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Compliance

This is the Compliance category of the Broad REach Benefits blog. At Broad Reach Benefits, we focus on employers that have between 30 and 500 benefit eligible employees. We’re employee benefit specialists, not a big box brokerage firm or payroll company with a sales force peddling policies.

Overview of the NLRB’s 2023 Joint-employer Standard

On Oct. 27, 2023, the National Labor Relations Board (NLRB) published a final rule that establishes new criteria to determine joint-employer status. Joint employment situations can happen when two or more employers share personnel hiring, supervision and management practices. When a joint employment status exists, joint employers are equally responsible for compliance with applicable laws and regulations.

The final rule becomes effective 60 days after publication, on Dec. 26, 2023. This final rule applies to labor issues related to the National Labor Relations Act (NLRA) and focuses on the amount of control an employer exerts over the employment relationship.

Whether joint employment is by design or unintentional, joint employers are equally:

  • Liable for unfair labor practices committed by other joint employers;
  • Required to bargain with the union that represents jointly employed workers; and
  • Subject to union picketing or other economic pressure if there is a labor dispute.

Action Items

Employers, particularly contractors and subcontractors, should become familiar with the new rule and determine whether a more inclusive joint-employer standard would reclassify them as joint employers in their operations by the rule’s effective date. Employers affected by the new standard should also take precautionary steps to ensure other joint employers comply with regulations regarding labor and employment laws for joint employees.

The 2020 Joint-employer Standard

The NLRB adopted the current joint-employer standard on April 27, 2020. This standard will expire once the 2023 final rule becomes effective. The NLRB will review cases filed before Dec. 26, 2023, under the 2020 joint-employer standard.

The 2020 standard considers the “substantial direct and immediate control” employers have over essential terms and conditions of employment for individuals who are employed by another organization. Specifically, the 2020 joint-employer standard indicates that a business is a joint …

By |October 30th, 2023|Compliance, Employee Communications, Human Resources, Legislation, U.S. Department of Labor|Comments Off on Overview of the NLRB’s 2023 Joint-employer Standard
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Federal Agencies May Expand Health Coverage for OTC Preventive Products

On Oct. 4, 2023, the Departments of Health and Human Services, Labor and the Treasury (Departments) issued a request for information (RFI) on the scope of the Affordable Care Act’s (ACA) preventive care coverage requirements for over-the-counter (OTC) products. Specifically, the Departments are gathering input from the public on requiring group health plans and health insurance issuers to cover OTC preventive products without cost sharing even when they are not prescribed by a health care provider.

The RFI signals that the Departments are considering eliminating the prescription requirement for first-dollar coverage of OTC preventive products. The Departments note that eliminating the prescription requirement is an important option to consider for expanding access to contraceptive care, as the first OTC daily oral contraceptive is expected to become available soon.

Preventive Care Coverage Requirements

The ACA requires non-grandfathered health plans and issuers to cover certain recommended preventive health services without imposing cost-sharing requirements when the services are provided by in-network providers. Most recommended preventive services require a health care provider to either provide a prescription for the item or service or directly furnish the service. However, there are several OTC preventive products available to consumers without a prescription. Examples of these include:

  • Certain types of tobacco cessation pharmacotherapy;
  • Folic acid supplements;
  • Breastfeeding supplies (e.g., breast pumps and breast milk storage supplies); and
  • Certain contraceptives, including the OTC daily oral contraceptive that was approved by the Food and Drug Administration in July 2023 and is expected to become available soon.

Current agency guidance requires health plans and issuers to cover OTC preventive products without cost sharing only when they are prescribed for an individual by their health care provider. The RFI seeks public input regarding the potential benefits and costs …

By |October 16th, 2023|Broad Reach Benefits, Compliance, Employee Communications, Legislation|Comments Off on Federal Agencies May Expand Health Coverage for OTC Preventive Products
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Legal Update-Upcoming EEO-1 Reporting Deadlines

Under Title VII of the Civil Rights Act (Title VII), employers with 100 or more employees and certain federal contractors must submit a report about their workforces to the Equal Employment Opportunity Commission (EEOC) by March 31 every year. This report, known as the EEO-1 report, is a federally mandated survey that collects workforce data categorized by race, ethnicity, sex and job category.

However, the collection of this data from 2022 was delayed, and the portal for submitting EEO-1 reports was not even opened before the usual deadline in 2023. Instead, the EEOC announced that it would open the portal for submissions of 2022 EEO-1 information on Oct. 31, 2023.

