Compliance Monthly Update: April 2023

State/Local Compliance Updates.

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.

Maryland

  • Changes made to Maryland’s paid leave program. SB 828 was recently passed which modifies aspects of Maryland’s Family and Medical Leave Insurance (FAMLI) program that was established by the Time to Care Act of 2022. FAMLI regulations are expected to be announced around July 1, 2023. In the meantime, SB 828 delays several implementation dates of the FAMLI program and makes other changes including:
    • The date for covered employers (those with 15 or more employees) to begin contributing to the program has been delayed from October 1, 2023, until October 1, 2024.
    • The date when employees can submit claims for benefits has been delayed from January 1, 2025, until January 1, 2026.
    • The prior premium cost-sharing method has been replaced with a 50-50 split with employers contributing 50% of the total rate of contribution for each covered employee and covered employees contributing the other 50%.
    • Domestic partners are now included in the definition of a covered “family member.”

Minnesota

  • Bloomington issues Initial Rules for sick and safe time ordinance. Last year Bloomington became the fourth city in Minnesota to pass an ordinance requiring certain employers provide paid sick and safe leave to eligible employees. Bloomington’s Earned Sick and Safe Leave (ESSL) Ordinance is set to go into effect on July 1, 2023, and will generally require employers to provide certain employees working in Bloomington with up to 48 hours of ESSL per year. Bloomington has now posted Initial Rules implementing the Ordinance (and FAQs are expected to be released shortly as well). The Initial Rules clarify that:
    • ESSL applies to all workers (including part-time and temporary employees), irrespective of U.S. citizenship status, who perform work within Bloomington for at least 80 hours in a calendar year. Employers are required to provide ESSL to an employee physically working in Bloomington city limits, regardless of an employer’s location.
    • Employers who have an employee handbook must include a notice of employees’ rights and remedies under ESSL by providing a copy of the workplace notice poster in the handbook. The rules also require employers provide employees with a copy of the poster in any type of “orientation material” provided.
    • Employers must provide employees with earnings statements showing the number of ESSL hours accrued and unused at the end of each pay period.

Virginia

  • Law mandating unpaid organ donor leave goes into effect July 1, 2023. Governor Youngkin signed a new law on April 12 (that goes into effect July 1, 2023) mandating Virginia employers with at least 50 employees provide unpaid leave to organ donors, including bone marrow donors. Employees are eligible for this leave if they were employed by their current employer for at least 12 months prior and worked at least 1,250 hours in the preceding 12 months. Employers must continue to provide eligible employees health benefits during organ donor leave. Leave can be up to 60 business days in any 12-month period for employees to serve as organ donors and 30 business days in any 12-month period for employees to serve as bone marrow donors.

Federal Level Compliance Updates.

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.

CMS announces 2024 Medicare Part D benefit parameters used for creditable coverage disclosures. On March 31, CMS released 2024 parameters (and an associated fact sheet) for the defined standard Medicare Part D prescription drug benefit. Most group health plan sponsors offering prescription drug coverage to Part D eligible individuals must disclose to those individuals and to CMS whether the plan coverage is creditable or non-creditable. For coverage to be creditable, its actuarial value must equal or exceed the actuarial value of defined standard Medicare Part D coverage under CMS guidelines. The 2024 parameters for the defined standard Medicare Part D prescription drug benefit are as follows:

  • Deductible: $545 (up from $505 in 2023)
  • Initial coverage limit: $5,030 (up from $4,660 in 2023)
  • Out-of-pocket threshold: $8,000 (up from $7,400 in 2023)
  • Total covered Part D spending at the out-of-pocket expense threshold for beneficiaries who are not eligible for the coverage gap discount program: $11,477.39 (up from $10,516.25 in 2023)
  • Estimated total covered Part D spending at the out-of-pocket expense threshold for beneficiaries who are eligible for the coverage gap discount program: $12,447.11 (up from $11,206.28 in 2023)

Uncertain future for access to abortion medication. On April 7, a district court in Texas issued an order that suspended the FDA’s approval of the drug mifepristone, which is used as part of a two-drug regimen to induce abortion, and ordered the drug be removed from the marketplace. The Texas court found, in part, that the FDA’s approval process in 2000 had been flawed. However, on April 21, the Supreme Court stayed the Texas court’s order and access to mifepristone will remain until a final decision is reached by the 5th Circuit, and likely the Supreme Court, on the merits of the case. Plan sponsors and advisors should be monitoring the outcome of this litigation, but for the time being the FDA’s current rules governing access to mifepristone will remain in place.

