IRS Releases Publication 5208: Determining If You Are an Applicable Large Employer
The IRS recently released Publication 5208, which is directed at applicable large employers (those subject to the ACA's employer mandate, also known as the "employer shared responsibility payment").
Specifically, the one-page document provides:
- Step-by-step instructions employers may use to determine whether they're applicable large employers (ALEs) and are therefore subject to the employer shared responsibility payment (ESRP) and information reporting requirements. It also includes a reminder that the law treats aggregated groups as one single employer when determining whether or not the employer is an ALE.
- An overview of information-reporting requirements for Forms 1094-C and 1095-C, which are the forms filed with the IRS that help the IRS determine if an employer potentially owes a shared responsibility payment. Form 1095-C is also provided to employees.
- A reminder that an ESRP is triggered if at least one full-time employee of an ALE received a premium tax credit through the exchange, and that ALE failed to offer coverage to at least 95 percent of full time employees, or the coverage offered was unaffordable or didn't meet minimum value.
The employer shared responsibility requirements and related reporting obligations are very complex. Publication 5208 touches only on a few high points. The takeaway for employers is that they must determine each year if they are ALEs and are subject to the employer shared responsibility provisions and subsequent information-reporting requirements. Specifically, those considered ALEs must offer coverage that's affordable and meets minimum value to all full-time employees or face a penalty.
IRS Releases Additional Guidance for Small Business Health Care Tax Credit
On April 27, 2018, the IRS published Notice 2018-27, which provides relief for certain small employers that wish to claim the Small Business Health Care Tax Credit (the Credit) for 2017 and later years.
As background, the Credit was created by the ACA under IRC Section 45R and provides relief to certain small employers that provide health insurance coverage to their employees. To qualify for the credit, the health insurance coverage must be a qualified health plan (QHP) purchased through the Small Business Health Options Program (SHOP) Marketplace, and employers may only claim the credit for two consecutive taxable years (the credit period).
The HHS advised the IRS that, for calendar years 2017 and 2018, SHOP exchanges in an increasing number of counties across the U.S. don't have any QHPs available for otherwise eligible small employers to offer employees. However, because the Credit has been available since 2010, the relief provided in this Notice is more limited than in earlier years.
The relief within 2018-27 helps "eligible small employers" who first claimed the credit for all or part of 2016 (or claimed the credit for all or part of a later taxable year) for coverage offered through the SHOP Marketplace, but are unable to offer employees a QHP through a SHOP Marketplace plan for all or part of the remainder of the credit period because there aren't any plans available in the county where the employer is located. Pursuant to this Notice, employers now have the ability to calculate the credit for the subsequent portion of the credit period by treating health insurance coverage provided for the portion of the remaining credit period as qualifying for the credit, as long as it would have qualified for the credit under the rules applicable before Jan. 1, 2014. The Notice provided five examples to illustrate when the relief will and won't apply.
Notice 2018-27 also mentions that employers in Hawaii continue to be unable to claim the Credit for plan years beginning in calendar years 2017-2021. This is because Hawaii's application for a 5-year state innovation waiver under ACA Section 1332 was approved in 2016 and, therefore, Hawaii isn't required to operate a SHOP Marketplace. As background, ACA Section 1332 waivers allow a state to pursue innovative strategies for providing residents with access to high-quality, affordable health insurance while retaining the basic protections of the ACA. As such, any future Section 1332 waivers that allow a state not to be required to operate a SHOP Marketplace will supersede the relief provided in this Notice.
Please note that this Notice in no way modifies or otherwise affects the transitional relief provided in the earlier issued notices that provide similar transitional relief for 2014, 2015 and 2016.
Final Regulations Related to Emergency Services
On May 3, the DOL, IRS and HHS (the Departments) issued final regulations related to ACA-mandated coverage for emergency services. As a reminder, the ACA places certain requirements on non-grandfathered group health plans that cover services received in an emergency department. The plan must pay benefits for those services without regard to prior authorization determination or the provider's network participation status.