The EEOC also set the deadline for employers to complete their 2022 EEO-1 Reports. These submissions must be completed by Dec. 5, 2023.

Covered Entities

The following entities are subject to EEO-1 reporting:

  • A private employer that has 100 or more employees (with limited exceptions for schools and other organizations);
  • A private employer with between 15 and 99 employees if it is part of a group of employers that legally constitutes a single enterprise that employs a total of 100 or more employees; and
  • A federal contractor with 50 or more employees, is either a prime contractor or first-tier subcontractor, and has a contract, subcontract or purchase order amounting to $50,000 or more.

Enforcement

Although the EEOC sends notification letters to employers it knows to be subject to the EEO-1 requirements, all employers are responsible for obtaining and submitting the necessary information prior to the appropriate deadline.

An employer that fails or refuses to file an EEO-1 report as required may be compelled to do so by a federal district court. Federal contractors also risk losing their government …

By |September 5th, 2023|Compliance, Employee Communications, Human Resources, Legislation, U.S. Department of Labor|Comments Off on Legal Update-Upcoming EEO-1 Reporting Deadlines
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Legal Alert- Workplace Wellness Plan Design

Many employers implement wellness plans to encourage healthier lifestyles, reduce absenteeism and help control health care spending.  There are several legal compliance issues that are involved with designing workplace wellness plans. Wellness plans must be carefully structured to comply with both state and federal laws. The three main federal laws that impact the design of wellness plans are:

  • The Health Insurance Portability and Accountability Act (HIPAA);
  • The Americans with Disabilities Act (ADA); and
  • The Genetic Information Nondiscrimination Act (GINA).

These laws each have their own set of legal rules for acceptable wellness program design, which are not always consistent with one another.

This Compliance Overview provides an overview of the requirements for wellness plans under HIPAA, the ADA and GINA. See Page 7 for a chart that compares key wellness plan requirements under these three laws.

HIPAA Requirements

A workplace wellness program that relates to a group health plan must comply with HIPAA’s nondiscrimination rules. HIPAA generally prohibits group health plans from using health factors to discriminate among similarly situated individuals with regard to eligibility, premiums or contributions. However, HIPAA includes a special rule that allows employers to provide incentives or rewards as part of a wellness program, as long as the program follows certain guidelines.

The HIPAA nondiscrimination rules were clarified by the Affordable Care Act (ACA). Under these rules, workplace wellness programs are divided into two general categories: participatory wellness plans and health-contingent wellness plans. This distinction is important because participatory wellness plans are not required to meet the same nondiscrimination standards that apply to health-contingent wellness plans.

Wellness programs that are not part of group health plans (for example, standalone programs that pay health club dues) are NOT subject to …

By |July 6th, 2023|Broad Reach Benefits, Compliance, Employee Benefits, Employee Communications, Human Resources, Voluntary Benefits|Comments Off on Legal Alert- Workplace Wellness Plan Design
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Family and Medical Leave Act (FMLA): Serious Health Condition

The federal Family and Medical Leave Act (FMLA) requires covered employers to provide eligible employees with unpaid, job-protected leave for qualifying reasons. Qualifying reasons include needing time off due to the employee’s own serious health condition and caring for a spouse, son, daughter or parent who has a serious health condition.

Serious Health Condition

A serious health condition is an illness, injury, impairment, or physical or mental condition that involves inpatient care or continuing treatment by a health care provider. It does not include routine medical examinations, such as a physical, or common medical conditions, such as an upset stomach unless complications develop.

Types of Serious Health Conditions

Inpatient care means an overnight stay in a hospital, hospice or residential medical care facility and any period of incapacity or subsequent treatment in connection with the overnight stay.

