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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.

Legal Alert- IRS Releases 2023 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits

In Rev. Proc. 2022-24, the IRS released the inflation adjusted amounts for 2023 relevant to Health Savings Accounts (HSAs) and high deductible health plans (HDHPs). The table below summarizes those adjustments and other applicable limits.

  2023 2022 Change
Annual HSA Contribution Limit

(employer and employee)

 Self-only: $3,850 Family: $7,750 Self-only: $3,650 Family: $7,300 Self-only: +$200 Family: +$450
HSA catch-up contributions

(age 55 or older)

 $1,000 $1,000 No change
Minimum Annual HDHP Deductible Self-only: $1,500 Family: $3,000 Self-only: $1,400 Family: $2,800 Self-only: +$100

Family: $200
Maximum Out-of-Pocket for HDHP

(deductibles, co-payment & other amounts except premiums)

 Self-only: $7,500 Family: $15,000 Self-only: $7,050 Family: $14,100 Self-only: +$450 Family: +$900

 

Out-of-Pocket Limits Applicable to Non-Grandfathered Plans

The ACA’s out-of-pocket limits for in-network essential health benefits have also been announced and have increased for 2023.

  2023 2022 Change
ACA Maximum Out-of-Pocket Self-only: $9,100

Family: $18,200

 Self-only: $8,700

Family: $17,400

 Self-only: +$400

Family: +$800

 

Note that all non-grandfathered group health plans must contain an embedded individual out-of-pocket limit within family coverage if the family out-of-pocket limit is above $9,100 (2023 plan years) or $8,700 (2022 plan years). Exceptions to the ACA’s out-of-pocket limit rule are available for certain small group plans eligible for transition relief (referred to as “Grandmothered” plans). While historically CMS has renewed the transition relief for Grandmothered plans each year, it announced in March that the transition relief will remain in effect until it announces that all such coverage must come into compliance with the specified requirements.

Next Steps for Employers

As employers prepare for the 2023 plan year, they should keep in mind the following rules and ensure that any plan materials and participant communications reflect the new limits:

  • HSA-qualified family HDHPs cannot have an embedded individual deductible that is …
By |May 3rd, 2022|Affordable Care Act, Compliance, Employee Benefits, Employee Communications, Health Care Reform, IRS, Legislation, Medical, Voluntary Benefits|Comments Off on Legal Alert- IRS Releases 2023 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits
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Legal Alert-Agencies Issue Additional Guidance on OTC COVID-19 Tests

On February 4, 2022, federal agencies released additional FAQs related to coverage of over the counter (“OTC”) COVID-19 tests by group health plans and health insurance carriers.  The FAQs are intended to clarify the previous FAQs released on January 10, 2022.

Prior Guidance

On January 10, 2022, the agencies released initial guidance for plans and carriers, which required them to cover FDA approved at-home, OTC COVID-19 tests without cost sharing, prior authorization, or medical management, and without the need for a prescription or recommendation of a health care provider.  These requirements apply during the COVID-19 public health emergency.  Notably, plans and carriers are not required to cover OTC COVID-19 tests purchased or used for workplace testing/employment purposes.

Plans and carriers may reimburse participants for their purchase upon submission of a claim or by reimbursing the entity who sold the test directly. The guidance provided for two safe harbors, which permit plans and carriers to:

  1. limit reimbursement to the lower of the actual price or $12 per test if the plan arranges for direct-to-consumer coverage of OTC COVID-19 tests that meet the FFCRA criteria through both its pharmacy network (or another entity designated by the plan or carrier) and a direct-to-consumer shipping program; and
  2. limit coverage to no less than eight (8) tests per Individual for a 30-day or one month period.

In order to limit reimbursements for tests purchased from non-preferred providers, plans must ensure there are an adequate number of retail locations (in-person and online) with access to OTC COVID-19 tests and communicate necessary information about the direct coverage program, including when it is available and which retail pharmacies are available.

New Guidance

The guidance issued on February 4, 2022 (which is generally effective prospectively for purposes of …

By |February 16th, 2022|Compliance, Employee Benefits, Employee Communications, Legislation, Medical, Voluntary Benefits, Wellness|Comments Off on Legal Alert-Agencies Issue Additional Guidance on OTC COVID-19 Tests
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DOL Publishes Guidance on $15 Minimum Wage for Federal Contractor Employees

On Jan. 13, 2022, the U.S. Department of Labor (DOL) published Field Assistance Bulletin (FAB) 2022-1 to help federal contractors understand and implement a $15 minimum wage rate for their employees by Jan. 30, 2022, as required by Executive Order (EO) 14026.

