by Lexi Garcia | Aug 28, 2023 | Blog
QUESTION: We’ve heard that the rules governing the emergency services covered by our group health plan changed in 2022. What are the revised requirements?
ANSWER: The Affordable Care Act (ACA) patient protections applicable to group health plans that provide benefits for emergency services were revised and expanded for plan years beginning on or after January 1, 2022. The revised requirements are as follows—
- No Prior Authorization. The services must be covered without the need for any prior authorization, even if provided out-of-network.
- No Participating Provider Requirement. The services must be covered without regard to whether the provider is a “participating provider” or “participating emergency facility” (i.e., without regard to whether the provider or facility is in-network or otherwise has a contractual relationship with the plan).
- Limited Out-of-Network Provider Restrictions. If the services are provided by a nonparticipating provider or nonparticipating emergency facility, the restrictions that may be applied are limited. For example, the plan may not impose any administrative requirement or coverage limitation that is more restrictive than the requirements or limitations that apply to emergency services received from participating providers and facilities. And cost-sharing may not be greater than the cost-sharing that would apply if the services were provided by a participating provider or facility. A host of rules regulate the process for plan payments to nonparticipating providers—and the amount that must be paid—including intricate rules for how cost-sharing is calculate.
- Restricted Use of Diagnosis Codes. The plan must not use diagnosis codes as the sole basis for limiting required coverage of an emergency medical condition.
- Limited Application of Other Terms or Conditions. The services must be covered without regard to any other coverage term or condition of the plan, other than the exclusion or coordination of benefits, a permissible waiting period, and applicable cost-sharing.
Source: Thomson Reuters
by Lexi Garcia | Aug 17, 2023 | Blog
QUESTION: How does the annual limit on health FSA salary reductions apply when employees join our company midyear and elect to participate in our health FSA? Does a reduced limit apply to new employees who were participating in their former employers’ health FSAs earlier in the year?
ANSWER: In general, and unless the plan provides otherwise, employees hired midyear may elect to make salary reductions of up to the annual limit, just like employees who are employed for the full plan year. (The limit is indexed for inflation—for $2023 it is $3,050.) Employees who participate in more than one employer’s health FSA during a plan year may make salary reductions of up to the annual limit under each employer’s health FSA unless the employers are treated as a single employer under the Code’s controlled group or affiliated service group rules. (These rules treat two or more employers as a single employer if there is sufficient common ownership or a combination of joint ownership and common activity.) Thus, your company need not apply a reduced limit to a midyear hire who was participating in an unrelated employer’s health FSA before joining your company. Likewise, an employee who works for your company and another unrelated employer at the same time could make salary reductions of up to the annual limit under your company’s health FSA and any health FSA sponsored by the other employer. But if your company and the other employer are members of a controlled group or affiliated service group, then a single limit applies, and the employee’s salary reductions to the two health FSAs must be aggregated.
Of course, employees should minimize their risk of loss by basing their elections on a careful estimate of the eligible medical expenses they expect to incur during their period of coverage. (Grace periods and carryovers are plan design choices employers may make that can also minimize risk of loss for employees.) Employers, too, may wish to minimize their risk of loss by limiting annual health FSA salary reductions to an amount lower than the limit. Note that nonelective employer contributions to a health FSA (e.g., matching or seed contributions, or flex credits) generally do not count toward the limit. However, if employees may elect to receive the employer contributions in cash or as a taxable benefit, then the contributions will be treated as salary reductions and will count toward the limit if contributed to the health FSA.
Source: Thomson Reuters
by Lexi Garcia | Aug 4, 2023 | Blog
QUESTION: Our company sponsors a group health plan that offers coverage to eligible employees and dependent children. We understand that we must make coverage available until a child is age 26. At what point during the month of the child’s 26th birthday is it permissible for our plan to terminate coverage for the child?
