As the year drew to a close on 2022 and Congress headed home to celebrate the holidays feeling accomplished for balancing the budget by conducting appropriations for needed services and the running of our government, compliance waited for the annual Congressional rush to legislate in a procrastinators’ way…waiting until the last week of the year…. and then compliance dug through four thousand – plus pages of the bill to find what is hidden in there that impacts group health plans and employers. This is what we found.
Telehealth
Telehealth offerings will continue to present no issues for High-Deductible Health Plans (HDHP) which ordinarily would prohibit contributions to the qualified Health Savings Account (HSA) for access to telehealth pre-deductible. During the pandemic, this exception to the rule allowed this coverage without loss of HSA-eligibility for plan years on/before December 31, 2021 and the last nine months of 2022 regardless of plan year. This exception is expanded during plan years beginning after December 31, 2022 and before January 1, 2025. Non-calendar plan years will suffer a gap between the end of 2022 and the beginning of their 2023 plan year. However, the full contribution rule (a.k.a., last-month rule or no- proration rule) will allow a full year’s worth of HSA contributions even if only HSA-eligible for part of the year. Health plans are not required to waive the deductible for any telehealth services but at the option of the plan.
Mental Health Parity
The previous year’s Consolidated Appropriation Act of 2021 (CAA 2021) included a requirement that health plans and insurers for full-insured plans conduct a self-audit called a comparative analysis of nonquantitative treatment limitations on the plans’ mental health or substance use disorder coverage. See the previous Leavitt Group articles on the self-audit tool and the mandate to conduct the comparative analysis. The CAA 2022 funds states for their enforcement of CAA 2021 and the MHPAEA rules. Additionally, self-funded, non-federal government health plans may no longer opt out of MHPAEA compliance effective immediately. Such plans electing the opt-out will need to comply with MHPAEA and the self-audit comparative analysis 180 days or more after December 29, 2022.
Since February 2021, plans have been required to conduct a comparative analysis of any treatment limitations that are not numerically based (e.g., day or dollar limits) if they exist on the mental health and or substance abuse coverage. A copy of this analysis should be kept in the health plan’s compliance records in the event of an audit. For full details on Mental Health Parity and the comparative analysis mandate, see the prior Leavitt Group article.
Does CAA apply to Me?
Besides SECURE ACT 2.0 below (which is applicable to most retirement plans), whether these changes impact you will depend on whether you have a fully insured or self-funded health plan. For fully insured plan sponsors, the good news is that the carrier will do most of the heavy lifting. For self-funded plans, you will need to coordinate with your Third-Party Administrator (TPA) to ensure all of the relevant provisions are complied with.
SECURE 2.0 Act of 2022
The most notable changes to plans pursuant to the CAA 2022 is found in the SECURE Act of 2022 embedded within the CAA 2022. These changes impact retirement plans in the following ways:
- Mandatory Participation beginning plan years after December 31, 2024 where 10+ employees in existence for at least three years offering a new 401(k) or 403(b) plan.
- Part-time employees eligible to participate with two consecutive years of 500 hours of service.
- Employer may incentivize participation with “de minimus” financial incentives. De minimus is not defined but is generally understood to be $50 or less. Taxation should always be paid by the employee for any gifts over $20.
- Increased tax credit for starting a plan for employes with 50 or fewer employees.
- For plans started in 2023, the credit is increased to 100% of administrative costs and ranges from $500 to $5,000.
- Additional 100% credit of up to $1,000 per employee for employer contributions made for employees earning less than $100,000 during the first year of the plan.
- Decreases by 25% each of the following 3 years.
- Smaller credit available for groups with 51-100 qualifying employees.
- Required minimum distributions from qualified plans pushed to later ages.
- Student loan repayment can be treated as employee’s salary deferral to a 401(k) or 403(b) plan as an option of the employer.
- This change will increase retirement savings for employees by allowing employer matching contributions to be made for compensation amounts employees use to pay down debt, rather than defer into the employer’s retirement savings plan.