Federal Contractor Employee Minimum Wage

Existing law requires federal contractors to pay at least the established minimum wage rate to workers performing work on or in connection with certain covered federal contracts for construction or services. EO 13658 authorized the DOL to adjust the applicable minimum wage rate annually based on inflation. The Jan. 1, 2022, EO 13658 minimum wage rate is $11.25 ($7.90 for tipped workers).

Increase to $15 per hour

EO 14026 raises the hourly minimum wage for workers performing work on or in connection with certain covered federal contracts for construction or services. EO 14026 establishes an initial minimum wage of $15 ($10.50 for tipped workers) as of Jan. 30, 2022. This rate will also be adjusted annually based on inflation. EO 14026 shares many similarities with EO 13658 but has some key differences relating to coverage and applicability. The DOL has published a final rule to implement the provisions of EO 14026.

FAB 2022-1

Federal contractors can use FAB 2022-1 to learn more about who is covered by EO 14026 and the $15 minimum wage as well as employee notice, recordkeeping and antiretaliation requirements

By |January 17th, 2022|Compliance, Employee Benefits, Human Resources, Legislation|Comments Off on DOL Publishes Guidance on $15 Minimum Wage for Federal Contractor Employees
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Agencies Issue FAQs Regarding Coverage of Over the Counter COVID-19 Diagnostic Tests

On December 2, 2021, President Biden announced that federal agencies would soon issue guidance regarding the availability of coverage/reimbursement from group health plans and health insurance carriers for individuals who purchase over the counter, at-home COVID-19 diagnostic tests (“OTC COVID-19 tests”).  Accordingly, on January 10, 2022, the agencies released “FAQs About Affordable Care Act Implementation Part 51, Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Implementation” which, among other things, requires group health plans and health insurance carriers to reimburse participants, beneficiaries, or enrollees (“Individuals”) for no less than eight (8) OTC COVID-19 tests per calendar month beginning on January 15, 2022 (i.e., for tests purchased on or after January 15, 2022).

Background

During the COVID-19 public health emergency, the FFCRA 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 (“Plans and Carriers”) 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 the agencies to implement the FFCRA through sub-regulatory guidance, program instruction, or otherwise.  The CARES Act 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.

In 2020, the agencies implemented several FAQs intended to serve as statements of policy to implement the above-referenced requirements under the FFCRA and CARES Act.  Since that time, the FDA has authorized at-home OTC COVID-19 diagnostic tests that individuals can self-administer and self-read to diagnose COVID-19.  Accordingly, per the agencies, the FAQs …

By |January 13th, 2022|Affordable Care Act, Compliance, Employee Benefits, Employee Communications, Health Care Reform, Legislation, Medical, Wellness|Comments Off on Agencies Issue FAQs Regarding Coverage of Over the Counter COVID-19 Diagnostic Tests
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Legal Alert- Temporary Enforcement Policy on CAA Compensation Disclosures

The Consolidated Appropriations Act of 2021 (CAA) created new requirements for brokers and consultants, beginning on Dec. 27, 2021, to disclose to ERISA-covered group health plan sponsors any direct or indirect compensation they may receive for referral of services. On Dec. 30, 2021, the U.S. Department of Labor (DOL) announced a temporary enforcement policy for these new requirements.

By |January 6th, 2022|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Legislation, Medical, U.S. Department of Labor|Comments Off on Legal Alert- Temporary Enforcement Policy on CAA Compensation Disclosures
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Legal Update-6th Circuit Dissolves 5th Circuits Stay of OSHA COVID-19 Vaccine ETS; OSHA Intends to Move Forward with Enforcement

 

The Sixth Circuit Court of Appeals to dissolve the Fifth Circuit’s stay of the OSHA COVID-19 Vaccination and Testing Emergency Temporary Standard (ETS). OSHA announced it intends to move forward with implementation of the ETS and will not issue citations for noncompliance with the ETS before January 10 (which is now the deadline for employers to, among other things, develop their written COVID-19 vaccination policies). Further, if an employer is exercising reasonable, good faith efforts to come into compliance with ensuring its employees are fully vaccinated or submit to weekly testing, OSHA will not issue citations for any employees who are not fully vaccinated before (or if the employer is not testing prior to) February 9, 2022. While petitioners have already appealed to the United States Supreme Court (Supreme Court), it is unclear at this time whether the Supreme Court will grant certiorari to review the decision or, if it does grant certiorari, whether it will overturn the decision.