The 2010 interim final regulations further clarified the amount that plans must pay for non-network emergency services. The plan must pay the greater of: the in-network negotiated amount for emergency services; the out-of-network amount based on usual, customary and reasonable (UCR) charges plus the in-network cost-sharing provision; or the Medicare amount.
Many stakeholders submitted comments to the Departments expressing concern over the methodology for determining the out-of-network emergency service rate. Specifically, the concern was that there would be manipulation of rates since there's little transparency or oversight related to insurers' UCR calculations. When the Departments issued final regulations in 2015, there was little change from the interim final rules.
In April 2016, the Departments issued additional guidance in the form of an FAQ, which stated that a plan's calculations of each of the three rate options must be disclosable to the DOL or a plan participate upon request.
In May 2016, the American College of Emergency Physicians filed a lawsuit against the Departments claiming that the Departments didn't meaningfully respond to the stakeholders' concerns and the rules didn't ensure a reasonable payment for out-of-network emergency services. The U.S. District Court for the District of Columbia agreed in part and remanded the case to the Departments for further explanation of the final regulations.
The recently issued final regulations are the Departments' response to that court order. The regulations retain the same methodology based on the three rate options with no change. The regulations provide detailed justification as well as a discussion of stakeholders' comments and suggestions. For example, some had suggested that the Departments create a national database to help set UCR rates. The Departments dismissed this solution as costly, time-consuming and an overstep of their authority.
The final regulations won't change how non-network emergency services will be paid under group health plans. However, it serves as a reminder for employers who sponsor an ERISA-covered group health plan. If a participant requests additional information related to the calculation or payment of their non-network emergency claim, this could be considered an ERISA disclosure request that must be responded to within 30 days. The employer would want to work with the insurer on any requests.
CSR Report: Federal Requirements on Private Health Insurance Plans
On May 1, 2018, the Congressional Research Service (CSR) published a report entitled "Federal Requirements on Private Health Insurance Plans." The report details the federal requirements that apply to private individual, small group and large group health insurance plans and also self-insured plans.
Of particular interest to employers may be the chart starting on page three of the report that lists more than 30 separate requirements (such as mental health parity, guaranteed issue, guaranteed renewability, COBRA and essential health benefits) and identifies which plans are subject to each requirement. For example, both small and large insured plans are subject to guaranteed issue and renewability; but large insured plans and self-insured plans aren't required to provide coverage for essential health benefits.
If you have any questions as to which requirements apply to your plan, please contact your advisor for guidance.
IRS and DOL Announce Semi-Annual Regulatory Agenda
Each year, government agencies provide semiannual regulatory agendas that outline the agencies' goals for proposing and finalizing agency regulations. The IRS and the DOL's Employee Benefits Security Administration (EBSA) annually provide such agendas, highlighting their possible action on a number of employee benefit plan issues. The regulatory agendas help plan sponsors and industry professionals prepare for potential changes in the employee benefits environment. The following is a preview of what the IRS and DOL have planned for the upcoming months.
Notably, the DOL is in the final rule stage for the following rules:
- Amendment of the Abandoned Plan Program: This rule would broaden the scope of entities that are authorized to identify wind-down abandoned plans.
- Adoption of Amended and Restated Voluntary Fiduciary Correction Program (VFCP): The DOL is expanding the VFCP to include more transactions and streamline the procedures.
- Religious and Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the ACA: These two rules expand the exemptions from the ACA contraceptive mandate to include those companies who have religious and moral objections to offering such coverage.
- Definition of an 'Employer' Under Section 3(5) of ERISA – Association Health Plans: This rule will establish criteria to allow more employer groups and associations to sponsor association health plans.
- Short-Term, Limited Duration Insurance: This rule will amend the definition of short-term, limited duration insurance to allow for a longer period of coverage.
