2023 Year End Legislative Summary
IRS
IRS Notice 2023-37
Among the myriad of COVID relief measures that have expired, the IRS confirmed this summer via Notice 2023-37 that HSA eligible high deductibles health plans (HDHPs) will not be able to waive deductible satisfaction requirements when it comes to COVID testing, as of December 31, 2024. Vaccinations will continue to be covered as preventive services items under the Affordable Care Act’s requirement, and will not impact HSA eligibility.
IRS Notice 2023-70
Notice 2023-70 announced the 2024 PCORI fee for calendar year plans (and those renewing on 12/1) will be $3.22 per covered life. For plans with non calendar year renewals (other than 12/1), the per head fee will be $3.00 in July 2024.
Sections 6055 and 6056
The Affordable Care Act added section 6055 and 6056 to the IRC, requiring employers with at least 50 full time and equivalent employees to file information returns with the IRS. In 2024, a// employers will be required to file their 1094-C and 1095-C Forms electronically with the IRS using the AIR system. The prior rules permitting hard copy filing for employers with fewer than 250 Forms 1095-C have been replaced with a new IRS rule, reducing the paper copy filing to 10 forms or less. As a reminder, the new permanent deadline for employee distribution of 1095-C forms is March 1, and the IRS electronic filing deadline is March 31.
Preventive Services
A core component of the Affordable Care Act is the requirement that group health plans provide coverage without cost share for services deemed to be ‘preventive’ by four different sources, including the U.S. Preventive Services Task Force (USPSTF), the Advisory Committee on Immunization Practices (ACIP), the Health Resources and Services Administration’s (HRSA’s) Bright Futures Project, and the HRSA-sponsored Women’s Preventive Services Initiative (WPSI). Recall that in March 2023, a Texas District Court invalidated several categories of preventive services in Braidwood Management v Becerra (those recommended by the USPSTF). The 5th Circuit has recently stayed the Texas Court’s holding, keeping all classes of preventive services intact for the time being.
SCOTUS
Reproductive Rights
The Supreme Court’s decision to overturn Roe v Wade as they rendered their 2022 opinion in Dobbs v Jackson sent shock waves through the nation. The Court essentially removed the Constitutional interpretation of a federal right to receive an abortion, and turned the issue back to the states to regulate. Through a tumultuous year of unrest at the state level, there are currently 14 states with total abortion bans, one state with a 6 week abortion ban, one state with a 12 week ban, and 4 states with a 15-20 week ban at the time of this writing.* Other states have added abortion protections into their legislation. Self-insured employers are largely free from state law but should be cognizant of the status of different state laws where they may have employees located. The legislation surrounding abortion is still an unsettled area, and health insurers will need to continue closely monitoring the states in which they write plans.
Affirmative Action
In 2023, the Supreme Court struck down affirmative action programs at both the University of North Carolina and Harvard University. In a 6-3 vote in Students for Fair Admissions Inc. v. University of North Carolina and a 6-2 vote in Students for Fair Admission Inc. v. President & Fellows of Harvard College (with Justice Brown Jackson recusing herself due to past involvement with Harvard), the Supreme Court ruled that both universities’ affirmative action programs violate the Equal Protection Clause of the U.S. Constitution.
These two cases overturned the tenants of the 2003 Supreme Court holding in Grutter v. Bollinger, which upheld the consideration of race as one of many factors in the college admission process.
Religious Accommodations
In Groff v. DeJoy, the Supreme Court unanimously ruled in favor of a U.S. Postal Service mail carrier who sought religious accommodation. This lawsuit was brought forward by the mail carrier after they were disciplined for refusing to work on Sundays because of religious reasons.
DOL
Transparency in Coverage Final Rules and MRF Enforcement
To assist plan sponsors with their compliance efforts, the Departments released FAQ Part 62 this fall, addressing the provisions of the final rules requiring plans and carriers to post machine-readable files (MRFs) for in-network negotiated rates and historical net prices for all covered prescription drugs by plan or issuer at the pharmacy location level. Employers with fully insured plans will generally be able to rely on their carriers to update existing MRFs to comply with these new requirements, while employers with self insured plans should coordinate with their ASO providers.
Consolidated Appropriations ‘No Gag Clause’
Section 201 of the 2021 CAA contained a clause prohibiting health plans and providers from contractually restricting the ability of the plan to provide information to another party.** The Departments issued guidance*** in the Spring of 2023 to assist plan sponsors in understanding their responsibility under the rule. In summary, Health plans cannot enter into contracts that restrict the plan from disclosing provider-specific cost information to providers, the plan sponsor, or participants, from accessing de-identified claims information, and from sharing this type of information with a TPA or business associate.
Annually on December 31 2023, plans will need to make an attestation stating that they are in compliance with this rule. Fully insured employers can rely on their carriers to complete this on their behalf, while self insured employers will need to log in to the CMS HIOS portal and complete the attestation themselves. This requirement only applies to medical plans, and needs to be completed annually.
Pregnant Workers Fairness Act
On June 27, 2023, a new Federal law now requires employers to provide pregnant employees with certain accommodations. The Pregnant Workers Fairness Act (PWFA) does not change any currently applicable state law, but rather adds to the Pregnancy Discrimination Act and requires 'covered employers' to provide 'reasonable accommodations' to workers for medical conditions related to the entire period from pregnancy through postpartum recovery.
A covered employer for purposes of the PWFA is any private or public employer with at least 15 employees. Examples of 'reasonable accommodation' include preferential parking, the ability to sit or drink water as needed throughout the day, more flexible hours, and additional break time to use the bathroom, eat, and rest. The EEOC has jurisdiction to enforce the PWFA and has published a helpful employer guide on their website, located here.
Mental Health Parity
In July 2023, the Departments released joint proposed rules to further enhance access to mental health benefits and treatment for substance use disorders. The Departments state “these proposed rules would amend the existing NQTL standard to prevent plans and issuers from using NQTLs to place greater limits on access to mental health and substance use disorder benefits as compared to medical/surgical benefits.” Additionally, the proposed rules will amend the Internal Revenue Code (IRC) such that Section 4980D, which imposes a penalty of $100 per day per instance of noncompliance with certain group health plan requirements, will also apply to violations of the MHPAEA.
New York State
New York PFL for 2024
Beginning January 1, 2024, the NY PFL premium rate will be 0.373% of covered payroll (down from 0.455% in 2023). The covered payroll threshold (which is equal to the statewide average weekly wage multiplied by 52), will increase to $89,343.80 per year (up from $87,785.88 per year for 2023). The maximum employee NY PFL premium will be $333.25 for 2024 (a decrease from $399.43 in 2023).
The benefit remains 67% of the statewide average weekly wage, which is $1,718.15 for 2024 (an increase from $1,688.19 in 2023). The maximum weekly benefit for 2024 is therefore $1,151.16 (up from $1,131.09 in 2023).
2023 Versus 2024 Plan/ Out of Pocket/ FSA Limits
State Paid Leave
*As of June 28, 2023 abortion is banned in Idaho, North Dakota, South Dakota, Wisconsin, Texas, Oklahoma, Missouri, Arkansas, Louisiana, Mississippi, Alabama, Tennessee, Kentucky, and West Virginia. Georgia has a 6 week ban, Nebraska has a 12 week ban, and Utah, Arizona, North Carolina and Florida have 15-20 weeks abortion bans. The bans in Utah, Arizona, and North Dakota are currently blocked by court order.
** IRC section 9824, ERISA section 724, and PHS Act section 2799A-9 prohibit group health plans from entering into agreements that include gag clauses
*** FAQs Part 57