Making a List and Checking it Twice: End of Year Employee Benefits Compliance

November and December can be a whirlwind of holidays, vacations, and distracted workweeks. Still, as the year draws to a close, it's important for employers to take stock of their employee benefits compliance obligations.

By staying organized and current on the latest rules and regulations, employers can avoid costly penalties and ensure that their employees have access to the benefits they need.

“As we come to the end of the year, it is a good time for employers with January 1st health plan renewals to review their plan documents and get ready for open enrollment,” writes Schwabe, Williamson & Wyatt PC for JD Supra.

So, in addition to spreading Yuletide cheer and planning company get-togethers, employers will want to have this end-of-the-year employee benefits compliance checklist handy:

Affordable Care Act

The Affordable Care Act (ACA) has brought about significant changes to employee benefits compliance. Employers should be aware of the following requirements:

• Applicable Large Employers (ALEs): Employers with 50 or more full-time employees (or full-time equivalents) are considered ALEs and must offer health insurance to their employees. For companies that have been growing this past year, or are historically around the 50-employee mark, it is important the number of full-time employees they have under ACA rules.
  
  
• Employer Mandate: ALEs that do not offer health insurance that meets certain standards may be subject to penalties.
  
  
• Generate Forms: ALEs should have a process in place, says JD Supra, to generate Forms 1094-C and 1095-C, provide these forms to employees no later than March 1, 2024, and file them with the IRS by March 31, 2024. Employers of any size that offer a self-insured health plan, including a level-funded plan, should be ready to provide Forms 1094-B and 1095-B on the same schedule.
  
  
• The IRS is requiring electronic filing of ACA reporting forms this year for all ALEs and those with 10 returns or more —no more paper forms for employers with fewer than 250 returns. Employers who have relied on paper filings should make it a priority to find an ACA reporting vendor with the technological capabilities to use the complex IRS Affordable Care Act Information Returns (AIR) system, says JD Supra.
  
  
• ALEs must offer at least one affordable, minimum-value health plan that costs the employee no more than 8.39 percent of a full-time employee’s household income, down from 9.12 percent this year.
  
  

Maximum Deductibles and Cost Sharing

The ACA also sets limits on maximum deductibles and out-of-pocket costs for certain health plans. Employers should review their plans to ensure that they comply with these limits.

JD Supra says that:

• Group health plans that are not designated high-deductible health plans (HDHPs) must limit annual out-of-pocket maximums for essential health benefits (EHB) to $9,450 for a single enrollee and $18,900 per family.
  
  
• High-deductible health plans (HDHPs) must have a minimum deductible of $1,600 for a single enrollee and $3,200 per family. The HDHP out-of-pocket maximum may not exceed $8,050 for a single enrollee, and $16,100 per family.
  
  
• Individuals with an HDHP may contribute $4,150 toward an employee-only Health Savings Account (HSA). A family may contribute $8,300. Individuals aged 55 and over may increase their contribution by $1,000. Members of a married couple who are both over age 55 can save up to $10,300 in their HSA in 2024.
  
  

COVID-19 Provisions

The ACA has been amended to provide certain COVID-19-related provisions, such as coverage for COVID-19 testing and treatment. Employers should review these provisions to ensure that they are compliant.

“The federally declared public health emergency has ended (for now), which means health plans are no longer required to cover diagnostic tests and related services without cost sharing. This may come as an unwelcome surprise to employees when they visit a healthcare provider for a PCR test in early 2024. Employers may want to clarify their insurer’s COVID testing policy and communicate it during open enrollment,” wrote Schwabe, Williamson & Wyatt PC.

• Health plans, according to KFF, must also provide coverage without cost-sharing for immunizations that are recommended and determined to be for routine use by the ACIP, a federal committee comprised of immunization experts that is convened by the Centers for Disease Control and Prevention (CDC).
  