COVID National Emergency ends early, but the end of the Outbreak Period remains unchanged. President Biden previously announced the COVID National Emergency (NE) would end on May 11, and as a result the Outbreak Period (which ends 60 days after the announced end of the NE) was scheduled to end on July 10. As a reminder, during the Outbreak Period, certain health plan deadlines are extended (e.g., HIPAA special enrollment periods, COBRA notice and premium payment deadlines, and claims/appeals deadlines) until the end of the Outbreak Period or, if earlier, after an individual has been eligible for a specific deadline extension for one year. But then President Biden signed H.R. Res. 7 into law which ended the NE early on April 10. It was thought this would correspondingly move up the end of the Outbreak Period to July 9 (60 days following April 10). However, the DOL informally announced that despite the early termination of the NE, to avoid potential confusion and changes to administrative processes already in place, July 10 will remain the end of the Outbreak Period. Note that FAQ guidance released by the regulatory agencies on March 29 (discussed in last month’s Compliance Update) provided, “the relief generally continues until 60 days after the announced end of the COVID-19 National Emergency or another date announced by DOL, the Treasury Department, and the IRS (the “Outbreak Period”). Further clarification and formal guidance are still expected to be issued.

Proposed HIPAA privacy rule modification in response to Dobbs. On April 12, HHS issued proposed regulations (and a fact sheet) that would prohibit the use or disclosure of PHI by a covered entity or business associate for a criminal, civil, or administrative investigation into or proceeding against a person in connection with seeking, obtaining, providing, or facilitating reproductive health care, where the health care is lawful under the circumstances in which it is provided. This is part of the Biden administration’s response to the U.S. Supreme Court’s ruling in Dobbs, which concluded that the Constitution does not prohibit states from regulating or banning abortion. The proposal would also prohibit the identification of any person for the purpose of initiating such investigations or proceedings. Reproductive health care would be interpreted broadly to include prenatal care, abortion, miscarriage management, infertility treatment, contraception use, and treatment for reproductive-related conditions such as ovarian cancer.

FAQ guidance addresses ACA preventive care mandate after Braidwood. On April 13, the DOL/HHS/IRS issued FAQs addressing the recent Braidwood court ruling that the ACA requirement to provide preventive care as recommended by the U.S. Preventive Services Task Force (PSTF) is unconstitutional (discussed in last month’s compliance update). As background, the ACA requires health plans to cover preventive care with no cost-sharing for participants, and the ACA empowers three agencies—the 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. Here are highlights of the FAQ guidance:

  •  Although Braidwood prevents the implementation and enforcement of coverage requirements for items and services recommended with an A or B rating by the USPSTF on or after March 23, 2010, the decision does not preclude plans and insurers from continuing to provide the full extent of such coverage. Also, Braidwood does not impact items and services recommended with an A or B rating by the USPSTF before March 23, 2010, or recommendations by the ACIP and HRSA.
  • Any overlap between recommendations made by HRSA and ACIP, with items listed with an A or B rating by USPSTF, must continue to be covered without cost sharing, even if the items and services were recommended after March 23, 2010.
  • Until further guidance is issued, items and services recommended with an A or B rating by the USPSTF on or after March 23, 2010, will be treated as preventive care for purposes of the HDHP preventive care safe harbor, regardless of whether these items and services must be covered without cost-sharing under the ACA. In other words, HDHPs may continue to provide USPSTF recommended A and B rated preventive services before the minimum deductible is satisfied without jeopardizing the ability to make HSA contributions.
  • Employers considering changes to their plan’s preventive health services coverage should proceed with caution since they may still be required to cover the full scope of recommended preventive services under other legal and contractual requirements. For instance, Braidwood does not affect state-law requirements, and the terms of contracts may prevent mid-year changes. In addition, the government has requested a stay pending appeal of the decision, so compliance with these rules will be a moving target.
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