On September 9, 2024, the Biden administration issued much-anticipated final regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA). The rules implement a host of complicated new compliance requirements for sponsors and issuers of health plans, instituting new obligations to collect and evaluate plan data, conduct comparative analyses, and act to address material differences in access to mental health and substance abuse benefits as compared to medical and surgical benefits.
During a recent webinar, Alden Bianchi, Jake Mattinson, and Sarah Raaii provided a comprehensive overview of the new rules, including compliance deadlines and key takeaways for employers, plan sponsors, and issuers of group health plans. The speakers also addressed how the new rules might impact any ongoing US Department of Labor investigations.
Last month, the Internal Revenue Service (IRS) released long-awaited guidance on matching contributions for qualified student loan payments under § 401(k) of the Internal Revenue Code and other similar retirement plans. This guidance aims to help plan sponsors with setting up these programs for plan years beginning after December 31, 2024, until proposed regulations are issued.
The Internal Revenue Service (IRS) recently announced (seeRevenue Procedure 2024-25) cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs), high-deductible health plans (HDHPs) and excepted benefit health reimbursement arrangements (HRAs) for 2025. All of the dollar limits currently in effect for 2024 will change for 2025, with the exception of one limit. The HSA catch-up contribution for individuals ages 55 and older will not change as it is not subject to cost-of-living adjustments.
The Internal Revenue Service (IRS) recently opened a new determination letter approval program for 403(b) retirement plans—commonly used by nonprofit organizations—which allows sponsors of certain individually designed plans to apply for a favorable determination letter. Long available to 401(k) retirement plan sponsors, determination letters can provide sponsors with advance assurance from the IRS that plans are compliant with the Internal Revenue Code. Plan sponsors of eligible 403(b) programs should take advantage of this new opportunity to submit a determination letter application to the IRS.
The US Department of the Treasury and the Internal Revenue Service recently issued proposed regulations on the use of forfeitures by tax-qualified retirement plans. The proposed changes provide welcome clarity for plan sponsors but may require revisions to plan administration and legal plan documents.
In an acknowledgment of uncommon market conditions and their corresponding effect on defined benefit pension plan funding, the Pension Benefit Guaranty Corporation (the PBGC) provided a welcome one-time waiver for some underfunded pension plans under Section 4010 of the Employee Retirement Income Security Act (ERISA). However, to qualify for the waiver, pension plan sponsors still need to timely notify the PBGC.
The Biden administration previously announced its intent to end the COVID-19 National Emergency (NE) and the COVID-19 Public Health Emergency (PHE) on May 11, 2023 (read our series introduction for more information). On April 10, 2023, President Biden signed a resolution moving up the end of the NE to April 10, 2023 (the PHE ended on May 11). The US Departments of Labor (DOL), Health and Human Services, and the Treasury (the Departments) issued a set of FAQs (available here) on March 29, 2023 (FAQs), which anticipated that the NE would end on May 11, 2023 (see our prior article explaining the FAQs). Plan sponsors should continue to treat May 11 as the end of the NE consistent with the FAQs until the Departments say otherwise.
During the COVID-19 pandemic, the Departments provided relief from certain benefit plan deadlines, including:
The minimum 60-day election period for the Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage.
The date for making COBRA premium payments (45 days for the initial, then minimum 30-day grace periods).
The date for individuals to notify the plan of certain qualifying events (divorce, dependent child aging out of plan coverage) or determination of disability as it relates to COBRA coverage.
The date for providing a COBRA election notice (typically within 14 days after the plan receives notice of a qualifying event).
The 30-day period (or 60-day period, if applicable) to request Health Insurance Portability and Accountability Act (HIPAA) special enrollment.
The date within which individuals may file a benefit claim or an appeal of an adverse benefit determination under a plan’s claims procedures.
The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination.
This article discusses how the affected tolled deadlines will be phased out and what actions employers may need to take.
BACKGROUND
EBSA Disaster Relief Notice 2020-01, later extended by EBSA Disaster Relief Notice 2021-01, provided that the deadline by which action needs to be taken for the events described above was tolled until the earlier of: (i) one year from the date the deadline would have first started running for that individual or (ii) sixty (60) days from the end of the NE (the Outbreak Period). This guidance created a tolling deadline specific to each affected individual. Where the individual has not reached the one-year anniversary of the date of the initial deadline, timeframes will begin to run again sixty (60) days after the end of the NE (i.e., July 10, 2023).
The FAQs released by the Departments at the end of March provided much-needed clarification and various helpful examples for employers of how the outbreak period should be taken into consideration when calculating the tolled deadlines. For example, if an employee experiences a qualifying event under COBRA and loses coverage on April 1, 2023, the deadline for the individual to make a COBRA election is tolled until the earlier [...]
