The IRS has issued Notice 2024-1 which sets forth the indexing factor required to be used by group health plans and insurers to calculate the qualifying payment amount (QPA) under the No Surprises Act. This indexing factor or percentage increase for 2024 is 1.0543149339. The factor should be used to determine costs for items or services provided on or after January 1, 2024, and before January 1, 2025. Those responsible for calculating QPAs on behalf of group health plans and insurers should familiarize themselves with the table and calculation methods as outlined in the Notice.

The IRS has issued a final regulation regarding the penalties for failure to file correct information returns or payee statements under Internal Revenue Code (Code) Sections 6721 and 6722. These Code Sections specifically pertain to information reported on Forms 1094/1095-C relevant to ACA information reporting. They also apply to Forms W-2 and 1099. The final regulation includes safe harbor rules that mitigate penalties for information returns and payee statements which have erroneous dollar amounts if the errors are considered ‘de minimis’ in dollar amount. The error is considered de minimis if the difference between any single error and the correct amount does not exceed $100 or, for tax withheld, the difference is no more than $25.

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.