Health conditions are also considered serious if they require continuing treatment by a health care provider. Such conditions include:

  • Incapacity plus treatment involving a period of incapacity of more than three consecutive, full calendar days, with follow-up treatment;
  • Any period of incapacity due to pregnancy or prenatal care;
  • Any period of incapacity due to a chronic serious health condition requiring health care provider visits at least twice a year and recurring over an extended period;
  • A period of incapacity due to a permanent or long-term condition for which treatment may not be effective but requires the continuing supervision of a health care provider; and
  • Conditions requiring multiple treatments, which specifically include surgery after an accident or other injury, or a condition that would likely result in incapacity of more than three days without treatment.
By |March 13th, 2023|Compliance, Employee Benefits, Employee Communications, Human Resources, Legislation, Medical, U.S. Department of Labor|Comments Off on Family and Medical Leave Act (FMLA): Serious Health Condition
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IRS Releases Final Rules Extending Deadline to Furnish ACA Reporting Forms

On December 12, 2022, the IRS released a Final Rule providing for, among other things,  an automatic 30-day extension of time for applicable large employers (“ALEs”) to furnish annual Forms 1095-C to individuals for calendar years beginning after December 31, 2022. The Final Rule is substantially consistent with the proposed rule issued by the IRS in November 2021 which employers were permitted to rely upon for their calendar year 2021 Forms 1095-C (which were due in 2022).

Prior to the IRS releasing its proposed rule last year, the IRS could grant an extension of time of up to 30 days to furnish Forms 1095-B and 1095-C to individuals for good cause shown; however, recognizing the January 31 deadline was difficult to meet, the proposed rule eliminated the good cause shown standard and simply allowed for an automatic 30-day extension to furnish the forms to employees.  The Final Rule does the same and, consistent with the proposed rule, provide that in years where the deadline falls on a weekend or holiday, the forms are due the next business day.

The deadline to file the Forms 1094-B or C and 1095-B or C with the IRS are not extended and will remain February 28 for paper filings and March 31 if filed electronically, though pursuant to current regulations, companies may receive an automatic 30-day extension of time to file the forms with the IRS by submitting Form 8809, Application for Extension of Time to File Information Returns, on or before the due date for filing the forms.

Additionally, because the penalty for the individual mandate is currently $0, for any calendar year in which it remains $0, the Final Rule provides relief (consistent with relief provided for tax years …

By |December 21st, 2022|Broad Reach Benefits, Compliance, Disability, Employee Benefits, Human Resources, IRS, Legislation, Voluntary Benefits|Comments Off on IRS Releases Final Rules Extending Deadline to Furnish ACA Reporting Forms
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Cafeteria Plan Deadline for CAA Amendments is Dec. 31, 2022

Employers that implemented the optional, temporary relief for cafeteria plans provided under the Consolidated Appropriations Act, 2021 (CAA) and IRS guidance must adopt plan amendments by Dec. 31, 2022. As a reminder, employers are permitted to retroactively amend their cafeteria plans for this temporary relief, so long as:

  • The amendment is adopted by the last day of the first calendar year following the plan year in which it is effective; and
  • The plan operates consistently with the amendment terms until the amendment is adopted.

Temporary Relief for Health FSAs and DCAPs

During 2020 and 2021 plan years, the CAA provided flexibility for health flexible spending accounts (FSAs) and dependent care assistance programs (DCAPs) with respect to the following:

  • Carryovers of unused amounts remaining at the end of the plan year;
  • Extension of the time period for incurring claims;
  • Post-termination reimbursements from health FSAs for employees who ceased participation during the calendar year; and
  • Special rules for dependents who “aged out” of DCAP coverage during the pandemic.

Mid-year Election Change Relief

The CAA and IRS guidance allowed employees to make prospective mid-year election changes even if they had not experienced a change in status. IRS Notice 2021-15 clarified that employers could decide how long to permit mid-year election changes with no change in status during the plan year, and could limit the number of election changes during the plan year that were not associated with a change in status.

By |November 28th, 2022|Broad Reach Benefits, Compliance, Employee Benefits, Employee Communications, Human Resources, IRS|Comments Off on Cafeteria Plan Deadline for CAA Amendments is Dec. 31, 2022
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Legal Alert-PCORI Fee Amount Adjusted for 2023

The Internal Revenue Service (IRS) has issued Notice 2022-59 to increase the Patient-Centered Outcomes Research Institute (PCORI) fee amount for plan years ending on or after Oct. 1, 2022, and before Oct. 1, 2023. The updated PCORI fee amount is $3.00 multiplied by the average number of lives covered under the plan.

Applicability of PCORI Fee

The PCORI fee was created by the Affordable Care Act (ACA) and first applied for plan or policy years ending after Sept. 30, 2012. The fee is imposed on health insurance issuers and self-insured plan sponsors to fund comparative effectiveness research. The PCORI fee was originally scheduled to expire in 2019. However, a federal spending bill extended the PCORI fee for an additional 10 years. As a result, the PCORI fee will apply through the plan or policy year ending before Oct. 1, 2029.