Recently, the Internal Revenue Service (IRS) announced (See Revenue Procedure 2023-23) cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs), high-deductible health plans (HDHPs) and excepted benefit health reimbursement arrangements (HRAs) for 2024. All of the dollar limits currently in effect for 2023 will change for 2024, with the exception of one limit. The HSA catch-up contribution for individuals ages 55 and older will not change as it is not subject to cost-of-living adjustments.
The Biden administration originally announced its intent to end the COVID-19 National Emergency (NE) and the COVID-19 Public Health Emergency (PHE) on May 11, 2023 (read our prior article for more information). Although the end date of the NE was subsequently advanced to April 10, 2023, by Congressional resolution, the US Departments of Labor, Health and Human Services, and the Treasury (the Departments) have given no indication that the change will affect employee benefits plans. Plan sponsors should continue to treat May 11 as the end of the NE until the Departments say otherwise.
During the COVID-19 pandemic, certain permissive practices were allowed by high-deductible health plans (HDHPs) and health savings accounts (HSAs). This article explores whether these benefit offerings can be continued at the end of the PHE and NE.
HDHPs AND HSAs
IRS Notice 2020-15 temporarily permits the coverage of COVID-19 testing with no cost-sharing for HDHPs. It provides that an HDHP will not fail to be an HDHP merely because the plan covers expenses related to COVID-19 testing and treatment prior to satisfying the applicable minimum deductible. This guidance was not directly tied to the NE or the PHE, meaning that it will eventually lapse. The eighth question/answer of the FAQs indicates that individuals covered by an HDHP who have purchased items related to COVID-19 testing or treatment prior to meeting the applicable minimum deductible can continue to contribute to an HSA until further guidance is issued. The Departments also assured plan sponsors that future changes will generally not require HDHPs to make mid-year changes for covered individuals to remain eligible to contribute to an HSA.
Thus, individuals covered by an HDHP may continue to contribute to an HSA following the end of the PHE. COVID-19 vaccinations also continue to be considered preventive care under Section 223 of the Code for purposes of determining whether a health plan is an HDHP.
ACTION ITEMS
Once the PHE and NE have ended, employers can continue their practice of allowing individuals covered by an HDHP plan to contribute to an HSA. Employers need to also consider whether they will continue to cover COVID-19 tests as required by a doctor or OTC without cost-sharing. Employers should strategize what effect this might have on the HDHP. This might also require an amendment to the health plan or its summary plan description. Employers should continue to watch for further guidance from the Departments on this issue.
The Biden administration has announced its intention to end the COVID-19 National Emergency (NE) and the COVID-19 Public Health Emergency (PHE) on May 11, 2023 (read our series introduction for more information).
On March 29, 2023, the US Departments of Labor, Health and Human Services, and Treasury (the Departments) issued a set of Frequently Asked Questions (available here), which answered questions from stakeholders relating to the various laws, regulations and other guidance enacted or adopted in connection with the NE and PHE. The FAQs include eight questions related to the anticipated end of the “Outbreak Period” on July 10, 2023, which is 60 days after the end of the NE and PHE on May 11 (rules regarding the Outbreak Period are set forth in our earlier articles here and here). Below are the highlights:
Following the end of the PHE, plans and issuers can impose cost-sharing, prior authorization or other medical management requirements for COVID-19 diagnostic tests, although the Departments encourage plans not to do so.
Plans and issuers are encouraged to notify plan participants of changes regarding COVID-19 diagnosis, testing and treatment. Special rules apply under which Summaries of Benefits and Coverage (SBCs) need not be amended mid-year.
While plans and issuers will no longer be required to post prices for diagnostic tests furnished after May 11, they are nevertheless encouraged to do so.
Plans must continue to cover vaccines that qualify as preventive services, without cost-sharing, when provided in-network.
The FAQs provide examples relating to the application and termination of extended time periods for elections under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA).
In what is a welcome surprise, the FAQs confirm that individuals covered by a High-Deductible Health Plan (HDHP) will remain Health Savings Account (HSA)-eligible until further notice even if the HDHP in which they are enrolled provides medical care services and items purchased related to testing for and treatment of COVID-19 prior to the satisfaction of the HDHP’s applicable minimum deductible.
To keep employers apprised of the rules and to assist with providing notice to plan participants of the changes that will accompany the end of the NE and PHE, the Department of Labor has issued two blog posts, which are available here and here.
Action Items: We urge plan sponsors to pay particular attention to notifying employees of the upcoming changes that will accompany the end of the PHE and NE and to ensure that participants covered under an HDHP understand that they may continue to contribute to their HSAs. Employers should consider communicating these changes to their employees.
For any questions regarding the end of the PHE and/or NE, please contact your regular McDermott lawyer or one of the authors.