Employee Benefits Compliance

Employee Benefits Compliance Changes in 2020

With a new year comes new compliance requirements…adding to or changing the slew of existing requirements plan sponsors must contend with as their new plan year begins. The following 2020 compliance changes represent those you need to know about now in order to best prepare for your 2020 plan year.

Prescription Drug Coverage Reporting

Prescription drug coverage reporting is mandated as part of the Medicare Secondary Payer (MSP) reporting. Insurers and Third-Party Administrators (TPA) are likely to handle MSP reporting, however, employer-plan sponsors may receive information requests from them in order to facilitate the reporting.

ACA Patient Centered Outcomes Research Institute (PCORI) Fee

The PCORI Fee ends for plan years ending before October 1, 2019. Meaning, the fee should’ve been paid as of July 2019 for plan years November – January 1 and must be paid July 2020 for all other plan months. UPDATE: Extended until 2029. See the Leavitt article for more information. 

Preparing for Transparency in Coverage & Model Notice

Self-funded plans are subject to new rules requiring the posting of plan costs along with providing a model notice that provides an estimate of participants’ cost sharing. While this information need not yet be provided, it is important to prepare in 2020 ahead of the effective date as this may cause significant work for some plans. See the Leavitt article.

Health Insurer Fee

The ACA included several tax or fee components that provide the funds needed for tax subsidies and supporting the marketplace. The Health Insurer Tax (HIT) fee was suspended in 2019 but is back on for 2020. See the Leavitt articleUPDATE: This tax was repealed. See the Leavitt article for more information.

Cost-of-living Adjustments

As usual, benefits limits change annually and Leavitt announces those changes on the news.leavitt.com website.

State Individual Mandates / Reporting

With the watering down of the ACA federal individual mandate by eliminating the penalty, some states have passed their own version in order to bolster the individual marketplace in that state. California, Rhode Island, New Jersey and the District of Columbia all have individual mandates effective in 2020; New Jersey requiring reporting in 2020, while the others will begin reporting in 2021. State reporting will accept the same reporting Forms 1094/1095-B/C used for federal ACA reporting.

While Vermont and Massachusetts also enacted individual mandates, there is no employer reporting (Vermont in 2020 and Massachusetts pre-dates the ACA).

Less common but still good to be in the know about …

ACA Reporting Delay

Deadline for furnishing Forms 1095-B/C to individuals has been delayed from January 31 to March 2, 2020. The deadline for submitting the Forms 1094/95-B/C to the IRS is unchanged: February 28, 2020 or March 31, 2020, if filing electronically.

Expanded Permissions for HRAs

HRAs that allow for integration with Medicare and individual policies that allow for reimbursement of premiums is a change in 2020 in plan design for companies looking for such options. The administrative hoops are a’plenty. See the Leavitt article on ICHRA.

New SBCs

New SBC templates were released with little change. See the Leavitt article.

Mental Health Parity Model Disclosure

Final FAQs on coverage limitations not based on day or dollar limits include a model form used to request information about such limitations. Must disclose for denials based on medical necessity. More information in the Leavitt article.”

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