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Over Half of U.S. Private-sector Workers Are Enrolled in HDHPs

More than half (55.7%) of American private-sector workers were enrolled in high deductible health plans (HDHPs) in 2021, according to the Kaiser Family Foundation’s recent 2022 Employer Health Benefits Survey. The 5.3% increase from 2020 is the highest on record, and 2021 is the eighth straight year an increase has occurred.

The top three states with the highest HDHP enrollment were Maine (76.2%), Tennessee (68.7%) and Nebraska (67.6%), all of which were not seen breaking the top 10 in HDHP enrollment in 2020.

HDHPs are on the rise because of the growing costs of health insurance. These plans create a more flexible way for someone to spend their health care dollars and require more active involvement in the management of health care spending. HDHPs also allow enrolled individuals to set aside pre-tax dollars for out-of-pocket health care expenses when combined with health savings accounts and health reimbursement arrangements.

What’s Next?

Employers continue to prioritize HDHP plans over preferred provider organization (PPOs) and health maintenance organization (HMOs), most likely due to cost savings in a time of economic uncertainty. Employers must consider implications of their offerings in the midst of a tight labor market.

To stay in tune with employee needs, employers should stay up to date with HDHP trends in the upcoming years.

Contact Alera Group for more information on trends near you.

By |March 8th, 2023|Broad Reach Benefits, Employee Benefits, Human Resources, Medical, Private Health Care Exchange, Voluntary Benefits|Comments Off on Over Half of U.S. Private-sector Workers Are Enrolled in HDHPs
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President Biden Announces Anticipated End of COVID-19 National and Public Health Emergencies

On January 30, 2023, President Biden issued a Statement of Administration Policy announcing his intent to extend the COVID-19 national and public health emergencies (collectively, “COVID-19 Emergencies”) set to expire on March 1 and April 11, respectively, until May 11, 2023.  While the COVID-19 Emergencies have not officially been extended at this time, if they are extended through May 11, 2023, then they will end on that date.

This announcement comes more than 3 months prior to the anticipated end of the COVID-19 Emergencies, and is intended to ensure that states, group health plans, health insurers, health care providers, and health plan participants, among many others, have sufficient advance notice, as the end of the COVID-19 Emergencies may trigger significant changes for health plans and employee benefits which are described in more detail below.

Employee Benefits Provisions Tied to COVID-19 Public Health Emergency

COVID-19 Testing

The Families First Coronavirus Response Act, which was enacted on March 18, 2020, requires group health plans (self-funded, fully insured, grandfathered, and non-grandfathered plans, but not excepted benefits such as dental or vision) and health insurance issuers to cover testing or certain other items or services intended to diagnose COVID-19 without cost sharing (deductibles, copays, or coinsurance), prior authorization, or other medical management requirements.  It also permits federal agencies to implement the FFCRA through sub-regulatory guidance, program instruction, or otherwise.  The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was enacted on March 27, 2020, expanded the FFCRA to, among other things, include a broader range of reimbursable COVID-19 diagnostic items and services that must be covered without cost-sharing, prior authorization, or medical management during the public health emergency, including testing provided by out-of-network (OON) providers.

As COVID-19 pandemic progressed and …

By |February 9th, 2023|Employee Benefits, Employee Communications, Health Care Reform, Human Resources, Legislation, Medical|Comments Off on President Biden Announces Anticipated End of COVID-19 National and Public Health Emergencies
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Record Number of Americans Delayed Medical Care in 2022 Due to Cost

The annual Gallup poll found that a record number of  Americans postponed medical care last year. In the survey, 38% of respondents said they or a family member postponed care in 2022, compared to 26% in 2021. The 2022 percentage is the highest figure since Gallup began tracking Americans’ postponed medical care in 2001.

The survey, conducted from Nov. 9 to Dec. 2, 2022, asked respondents about medical treatment within the past 12 months. Given the poll’s timing, most Americans said inflation is creating hardships for them, impacting their decisions to receive medical care. Moreover, it remains to be seen how quickly inflation will return to normal after a year and a half of unusually rapid increases. A full deceleration may well be a long process, pushing Americans to continue making health-related decisions based on cost.

Americans were more than twice as likely to report the delayed treatment in their family was for a serious rather than a nonserious condition or illness. In 2022, 27% of respondents said the treatment they delayed was for a “somewhat” or “very” serious condition, while 11% said it was “not very” or “not at all” serious.

