Federal Compliance: May 2023
A brief update on what happened the prior month in group health plan compliance at the federal level, organized chronologically. If you would like additional information, please reach out to the GBS Compliance Team.
HHS fact sheet on the end of the COVID Public Health Emergency (PHE). On May 9, HHS issued a Fact Sheet: End of the COVID-19 Public Health Emergency with an update on flexibilities enabled by the COVID emergency declaration and how they will be impacted by the ending of the PHE on May 11. The fact sheet summarizes what will not be impacted by the end of the PHE including—access to COVID vaccinations/treatments and telehealth flexibilities—although, once the federal government is no longer purchasing or distributing COVID vaccines and treatments, coverage and access may change. The fact sheet also summarizes what will be impacted by the end of the PHE including: Medicare/Medicaid waivers ending and changes in coverage for COVID testing.
DEA temporary rule extends telemedicine prescribing flexibilities. On May 10, the DEA published a temporary rule extending COVID telemedicine flexibilities for prescribing controlled medications. The DEA states that there ultimately will be final regulations issued permitting the practice of telemedicine under circumstances that are consistent with public health, safety, and effective controls against diversion.
ACA preventive care requirements continue while Braidwood case is on appeal. On May 15, the 5th Circuit temporarily stayed a district court ruling that struck down a key part of the ACA’s preventive services mandate. As background, the ACA requires health plans to cover preventive care with no cost-sharing for participants, and the ACA empowers three agencies—the U.S Preventive Services Task Force (PSTF), the Health Resources and Services Administration (HRSA), and the Advisory Committee on Immunization Practices (ACIP)—to determine what kinds of preventive care fall within each category of mandatory coverage by issuing guidelines or recommendations. But, this past March a district court ruled in the Braidwood case that the ACA requirement to provide preventive care as recommended by the PSTF is unconstitutional. That district court ruling has now been stayed pending the outcome of the appeal. It is expected that, regardless of the outcome of the 5th Circuit appeal decision, the Braidwood case will ultimately reach the U.S. Supreme Court.
2024 inflation-adjusted amounts for HSAs and HDHPs. On May 16, the IRS released the 2024 cost-of-living adjusted limits for HSAs, HDHPs, and excepted benefit reimbursement arrangements (EBHRAs). Remember that the out-of-pocket maximums listed below are applicable to HSA-compatible HDHPs. Separate out-of-pocket dollar limits were previously announced for 2024 that apply to non-grandfathered non-HDHP plans (which is $9,450 for self-only coverage and $18,900 for family coverage).
- HSA contribution limits. The 2024 annual HSA contribution limit is $4,150 for individuals with self-only HDHP coverage (up from $3,850 in 2023), and $8,300 for individuals with family HDHP coverage (up from $7,750 in 2023). The catch-up contribution limit for HSA-eligible individuals 55 or older remains unchanged at $1,000.
- HDHP Minimum Deductibles. The 2024 minimum annual deductible is $1,600 for self-only HDHP coverage (up from $1,500 in 2023) and $3,200 for family HDHP coverage (up from $3,000 in 2023).
- HDHP Out-of-Pocket Maximums. The 2024 limit on out-of-pocket expenses (including items such as deductibles, copayments, and coinsurance, but not premiums) is $8,050 for self-only HDHP coverage (up from $7,500 in 2023), and $16,100 for family HDHP coverage (up from $15,000 in 2023).
- EBHRA Contribution Limit. The maximum amount that may be made newly available for plan years beginning in 2024 is $2,100 (up from $1,950 for plan years beginning in 2023).
State/Local Compliance: May 2023
A brief update on what happened the prior month in group health plan compliance at the state and local level, listed alphabetically. If you would like additional information, please reach out to the GBS Compliance Team.
- Colorado sick leave requirements will simplify with the end of the COVID public health emergency (PHE). Under the Health Families and Workplaces Act (HFWA), employers were required to (1) provide accrued paid sick leave for sick- and safety-related reasons and (2) provide supplemental PHE leave for PHE-related needs. The supplemental PHE leave is only required during an announced public health emergency. Colorado’s disaster recovery order ended April 27, and the federal COVID PHE ended May 11. The end of the PHE on May 11 triggered a 4-week countdown for supplemental PHE leave, and employees may only use supplemental PHE leave until June 8. Note the requirement that employers provide accrued paid sick leave for various sick- and safety-related reasons remains and does not expire with the end of the PHE. Employers may wish to revisit their HFWA policies.
- PBM transparency bill passed. On May 10, Governor Polis signed HB23-1201 that requires certain disclosures to be provided by a PBM or carrier (when fulfilling a contract for pharmacy services) to a group health plan, including to plan sponsors of fully insured and self-insured plans. The goal of the bill is to make details of PBM contracts more transparent to the group health plan and plan sponsors. Additional details will be provided during the regulatory process.
- New rules adopted for the Colorado Family and Medical Leave Insurance Program (FAMLI). The FAMLI Division finalized changes and officially adopted the rules listed below on May 25. These rules become effective on July 15, 2023, and are available HERE. As a reminder, FAMLI employer and employee premium payments began January 1, 2023, and FAMLI will start providing benefits to employees beginning January 1, 2024.
