Compliance Resource Center
Our employee benefits compliance experts track the latest state & federal employee benefits regulations to keep our clients from incurring costly fees or penalties.
Find information on new developments and the expert guidance to understand them.
IRS Announces Health FSA and Other 2024 Plan Limits
The Transportation Benefits Program Act (the Act) was signed into law by Governor J.B. Pritzker. It requires covered employers (generally, employers with 50 or more employees in Cook County or 37 designated townships) to implement a pre-tax transportation benefits program that allows employees to pay for transit passes with pre-tax dollars up to the federal limit.
California’s State Disability Insurance (SDI) program has historically been capped. For 2023, the contribution rate was 0.9% on wages up to $153,164. Starting in 2024, the contribution will now take into account all taxable wages per California Senate Bill-951. The SDI tax will now be calculated using that total taxable wage. Employers should ensure that their payroll system is updated to reflect the wage cap removal. They should also communicate this increase to employees and provide updated resources for the program.
San Francisco’s Office of Labor Standards Enforcement has released the updated employer expenditure rates and the exemption wage threshold required by the Health Care Security Ordinance (HCSO) effective January 1, 2024. The HCSO requires covered employers in the City or County of San Francisco to meet a certain health care expenditure amount for each covered employee. The 2024 expenditure rates by employer size have increased to $3.51 (100 or more employees), $2.34 (20-99 employees or 50-99 for non-profits) respectively. Additionally, employees who are considered managerial, supervisory and confidential, and who make more than $121,372 per year ($58.35 per hour), are exempt from the expenditure requirement in 2024. Covered employers should ensure they are using the updated rates in 2024.
The Departments of Labor, Treasury, and Health and Human Services (Agencies) have issued FAQ guidance revoking two non-enforcement policies related to the machine-readable file (MRF) requirements included in the transparency in coverage (TIC) final rules. The revoked non-enforcement policies applied to the MRF disclosures of: (i) in-network rates (expressed as a dollar amount) for covered items and services, and (ii) negotiated rates and historical net prices for covered prescription drugs. While the Agencies’ FAQ guidance states their intent to provide additional technical guidance in the future, plan sponsors should review their contracts with plan service providers to ensure they are properly publishing the MRFs as required by these rules.
The Departments of Labor, Treasury, and Health and Human Services (Agencies) published proposed rules regarding fixed and hospital indemnity plans and related coverages. These rules, if finalized as proposed, would (i) change the requirements for such plans to be considered excepted benefits in the group and individual health insurance markets, and (ii) confirm that amounts received by participants in such plans that are paid out without reference to the cost and amount of incurred medical expenses would be considered taxable.
Employers with employees working in San Francisco must submit their annual HCSO reporting on their 2022 compliance by midnight on May 1, 2023. The Office of Labor Standards Enforcement (OLSE) has posted the reporting form, related instructions and a webinar. Employers failing to file by that date can face penalties up to $500 per quarter.
The Drug Enforcement Administration (DEA) and Dept. of Health and Human Services (HHS) have issued proposed rules that would ban with only limited exceptions the prescription of controlled substances like opioids and ADD medication via telehealth, unless in-person visits are not possible due to certain circumstances. The agencies hope the new rules will allow for better monitoring and abuse prevention. The public has 30 days to review and comment on the proposals.
The Departments of Labor, Health and Human Services, and the Treasury (Agencies) have issued FAQ guidance under the Consolidated Appropriations Act, 2021 (CAA) requiring group health plans and insurers to annually attest that they have not included any “gag clauses” in their contracts with healthcare providers, TPAs and other plan service providers. Gag clauses prevent providers from sharing certain cost, quality and claims information with plan participants. This certification is made through a “Gag Clause Prohibition Compliance Attestation” (GCPA) form submitted by December 31 each year (beginning December 31, 2023). Plan sponsors should review their contracts with plan service providers and ensure that gag clause provisions have been removed.
The No Surprises Act (NSA) requires group health plans and health insurers to report certain information on plans’ air ambulance services to federal agencies. Proposed regulations under the NSA issued in September, 2021, had indicated that the first reporting deadline would be March 31, 2023 for 2022 calendar-year reporting. However, since final regulations have not yet been issued, no reporting is required in 2023.