The IRS has several rules affecting employee benefits (more than 20) that they're seeking to propose or adjust in the coming months. Here are a few that may be of special interest to employee benefit plan sponsors:
- Final regulations regarding qualified nonelective contributions (QNECs) and qualified matching contributions (QMACs): The final regulations will permit employers to use forfeitures to fund these contributions
- Announcements on hardship distributions following last year's hurricanes and the California wildfires
- Church plan guidance: The proposed rule would update the definition of church plan under the IRC
- Guidance on the definition of "affiliated service groups": This guidance would define the term "affiliated service group," and the IRS would release the guidance under consideration and request comments
- Guidance on missing participants
- Proposed Rule to modify EPCRS (IRS correction program) by expanding certain corrections
This appears to be another busy year for the IRS and the DOL. Interestingly, much of the regulatory action in the next 12 months seems to be aimed at clarifying requirements and providing additional ways for employers to comply with IRC and ERISA requirements. As with all years, the timing of this guidance is always subject to change.
IRS Tax Reform Tax Tip 2018-69: How the Employer Credit for Family and Medical Leave Benefits Employers
On May 4, 2018, the IRS released IRS Tax Reform Tax Tip 2018-69, which provides employers with valuable facts about the employer credit for paid family and medical leave created by the Tax Cuts and Jobs Act passed last year. Our April 17, 2018, Compliance Corner contained an article about the IRS FAQ guidance on the newly created tax credit for employers that choose to offer paid family and medical leave. Specifically, the tax tip identifies the requirements to claim the credit, who is a qualifying employee, and how it benefits employers.
Although this publication doesn't convey new information, it is a helpful resource and reminder that this credit is currently available for wages paid in taxable years beginning after Dec. 31, 2017, and is scheduled to expire after Dec. 31, 2019. Essentially, it's available for employers that offer paid family and medical leave in 2018 and 2019.
IRS Publishes 2019 HSA Contribution Limits and Qualifying HDHP Deductible and Maximum Out-of-Pocket Limits
On May 11, 2018, the IRS published Rev. Proc. 2018-30, which provides the 2019 inflation-adjusted amounts for HSAs and HSA-qualifying HDHPs. According to the revenue procedure, the 2019 annual HSA contribution limit will increase to $3,500 (up $50 from 2018) for individuals with self-only HDHP coverage and to $7,000 (up $50 from 2018) for individuals with family HDHP coverage (i.e., anything other than self-only HDHP coverage).
For qualified HDHPs, the 2019 minimum statutory deductibles remain the same as compared to 2018 ($1,350 for self-only coverage and $2,700 for family coverage). The 2019 maximum out-of-pocket limits, however, increased to $6,750 (up $100 from 2018) for self-only HDHP coverage and $13,500 (up $200 from 2018) for family HDHP coverage (i.e., anything other than self-only HDHP coverage). Out-of-pocket limits on expenses include deductibles, copayments and coinsurance, but not premiums.
The 2019 limits may impact employer benefit strategies, particularly for employers coupling HSAs with HDHPs. Employers should ensure that employer HSA contributions and employer-sponsored qualified HDHPs are designed to comply with the 2019 limits.
DOL Releases Field Assistance Bulletin Following Fiduciary Rule Revocation
On May 7, 2018, the DOL released Field Assistance Bulletin (FAB) No. 2018-02. This FAB addresses the DOL's non-enforcement policy now that the Fiduciary Rule (the Rule) has been vacated by the U.S. Court of Appeals for the Fifth Circuit. As background, the Fifth Circuit vacated the Rule in a 2-1 decision in U.S. Chamber of Commerce v. DOL . We discussed that opinion in the March 20, 2018, edition of Compliance Corner .
The revocation of the Rule took place after the DOL failed to appeal the Fifth Circuit's decision by May 7, 2018. In this FAB, the DOL acknowledges that the revocation of the Rule left many institutions uncertain about how advisors would avoid engaging in prohibited transactions when the Best Interest Contract Exemption (BICE) and other prohibited transaction exemptions (PTEs) that were created along with the Rule became null and void.
The FAB announces that the DOL will continue its non-enforcement policy related to the Rule. Specifically, the DOL won't pursue any prohibited transaction claims against investment advisor fiduciaries who are "working diligently and in good faith to comply with the impartial conduct standards" set by the BICE and other PTEs. Those investment advisors can also choose to rely on any other available exemptions for relief. Interestingly, though, the FAB doesn't address the rights or obligations of other parties; so there might still be private rights of action that can be pursued against advisors who offer conflicted advice.