ANSWER: Group health plans that offer dependent coverage are required to continue making coverage available for an employee’s child until the child’s 26th birthday—regardless of the child’s residency, financial dependence, student status, employment, or other factors. Your plan will satisfy the dependent coverage requirement if coverage is provided until a child attains 26 years of age. As an example, assume an employee’s child’s birthday is July 17. The plan need only offer coverage for the child through the day before his or her 26th birthday—i.e., July 16.
Keep in mind, however, that if your company is an applicable large employer (i.e., if you employed an average of 50 or more full-time employees (or equivalents) in the preceding year), you could face potential employer shared responsibility penalties if you do not offer coverage to an employee’s child through the last day of the month containing the child’s 26th birthday. Applicable large employers may be subject to these penalties if they fail to offer adequate health insurance to full-time employees “and their dependents.” For this purpose, “dependents” means an employee’s children, but excluding stepchildren and foster children, who are under 26 years of age. Regulations implementing the penalties specifically provide that a child is a dependent for the entire calendar month during which he or she attains age 26. Thus, in the example above, coverage must be offered through July 31 to avoid potential penalties. Absent information to the contrary, employers may rely on employees’ representations concerning the identity and ages of the employees’ children.
Source: Thomson Reuters
by Lexi Garcia | Mar 2, 2023 | Blog
HHS’s Center for Medicare & Medicaid Services (CMS) has issued a fact sheet addressing the end of the COVID-19 public health emergency (PHE), which (along with the COVID-19 national emergency) is anticipated to end on May 11, 2023. The fact sheet, which is addressed to individuals, confirms that HHS is expecting the PHE to expire at the end of the day on May 11 and provides information about the implications for coverage under private health insurance, as well as Medicare, Medicaid, and CHIP. Here are highlights relevant to employer-sponsored group health plans:
- COVID-19 Vaccines, Testing, and Treatments. Most plans must continue to cover vaccines furnished by in-network providers without cost sharing but may require individuals receiving vaccines from out-of-network providers to share part of the cost. When the PHE ends, mandatory coverage for OTC and laboratory-based COVID-19 PCR and antigen tests will end. Plans may choose to cover these tests but may require cost sharing, prior authorization, or other forms of medical management. The end of the PHE will not change how COVID-19 treatments are covered; plans that require cost sharing or apply deductibles may continue to do so.
- Access to Telehealth Services. As is currently the case during the PHE, coverage for telehealth and other remote care services may vary from plan to plan after the PHE ends. When covered, plans may impose cost-sharing, prior authorization, or other forms of medical management.
Source: Thomson Reuters
by Lexi Garcia | Feb 28, 2023 | Blog
QUESTION: For 2023, an employee elected $2,400 of health FSA coverage under our calendar-year cafeteria plan, which is funded solely through employee salary reductions and does not provide for carryovers or include a grace period. The employee has already incurred medical expenses equal to this amount in 2023 and wants to be reimbursed for the expenses now, even though she has only made health FSA salary reductions of $400 to date. Do we have to reimburse all of these expenses right away, or can we limit reimbursements to the amount our employee has already contributed and ask her to resubmit the remaining expenses as additional contributions are made?
ANSWER: Your employee must be reimbursed for all of her expenses now, assuming that the expenses are otherwise eligible for reimbursement (e.g., they are for medical care incurred during the current period of coverage, and appropriate substantiation has been provided). That’s because IRS requirements for health FSAs include a “uniform coverage” rule under which the maximum amount of reimbursement must be available at all times during the plan year (or other period of coverage), reduced only for any prior reimbursements for the same period. Reimbursement is deemed “available” under the uniform coverage rule if claims are paid at least monthly, or when an employee’s submitted claims reach a reasonable plan minimum (e.g., $50). Thus, reimbursements cannot be restricted to the amount of the employee’s contributions.
The uniform coverage rule also prohibits accelerating an employee’s salary reductions based on health FSA claims submitted or paid. Note that the uniform coverage rule does not apply to DCAPs, so reimbursements under a DCAP can be limited to the amount that has been contributed, less expenses already reimbursed.
Source: Thomson Reuters
