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Year End Compliance Review:  What Are You Missing?

Employee benefits compliance is a complex year-round process.  Benefits professionals are grappling with year three of Covid-19, and ever-changing legislation.  The Consolidated Appropriations Act of 2021 (CAA) has created additional compliance responsibilities that may be under the radar for most employers.   

The CAA has three deadlines coming up very quickly:

  • Notice Regarding Patient Protections Against Surprise Billing:  All employers that maintain a public website for their group health plan need to post the new version of the Notice on that site by the first day of the plan year beginning on or after January 1, 2023.  Employers without a public group health plan website should ensure the insurance carrier or TPA makes the Notice available on the carrier’s or TPA’s public website for the plan.  The model Surprise Billing Notice is located within the CMS No Surprises Act website.  

    For more details see our blog: The New CAA Surprise Billing Notice

  • CAA Prescription Drug Data Collection:  All employer-sponsored medical plans, whether fully insured or self-insured are subject to a new annual prescription drug and health care spending data submission requirement commonly referred to as the Prescription Drug Data Collection (RxDC) report.  Reporting for the 2020 and 2021 calendar years is due December 27,2022, and then reporting will be due each June 1, for subsequent calendar years.  Absent any further extensions, the 2022 report will be due June 1, 2023.  

    Employers with fully insured plans will rely on their insurance carrier to submit the report but should confirm this with the insurance carrier.  Self-insured employers (including level funded plans) should confirm with their third-party administrator (TPA) or pharmacy benefit manager (PBM) that they will complete the report on the plan’s behalf.      

    For more details see our blog: Additional Health Plan Price Transparency Disclosures Coming Soon

  • Participant-Level Transparency in Coverage (TiC): Health plans must begin offering an internet-based price comparison tool disclosing an initial list of 500 shoppable items effective the first plan year beginning on or after January 1, 2023.  Employers will rely on their insurance carrier for fully insured plans or TPA for self-insured plans to provide this tool.  

    Employers can enter into a written agreement with the insurance carrier or TPA to provide that they will comply with the TiC requirements.  

    For more details see our blog: Additional Health Plan Price Transparency Disclosures Coming Soon

Other frequently overlooked items include: 

  • ACA Reporting:  Applicable Large Employers (ALEs) and self-insured employers of any size, must report group health plan offer and coverage information to the IRS and to employees annually.  The forms must be distributed by March 2, 2023 to employees and filed with the IRS by March 31 if filing electronically (required for employers that filed 250 or more returns with the IRS).  If filing by paper, the forms must be furnished by February 28, 2023.   

    An employer is an ALE in the current year if it employed on average at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year.

    For more details see our Newfront Office Hours Webinar: The ACA Employer Mandate & ACA Reporting

  • Imputed Income for Domestic Partners: Employers must report imputed income on the Form W-2 for employees who cover non-tax dependent domestic partners and/or domestic partner’s children under the health plan.  

    For more details see our Newfront Office Hours Webinar: Health Benefits for Domestic Partners

  • Nondiscrimination Testing (NDT) for Cafeteria Plans:  All cafeteria plans must undergo annual non-discrimination testing.  While most employers will pass most of the required tests easily, some dependent care FSA plans which have a large number of highly compensated employees (HCEs) participating may fail the 55% average benefits test.  In that case, the employer must make adjustments to the HCEs elections by year-end to preserve at least a portion of the HCEs’ pre-tax benefit.  

    For more details see our Newfront Office Hours Webinar: Section 125 Cafeteria Plans

There are many more employee benefits compliance items that need to be considered – not just at year-end.  To help with compliance, Newfront provides its clients with an internet-based reminder system tailored to each client’s plan year, funding arrangement, and other relevant characteristics.  

Karen Hooper

About the author

Karen Hooper

VP, Senior Compliance Manager

Karen Hooper, CEBS, CMS, Fellow, is a Vice President and Senior Compliance Manager working closely with the Lead Benefit Counsel in Newfront's Employee Benefits division. She works closely with internal staff and clients regarding compliance issues, providing information, education and training.

The information provided is of a general nature and an educational resource. It is not intended to provide advice or address the situation of any particular individual or entity. Any recipient shall be responsible for the use to which it puts this document. Newfront shall have no liability for the information provided. While care has been taken to produce this document, Newfront does not warrant, represent or guarantee the completeness, accuracy, adequacy, or fitness with respect to the information contained in this document. The information provided does not reflect new circumstances, or additional regulatory and legal changes. The issues addressed may have legal, financial, and health implications, and we recommend you speak to your legal, financial, and health advisors before acting on any of the information provided.

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