- Regulations Concerning Program Integrity (7 CCR 1107-6)
- Coordination of Benefits and Reimbursement of Advanced Payments (7 CCR 1107-4)
- Investigations, Determinations, and Appeals (7 CCR 1107-8)
- Job Protection, Anti-retaliation, and Anti-interference (7 CCR 1107-7)
- Florida passes comprehensive PBM law. On May 3, Governor DeSantis signed the Prescription Drug Reform Act (SB 1550) to enhance drug pricing transparency, define relationships and contract requirements between PBMs and pharmacy benefit plans and/or network pharmacies, and enact protections for pharmaceutical consumers.
- Voting leave law takes effect July 1. A new Georgia law takes effect on July 1 that provides employees time off to vote in primaries and elections. Georgia employees can take two hours off on election day or on one of the days designated for in-person early voting. Georgia employees can take the two hours off, regardless of whether the polls are open two hours before or after a work shift ends. Time off for voting is not required to be paid—that is up to the employer. From a practical standpoint, employees must give reasonable notice to their employers of the need for time away from work to vote.
- Earned sick and safe time (ESST) law signed. On May 24, Governor Walz signed an omnibus bill which in part creates state-wide paid sick and safe leave entitlements for eligible employees. Starting January 1, 2024, Minnesota employees will be entitled to receive up to 48 hours of ESST in a year. The state ESST provisions do not preempt other local paid sick and safe time laws in Minneapolis, St. Paul, Duluth, and Bloomington. Employers with employees in those cities will need to meet the most generous sick and safe leave provisions and other protections of the applicable laws. More information is available on the Minnesota Earned Sick and Safe Time website.
- Minnesota enacts state-wide paid family and medical leave law. Minnesota has joined the growing number of jurisdictions that have enacted paid family and medical leave for employees. On May 25, Governor Walz signed a Paid Family and Medical Leave (PFML) bill that will provide eligible Minnesota employees up to 20 weeks of leave benefits. More specifically the Minnesota PFML law, starting in 2026, will provide eligible employees with up to 12 weeks of family leave benefits and 12 weeks of medical leave benefits (subject to a 20-week annual limit). The program will be funded through employer and employee contributions which will also begin in 2026. These paid leave laws are further complicated in Minnesota where Minneapolis, St. Paul, Duluth, and Bloomington all have paid sick leave laws already on the books. The new state-wide paid sick leave law does not preempt the local ordinances. Employers with employees in those cities will need to meet the most generous leave provisions and other protections of the applicable laws. More information is available on the Minnesota Paid Family and Medical Leave website.
- Montana Consumer Data Privacy Act signed into law. On May 19, Governor Gianforte signed the Montana Consumer Data Privacy Act (MCDPA) that will go into effect October 1, 2024. Montana joins California, Virginia, Colorado, Connecticut, Utah, Iowa, Indiana, and Tennessee in enacting a comprehensive state privacy law. The MCDPA applies to persons that conduct business in Montana or that produce products or services that are targeted to Montana residents and (i) control or process personal data of at least 50,000 consumers or (ii) control or process personal data of at least 25,000 consumers and derive over 25% of gross revenue from the sale of personal data. There are several exemptions to MCDPA including, but not limited to: exemptions for covered entities and business associates governed under HIPAA, data-specific exemption to PHI under HIPAA, and an exemption for personal information used for employment-related purposes.
- Bulletin issued on end of public health emergency (PHE). On May 11, Oregon issued a bulletin on the end of the federal PHE with the purpose to:
- Clarify the state’s expectations regarding coverage of COVID vaccines, testing, treatment, and telehealth.
- Provide information about the end of the Oregon Health Plan’s continuous Medicaid enrollment period.
- Clarifies expectations regarding Medicare Supplement Insurance Guaranteed Issue protections for people whose Medicaid is terminated due to the end of the Medicaid continuous coverage requirement.
- WA Cares long-term care program deductions to start July 1, 2023. Washington State’s Long-Term Services and Supports Trust Program (WA Cares) is set to go into effect on July 1, 2023. WA Cares will require employers to withhold a payroll tax equal to 0.58% of certain employee wages unless the employee has provided a state-issued letter of exemption to their employer. All employees who are employed in Washington State are required to pay the WA Cares tax. There are exceptions for self-employed individuals, employees of a federal recognized tribe, employees of the federal government, and employees who qualify for an exemption. Benefits under WA Cares will first be payable starting on July 1, 2026. Full benefits are available to Washington residents who have paid the tax for: (1) ten years without interruption of five or more consecutive years; or (2) three of the last six years before the application for benefits is made. If eligible, and if the Department of Social and Health Services determines that an individual requires assistance with at least three activities of daily living, WA Cares provides benefits of up to $100 day, up to a maximum lifetime limit of $36,500. See the WA Cares website for more information. Employers and employees should be prepared for wage withholdings to begin July 1, 2023.
- Washington enacts My Health, My Data Act. Governor Inslee signed the My Health, My Data (MHMD) Act into law. The MHMD will go into effect on March 31, 2024, for certain larger organization conducting business in Washington, and on June 30, 2024, for organizations that qualify as a “small business.” The MHMD has broad definitions for “consumer health data,” “consumers,” and “regulated entities” – including that protected consumers include not only Washington residents, but anyone whose health data is collected, stored, analyzed, or otherwise processed in Washington. Like most other state privacy laws, MHMD does not apply to data in an employment context and excludes PHI under HIPAA – otherwise the scope of this new law is expansive.