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Medicare Part D Changes May Impact Creditable Coverage Status of Employer Plans

The Inflation Reduction Act of 2022 (IRA) includes several cost-reduction provisions affecting Medicare Part D plans, which may impact the creditable coverage status of employer-sponsored prescription drug coverage beginning in 2025.

Employers that provide prescription drug coverage to individuals who are eligible for Medicare Part D must inform these individuals and the Centers for Medicare and Medicaid Services (CMS) whether their prescription drug coverage is creditable, meaning that the employer’s prescription drug coverage is at least as good as Medicare Part D coverage.

CMS’ Draft Part D Redesign Program Instructions state that given the significant changes that the IRA made to Medicare Part D, one of the methods for determining whether employer-sponsored prescription drug coverage is creditable will no longer be valid as of calendar year 2025. These draft program instructions are subject to change, and CMS will issue final program instructions for 2025 after considering the public comments received in response to the draft program instructions.

Creditable Coverage Determination

A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage, as demonstrated through the use of generally accepted actuarial principles and in accordance with CMS guidelines. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit. For plans that have multiple benefit options (for example, PPOs, HDHPs and HMOs), the creditable coverage test must be applied separately for each benefit option.

Under existing CMS guidance, there are a few different ways for an employer to determine whether its …

By |March 26th, 2024|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, Medical, U.S. Department of Labor|Comments Off on Medicare Part D Changes May Impact Creditable Coverage Status of Employer Plans
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Fair Employment – Equal Pay Laws For New Jersey

The federal Equal Pay Act (EPA) requires that men and women receive equal pay for equal work in the same establishment. In addition to the federal EPA, many states, including New Jersey, have enacted their own equal pay laws prohibiting wage discrimination based on gender and other characteristics.

This Employment Law Summary provides an overview of New Jersey’s Diane B. Allen Equal Pay Act (NJEPA), which prohibits certain pay differentials between men and women, and the Law Against Discrimination (LAD), which was amended by the NJEPA to expand protections against unequal pay based on various protected traits.

COVERED EMPLOYERS

The NJEPA applies to virtually all employers in the state, other than nonprofit hospital associations or corporations, and generally protects all employees, both male and female. However, it does not protect volunteers providing service for a nonprofit organization, farm workers, or domestic servants in a private home or hotel.

The LAD is a broader anti-discrimination law that prohibits a variety of entities, including all employers with one or more employees in the state (other than employers of domestic servants), from discriminating in compensation or against employees or job applicants based on any of several characteristics.

PROHIBITED PAY PRACTICES

The NJEPA prohibits employers from discriminating in any way in the rate or method of payment of wages to any employee based on sex. In addition, the LAD prohibits employers from discriminating against employees or applicants in compensation or the terms, conditions or privileges of employment based on any of the following, which are known as protected traits:

  • Race (including “traits historically associated with race,” such as hair texture, hair type and protective hairstyles);
  • Color;
  • Age (18+);
  • Sex (including pregnancy or breastfeeding);
  • Affectional or sexual orientation;
  • Gender identity or expression;
  • Creed/religion;
  • Marital status;

    • …

By |March 3rd, 2024|Broad Reach Benefits, Disability, Employee Benefits, Employee Communications, Human Resources, Legislation, U.S. Department of Labor|Comments Off on Fair Employment – Equal Pay Laws For New Jersey
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Legal Alert- DOL Updates Model Employer CHIP Notice

The U.S. Department of Labor (DOL), through its Employee Benefits Security Administration (EBSA), has released a new model Employer CHIP Notice with information current as of Jan. 31, 2024.

Background

As a reminder, the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) imposes an annual notice requirement on employers that maintain group health plans in states that provide premium assistance subsidies under a Medicaid plan or a Children’s Health Insurance Plan (CHIP).

An employer can choose to provide the notice on its own or concurrent with the furnishing of:

  • Materials notifying the employee of health plan eligibility;
  • Materials provided to the employee in connection with an open season or election process conducted under the plan; o
  • The summary plan description (SPD).

Covered Employers

An employer is subject to this annual notice requirement if its group health plan covers participants who reside in a state that provides a premium assistance subsidy, regardless of the employer’s location.

The DOL’s model notice, which employers may use for this disclosure, is updated periodically to reflect changes in the states that offer premium assistance subsidies. The DOL’s model Employer CHIP Notice includes information current as of Jan. 31, 2024.

Employers could also choose to prepare their own notices or modify the model notice. Employers should be sure to include at least the minimum relevant state contact information for any employee residing in a state with premium assistance.

Employer Resources

The EBSA’s CHIPRA webpage includes the latest model notice (English language and Spanish language versions are available), a fact sheet, a compliance assistance guide and other publications for employers and advisers.

By |February 4th, 2024|Broad Reach Benefits, Human Resources, U.S. Department of Labor|Comments Off on Legal Alert- DOL Updates Model Employer CHIP Notice
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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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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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What Employers Need to Know About Medicaid Redeterminations

In 2020, the U.S. Congress passed the Families First Coronavirus Response Act in response to the COVID-19 pandemic, requiring states to maintain Medicaid coverage for most enrollees during the public health emergency (PHE). During this period, individuals receiving Medicaid did not have to reapply to remain eligible for benefits. In December 2022, the 2023 Consolidated Appropriations Act was passed, uncoupling Medicaid redeterminations from the PHE and establishing a timeline for states to restart the Medicaid redetermination process. As a result, as many as 15 million Americans may soon no longer be eligible for Medicaid because of redeterminations, according to U.S. Department of Health and Human Services estimates.

Medicaid provides health insurance to millions of eligible Americans with limited income and resources. Each state administers its own Medicaid program, and enrollees must apply annually to qualify for Medicaid benefits. This process is known as redetermination, renewal or recertification. The Medicaid redetermination process helps evaluate whether Medicaid enrollees are eligible for continued health coverage. Eligibility for continued health coverage depends on various factors, including changes in age, disability status, household size and income. States were able to resume annual Medicaid renewals starting April 1, 2023. This means coverage terminations have resumed for Medicaid enrollees who have been redetermined by state agencies as ineligible for Medicaid, resulting in the loss of their health care coverage. The precise date of resuming coverage terminations will vary by state.

A Primer on Stop-loss Contracts

Stop-loss insurance is coverage self-funded employers purchase to manage their health care costs and protect against unexpected or catastrophic claims by establishing a limit for the amount they pay in health claims. This coverage is not a form of medical insurance, and employers can add stop-loss insurance to an existing …

By |May 15th, 2023|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, Medical, Private Health Care Exchange, U.S. Department of Labor, Wellness|Comments Off on What Employers Need to Know About Medicaid Redeterminations
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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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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 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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