By |December 21st, 2021|Broad Reach Benefits, Compliance, Employee Benefits, Employee Communications, Human Resources, Legislation, Medical|Comments Off on Legal Update-6th Circuit Dissolves 5th Circuits Stay of OSHA COVID-19 Vaccine ETS; OSHA Intends to Move Forward with Enforcement
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OSHA Emergency Temporary Standard for COVID-19 Vaccine and Testing Stayed By 5th Circuit Court of Appeals

President Biden announced that he ordered OSHA to develop an emergency temporary standard (ETS) that would require private employers with 100 or more employees to mandate that employees either receive one of the three available COVID-19 vaccines or submit to weekly COVID-19 testing.  On November 5, 2021, OSHA published its COVID-19 Vaccination and Testing Emergency Temporary Standard, which included a summary, fact sheet, and FAQs.  The ETS was immediately challenged by a number of petitioners, including states and private companies, seeking to permanently enjoin enforcement of the ETS.  On November 6, 2021, the United States Court of Appeals for the Fifth Circuit (the 5th Circuit), temporarily stayed enforcement of the ETS pending briefing by the parties and expedited judicial review.

After completing its expedited review, on November 12, 2021, the 5th Circuit affirmed its initial stay, holding that petitioners met all four factors to establish the need for further stay, and ordered OSHA to take no further steps to implement or enforce the ETS pending adequate judicial review of the request for permanent injunction.  The U.S. Department of Justice disagreed that an immediate stay was necessary given that a “multi-circuit lottery” will occur on or about November 16, after which all lawsuits challenging the ETS will be heard by one federal appeals court.

OSHA ETS

As a reminder, the ETS requires employers with 100 or more employees to develop and implement a mandatory, written COVID-19 vaccination policy by December 5, 2021, or a written policy requiring employees to either be vaccinated or produce a negative COVID-19 test result and wear a face covering at work. Employers are required to begin enforcing the policy on January 4, 2022, meaning most employees of covered employers would …

By |November 17th, 2021|Broad Reach Benefits, Compliance, Employee Benefits, Employee Benefits Adviser, Human Resources, Medical, Wellness|Comments Off on OSHA Emergency Temporary Standard for COVID-19 Vaccine and Testing Stayed By 5th Circuit Court of Appeals
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Legal Alert- IRS Issues Affordability Percentage Adjustment for 2022

The Internal Revenue Service (IRS) has released Rev. Proc. 2021-36, which contains the inflation adjusted amounts for 2022 used to determine whether employer-sponsored coverage is “affordable” for purposes of the Affordable Care Act’s (ACA) employer shared responsibility provisions and premium tax credit program. As shown in the table below, for plan years beginning in 2022, the affordability percentage for employer mandate purposes is indexed to 9.61%.  Employer shared responsibility payments are also indexed.

Code Section 4980H(a) 4980H(b) 36B(b)(3)(A)(i)
Description Coverage not offered to 95% (or all but 5) of full-time employees. Coverage offered, but unaffordable or is not minimum value. Premium credits and affordability safe harbors.
2022* $2,750 $4,120 9.61%
2021 $2,700 $4,060 9.83%
2020 $2,570 $3,860 9.78%
2019 $2,500 $3,750 9.86%
2018 $2,320 $3,480 9.56%
2017 $2,260 $3,390 9.69%
2016 $2,160 $3,240 9.66%
2015 $2,080 $3,120 9.56%
2014** $2,000 $3,000 9.50%

*Section 4980H(a) and (b) penalties 2022 are projected.

