In early January the Equal Employment Opportunity Commission (EEOC) released proposed wellness rules addressing what type of incentive can be offered for participation in a wellness program without violating the Americans with Disabilities Act (ADA) or the Genetic Information Nondiscrimination Act (GINA). However, these rules were subsequently pulled from publication in the Federal Register and placed on hold pending further review by the Biden Administration.
In mid-January, the Department of Health and Human Services (HHS) updated the federal mainland poverty level (FPL), setting it at $12,880 for 2021 (up from $12,760 in 2020). Applicable Large Employers who are relying on the FPL affordability safe harbor may use the FPL in effect 6 months before the start of the plan year.
On January 19, the Centers for Medicare and Medicaid Services (CMS) issued a bulletin extending its nonenforcement policy (in place since 2013) for certain non-grandfathered individual and small group market plans that do not comply with specified market reforms (so-called “grandmothered plans”). The extended non-enforcement allows states to permit insurers to renew “grandmothered” policies that begin on or before October 1, 2022. It also requires that such coverage come into compliance with the applicable requirements by January 1, 2023.
The Consolidated Appropriations Act passed late last year contained provisions prioritizing efforts for existing rules that require parity for group health plan coverage of mental health and substance use disorder benefits. Group health plans that provide coverage for mental health or substance use disorder benefits and are therefore subject to mental health parity rules will soon be required to prepare a comparative analysis and have it available upon request. More information can be found in our issue brief, here.
On January 14, the Internal Revenue Services (IRS) announced an update to the codes for the 2020 Form 1095-C. Applicable large employers (ALEs) offering an individual coverage HRA (ICHRA) can use Code 1T (indicating that an affordable ICHRA was offered to an employee and spouse [not dependents]) and Code 1U (indicating that an affordable ICHRA was offered to an employee and spouse [no dependents] and affordability was determined using an affordability safe harbor).
Also on January 14, the DOL issued updated civil monetary penalties for ERISA health and welfare benefit plan violations. The increased rates apply for penalties imposed after January 15, 2021 for any violation occurring after November 2, 2015.
The IRS released an updated version of Publication 502, which sets forth expenses that are considered “medical expenses” under Code § 213(d) and that may be eligible for reimbursement under a health FSA, HSA, HRA, or covered on a tax-favored basis under a group health plan.
HHS has finalized portions of its proposed Notice of Benefits and Payments Parameters for 2022 to address standards for individual coverage HRAs (ICHRAs) and qualified small employer health reimbursement arrangements (QSEHRAs). Under the final rules, individual market insurers will be required to: 1) accept payments of premiums that are received directly from an ICHRA or QSEHRA that are made on behalf of an enrollee covered by the ICHRA or QSEHRA; and 2) accept made directly by enrollees in connection with an ICHRA or QSEHRA. Issuers must accept such payments as long as they are made using one of the acceptable monthly premium payment methods under existing exchange standards.
On January 28, the Biden administration issued an Executive Orderindicating that it would be opening a special enrollment period (SEP) for individuals in the Health Insurance Marketplace (federal exchange) from February 15, 2021 – May 15, 2021. Individuals who are uninsured and those who are currently covered by a Marketplace plan and wish to change coverage will be eligible to enroll. Individuals covered by COBRA will also be able to drop COBRA and enroll. More details are available from Kaiser, here.
The House of Representatives is finalizing its version of President Biden’s $1.9 Trillion “American Rescue Plan” Covid-19 relief package. Key provisions in the draft legislation include an 85% COBRA premium subsidy, new paid leave requirements, and requirements for group health plans to pay for all COVID-19 testing and vaccine-related costs. Once finalized by the House, the bill will go to the Senate, where Democrats will make an attempt to obtain bipartisan support bill will go to the Senate where it will likely pass via the budget reconciliation process that bypasses the filibuster. We expect the final legislation to be enacted in mid-March.