On May 16, 2023, the IRS released Revenue Procedure 2023-23 to provide the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2024. The IRS is required to publish these limits by June 1 of each year.
These limits include:
Inflation has increased the cost of goods and services for most every employer, while low unemployment rates have pushed-up wage and benefit costs across the country. Restaurants, in particular, have seen their costs across the board soar, impacting already slim margins.
Some businesses have started to provide line-item detail of these additional expenses to customers, typically to help justify price increases or to make a political statement.
While this practice isn’t entirely new (it started to gain prominence ten years ago with the passage of the employer mandate, part of the Affordable Care Act), recent actions in this regard by two Scottsdale Arizona restaurants resulted in a $20,000 fine.
Employee handbooks are important tools for establishing employee expectations, addressing workplace issues, and defending against potential lawsuits.
Failing to update employee handbooks regularly can make employers vulnerable to legal risks and liabilities, resulting in costly fines, penalties, and attorneys’ fees.
Employment laws are often complicated, and employers need to be aware of any new regulatory developments that may impact their organizations and workforce. Each new calendar year provides employers with an excellent opportunity to review and update the policies in their employee handbooks.
Here are five employment policies employers should consider reviewing in 2023.
On nearly the eve of its expiration, Congress has extended the ability of high deductible health plans (“HDHPs”) to offer first-dollar telehealth coverage through plan years beginning before January 1, 2025. This will allow participants receiving this coverage to continue to contribute to a health savings account (“HSA") for this purpose.
Separately, the agencies responsible for enforcing prescription drug reporting have issued good faith relief, an extension, and some additional flexibility in reporting.
Employers subject to Affordable Care Act (ACA) reporting under Internal Revenue Code Sections 6055 or 6056 should prepare now to comply with reporting deadlines
in early 2023.
For the 2022 calendar year, covered employers must: a) furnish statements to individuals by March 2, 2023; and b) file returns with the IRS by Feb. 28, 2023 (or March 31, 2023, if filing electronically).
Penalties may apply if employers are subject to ACA reporting and fail to file returns and furnish statements by the applicable deadlines.
Note that while the annual deadline for furnishing statements to individuals is Jan. 31, the IRS finalized a 30-day automatic extension to the annual furnishing deadline. Thus, the deadline for furnishing statements to individuals for the 2022 calendar year is extended from Jan. 31, 2023, to March 2, 2023.
In addition, the IRS has provided an alternative to automatically furnishing statements to covered individuals in certain situations.
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.
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;
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.
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.
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.