Lower-income adults (an annual household income under $40,000), younger adults (aged 18 to 49) and women have consistently been more likely than their counterparts to say they or a family member have delayed care for a serious medical condition.

Takeaway

Not surprisingly, many Americans are deciding to hold off on medical care for financial reasons. This behavior is expected to continue as inflation strains Americans’ finances. Employers can help workers struggling with health care costs by sharing the following tips:

  • Use in-network providers to control the cost of health care services.
  • Consider the deductible and opt for …
By |February 2nd, 2023|Employee Benefits, Human Resources, Medical, Wellness|Comments Off on Record Number of Americans Delayed Medical Care in 2022 Due to Cost
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Legal Alert- CAA, 2023 Eliminates MHPAEA Exemption for Self-Funded Non-Federal Governmental Health Plans

On December 29, 2022, the President signed the Consolidated Appropriations Act, 2023  (“CAA, 2023”), into law.  The CAA 2023, which is largely a bipartisan spending bill, sunsets provisions of the Public Health Service Act which permitted large, self-funded, non-federal governmental plans (i.e., self-funded state and local governmental plans) to opt out of the Mental Health Parity and Addiction Equity Act (“MHPAEA”). Essentially, this means any self-funded state and local governmental plans that have not previously elected to opt out of the MHPAEA will no longer be able to submit an election to opt out.  Further, any self-funded state and local governmental plans that previously elected to opt out of the MHPAEA will be unable to renew their election once it expires.

There is an exception for certain collectively bargained, non-federal governmental plans with existing opt outs that are subject to multiple collective bargaining agreements (“CBA”) with varying lengths. These plans may extend their opt out elections until the date on which the term of the last CBA expires.

Background

The MHPAEA prohibits a group health plan from applying financial requirements (e.g., deductibles, co-payments, coinsurance, and out-of-pocket maximums), quantitative treatment limitations (e.g., number of treatments, visits, or days of coverage), or non-quantitative treatment limitations (such as restrictions based on facility type) to its mental health and substance use disorder benefits that are more restrictive than those applied to the plan’s medical and surgical benefits.

With limited exceptions, the MHPAEA applies to both self-funded, fully insured, grandfathered and non-grandfathered group health plans offering medical/surgical benefits and mental health and substance use disorder benefits. Certain plans may be exempt from the MHPAEA requirements, including: (1) self-insured plans sponsored by employers with 50 or fewer employees, (2) group health plans and group …

By |January 11th, 2023|Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, Legislation|Comments Off on Legal Alert- CAA, 2023 Eliminates MHPAEA Exemption for Self-Funded Non-Federal Governmental Health Plans
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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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Assembling an Inflation-proof Benefits Package

Employers are becoming increasingly concerned about inflation’s impact on their employees, especially as the U.S economy faces the very real prospect of an upcoming recession. Many employers are searching for creative solutions to better support employees while navigating a competitive labor market. Many employers are building inflation-proof benefits packages to help employees counter inflation’s impact and address their attraction and retention struggles.

This article outlines employer strategies for assembling inflation-proof benefits packages.

Focusing on Comprehensive Benefits Packages

Many employers’ budgets are shrinking due to the current economic downturn. As a result, employers have fewer resources to allocate to employee compensation and benefits at a time when employee expectations remain high. With limited resources, employers can strategically invest in the benefits employees want and value most, such as cash incentives, flexible stipends, mental health support, enhanced leave options and financial wellness resources. Shifting to a holistic approach allows employers to provide employees with comprehensive benefits packages that can ease current inflationary pressures.

According to a recent Mercer survey, HR managers reported that they are considering expanding benefits offerings to maximize employee benefit spending in response to inflation. These benefits offerings include:

  • Financial wellness programs—Financial wellness programs go beyond retirement preparedness to focusing on all aspects of an employee’s financial well-being. These programs attempt to reduce financial stress as well as repair and increase an employee’s financial health by providing individualized financial guidance. Eighty percent of employers have started addressing employee financial wellness, and 63% expect to increase their financial wellness budget in the next one to two years, according to the Employee Benefit Research Institute’s 2021 Financial Well-being Employer Survey.
  • Voluntary benefits—Increasingly, employees expect their employers to provide voluntary benefits as part of a competitive benefits package. Many employers are …
By |October 25th, 2022|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Human Resources, Medical, Voluntary Benefits|Comments Off on Assembling an Inflation-proof Benefits Package
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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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