Payment Deadline

PCORI fees are reported and paid annually on IRS Form 720 (Quarterly Federal Excise Tax Return). These fees are due each year by July 31 of the year following the last day of the plan year. For plan years ending in 2022, the PCORI fee is due by July 31, 2023. Employers with self-insured health plans should have reported and paid PCORI fees for 2021 by Aug. 1, 2022 (since July 31, 2022, was a Sunday).

Calculating the PCORI Fee

The PCORI fees are calculated based on the average number of covered lives under the plan or policy. This generally includes employees and their enrolled spouses and dependents, unless the plan is an HRA or FSA. Final rules outline a number of alternatives for issuers and plan sponsors to determine the average number of covered lives.

By |November 15th, 2022|Affordable Care Act, Compliance, Employee Benefits, Human Resources, IRS, Legislation|Comments Off on Legal Alert-PCORI Fee Amount Adjusted for 2023
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Legal Update- FAQs Clarify Posting Requirement for Machine-readable Files

On Aug. 19, 2022, federal agencies released FAQs implementing certain health care transparency requirements, including the requirement that health plans and health insurance issuers disclose on a public website detailed pricing information in three separate machine-readable files (MRFs). The files must be publicly available and accessible free of charge without any restrictions.

Health Plans Without Public Websites

The FAQs address the common situation where a group health plan does not have its own public website for posting the MRFs (or providing a link to where the MRFs are publicly available). According to the FAQs, health plans are not required to create their own public website for purposes of providing (or linking to) the MRFs. This guidance applies even when an employer maintains its own public website but does not have a public website for its health plan. The FAQs clarify that a plan may satisfy the MRF disclosure requirements by entering into a written agreement under which a service provider (such as a TPA) posts the MRFs on its public website on behalf of the plan. However, employers should monitor their service providers to ensure they comply with this requirement. According to the FAQs, a health plan violates the MRF disclosure requirements if its service provider fails to comply with a written agreement requiring it to publicly post the MRFs on the plan’s behalf.

Enforcement Dates

While the MRF requirements are applicable for plan years beginning on or after Jan. 1, 2022, federal agencies deferred enforcement of the first and second MRFs related to disclosing in-network and out-of-network data until July 1, 2022. Enforcement of the third MRF relating to prescription drugs is delayed until further notice.

By |September 26th, 2022|Compliance, Employee Benefits, Employee Communications, Human Resources, Medical|Comments Off on Legal Update- FAQs Clarify Posting Requirement for Machine-readable Files
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REMINDER: PCORI Fees Due By July 31, 2022

Employers that sponsor self-insured group health plans, including health reimbursement arrangements (HRAs) should keep in mind the upcoming July 31, 2022 deadline for paying fees that fund the Patient-Centered Outcomes Research Institute (PCORI) via Form 720, which was recently updated and released by the IRS.  As background, the PCORI was established as part of the Affordable Care Act (ACA) to conduct research to evaluate the effectiveness of medical treatments, procedures and strategies that treat, manage, diagnose or prevent illness or injury.  Under the ACA, most employer sponsors and insurers are required to pay PCORI fees until 2029, as it only applies to plan years ending on or before September 30, 2029 (unless extended).

The amount of PCORI fees due by employer sponsors and insurers is based upon the number of covered lives under each “applicable self-insured health plan” and “specified health insurance policy” (as defined by regulations) and the plan or policy year end date.  This year, employers will pay the fee for plan years ending in 2021.

The fee is due by July 31, 2022 and varies based on the applicable plan year as follows:

  • For plan years that ended between January 1, 2021 and September 30, 2021, the fee is $2.66 per covered life.
  • For plan years that ended between October 1, 2021 and December 31, 2021, the fee is $2.79 per covered life.

For example, for a plan year that ran from July 1, 2020 through June 30, 2021 the fee is $2.66 per covered life. The fee for calendar year 2021 plans is $2.79 per covered life. The insurance carrier is responsible for paying the PCORI fee on behalf of a fully insured plan.  The employer is responsible for paying the fee on …

By |May 24th, 2022|Affordable Care Act, Broad Reach Benefits, Compliance, Employee Benefits, Human Resources, IRS, Legislation, Medical, Voluntary Benefits|Comments Off on REMINDER: PCORI Fees Due By July 31, 2022
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