This is the Wellness 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.
On March 27, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act comes as a continued response to the Coronavirus 2019 (COVID-19) pandemic that is significantly impacting the United States. The Act is a $2.2 trillion economic package that is meant to stabilize individuals and employers, while the nation continues to experience shelter-in-place advisories/orders and hospitals report a surge of severely ill COVID-19 patients. The Act’s Paycheck Protection Program is retroactive to February 15, 2020, which is important for businesses that have been experiencing financial hardships starting in February.
Overview of CARES Act
The CARES Act amends several laws, as well as appropriates funds to assist individuals, families, and businesses that are experiencing financial difficulties due to COVID-19. There are loans available to small businesses for paycheck protection and loan forgiveness, and other assistance for individuals and businesses as it relates to unemployment insurance and tax relief. The Act supports the health care system by providing financial assistance for medical supplies and coverage. It also provides economic stabilization and assistance for severely distressed sectors (such as airlines), as well as additional COVID-19 relief funds, expanded telehealth and COVID-19 testing provisions, and emergency appropriations for COVID-19 health response and agency operations.
HSA and Telehealth Expansion
The CARES Act includes a new safe harbor under which high deductible health plans (HDHPs) can cover telehealth and other remote care before participants meet their deductibles (i.e., without cost-sharing). This temporary safe harbor applies for plan years beginning on or before December 31, 2021, unless extended. As a result of this safe harbor, no-cost telehealth may be provided for any reason–not just COVID-19 related issues–without disrupting HSA eligibility.
Prescription Drug Reimbursement under FSA/HRA/HSAs
The CARES Act […]
States and the federal government have issued (or re-issued) guidance for employers in response to the recent novel coronavirus disease 2019 (COVID-19) pandemic. As of March 14, 2020, the Centers for Disease Control and Prevention (CDC) has reported more than 2,000 cases from 49 states and Washington, DC. Agency guidance includes the following:
- Internal Revenue Service (IRS): High Deductible Health Plans and Expenses Related to COVID-19
- Centers for Medicare and Medicaid Services (CMS): FAQs on Essential Health Benefit Coverage and the Coronavirus
- Equal Employment Opportunity Commission (EEOC): Pandemic Preparedness in the Workplace and the Americans With Disabilities Act (ADA)
- S. Department of Labor (DOL): COVID-19 or Other Public Health Emergencies and the Family and Medical Leave Act Questions and Answers
We expect additional guidance in the coming weeks. There will likely be COVID-19 related legislation as well. On March 14, the House of Representatives passed the Families First Coronavirus Response Act (with adjustments on March 16) which includes emergency paid sick leave and job-protected paid family and medical leave. The Act will head to the Senate the week of March 16, where it’s expected to pass. The Act applies to employers with less than 500 employees, primarily because there are tax credits to assist employers in paying employees. In the meantime, below are highlights of state action and other guidance for employers related to COVID-19.
State Mandates and Related Guidance
Some states have begun directing insurance companies to eliminate cost-sharing for COVID-19 testing. These insurance mandates apply directly to fully insured group health plans; self-insured ERISA plans would not be subject to any state insurance mandates, although third party administrators may be making certain changes automatically unless the employer opts-out. Likewise, […]
Updated December 21 to reflect that the bill has been signed into law.
On December 20, 2019, the House and Senate, with the final signature from President Trump, passed a bipartisan legislative package of spending bills to avoid a government shutdown. This package of bills is collectively referred to as the Further Consolidated Appropriations Act, 2020 (the “Act”). The Act includes a permanent repeal of three Affordable Care Act (ACA) taxes: the tax on high-cost health plans (the so-called “Cadillac Tax”), the Health Insurance Tax (HIT tax), and the medical device tax. Overall, the repeal of these ACA taxes may result in at least $300 billion in lost revenue to the government; however, the bill brings relief to employers and consumers, who may have experienced tax payments, increased health premiums and other costs. The repeal of the HIT tax is effective as of January 1, 2021, and the medical device tax is repealed as of January 1, 2020. The Cadillac Tax was already delayed until 2022, and thus will never take effect. The Patient-Centered Outcomes Research Institute (PCORI) fee has also been extended to 2029 (i.e., it will apply to plan years ending on or before September 30, 2029).
PCORI Fee Extension
The PCORI fee is now extended to plan years ending on or before September 30, 2029. PCORI fee extensions have been discussed frequently and have been included in previously introduced bills, such as the Protecting Access to Information for Effective and Necessary Treatment and Services Act (PATIENTS Act) that was approved by the House Ways and Means Committee in June 2019. The amount due per life covered under a policy will be adjusted annually, as it has been previously. Insurers of fully insured health […]
IRS Releases Draft 2019 ACA Reporting Forms and Instructions
The IRS has released draft forms and instructions for the 2019 B-Series and C-Series reporting forms (Forms 1094-B, 1095-B, 1094-C and 1095-C) used by employers and coverage providers to report certain information to full-time employees and the Internal Revenue Service (IRS).
