Compliance Monthly Update: February 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. The PDF at the bottom of this article provides additional links and resources.

IRS Publication 969 (HSAs) released.

The IRS releasedPublication 969 (Health Savings Accounts and Other Tax-Favored Health Plans) for use in preparing 2022 tax returns. This publication is a good source of information and guidance on HSAsand health FSAs—includingcontribution limits, eligibility criteria, tax treatment of withdrawals, and provides examples to help understand howHSAs and FSAs work.

CRS report issued on mental health parity requirements for health plans.

On February 1, the Congressional ResearchService (CRS) issued a report on the federal mental health parity (MHP) requirements for group health plans. This report is prepared for members and committees of Congress and is a useful resource summarizing the federal rules related to mental health and substance use disorder (MH/SUD) benefits and the parity requirements.

Calendar year plans must complete online CMS Medicare Part D disclosures by March 1.

Person working from home.

Group health plans that offer prescription coverage to Medicare-eligible individuals are required to report to CMS whether their coverage is creditable or non creditable. The disclosure must be provided to CMS within 60 days after the beginning of the plan year(e.g., March 1, forcalendar year plans). The reporting is relatively straight-forward and is completed online. See the CMSCreditable Coverage page for instructions and the online disclosure form.

Court vacates portions of surprise billing IDR rules, and in response, HHS suspends surprise billing IDR payment determinations.

On February 6, a federal court vacated key portions of the finalregulations implementing the surprise billing independent dispute resolution (IDR) provisions of the Consolidated Appropriations Act, 2021 (CAA).The CAA expanded patient protections to shield individuals from surprise medical bills for certain out-of-network emergency and non-emergency services. In response to the decision vacating portions of the final regulations on the surprise billing IDR process, on February 10 HHS directed certified IDR entities not to issue new payment determinations until they receive further guidance from the agencies. In addition, any payment determinations issued after February 6, 2023 (the date of the court order) are to be recalled. HHS explained that the agencies are in the process of evaluating and updating the federal IDR process guidance, systems, and related documents to make them consistent with the court order. HHS directs certified IDR entities to continue working through other parts of the IDR process as they wait for additional direction from the agencies —so,disputing parties will still be able to submit notices of IDR initiation through the IDR portalwhich willfurther exacerbate a growing backlog of disputes.

HHS issues transition roadmap fact sheet for the end of the public health emergency (PHE).

HHS issues transition roadmap fact sheet for the end of the public health emergency (PHE). Following on the White House statement( discussed last month) indicating the end of the COVID public health emergency (PHE) and national emergency (NE)—on February 9, HHS issued a Fact Sheet: COVID-19 Public Health Emergency Transition Roadmap. This fact sheet summarizes key items that will (and that will not) be impacted with the end of the PHE. As a reminder, the end of the emergency periods on May 11, 2023, will trigger the end of numerous emergency measures related to the federal government’s pandemic response, including requirements for group health plans such as:

  • When the PHE ends, health plans will no longer be required to cover COVID-19 diagnostic tests and related services without cost sharing. Non-grandfathered health plans will still be required to cover recommended preventive services, including COVID-19 immunizations, without costsharing; however, this coverage requirement will be limited to in-network providers.
  • The COVID Outbreak Period will end 60 days after the NE ends. Therefore, the Outbreak Period will end on July 10, 2023. During the Outbreak Period, certain health plan deadlines areextended (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.

Updated versions of IRS Publications 502 and 503 for 2022 tax year released.

The IRS released Publication 502 (Medical and Dental Expenses) and Publication 503 (Child and Dependent Care Expenses) for use in preparing 2022 tax returns. Publication 502 describes the medical expenses that are deductible by taxpayers on their tax return and that may be reimbursed or paid by an FSA, HSA, or HRA. Publication 503 explains the requirements that taxpayers must meet to claim the dependent care tax credit (DCTC)for child and dependent care expenses. The publications have been revised to note that most of the temporary changes to the DCTC and DCAP rules under COVID-related relief are no longer available.

Woman reading and doing paperwork.

IRS issues final regulations expanding mandatory e-filing for Forms 1094/95.

The IRS published final regulations on February 23, and issued a press release, establishing lower thresholds for mandatory electronic filing of various information returns including Forms 1094 and 1095. Currently, employers are required to file Forms 1094 and 1095 electronically if the employer is required to file 250 or more of these forms for the calendar year. Under this new final rule, for forms required to be filed after December 31, 2023, the threshold for required e-filing is ten returns (determined by aggregating most information returns including these forms and Forms W-2).This means that essentially all employers who are subject to the employer mandate will need to file electronically, and employers that are currently filing paper forms with the IRS will want to take steps to prepare to e-file before the due date in 2024. Employers are strongly encouraged to hire a vendor (such as their payroll vendor) to electronically file on their behalf as most employers do not have the IT resources to develop the complex systems needed to file without a vendor.

Group health plans required to submit gag clause attestations by December 31, 2023.

On February 28, the DOL, HHS, and IRS issued FAQs on the prohibition of gag clauses under the transparency provisions of the Consolidated Appropriations Act, 2021 (CAA). The FAQ guidance requires health plans and health insurance issuers to submit the first attestation of compliance with the prohibition of gag clauses by December 31, 2023 (with subsequent attestations due each December 31 thereafter). The CAA’s gag clause prohibition rule generally prohibits plans and issuers from entering into agreements with providers, TPAs, or other service providers that would restrict provider-specific cost or quality information sharing with plan members or claims data (including individual claims pricing) sharing with plan sponsors (and their service providers). Employers should ensure any contracts with TPAs or other health plan service providers offering access to a network of providers do not violate the CAA’s prohibition of gag clauses. Also, employers with fully insured or self-insured health plans should prepare to provide the compliance attestation by December 31, 2023. If the issuer for a fully insured health plan provides the attestation, the plan does not also need to provide an attestation. Employers with self-insured health plans can enter into written agreements with their TPAs to provide the attestation, but the legal responsibility remains with the health plan.CMS has a website for plans and issuers to submit their gag clause compliance attestation. Additional information, instructions, and guidance are available on the CMS Gag Clause Prohibition Compliance Attestation webpage.

Air ambulance data reporting deadline delayed.

HHS, DOL, and IRS confirmed that the group health plan and insurer requirement to report information on air ambulance services (under the CAA) will not be due until after final regulations are issued and that no reporting will be required in 2023. Proposed regulations had indicated that the first reporting deadline would be March 31, 2023 (for 2022 calendar year reporting), but those deadlines were based on the expectation that final regulations would be issued by now. The annual reporting is to take place over two years and after that HHS will provide a comprehensive public report synthesizing the reported information. Under CAA statutory provisions, initial reporting is not due until more than a year following the issuance of final regulations—therefore, assuming final regulations are issued during the 2023 calendar year, then the first report would be due 90 days after the end of 2024 (i.e., March 31, 2025) for the 2024 calendar year, and the report for calendar year 2025 (the second reporting year) would be due March 31, 2026.

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