This FAB makes it seem quite unlikely that the DOL is going to continue to pursue the Rule in its current form. Although they'd have until June 13, 2018 to appeal the Fifth Circuit's decision to the U.S. Supreme Court, the DOL's non-enforcement policy makes it seem that they won't do so. Instead, the DOL has expressed that it will evaluate the need for additional prohibited transaction relief.
It's also important to note that, in April, the SEC came out with its own proposed best interest rule, which incorporates a number of aspects of the Rule and the BICE. In fact, their rule requires registered investment advisers and broker-dealers to act in the best interest of their customers and to mitigate certain conflicts of interest.
Employer plan sponsors won't see much change in anything now that the Rule has been revoked and the DOL has announced a non-enforcement policy. Many advisers and broker-dealers have already taken steps to comply with the Rule and likely won't switch back to the processes in place before the Rule. We'll continue to follow this issue, though, and we'll share any additional information that might affect plan sponsors.
Can an employee have an FSA and an HSA in the same calendar year?
HSA eligibility is determined on a monthly basis and not on a plan year or calendar year basis. An individual is only allowed to establish and contribute to an HSA if they're enrolled in a qualified HDHP and have no other disqualifying coverage (e.g., general purpose health FSA or HRA, copay-type medical plan, Medicare, TRICARE, etc.) for that same month. For example, if an employee enrolls in a general purpose FSA or a copay-type medical plan, the individual wouldn't be eligible to make contributions into an HSA for that same month or for any other months while still enrolled in disqualifying coverage.
However, health FSA elections are generally irrevocable for the full plan year unless there's a qualifying life event that would allow the employee's FSA election to be revoked. So, if an employee enrolls in an FSA as of Jan. 1, for example, the individual couldn't also establish or contribute to an HSA while enrolled in the FSA and couldn't decide to change their FSA election later without experiencing a qualifying event. However, an employee could wait until open enrollment to waive health FSA participation and contribute to the HSA after the end of the FSA plan year.
Lastly, an individual is generally responsible for IRS compliance with an HSA because they're the account holder. However, if the employer sponsors an HSA and HDHP, then they also have a responsibility to determine whether individuals' HSA contributions are excludable from income. IRS guidance says that the employer who sponsors the non-HDHP coverage has the responsibility to confirm that an employee is covered under the HDHP and isn't covered under any other disqualifying coverage sponsored by that employer if an employee is contributing to an HSA. In other words, if an employer sponsors a health FSA, they have an obligation to make sure employees are actually eligible to make HSA contributions if they offer an HSA and HDHP (including any employer HSA contributions).
Thus, once non-HDHP coverage ends and an individual enrolls in a qualified HDHP, even if it's in the same calendar year or plan year, they could generally contribute to an HSA for the remaining months. Importantly, though, employers must keep in mind their responsibly to determine whether an employee's HSA contributions are excludable from income and clearly communicate HSA-eligibility to employees.
Plans Must Provide Coverage of Pain Medicine, Substance Abuse and Urology Through Telemedicine
On April 11, 2018, Gov. Ducey signed HB 2042 into law. This bill amends the state's law on telemedicine to include pain medicine, substance abuse and urology as conditions that can be treated through telemedicine services. The amendments to include pain medicine and substance abuse are effective Jan. 1, 2019. The amendment to include urology is effective Jan. 1, 2020.
Supreme Court Rules in Independent Contractor Misclassification Case
On April 30, the California Supreme Court issued a ruling in Dynamex Operations West, Inc. v. Superior Court related to the classification of workers as independent contractors or common law employees.
