Health & Welfare Plans Newsletter

January 29, 2021

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[Official Guidance]

Text of Draft IRS Publication 15-B: Employer's Tax Guide to Fringe Benefits, for Use in 2021 (PDF)

35 pages, Jan. 27, 2021. "What's New: Cents-per-mile rule.... Qualified parking exclusion and commuter transportation benefit.... Contribution limit on a health flexible spending arrangement (FSA).... New Form 1099-NEC." Icon to read more

Internal Revenue Service [IRS]

[Official Guidance]

Text of HHS-Developed Risk Adjustment Model Algorithm 'Do It Yourself' Software Instructions for the 2020 Benefit Year (PDF)

25 pages; Jan. 25, 2021. "The methodology that HHS will use when operating a risk adjustment program on behalf of a State for the 2020 benefit year will calculate a plan average risk score for each covered plan based upon the relative risk of the plan's enrollees, and apply a state payment transfer formula in order to determine risk adjustment payments and charges for plans within a State market risk pool." [Also available: Technical Details (XLSX), and 2020 Benefit Year Risk Adjustment: SAS Version of HHS-Developed Risk Adjustment Model Algorithm Software (ZIP)] Icon to read more

Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Official Guidance]

Text of Executive Order: Strengthening Medicaid and the Affordable Care Act

"In light of the exceptional circumstances caused by the ongoing COVID-19 pandemic, the Secretary of [HHS] shall consider establishing a Special Enrollment Period for uninsured and under-insured Americans to seek coverage through the Federally Facilitated Marketplace ... Executive Order 13765 of January 20, 2017 (Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal), and Executive Order 13813 of October 12, 2017 (Promoting Healthcare Choice and Competition Across the United States), are revoked." Icon to read more

Executive Office of the President

[Official Guidance]

CMS Announcement: 2021 Special Enrollment Period in Response to the COVID-19 Emergency

"Starting on February 15, 2021 and continuing through May 15, 2021, Marketplaces using the HealthCare.gov platform will operationalize functionality to make a SEP available to all Marketplace-eligible consumers who are submitting a new application or updating an existing application. These consumers will newly be able to access the SEP through a variety of channels: through HealthCare.gov directly, the Marketplace call center, or direct enrollment channels." Icon to read more

Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]

[Official Guidance]

Text of HHS Final Rule: Delay of Effective Date of Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection for Certain Point-of-Sale Reductions in Price on Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager Service Fees

"In accordance with the memorandum of January 20, 2021, from the Assistant to the President and Chief of Staff, entitled 'Regulatory Freeze Pending Review,' and given the pendency of litigation ... challenging the final rule, this action temporarily delays for 60 days from the date of the memorandum the effective date of certain amendments as promulgated by the final rule titled 'Fraud and Abuse; Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection for Certain Point-of-Sale Reductions in Price on Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager Service Fees,' published in the November 30, 2020, Federal Register. This document announces that the effective date for the certain provisions of the final rule is delayed until March 22, 2021, the first business day after 60 days from the date of the memorandum. This document also corrects a technical error in the amendatory instructions." Icon to read more

Office of Inspector General [OIG], U.S. Department of Health and Human Services [HHS]

[Guidance Overview]

Upcoming Deadline iconConsolidated Appropriations Act Underscores Mental Health Parity Compliance

"[T]he MHPAEA requirement under CAA section 203 goes into effect very soon -- on February 10, 2021.... [It] requires group health plans to 'perform and document comparative analyses of the design and application of [nonquantitative treatment limits (NQTLs)].' Group health plans must make this comparative analysis available, upon request, to [HHS], the [DOL], and the Department of the Treasury. Further, those agencies are required under the CAA to request these comparative analyses from at least 20 group health plans and/or health insurance issuers each year." Icon to read more

Ogletree Deakins

[Guidance Overview]

Upcoming Deadline iconLos Angeles County Imposes Retroactive COVID-19 Paid Sick Leave

"In the wake of the expiration of [FFCRA] paid sick leave, and California's state-wide COVID-19 supplemental paid sick leave, many locales (such as the Cities of Sacramento, Oakland, San Jose, and Sacramento and San Mateo Counties) have extended their COVID-19 paid sick leave ordinances. On January 26, 2021, Los Angeles County followed suit with an ordinance that became effective immediately, and retroactively applies as of January 1, 2021." Icon to read more

