This checklist is designed to help brokers and employers who sponsor group health plans review compliance with key provisions of the Affordable Care Act (ACA) and the Consolidated Appropriations Act of 2021 (CAA).

Note: This list is for general reference purposes only and is not all-inclusive. The information is subject to change based on new requirements or amendments to the law. Additionally, your client’s group health plan may be exempt from certain requirements and/or subject to more stringent rules under your state’s laws.

• Notice Regarding Patient Protections Against Surprise Billing: All employers that maintain a public website for their group health plan need to post the new version of the Notice on that site by the first day of the plan year beginning on or after January 1, 2023. Employers without a public group health plan website should ensure the insurance carrier or TPA makes the Notice available on the carrier’s or TPA’s public website for the plan. The model Surprise Billing Notice is located within the CMS No Surprises Act website.
• CAA Prescription Drug Data Collection: All employer-sponsored medical plans, whether fully insured or self-insured are subject to a new annual prescription drug and health care spending data submission requirement commonly referred to as the Prescription Drug Data Collection (RxDC) report. Reporting for the 2020 and 2021 calendar years is due December 27, 2022, and then reporting will be due each June 1, for subsequent calendar years. Absent any further extensions, the 2022 report will be due June 1, 2023.

Employers with fully insured plans will rely on their insurance carrier to submit the report but should confirm this with the insurance carrier. Self-insured employers (including level-funded plans) should confirm with their third-party administrator (TPA) or pharmacy benefit manager (PBM) that they will complete the report on the plan’s behalf.

• Participant-Level Transparency in Coverage (TiC): Health plans must begin offering an internet-based price comparison tool disclosing an initial list of 500 shoppable items effective the first plan year beginning on or after January 1, 2023. Employers will rely on their insurance carrier for fully insured plans or TPA for self-insured plans to provide this tool.

Employers can enter into a written agreement with the insurance carrier or TPA to provide that they will comply with the TiC requirements.

• ACA Reporting: Applicable Large Employers (ALEs) and self-insured employers of any size, must report group health plan offer and coverage information to the IRS and to employees annually. The forms must be distributed by March 2, 2023, to employees and filed with the IRS by March 31 if filing electronically (required for employers that filed 250 or more returns with the IRS). If filing by paper, the forms must be furnished by February 28, 2023.

An employer is an ALE in the current year if it employed on average at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year.

• Imputed Income for Domestic Partners: Employers must report imputed income on the Form W-2 for employees who cover non-tax dependent domestic partners and/or domestic partner’s children under the health plan.
• Nondiscrimination Testing (NDT) for Cafeteria Plans: All cafeteria plans must undergo annual non-discrimination testing. While most employers will pass most of the required tests easily, some dependent care FSA plans which have a large number of highly compensated employees (HCEs) participating may fail the 55% average benefits test. In that case, the employer must make adjustments to the HCEs elections by year-end to preserve at least a portion of the HCEs’ pre-tax benefit.

With the new IRS rule, some families will be newly eligible for premium subsidies.

The “family glitch” refers to a 2013 ACA implementation rule that based eligibility for a family’s premium subsidies on whether available employer-sponsored insurance is affordable for the employee only, even if it’s not actually affordable for the whole family.

In 2022, the Biden administration proposed a rule change to address the family glitch, and the IRS finalized it prior to the open enrollment period for 2023 coverage.

Large employers have to offer coverage to dependents, but they don’t have to pay for that coverage.

Many kids who would otherwise have been caught by the family glitch are eligible for CHIP. But that didn’t help spouses, and there were still about 2.8 million kids caught by the glitch and ineligible for Medicaid or CHIP.

The glitch was not an accident – basing affordability on the whole family’s premiums would have increased federal costs significantly. But the rules are changing as of 2023 to ensure that affordability is based on family premiums when applicable.

Proposed legislation to fix the family glitch never succeeded. But administrative changes ended up being a viable solution. Fixing the family glitch by making the spouse and/or kids eligible for subsidies doesn’t help everyone, and neither will employers dropping spousal coverage.

More to come on this new legislation!

The Departments of Health and Human Services (HHS), the Treasury and Labor (collectively, the Departments) issued new guidance clarifying birth control protections created under the Affordable Care Act (ACA). Regulators had previously warned insurers about complying with the law to ensure birth control is accessible nationwide with no additional costs involved.

The ACA requires most private plans to offer birth control and family planning counseling at no additional cost to beneficiaries. Other services required to be offered at no additional charge include:

• Sterilization procedures
• Implanted devices such as intrauterine devices and diaphragms

There are strict limitations that apply to medical management. Medical management is only permitted within a specific category of contraception. Plans must automatically cover at least one option within a given category. Medical management may then be used for other options in that category provided:

• The techniques used are reasonable.
• The exceptions process discussed below is followed.

On July 28, the Departments issued updated FAQs which lay out which services are included in the definition of contraception and must be covered without cost sharing:

• Items and services necessary to furnish a recommended preventive service, such as anesthesia for a tubal ligation procedure or pregnancy tests needed before the provision of an intrauterine device
• Clinical services, including patient education and counseling needed to provide any covered contraceptive product or service
• Counseling and education about fertility awareness-based methods, including lactation amenorrhea
• Over-the-counter emergency contraception when prescribed by a treating physician, even when such products are prescribed before the need for their use arises
• Plans are also permitted to cover such OTC products without a prescription. If an individual’s plan does not cover OTC emergency contraception, an HSA, health FSA or HRA may be used to cover such expenses.

The guidance clarifies the fact that the federal mandate will control if there is a conflict between the federal contraception mandate and a state law. For example, if a state were to ban emergency contraception (commonly referred to as the morning after pill), such a ban would be invalid under federal law. The guidance goes on to specify that in such a case, the Department of Health and Human Services will take direct action to enforce these federal rules. For more information, please reach out to our office or contact your insurance carrier directly.

The Affordable Care Act (ACA) benchmark for determining the affordability of employer-sponsored health coverage will significantly decrease to 9.12% of an employee’s household income for the 2023 plan year. This is a significant decrease from the 2022 level of 9.61%. This affordability percentage affects an individual’s eligibility for federally subsidized coverage from a marketplace exchange. It also can potentially affect the employer’s liability for shared-responsibility assessments.

Under the ACA, employer-sponsored minimum essential coverage (MEC) is affordable if an employee’s required contribution for the lowest-cost, self-only option with minimum value does not exceed an annually indexed percentage of the employee’s household income. Employees and their family members eligible for minimum-value employer-sponsored MEC that meets the affordability standard cannot receive premium tax credits or cost-sharing reductions for public exchange coverage.

To determine liability for play-or-pay assessments, there are three employer-safe harbors that can replace household income in the affordability calculation. They are:

• Form W-2 wages
• Rate of pay
• Federal Poverty Level (FPL)

Employers should review the required employee contribution for 2023 coverage if they plan to meet the ACA’s affordability limit under the applicable safe harbor. If the employer plans to use the Federal Poverty Level (FPL) for the 2023 calendar-year plans, the required employee contribution cannot exceed 9.12% of the FPL for a particular area which is $13,590 for mainland U.S. or $103.28 per month.

Non-calendar year plans will continue to use 9.61% to determine affordability in 2023 until their new plan year starts. Non-calendar-year plans won’t be able to calculate the FPL safe harbor contribution limit for plan years beginning after January 1, 2023, until the Department of Health and Human Services issues the 2023 FPL guidelines in January or February 2023.

A copy of the Revenue Procedure is available here: RP-2022-34 (irs.gov).