As we inch closer to 2024, employers should be mindful of their year-end compliance action items and what’s in store for the new year.
The Consolidated Appropriations Act (CAA) is approaching the point where it is fully implemented as it enters its fourth year. The deadlines accompanying this include the new gag clause prohibition compliance attestation requirement and the additional participant-level Transparency in Coverage (TiC) disclosures. Plus, there are important ACA reporting changes to assess before the distribution and filing deadlines arrive early in 2024.
Open enrollments for the January 1, 2024, plan years are progressing, and essential compliance items often come up as brokers and employers discuss how to proceed.
Some of the critical year-end action items that employers should put on their to-do lists include:
So much has been written and said about this regulation. With a deadline of December 31, 2023, all employers need to ensure that their health plan contracts do not include provisions designed to restrict access to the following:
Health plans must submit an annual attestation that they have not entered into any prohibited contractual restrictions. This first attestation will cover the period from December 27th, 2020, to the actual date of the attestation. Going forward, annual attestations will be due by December 31.
So, what should employers do? Those that sponsor a fully insured medical plan have the “luxury” of their insurance carrier assuming direct responsibility for completing the GCPCA. These employers do not need to complete the attestation separately, but they should verify that the carrier will complete the required attestation on the plan’s behalf.
Employers that sponsor a self-insured medical plan (including level-funded plans) must consult and/or contract with their third-party administrator (TPA) to determine who will complete the attestation. The responsibility ultimately lies with the employer, but many TPAs have agreed to assume the attestation requirement.
Since the start of their 2023 plan year, health plans have been required to provide an internet-based tool that provides participants access to out-of-pocket cost information before receiving a service. Initially, this requirement only applied to 500 specified items and services. With the start of the 2024 plan year, health plans must add the remaining list of shoppable items to their internet-based price comparison tool.
Employers can usually rely on carriers and/or TPAs to comply with this requirement. But, as with many other regulations, the proper action depends partly on how the group’s plan is funded.
Employers with fully insured plans should confirm with the carrier that they will update their self-service online tools to include all covered items and services. A written agreement with their carrier is essential and will protect the employer from any liability in case of a failure.
Employers with self-funded and level-funded plans must confirm that their TPA/ASO provides the necessary disclosures to include all covered items and services as part of the self-service online tool. A written agreement with the ASO/TPAs is also warranted; however, self-insured/level-funded employers will nonetheless be held liable for any failure, even if there is a contractual agreement in place with the ASO or TPA.
2022 and 2023 showed us how complex reporting is under the RxDC regulation. As we enter the new year, it’s not too early to remind employers that reporting for the 2023 calendar year prescription drug and health care spending data is due on June 3rd, 2024 (June 1st is a Saturday).
Once again, employers with fully insured plans can rely on their insurance carrier to submit the report (but should confirm in writing that the carrier will file on their behalf). Self-insured/level-funded employers should get written confirmation from their TPA or pharmacy benefit manager (PBM) that they will complete the report on behalf of the plan.
Even when carriers or TPAs fulfill the reporting requirement, they may call upon the employer to provide information that they do not have access to but is needed to complete the filing. If requested, employers should do their best to provide the information in a timely manner to ensure proper filing.
In prior years, employers with fewer than 250 ACA reporting forms could paper mail their returns to the IRS. This year brings a very different process. Employers filing ten or more returns in aggregate (including W-2s, 1099s, 1095s, etc.) must file their reporting forms electronically. All Applicable Large Employers (ALEs) must file their 2023 Forms 1094-C and 1095-C electronically in the first quarter of 2024. Non-ALEs that sponsor a self-insured health plan must also file their 2023 Forms 1094-B and 1095-B electronically in the first quarter of 2024.
Considerable technical expertise is required to complete electronic ACA filing via the IRS AIR system, making the task particularly cumbersome. It would behoove all employers subject to ACA reporting to enlist the help of a third-party vendor that can complete the electronic filing on their behalf in 2024.
Last year, the Internal Revenue Service finalized ACA reporting regulations that provide a 30-day automatic extension from January 31 for employers to furnish Forms 1095-B/1095-C to individuals. Accordingly, the new deadlines for all employers that need to provide these forms in 2024 (regardless of plan year) are as follows:
Non-discrimination testing is something that employers tend to avoid. They inevitably procrastinate until the last tick of the clock before the deadline expires. All cafeteria plans must undergo annual nondiscrimination testing, and while this may be perceived as a hassle, the importance of testing cannot be stressed enough. Most employers will pass the majority of the required §125 tests easily. Still, some could fail in situations like dependent care FSA plans, which have many highly compensated employees (HCEs).
Employee benefits compliance requirements increase in number and importance every year. The level of complexity of each requirement varies, but the need to comply remains rigid, as does enforcement.
All the items in this checklist represent only a portion of the compliance items employers must consider throughout the plan year. MZQ Consulting has the knowledge, guidance, and tools to assist employers and brokers. Please reach out to us with any questions or concerns.