Seyfarth Shaw LLP

[Guidance Overview]

San Francisco Paid Parental Leave Ordinance and Existing Paid Parental Leave Policies

"Employers must provide full pay to SF employees (up to the weekly cap) for at least the CA PFL new child bonding period without integrating with other available benefits.... Effective July 1, 2020, PFL benefits expanded from six weeks to eight weeks for all claims, including new child bonding claims.... [t]his automatically extended the requirement for employers to provide Supplemental Compensation (i.e., the remaining 30% -- 40% not paid by PFL during the new child bonding period) from up to six weeks to up to eight weeks." Icon to read more

ABD Insurance & Financial Services

IRS Issues 2020 Version of Publication 502 on Medical and Dental Expenses

"Publication 502 provides valuable guidance on what qualifies as a medical expense under Code Section 213(d), and thus helps identify the expenses that may be reimbursed or paid by health FSAs, HSAs, or HRAs, or covered on a tax-favored basis under other group health plans (e.g., employer-sponsored medical plans). But Publication 502 should be used with caution in connection with these benefits because it addresses the deductibility of medical expenses for individuals -- it does not account for differences in the rules for reimbursing expenses under health FSAs, HSAs, or HRAs." Icon to read more

Thomson Reuters / EBIA

CMS Announces 2022 Medicare Part D Benefit Parameters Used for Creditable Coverage Disclosures

"CMS has released the following 2022 parameters for the defined standard Medicare Part D prescription drug benefit: [1] Deductible: $480 (up from $445 in 2021); [2] Initial coverage limit: $4,430 (up from $4,130 in 2021); [3] Out-of-pocket threshold: $7,050 (up from $6,550 in 2021)... These parameters will be used by group health plan sponsors to determine whether their plans' prescription drug coverage is creditable for 2022." Icon to read more

Thomson Reuters / EBIA

[Opinion]

P4ESC Comment Letter on IRS Notice 2020-76: Transition Relief Related to Health Coverage Reporting Required by Sections 6055 and 6056 for 2020 (PDF)

15 pages. "[The Partnership for Employer-Sponsored Coverage (P4ESC) strongly urges] the new Administration to: ... [1] Revise the list of data requirements under sections 6055 and 6056 to be relevant and practical ... [2] Decouple information reporting for sections 6055 and 6056 from Form 1095-C.... [3] Enable applicable large employers (ALEs) to prospectively report to the IRS relevant data items about the type of coverage offered to their workforce of full-time employees ... prior to open enrollment season in the Exchanges ... [4] Eliminate the requirement that self-insured employers send an individual 1095-C form to all enrolled employees.... [5] Require review of ALE-filed data before a 226-J penalty notification letter is sent.... [6] Provide employers with 90 days, rather than 30 days, to appeal a 226-J tax penalty letter for any tax compliance year.... [7] Work directly with HHS and state-based Exchanges to verify employer information during open enrollment to determine individual premium tax credit eligibility." Icon to read more

Partnership for Employer-Sponsored Coverage [P4ESC]

Benefits in General

DOL Rescinds Limitation on Agency Guidance

"Although the rescinded rule was intended to ensure that DOL guidance was appropriate, transparent, and accessible to the public, it created potential confusion -- in particular regarding whether items available on the DOL website but not found through the single search portal required by the rule were still in effect." Icon to read more

Thomson Reuters / EBIA

One-Third of American Workers Don't Understand the Benefits They Selected During Open Enrollment

"35% of employed individuals report not fully understanding any of the employee benefits they enrolled in during their most recent open enrollment period.... [M]ore than half (54%) of millennials [report] they don't understand their benefit selections.... Two-thirds of employees (66%) indicated they want their employer to help them better understand their employee benefits throughout the year -- not just at open enrollment.... 78% of millennials [report] they would like more communications about their workplace benefits throughout 2021.... [M]ore than 7-in-10 of employees (73%) are interested in support and guidance tools that help them understand how much money to put aside for retirement, emergency savings and health-care expenses." Icon to read more

VOYA Financial

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BenefitsLink Health & Welfare Plans Newsletter, ISSN no. 1536-9595. Copyright 2021 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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