  
• The preventive services guidelines require coverage for adults and children and include immunizations such as:

o   Influenza

o   Meningitis

o   Tetanus

o   HPV

o   Hepatitis A and B

o   Measles

o   Mumps

o   Rubella

o   Varicella

o   COVID-19

“Going forward, any COVID-19 vaccine recommended by ACIP, including updated boosters, will continue to be fully covered for people enrolled in non-grandfathered plans starting 15 days after the vaccine is recommended by ACIP, irrespective of whether the vaccine is under an emergency use authorization or fully approved by the FDA,” says KFF.

Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)

FSAs allow employees to save pre-tax money for certain eligible expenses, such as medical, dental, and vision care. Employers should review their FSA plans to ensure that they comply with the latest rules and regulations.

“Employees should be reminded about new strict substantiation requirements for FSA reimbursements. Administrators are no longer allowed to rely on self-certification, waiver of substantiation of claims from favored providers, or not having to verify expenses below certain dollar amounts,” said JD Supra. “Plans that fail to substantiate all claims may be disqualified by the IRS, resulting in adverse tax consequences for the employer and all participating employees.”

• For FSAs, the employee contribution limit will increase by 5 percent – $150 – going from $3,050 to $3,200, reports HR Morning.
  
  
• There will also be an increase in the carryover limit from year to year, which is optional for employers. Carryover limits are going from $610 to $640 for the new year.
  
  
• In 2024, HSA contributions limits are set at $4,150 for individuals and $8,300 for families, a 7% increase from 2023, which had limits of $3,850 and $7,750 respectively.
  
  
• Catch-up contribution limits will stay at $1,000.
  
  

Annual Notices

Employers are required to provide certain annual notices to their employees, such as a summary of benefits and coverage (SBC) and a Marketplace Notice. These notices must be provided by certain deadlines each year.

JD Supra says employers should pay attention to the following annual notices:

• ACA Exchange Notice.
• ADA Wellness Program Notice (if a wellness plan includes medical exams or medical questionnaires).
• Children’s Health Insurance Program (CHIP) Notice.
• Grandfathered Plan Notice.
• HIPAA Notice of Privacy Practices (for self-insured health plans).
• HIPAA Special Enrollment Notice.
• Individual Coverage HRA (ICHRA).
• Initial COBRA Notice.
• Medicare Part D Notice of Creditable/Non-Creditable Coverage.
• Newborns’ and Mothers’ Health Protection Act Notice.
• Notice Regarding Patient Protections Against Surprise Billing.
• Primary Care Provider-Patient Protection Notice (for plans that require the designation of a PCP, such as an HMO plan).
• Summary of Benefits and Coverage (SBC).
• Summary Plan Description.
• Women’s Health and Cancer Rights Act (WHCRA) Notice.

Importance of Staying Organized and Compliant

Staying organized and compliant with employee benefits regulations is important for several reasons:

• Avoid Penalties: Employers can avoid costly penalties by staying compliant with the latest rules and regulations.
  
  
• Protect Employees: Employers have a duty to ensure that their employees have access to the benefits they need.
  
  
• Maintain a Positive Reputation: Employers can maintain a positive reputation by being a responsible and compliant employer.
  
  

Navigating the complexities of employee benefits compliance can be a daunting task, but it is essential for employers to protect their business and their employees.

The recommendation(s), advice, and contents of this material are provided for informational purposes only and do not purport to address every possible legal obligation, hazard, code violation, loss potential, or exception to good practice. Dean & Draper Insurance Agency specifically disclaims any warranty or representation that acceptance of any recommendations or advice contained herein will make any premises, property, or operation safe or in compliance with any law or regulation. Under no circumstances should this material or your acceptance of any recommendations or advice contained herein be construed as establishing the existence or availability of any insurance coverage with Dean & Draper Insurance Agency. By providing this information to you, Dean & Draper Insurance Agency does not assume (and specifically disclaims) any duty, undertaking, or responsibility to you.  The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.