or helping to provide an abortion, except to save the mother's life. It calls for a mandatory prison sentence of two to five years for violators.

Republicans in the state Legislature passed the new anti-abortion law this year; Gov. Doug Ducey signed it into law in March. Scheduled to take effect 90 days after the Legislature adjourns its current session (which may happen by the end of June), it bans abortions after 15 weeks of pregnancy except if necessary to save the mother’s life. Violating physicians face potential felony charges and loss of their professional licenses.

The state court system, likely the Arizona Supreme Court, will need to settle the issue as women seeking abortions and abortion service providers wait for guidance. Since this question remains unanswered, Planned Parenthood of Arizona has paused all abortions, both medical and surgical, and seven of nine licensed providers in the state have immediately halted abortions.

FEDERAL REGULATION OF HEALTH PLANS

Notably, in the employee benefits context this decision indirectly affects group health plans, especially insured plans issued in states that ban or limit abortion. Self-insured plans are also impacted, because though exempted from complying with state-mandated health care services, they must comply with state laws whenever reimbursing medical expenses incurred by plan participants.

Shown below is a list of key issues employers should consider in response to this decision. Note, however, that just as state laws are likely to be enacted in response to this decision, new federal rules may be introduced to modify the treatment of certain healthcare services, which would impact some of the considerations noted below.

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Topics: Compliance

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Transparency Rules Deadline Approaching for Employers to Conform by July 1

Jeff Griffin

If you’re an employer who has not yet made public your in-network negotiated rates, out-of-network billed charges, and historically allowed amounts, you have less than two weeks to complete this task.

This rule came into being through a series of overlapping transparency rules passed by congress in 2020 and 2021. Some were a part of a rulemaking from 2020 (the “Transparency in Coverage Rules” or “TiC Rules”), while others were enacted as part of the Consolidated Appropriations Act, 2021 (the year-end 2020 COVID relief bill or the “CAA”)).

Most fully-funded employers are conforming to this rule by simply ensuring that their carrier partners are making this information publicly accessible. Other employers, especially those who are self-funded, are conforming to this rule by accessing and posting links on their websites, which are being provided by insurance carriers or third-party administrators (TPAs) who are hosting these rates and historical payments on their own websites. Still, other employers are publishing this information directly on their own websites. 

That said, employers and group health plans must familiarize themselves with this disclosure requirement as insurance carriers and TPAs expect group health plan sponsors to assist them with posting the machine-readable files.

Here’s a recap of what the Transparency Rules entail;

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Topics: Compliance

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2022 IRS Contribution Limits For Tax-Advantaged Employee Benefit Programs (Consolidated)

Jeff Griffin

The IRS has finally announced adjustments to 2022 contribution limits on various tax-advantaged health and dependent care spending accounts, retirement plans, and other employee benefits such as adoption assistance and transportation benefits. Many of these contribution limits, though not all, are indexed to cost-of-living adjustments.

Together, these combined announcements by the IRS detail 2022 adjusted limits to the amounts employees can tuck away pretax into Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), transportation benefits, and retirement plans such as 401(k)s.

While IRS limits for HSAs and HDHPs are required, by law, to be announced by June 1st, limits for these other pretax savings vehicles always seem to come so late in the year that many employers have already completed their employee benefits open enrollments.

Employers who have already completed open enrollment for 2022 have two choices when it comes to communicating these updates; 1) they can do nothing, since there isn't an obligation to make the maximum election amounts available to employees, or 2) they can reopen the enrollment process and let employees who want to increase their elections do so before December 31st, for calendar year plans.

What follows is a summary of the new IRS limits;

Read More
Topics: Compliance, Employee Communications, HSAs, Retirement Planning, HDHPs, FSAs

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Employer Vaccination Mandates and Medical Premium Surcharges

Jeff Griffin

Many employers are struggling to increase COVID-19 vaccination rates among their workforce, concerned not only about the safety of the workforce but also the costs of COVID-19 treatment that could be avoided through vaccination.

Some, like Delta Airlines, are turning to higher premium costs, or a surcharge, for any group health plan participants who remain unvaccinated. This decision by Delta, taken once an FDA-approved vaccine came on the market, should by no means be interpreted as a full-throated endorsement of this action. In fact, it’s quite likely that Delta’s decision will be tested in the courts.

Challenges are likely to come in three areas: wellness positioning, surcharge amounts, and possible discrimination. Nevertheless, Delta’s decision has prompted some employers to consider doing something similar.

Here are issues employers need to consider if they decide to take similar action.

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Topics: Compliance, Cost Containment, wellness, COVID-19

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Vendor Contracts – Beware of These Five Pitfalls in Employee Benefits Agreements

Jeff Griffin

Anyone who has ever signed up for cellular phone service with a mobile phone carrier knows what a burdensome service agreement looks like. It's pages and pages of terms and conditions, often delivered by an anxious salesperson consumed with an expectation that the customer desiring service will sign the carrier agreement on the spot.

While consumer law often provides protections to the little guy when big corporations require the signing of contacts like this, the courts aren't nearly as understanding when it comes to agreements between business parties. In many of these cases, the courts expect business-to-business agreements to be fully enforced.

This is particularly unfortunate given what's occurred over the last decade in the employer-sponsored group benefits space. These agreements have morphed from straightforward, comprehendible documents to verbose and cryptic agreements that shift virtually all risk to the plan sponsor (e.g., the employer) while relieving the vendor from almost all meaningful liability.

Plan sponsors have seen some of this behavior abate in recent years, fueled by their successful push back against commercially unreasonable contract provisions. Furthermore, the DOL's Fiduciary Rule, which went into effect July 1, 2019, has also helped neutralize some of these more unreasonable provisions.

Nevertheless, employers should resist the temptation to view the provisions of their employee benefits vendor contracts as minor details. The wrong provisions could easily bankrupt a small to medium-size business or cripple the growth of a larger one.

Although every single word of every vendor contract needs to be reviewed carefully by not only you and your employee benefits broker, but also qualified legal counsel, here is a list of five common provisions that require special attention.

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Topics: Compliance, Legal Review

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