Compliance Update: September 2022

State/Local Compliance Update: September 2022

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.

  • California legislature votes to extend COVID-19 supplemental paid sick leave requirements. The current COVID Supplemental Paid Sick Leave (SPSL) requirements were set to expire September 30, 2022, but the CA legislature passed Assembly Bill 152 to extend the requirements through December 31, 2022. The bill (expected to be signed by Governor Newsom) does not increase the amount of leave employees may take but gives them an additional three months to use any SPSL for which they may be entitled. Impacted employers should update related leave policies. Assembly Bill 152 also establishes the California Small Business and Nonprofit COVID SPSL Relief Grant Program to assist qualified small business and nonprofits incurring costs for SPSL. For more information, see the CA 2022 SPSL FAQs website.
  • Employers required to provide permanent public health emergency leave to San Francisco employees. Effective October 1, 2022, San Francisco Proposition G requires employers with 100+ employees (worldwide) to provided public health emergency leave (PHEL) to their San Francisco employees. The ordinance does not apply to certain non-profits, employees covered by a collective bargaining agreement that waives the ordinance, and government entities other than the city and county of San Francisco. San Francisco employees may use PHEL for themselves or, under certain circumstances, to care for or assist a family member. From October 1 through December 31, 2022, employees who work a full-time, regular, or fixed schedule must be provided with PHEL equal to the number of hours they regularly work over a one-week period, up to 40 hours. Starting January 1, 2023, full-time, regular, and fixed-schedule employees must be provided with PHEL equal to the number of hours they work regularly over a two-week period, up to 80 hours. For employees whose hours vary, the amount of leave will depend on the average number of hours the employee worked. Covered employers are required to post a notice and also provide the notice electronically (where feasible). See the San Francisco Public Health Emergency Leave Ordinance webpage for more details and updates.
  • Final rules for new Colorado paid family and medical leave insurance program (FAMLI) issued. Colorado published final regulations on benefits and employer participation requirements under FAMLI. Employers must begin withholding payroll tax from their Colorado employees as of January 1, 2023, and remit these taxes to the state. Then, starting January 1, 2024, most Colorado employees will be entitled to take paid family and medical leave for a variety of reasons, including for their own serious health condition, to care for a family member’s serious health condition, to care for a new child. Employees can take 12 weeks of paid leave, unless leave is needed due to a pregnancy- or childbirth-related complication, in which case an employee can receive an additional 4 weeks of FAMLI leave. See the CO FAMLI webpage for more information and updates.
  • New York releases its 2023 updates to the Paid Family Leave (PFL) program. The New York Department of Financial Services released its 2023 PFL program updates and decided to expand benefits under the program while reducing the employee contribution rate. The 2023 premium amount will be 0.455% of employee’s gross wages (down from 0.511% in 2022), capped at an annual maximum employee contribution of $399.43 (down from $423.71 in 2022). More information is available at the New York State Paid Family Leave website.
  • Rules for new Oregon paid family and medical leave insurance (PFMLI) program released. Over the last couple months, the Oregon Employment Department published its latest rules governing the new PFMLI program. The PFMLI program will be funded by employer and employee payroll deductions beginning January 1, 2023, and will provide up to 12 weeks of paid leave for qualified events beginning September 3, 2023. PFMLI covers any employer that employs one or more employees working anywhere in Oregon, but only employers with 25 or more employees will be required to pay into the fund via employer and employee payroll taxes. See the Paid Leave Oregon webpage for more information.

Federal Level Compliance Update: September 2022

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.

Court finds part of ACA preventive services mandate unconstitutional. On September 7 a federal court in the case Braidwood Mgmt. Inc. v. Becerra held that a key portion of the ACA preventive services mandate violates the U.S. Constitution and employer’s rights under the Religious Freedom Restoration Act.
  • Background. The ACA requires group health plans and insurers to provide specified preventive services without cost-sharing, including certain evidence-based items and services recommended by the United States Preventive Services Task Force (USPSTF), the Health Resources and Services Administration (HRSA), and the Advisory Committee on Immunization Practices (ACIP). At issue in the case was a June 2019 USPSTF recommendation of HIV pre-exposure prophylaxis (PrEP) triggering a preventive care coverage requirement for plan years beginning on or after June 30, 2020.
  • Court holding. The court held that members of USPSTF (but not HRSA or ACIP) were unconstitutionally appointed and therefore don’t have the authority to determine the preventive services that must be covered. The court further concluded the coverage mandate for PrEP violated an employer’s rights under the Religious Freedom Restoration Act because the agencies failed to show a compelling government interest in requiring religious employers to provide coverage without cost-sharing or religious exemptions, and the agencies failed to show that the PrEP coverage mandate is the least restrictive means of satisfying the government’s interest in providing PrEP to reduce the spread of HIV.
  • Impact of the ruling. It is uncertain if this ruling will apply only to the employers involved in the litigation or if there will be a nationwide impact on group health plans and if this will open employer’s ability to argue their religious beliefs justify exemption from a wider range of other medical treatments. Note that a wholesale invalidation of USPSTF’s recommendations could eliminate the requirement to cover a wide variety of preventive services without cost-sharing, including colonoscopies and mammograms. We will be monitoring the final outcomes of this case closely.
Transparency prescription drug data collection (RxDC) FAQs updated for initial RxDC reporting due December 27, 2022. CMS added several new FAQs related to the prescription drug data collection (RxDC) under the new transparency requirements under the Consolidated Appropriations Act, 2021 (CAA).
The CAA requires group health plans and health insurance issuers to report information about prescription drugs and health care spending to the regulatory departments. 
The report was initially required to be provided by Dec. 27, 2021, and by June 1 of each following year. However, the initial deadline was extended to Dec. 27, 2022. 
Group health plans typically will contract with their TPA, PBM, or other plan providers to submit the RxDC report on their behalf. Detailed RxDC reporting instructions and additional information are provided by CMS here.
Medicare Part D Notices due before October 15. Each year, Medicare Part D requires group health plan sponsors to disclose to those eligible for Medicare Part D and to CMS whether the health plan’s prescription coverage is creditable or not. 
The Medicare Part D Notice is important because Medicare beneficiaries who are not covered by creditable prescription drug coverage and do not enroll in Medicare Part D when first eligible will likely pay higher premiums if they enroll at a later date.
The annual disclosure notice must be provided at some point during the calendar year prior to October 15 (the start date of the annual enrollment period for Medicare Part D). Although there are no specific penalties associated with this notice requirement, failing to provide the notice may be detrimental to employees. 
The GBS annual notices packet contains this notice, and employers should distribute this notice if it has not already been distributed this calendar year. Note that the Medicare Part D Notice should also be included in new hire enrollment materials and in annual open enrollment materials.
Share this post
You may also like
Get CRITICAL employee benefits information delivered right to your inbox!
Featured Post
Recent posts