The court's ruling emphasized the importance of the issue by stating that misclassification results in a financial burden to workers and loss of labor law protections. Further, the court stated that employers who misclassify workers as independent contractors have an unfair competitive advantage over other employers, since they don't have the cost of complying with any of the following:
- Federal and state labor laws
- Federal Social Security and payroll taxes
- Unemployment insurance and state employment taxes
- Workers' compensation insurance requirements
The case involved drivers for a package and document delivery company. In 2004, Dynamex adopted a policy in which all delivery drivers were classified as independent contractors. Dynamex obtained the customers, set the delivery rates and determined the delivery assignments. The drivers were permitted to set their own schedules but had to inform Dynamex of the days they intended to work. The drivers were permitted to hire assistants but had to pay for the assistants themselves. The drivers had to provide their own vehicles and pay for transportation costs (fuel, tolls, vehicle maintenance and vehicle insurance). The drivers were required to purchase and wear Dynamex uniforms. In some cases, the drivers were required to attach Dynamex logos to their vehicle.
The Supreme Court ruled that the drivers were misclassified and were, in fact, common law employees. The determination was based on the following three-prong test. Importantly, this ruling establishes a new standard for employers when determining whether workers are independent contractors or employees. In the past, the determination was based on a totality of facts analyzed through a multiple-factor standard. Under the new test, workers are presumed to be common law employees. They can only be classified as independent contractors if they satisfy all three of the following conditions:
- That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work
- That the worker performs work that's outside the usual course of the hiring entity's business
- That the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity
Importantly, the ruling specifically only applies for purposes of California wage orders (minimum wage, maximum hours, meal and rest breaks). It doesn't directly apply to eligibility for group health plan coverage under ERISA and the ACA's employer mandate. However, an employer will need to carefully consider the consequences of reclassifying a worker from an independent contractor to a common law employee. The employer mandate requires large employers (those with 50 or more full-time employees, including equivalents) to offer minimum value, affordable coverage to common law employees working 30 hours or more per week. If an employee has been reclassified as a common law employee, the employer will likely need to offer them coverage if they're working full-time hours. Otherwise, the employer could be at risk for a penalty under the employer mandate. Depending on the percentage of affected workers, the employer could be at risk for the more costly Penalty A for failure to offer coverage to substantially all full-time employees (95 percent).
An employer who wishes to review their employee classifications should contact outside counsel. If workers are found to be misclassified, there may be previous tax liability and filings to be addressed as well as future benefit offerings and labor law protections.
Pharmacist Health Care Services Coverage
On April 9, 2018, Gov. Hickenlooper signed HB 1112 into law. This bill requires plans to provide coverage for health care services provided by a pharmacist if the services are provided within a health professional shortage area and the plan provides coverage for the same services provided by a licensed physician or advanced practice nurse. The effective date of HB 1112 is Aug. 8, 2018.
Step Therapy Prohibited for Stage Four Metastatic Cancer Drugs
On April 9, 2018, Gov. Hickenlooper signed HB 1148 into law. This bill prohibits insurance carriers from requiring stage four advanced metastatic cancer patients to undergo step therapy prior to receiving a prescription drug approved by the FDA. This prohibition would apply as long as the drug is on the carrier's prescription drug formulary and the use of the drug is consistent with best practices for the treatment of cancer. The effective date of HB 1148 is Jan. 1, 2019.
On March 29, 2018, Gov. Reynolds signed HF 2305 into law, creating Acts Chapter 1055. This law requires insurers to cover telehealth services to the same extent as comparable services not offered by telehealth. Specifically, a policy, contract or plan providing for third-party payment or prepayment of health or medical expenses shall not discriminate between coverage benefits for health care services that are provided in person and the same health care services that are delivered through telehealth. This law is effective in Iowa on or after Jan. 1, 2019.
Mandated Coverage for Fertility Instruction
On May 8, 2018, Gov. Hogan signed HB 249 into law. The new law requires group health insurance plans to provide coverage for certain instruction related to fertility awareness-based methods. "Fertility awareness-based methods" include cervical mucus method, symptom-thermal or symptom-hormonal method, the standard days method and the lactational amenorrhea method. The coverage must not be subject to participant cost sharing. It's effective for policies issued or renewed on or after Jan. 1, 2019.
Massachusetts DUA Releases Updated FAQs on EMAC Contributions That Incorporate the Final Regulations
The Massachusetts Department of Unemployment Assistance (DUA) recently released an updated set of FAQs that add an additional five Q&As to generally incorporate the final regulations for the Employer Medical Assistance Contribution (EMAC).