As background, the Affordable Care Act (ACA) added Sections 6055 and 6056 to the Internal Revenue Code. These sections require employers, plans, and health insurance issuers to report health coverage information to the IRS and to participants annually. Section 6055 reporting requirements apply to insurers, employers that sponsor self-insured group health plans, and other entities that provide minimum essential coverage (such as multiemployer plans). Section 6056 reporting requirements apply to “applicable large employers” or “ALEs” (generally, employers with 50 or more full-time employees) and require reporting of health care coverage provided to the employer’s full-time employees.
Reporting under Sections 6055 and 6056 involves two sets of forms: the “B-Series” (Forms 1094-B and 1095-B); and the “C-Series” (Forms 1094-C and 1095-C). Each includes a transmittal form (Form 1094-B or 1094-C), which serves as a cover page and provides aggregate information, and an individualized form (Form 1095-B or 1095-C) for each employee for whom the employer is required to report.
The forms for calendar year 2019 are due to employees by January 31, 2020. Forms are due to the IRS by February 28, 2020 if filing by paper and by March 31, 2020 if filing electronically. The forms that must be filed and distributed depend on whether the employer is an ALE and the type of coverage provided. Employers filing 250 or more of a particular form are required to file with the IRS electronically. The following table summarizes the […]
On November 6, 2019, the Internal Revenue Service (IRS) released Revenue Procedure 2019-44, which raises the health Flexible Spending Account (FSA) salary reduction contribution limit by $50 to $2,750 for plan years beginning in 2020. The Revenue Procedure also contains the cost-of-living adjustments that apply to dollar limitations in certain sections of the Internal Revenue Code.
Qualified Commuter Parking and Mass Transit Pass Monthly Limit Increase
For 2020, the monthly limits for qualified parking and mass transit are $270 each (up $5 from 2019).
Adoption Assistance Tax Credit Increase
For 2020, the credit allowed for adoption of a child is $14,300 (up $220 from 2019). The credit begins to phase out for taxpayers with modified adjusted gross income in excess of $214,520 (up $3,360 from 2019) and is completely phased out for taxpayers with modified adjusted gross income of $254,520 or more (up $3,360 from 2019).
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) Increase
For 2020, reimbursements under a QSEHRA cannot exceed $5,250 (single) / $10,600 (family), an increase of $100 (single) / $150 (family) from 2019.
Reminder: 2020 HSA Contribution Limits and HDHP Deductible and Out-of-Pocket Limits
Earlier this year, the IRS announced the inflation adjusted amounts for HSAs and high deductible health plans (HDHPs).
|2020 (single/family)||2019 (single/family)|
|Annual HSA Contribution Limit||$3,550 / $7,100||$3,500 / $7,000|
|Minimum Annual HDHP Deductible||$1,400 / $2,800||$1,350 / $2,700|
|Maximum Out-of-Pocket for HDHP||$6,900 / $13,800||$6,750 / $13,500|
The ACA’s out-of-pocket limits for in-network essential health benefits have also increased for 2020. 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 $8,150 (2020 plan years). Exceptions to the ACA’s out-of-pocket limit rule are also […]
On Friday, December 14, a federal judge in Texas issued a partial ruling that strikes down the entire Affordable Care Act (ACA) as unconstitutional. The White House has stated that the law will remain in place, however, pending the appeal process. The case, Texas v. U.S., will be appealed to the U.S. Court of Appeals for the Fifth Circuit in New Orleans, and then likely to the U.S. Supreme Court.
The plaintiffs in Texas (a coalition of twenty states) argue that since the Tax Cuts and Jobs Act zeroed out the individual mandate penalty, it can no longer be considered a tax. Accordingly, because the U.S. Supreme Court upheld the ACA in 2012 by saying the individual mandate was a legitimate use of Congress’s taxing power, eliminating the tax penalty imposed by the mandate renders the individual mandate unconstitutional. Further, the individual mandate is not severable from the ACA in its entirety. Thus, the ACA should be found unconstitutional and struck down.
The court in Texas agreed, finding that the individual mandate can no longer be fairly read as an exercise of Congress’s Tax Power and is still impermissible under the Interstate Commerce Clause—meaning it is unconstitutional. Also, the court found the individual mandate is essential to and inseverable from the remainder of the ACA, which would include not only the patient protections (no annual limits, coverage of pre-existing conditions) but the premium tax credits, Medicaid expansion, and of course the employer mandate and ACA reporting.
