The COVID-19 National Emergency Has Ended
2022 HSA Contributions and Corrections Deadline April 18
Individuals who were HSA-eligible in 2022 have until the tax filing deadline to make or receive contributions. So, 2022 HSA contributions must generally be made by April 18, 2023. This includes employer contributions. The 2022 contribution limit is $3,650 for self-only coverage and $7,300 for any tier of coverage other than self-only. Those aged 55 and older are permitted an additional catch-up contribution of $1,000.
Generally, an individual’s maximum annual contribution is limited by the number of months they were eligible for the HSA. There is an exception to this rule. An individual who was HSA eligible on December 1 is permitted to contribute the full statutory maximum for the year. However, if eligible employees do not remain HSA eligible through December of the following year, they may experience negative tax consequences.
Individuals who contributed more than the allowable amount for 2022 should remove the excess contributions and associated earnings by April 18, 2023. The excess would be subject to income tax. If the employee fails to remove the excess contribution by the income tax filing deadline, an additional 6% penalty applies for each tax year the excess remains in the account. Employees who were not eligible for a contribution or contributed more than the allowable amount for 2022 should work with the HSA bank/trustee to process the excess contribution. Employees should consult with their tax advisors for specific tax advice and guidance.
For further information, please see IRS Publication 969 and our recent FAQ.
Bulletin Addresses Early Refills for Tornado Victims
April 11, 2023
On April 7, 2023, Insurance Department Commissioner McClain issued Bulletin 6-2023 regarding early prescription refills following the tornadoes on March 31, 2023, which caused severe destruction in the state. The bulletin is directed at all insurers transacting health insurance business in the state.
The bulletin encourages insurers to assist covered state residents who lost medications due to the tornadoes to prevent further illness and injury that may result from an inability to fill their prescriptions.
Sponsors of group health plans with participants in affected areas should be aware of the bulletin.
New Healthcare Bills Become Law
April 11, 2023
Recently, two healthcare bills were enacted into law.
Act 316 (previously HB 1035) mandates that insurance policies cover screening for depression of birth mothers. Specifically, Act 316 requires a healthcare insurer that offers, issues, or renews a health benefit plan in the state to provide coverage for depression screening of a birth mother by a healthcare professional within the first six weeks of the mother giving birth on or after January 1, 2024. For this purpose, a healthcare insurer includes but is not limited to, an insurance company, a health maintenance organization and a self-insured governmental or church plan in the state.
Act 429 (previously HB 1121) concerns coverage for biomarker testing for cancer diagnosis and treatment. Specifically, Act 429 requires a health benefit plan that is offered, issued, or renewed in the state to provide coverage for biomarker testing, including for the purpose of diagnosis, treatment, appropriate management, or ongoing monitoring of a participant's disease or condition, when the biomarker test is supported by medical and scientific evidence. If prior authorization is required for biomarker testing, Act 429 requires that the utilization review entity approve or deny a prior authorization request within 72 hours for nonurgent healthcare services and within 24 hours for urgent healthcare services.
Employers should be aware of these new laws and may want to contact their carrier for further information.
Paid Leave for All Workers Act Is Set to Begin
April 11, 2023
On March 13, 2023, Gov. Pritzker signed Senate Bill 208, known as the Paid Leave for All Workers Act (the “Act”), which will require covered Illinois employers to provide covered employees up to 40 hours of paid leave per year beginning January 1, 2024. Covered employees will accrue one hour of paid leave for every 40 hours worked. Employers can choose to frontload the 40 hours of paid leave if desired.
Covered employers include all employers with employees in Illinois, including state and local governments and their agencies. School districts organized under the School Code and park districts organized under the Park District Code are not considered covered employers. Interestingly, the Act does not preempt the Cook County and/or Chicago Paid Sick Leave Ordinances; employers subject to those ordinances would not have to comply with the Act at this time.
Employees who work in Illinois are considered covered employees except for certain short-term employees of an institution of higher learning, temporary university student workers, employees defined in the Federal Railroad Unemployment Insurance Act, and certain employees covered by a bona fide collective bargaining agreement in specific industries.
It is important to note that the paid leave under the Act functions as paid time off, so it is to be used for any purpose, and it is not restricted to sick leave or to care for a family member like many other state leave laws require. Employers are expressly prohibited from requiring documentation to support an employee’s leave request.
Employers with employees working in Illinois should be aware of the new law and begin working with employment law counsel to implement any new policies or changes to ensure compliance ahead of the January 1, 2024, deadline. The Illinois Department of Labor may also provide additional information or FAQs for employers as we move closer to the law’s effective date.
Coverage for Mental Health Mobile Crisis Response and Stabilization Services
April 11, 2023
On March 22, 2023, Gov. Youngkin signed SB 1347/HB 2216 into law. The new law requires group health insurance policies to cover mobile crisis response services and stabilization services delivered in a residential crisis stabilization unit for individuals experiencing a mental health crisis. These services must be covered to the extent they are covered in any other setting, regardless of any difference in billing codes. The mandate applies to policies issued or renewed in Virginia on and after January 1, 2024.
Employers sponsoring health plans in Virginia should be aware of this development and contact their carrier for further information.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.