As background, the EMAC rules generally impose additional employer fees on employers with at least five employees, regardless of whether the employers offer health coverage to their employees. In August 2017, MA passed "An Act Further Regulating Employer Contributions to Health Care" (the Act) that, among other things, increased the EMAC and imposed a tax penalty, or "EMAC Supplement." The Act applies only for 2018 and 2019, and it increases the EMAC fee from $51 per employee to $77 per employee. It also adds a temporary EMAC supplement contribution (for 2018 and 2019) that applies when non-disabled employees who aren't eligible for an employer group health plan have coverage through the state (which may include MassHealth or the MA ConnectorCare Program). This EMAC supplement is based on the wages of employees who receive health-subsidized coverage and is applied to part- and full-time employees. The time-limited increase in the EMAC and additional supplement are intended to help offset the costs for employees on subsidized coverage while longer-term reforms are established and implemented.
The EMAC final regulations are generally the same as the proposed regulations but include some minor modifications. One difference is to the definition of "Liability for EMAC Contribution Supplement" that extends the days required for an employee to be covered through MassHealth or ConnectorCare before a payment is assessed. Specifically, the covered employer is liable for a payment of the EMAC Supplement if one or more non-disabled employees receive health insurance coverage through MassHealth or ConnectorCare and coverage continues for at least 56 days (as opposed to the 14 days provided for in the proposed regulations). Also note that the employer won't be liable for a payment for employees who only enroll in the MassHealth Premium Assistance Program.
A second difference is that the final regulations clarified that cities, towns, regional school districts and educational collaboratives aren't considered covered employers and, therefore, aren't subject to or liable for the EMAC supplement, except under limited circumstances. The final regulations also include a provision on how to determine the date of receipt of an electronically transmitted notice of determination by the DUA.
Employers should work with tax counsel and payroll providers to make adjustments relating to the increased EMAC and potential supplemental contributions as well as any potential change within the final regulations' provisions relating to the payment and collection of contributions or payments.
New Hampshire Expands Anti-Discrimination Law to Include Transgender People
On May 2, 2018, the New Hampshire Senate passed bill HB 1319, which updates the state's anti-discrimination laws to prohibit discrimination against the state's transgender residents. Gov. Sununu has indicated his intention to sign the bill into law.
The state's anti-discrimination law bans discrimination in housing, employment and public accommodations and already prohibits discrimination based on "age, sex, race, creed, color, marital status, familial status, physical or mental disability, or national origin." Once the bill is signed by the governor, New Hampshire will become the 21st state to extend the protected class designation to include gender identity.
NH employers shouldn't treat transgender people differently with regard to health plan offerings and other benefits, and should work with outside counsel on overall compliance with the new law.
New York City Publishes Revised Notice of Employee Rights
On May 7, 2018, the New York City Department of Consumer Affairs (DCA) issued a revised Notice of Employee Rights (the Notice) under the Earned Safe and Sick Time Act (ESSTA). All covered employers are now required to provide any new hires with the new Notice of Employee Rights on the first day of an employee's employment, and all current employees should be provided the revised notice on or before June 4, 2018.
The revised notice incorporates the recent changes to the ESSTA that also became effective this month (on May 5, 2018). Under the ESSTA, employers must allow employees to use sick and safe time if they or a family member have been the victim of any act or threat of domestic violence, unwanted sexual contact, stalking or human trafficking. The law also expands the definition of "family member" to allow an employee to use safe and sick leave time for (i) any individual related by blood to the employee and (ii) individuals whose close association with the employee is the equivalent of a family relationship.