Several states such as Massachusetts, New York and California have since intervened to defend the law. They argue that, if Congress wanted to repeal the law it would have done so. The Congressional record makes it clear Congress was voting only […]
On Monday, May 16, the Equal Employment Opportunity Commission (EEOC) released final regulations (Final Regulations) under Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA) governing wellness programs. The ADA rules cover an employer’s requests for health information from employees and the GINA rules cover requests for health information from family members.
The Final Regulations can be found here (ADA) and here (GINA). Additional Q&A guidance and information for small employers can be found here. The Final Regulations are effective for plan years beginning on or after January 1, 2017, and they apply to all workplace wellness programs, including those offered to employees or their family members that do not require participation in a particular health plan.
The rules clarify the EEOC’s stance on wellness programs and how to determine limits on incentives for spouses, although it is not all good news for employers. As discussed below, there continues to be significant disconnect between EEOC and U.S. Department of Labor (DOL) rules on wellness programs, most notably on the treatment of health risk assessments (HRAs) and biometric screenings when used as a gateway to eligibility.
Overview of the Final Regulations
The Final Regulations apply to any wellness program—both participation-based and outcome-based—that includes disability-related inquiries and/or medical examinations. In other words, if there’s no medical exam or inquiry, the program isn’t subject to the Final Regulations.
Under the ADA rules, the maximum reward (or penalty) attributable to an employee’s participation in a wellness program is 30% of the total cost of self-only coverage. Likewise, under GINA, the maximum reward (or penalty) attributable to a spouse’s participation in a wellness program is also 30% of the total cost […]
“I’m just a bill, yes I’m only a bill, and I’m sitting here on Capitol Hill…”
A generation of Americans first learned of the legislative process from the 1976 “Schoolhouse Rock” cartoon segment called “I’m Just a Bill.” In the song, “Bill”—a fictitious bill proposed in Congress—starts as an idea by “some folks back home.” A Congressman hears the call and brings Bill to Washington, where he first sits in committee and then is passed by the House of Representatives and then by the Senate. If Bill is lucky enough to get signed by the President, he becomes law. Bill reminds us near the end of the song that “it’s not easy to become law.” That’s true. But the sequel to “I’m Just a Bill” might focus on the desire of some federal regulators to rewrite the laws after the process described in “I’m Just a Bill” is completed.
A case in point: the Equal Employment Opportunity Commission’s (EEOC’s) position on the use of health risk assessments, biometric screening and other wellness-related tools (collectively referred to in this Alert as “HRAs”) used by employers across the country in their fight to control health insurance costs. […]
The Affordable Care Act (ACA) now allows health insurance issuers in the individual and small group markets to impose a tobacco use surcharge, within a ratio of 1.5 to 1. Beginning in 2014 health insurance issuers in the individual and small group markets may vary insurance premiums based on a policyholder (or dependent’s) tobacco use, up to 1.5 times the regular premium. In addition, issuers of qualified health plans (QHPs) offered through an Exchange may also impose up to a 1.5:1 tobacco use surcharge.
The tobacco use surcharge is part of the ACA’s premium rating restrictions that apply for health insurance issuers in the individual and small group markets. The ACA’s rating restrictions do not apply to grandfathered plans, large group plans or self-funded plans.
On Feb. 22, 2013, the Department of Health and Human Services (HHS) issued a final rule to implement the ACA’s rating restrictions for health insurance premiums. The guidance in the final rule is effective for 2014 plan (or policy) years.
Overview of the Tobacco Use Surcharge
A tobacco use surcharge allows in insurance carrier to vary insurance premiums based on a policyholder’s (or dependent’s) tobacco use. Under the ACA, the premium rate charged by an issuer for non-grandfathered health insurance coverage offered in the individual or small group market may vary for tobacco use. However, the ACA limits this variation by not allowing insurance companies to charge those who use tobacco products more than 1.5 times the non-tobacco user’s rate.
States have the option of reducing or eliminating the tobacco surcharge altogether. However, states that wished to establish tobacco rating bands more protective than the federal requirements were required to report this decision to HHS by March 29, 2013.
Today’s culture is centered around instant gratification. We all want it now. People in decades past had to reheat food on the stove or in the oven before microwaves appeared. Black-and-white television sets would take a long time to warm up in the past, but modern devices display a vivid color picture almost instantly when powered on. The idea that not everything can be obtained without putting forth some effort and waiting seems to be a concept that is dying quickly.
When it comes to adopting healthy habits and getting rid of the unhealthy ones, a person’s gratification will certainly take time. Diet pills, miracle creams and other concoctions seem to promise quick or instant results for various health issues or conditions, but the truth is that quality results take time and effort. Some steps such as quitting smoking also take a great deal of commitment. The same is true for other addiction programs and weight loss programs. Workplace wellness programs can be very useful for employers to encourage healthy habits among their workers, but these programs need to leave room for the important points. They must also include ways to engage employees. […]