**No employer shared responsibility penalties were assessed for 2014.

Under the ACA, applicable large employers (ALEs) must offer affordable health insurance coverage to full-time employees. If the ALE does not offer affordable coverage, it may be subject to an employer shared responsibility payment. An ALE is an employer that employed 50 or more full-time equivalent employees on average in the prior calendar year. Coverage is considered affordable if the employee’s required contribution for self-only coverage on the employer’s lowest-cost, minimum value plan does not exceed 9.61% of the employee’s household income in 2022 (prior years shown above). An ALE may rely on one or more safe harbors in determining if coverage is affordable: W-2, Rate of Pay, and Federal Poverty Level.

If the employer’s coverage is not affordable under one of the safe harbors and a full-time …

By |September 21st, 2021|Affordable Care Act, Compliance, Disability, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, IRS, Legislation, Medical, Private Health Care Exchange, U.S. Department of Labor, Wellness|Comments Off on Legal Alert- IRS Issues Affordability Percentage Adjustment for 2022
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President Orders OSHA To Develop Mandatory Vaccine Requirement for Large Employers

President Biden announced that he ordered OSHA to develop emergency temporary standards (ETSs) that would require employers with 100 or more employees to mandate that employees either receive one of the three available COVID-19 vaccines or submit to at least weekly COVID-19 testing.  Employers who do not comply with these requirements could be fined approximately $13,650 per employee.  The President also announced the OSHA ETSs will require employers to offer paid time off to employees to receive the vaccine, as well as any time necessary to recover from a reaction to the vaccine.

The President also issued executive orders requiring federal executive branch employees to be fully vaccinated (i.e., no weekly testing option) and federal contractor employees under new or newly extended/newly optioned contracts to comply with vaccine safety protocols.  He also announced (1) health care workers at certain facilities that receive Medicaid or Medicare funding must be fully vaccinated, (2) that the Department of Transportation will double its fines for individuals who refuse to wear masks on public transportation, and (3) increased testing availability for individuals either at home (through certain, chosen retailers who will sell the kits at cost) [1] and at pharmacies.

The pending OSHA ETSs, and approaches large employers (i.e., 100 or more employees) and small employer (i.e., fewer than 100 employees) can take to incentivize vaccines are the focus of this alert.

Background

On August 23, 2021, the U.S. Food and Drug Administration (FDA) approved the Pfizer-BioNTech COVID-19 vaccine, one of the three COVID-19 vaccines approved for emergency use in the United States.  Due to this approval and the rampant spread of the COVID-19 Delta variant, employers recently began implementing different approaches to encourage individuals to receive the COVID-19 vaccine.  Some implemented …

By |September 16th, 2021|Affordable Care Act, Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, Human Resources, Legislation, Medical, U.S. Department of Labor, Wellness|Comments Off on President Orders OSHA To Develop Mandatory Vaccine Requirement for Large Employers
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Legal Alert: COVID-19 Plan Design

As the U.S. continues to battle the COVID-19 pandemic, vaccinations of Americans age 12 and older are underway with approximately half of the eligible population vaccinated against the virus. In the States, there are currently three vaccines—one from Moderna, Pfizer and Johnson & Johnson—that are available, with distribution being handled at the state and local level.

To help combat the pandemic, many employers are implementing some level of a vaccine mandate at work, with some employers requiring all employees who return to the office to be vaccinated (ex: Google, Facebook and Anthem), requiring all new hires to show proof of vaccination (Disney) or merely requiring all their U.S.-based employee population to be vaccinated by a certain date (United Airlines). Members of the U.S. military will also be required to be vaccinated as a matter of national security to maintain military readiness.

As businesses are eager to return to the office and bring customers back on-site as applicable, many employers are wondering if they can modify their group health plan design to provide richer benefits for employees who are vaccinated.

Specifically, employers are wondering if:

  • They can limit eligibility for their group health plan to only employees who have received the vaccine (or who have a medical or religious waiver);
  • They can charge vaccinated employees lower premiums, co-pays or deductible limits (or, conversely, charge non-vaccinated employees higher premiums, co-pays or deductibles);
  • Exclude all COVID-19 treatment from group health plan coverage for employees who are not vaccinated (example: the plan would deny all claims for out-patient, in-patient or prescription drug treatment of COVID-19 for individuals who are not vaccinated;
  • Provide larger HSA, HRA, or FSA contributions to individuals who are vaccinated.

At …

By |September 7th, 2021|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, Medical|Comments Off on Legal Alert: COVID-19 Plan Design
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