Under ESSTA, employees can take time off to restore their physical, psychological and economic health or that of a family member. For example, individuals can take time off to:
- Obtain services from a domestic violence shelter, rape crisis center or other services program
- Participate in safety planning, relocate, enroll a child in a new school or take other actions to protect their safety or that of their family members
- Meet with an attorney or social service provider to obtain information and advice related to custody, visitation, matrimonial issues, orders of protection, immigration, housing, and discrimination in employment, housing or consumer credit
- File a domestic incident report with law enforcement or meet with a district attorney's office
New York City employers should download the revised Notice of Employee Rights template and be prepared to provide the Notice in the employee's primary language (if not English). It also would be beneficial to review their handbook policies relating to sick time to make sure that "safe time" reasons are provided as well and that the broader definition of "family member" is incorporated into the document.
New York Makes Updates to Health Benefit Mandates
On April 12, 2018, Gov. Cuomo signed a budget bill that also included several changes to the New York Health Benefit Mandates. Generally, S 7507 enacts into law major components of legislation necessary to implement the state health and mental hygiene budget for the 2018-2019 fiscal year, but also includes the following health benefit mandates:
Outpatient Coverage for Diagnosis and Treatment of Substance Use Disorders
Effective April 12, 2018, and until June 30, 2024, New York-based facilities certified by the New York Office of Alcoholism and Substance Abuse Services that participate in insurers' provider networks and provide outpatient, intensive outpatient, outpatient rehabilitation and opioid treatment can't be subject to: (i) preauthorization or (ii) a concurrent review for the first two weeks of continuous treatment, not to exceed 14 visits, so long as the facilities notify insurers within 48 hours after plan participants are admitted about the start of treatment and the initial treatment plan.
Facilities must perform clinical assessments of plan participants at each visit, including periodic consultations with insurers to ensure that the facilities are using the insurers' evidence-based and peer-reviewed clinical tool, as designated by the New York Office of Alcoholism and Substance Abuse Services and appropriate to the participant's age, to ensure that outpatient treatment is medically necessary.
Utilization reviews can include all services provided during outpatient treatment, including all services provided during the first two weeks of continuous treatment, not to exceed 14 visits, of such outpatient treatment. However, during the initial two weeks, insurers can only deny coverage for outpatient treatment on the basis that such treatment isn't medically necessary if the treatment is contrary to the clinical review tool used by the insurer. Facilities providing such treatments can only charge participants for copayments, coinsurance or deductibles otherwise required under plans.
NY Passes Law to Require Hospitals to Provide Pasteurized Donor Human Milk
Effective April 12, 2018, and until June 30, 2024, plans that provide hospital, surgical or medical coverage must provide coverage for pasteurized donor human milk, including fortifiers, as medically indicated for inpatient use by certain infants:
- For which licensed medical practitioners issue orders deeming the infants medically or physically unable to receive maternal breast milk or participate in breastfeeding, or
- Whose mothers are medically or physically unable to produce maternal breast milk at all or in sufficient quantities or participate in breastfeeding despite optimal lactation support.
Such infants must have:
- Documented birth weights of less than 1,500 grams, or
- Congenital or acquired conditions that place them at a high risk for developing necrotizing enterocolitis.
Changes in Low-Dose Mammography Screenings Provisions
On May 1, 2018, Gov. Fallin signed SB 1103 into law. This bill amends the insurance code to require that plans cover low-dose mammography screenings to test for the presence of occult breast cancer. Participants aged 35-39 must be allowed one low-dose mammography screening every five years and participants aged 40 and older must be allowed one annually. These screenings cannot be subject to plan deductibles, copayments or coinsurance, and the plan can't require participants to undergo the screenings at a specified time as a condition of payment. The law takes effect on Nov. 1, 2018.
Coverage for Prescription Eye Drops
On April 17, 2018, Gov. Walker signed AB 876 into law, creating Wisconsin Act 305. The law specifies that if a health insurance policy provides coverage for prescription eye drops, the policy must allow coverage for a refill beginning when 75 percent of the days have passed from the most recent covered filling of the prescription. The requirement also applies to a self-insured health plan of the state or of a county, city, town, village or school district. This requirement is generally effective for health plans delivered, issued for delivery or renewed in Wisconsin on or after Jan. 1, 2019.
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.
Industry news topics covered in the Compliance Corner are chosen based on general interest to most employers and may include articles about services not available through PPI.
Can an employee have an FSA and an HSA in the same calendar year?