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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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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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Congress Passes Another Temporary Telehealth Safe Harbor

On March 15, 2022, the President signed the Consolidated Appropriations Act, 2022 (H.R. 2471) into law (“CAA 2022”).  The CAA 2022 is largely a spending bill but also includes, among other things, a much-anticipated new telemedicine safe harbor similar to that which was created under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  The safe harbor allows high deductible health plans (HDHPs) to cover medical and behavioral health treatment before participants meet their deductibles (i.e., without cost sharing).  The safe harbor applies from April 1, 2022, through December 31, 2022, regardless of plan year.

Background on Telehealth Safe Harbor under the CARES Act

On March 27, 2020, the CARES Act became law. While the CARES Act was largely an economic package intended to stabilize individuals and employers during COVID-19-related shutdowns, it also included several measures directly related to employee benefits. One specific provision was the safe harbor under which HDHPs could cover telehealth and other remote care without cost-sharing. As a result, no-cost telehealth could be provided to plan participants for any reason–not just COVID-19 related issues–without disrupting HSA eligibility.

The CARES Act safe harbor was a temporary measure, applying only to plan years beginning on or before December 31, 2021, which means, for calendar year plans, the safe harbor expired on December 31, 2021.  Without the safe harbor, telehealth programs that provide “significant benefits” in the nature of medical care or treatment generally disrupt HSA eligibility.  Whether benefits are “significant” is a facts and circumstances determination.  That said, in cases where a telehealth program provides robust benefits, such as medical advice and diagnosis for a broad range of non-emergency, common medical illnesses, general referrals to other provider types (including the emergency room), and certain …

By |March 21st, 2022|Broad Reach Benefits, Employee Benefits, Employee Communications, IRS, Legislation, Medical, Voluntary Benefits, Wellness|Comments Off on Congress Passes Another Temporary Telehealth Safe Harbor
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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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