January 2023 Employee Benefits Compliance Alert
Release Date: January 9, 2023
Federal Government Extends Health Plan Participants’ Ability to Utilize Telehealth Services with a Health Savings Account and High Deductible Health Plan
During the last week of December 2022, Congress approved the Consolidated Appropriations Act, 2023 (CAA 2023), which included, among other things, a temporary telehealth services safe harbor for High Deductible Health Plans (HDHP) first-dollar coverage without violating Health Savings Account (HSA) contribution rules. As of January 1, 2023, HDHP participants can still take advantage of coverage for telehealth services without losing their eligibility to make HSA contributions and having to first satisfy the minimum required deductible of their HDHP. Although the extension of the safe harbor is still temporary, there remains hope that before the expiration of the new extension in 2024, Congress will make the availability of a telehealth services exception permanent.
Why Was the Safe Harbor and Extension Necessary?
The CAA 2023 telehealth safe harbor legislation builds further upon earlier extensions legislated in 2020 and 2022 that arose because of the COVID-19 pandemic. Telehealth services gained value during the pandemic, since they allowed for lower-cost remote care and removed the risk of in-person infection between health care providers and patients. Prior to the first safe harbor exception for telehealth services, employees who were participating in a health plan (such as telehealth services) were ineligible to contribute to an HSA. Absent a specific exception in the Internal Revenue Code, those plan participants who used telehealth services as part of their health coverage would have to pay the fair market value of the telehealth services before the HDHP deductible was satisfied.
How Long Will the Extension Last?
The most recent extension was set to expire on December 31, 2022, which would have required charging health plan participants for telehealth services as of January 1, 2023, if they were enrolled in an HDHP. The new safe harbor and extension in the 2023 CAA applies to plan years beginning after December 31, 2022, and before January 1, 2025. For calendar year plans, this means that the extension applies for the 2023 and 2024 calendar years.
What To Do?
As we noted following the 2022 telehealth extension, the extension of telehealth relief is optional and must first be implemented by the plan sponsor. If a plan sponsor opts to implement the relief, they should do the following:
- If fully insured, the plan sponsor should contact their carrier to assist with the adoption of the telehealth relief; once adopted, the plan sponsor should ensure that their plan documents are properly updated and that plan participants are notified.
- If self-funded, the plan sponsor should discuss these changes with their third-party administrator (TPA) and stop-loss carrier; once adopted, the plan sponsor should ensure that their plan documents are properly updated and that plan participants are notified.
Due to the timing associated with this relief, plan sponsors should consider issuing a Summary of Material Modifications (SMM) to alert employees.
Please feel free to contact George Thompson, Senior Counsel, VP of Compliance at Fred C. Church with any questions.
Release Date: January 20, 2023
New Federal Legislation: The Pregnant Workers Fairness Act (PWFA) and the Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act)
In late December 2022, as part of the Comprehensive Appropriations Act, President Biden signed into law the Pregnant Workers Fairness Act (PWFA) and the Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act). Both laws enjoyed bipartisan support and, from a practical point of view, supplement existing employee protections in the Pregnancy Discrimination Act of 1978, the Americans With Disabilities Act (accommodating pregnant employees), and the Affordable Care Act (breastfeeding at work). Employers should review their current employment practice policies or discuss with their employment law counsel to ensure that they are incompliance with both the PWFA and the PUMP Act.
Pregnant Workers Fairness Act (PWFA)
The PWFA is designed “[t]o eliminate discrimination and promote women’s health and economic security by ensuring reasonable workplace accommodations for workers whose ability to perform the functions of a job are limited by pregnancy, childbirth, or a related medical condition.” Employers with 15 or more employees are required to make reasonable accommodations for employees and job applicants with known limitations related to pregnancy, childbirth, or related medical conditions, enabling them to continue working while maintaining a healthy pregnancy. Specifically, employers violate the act if they:
(1) do not make reasonable accommodations to the known limitations related to the pregnancy, childbirth, or related medical conditions of a qualified employee, unless such covered entity can demonstrate that the accommodation would impose an undue hardship on the operation of the business of such covered entity;
(2) require a qualified employee affected by pregnancy, childbirth, or related medical conditions to accept an accommodation other than any reasonable accommodation arrived at through the interactive process;
(3) deny employment opportunities to a qualified employee if such denial is based on the need of the covered entity to make reasonable accommodations to the known limitations related to the pregnancy, childbirth, or related medical conditions of a qualified employee;
(4) require a qualified employee to take leave, whether paid or unpaid, if another reasonable accommodation can be provided to the known limitations related to the pregnancy, childbirth, or related medical conditions of a qualified employee; or
(5) take adverse action in terms, conditions, or privileges of employment against a qualified employee on account of the employee requesting or using a reasonable accommodation to the known limitations related to the pregnancy, childbirth, or related medical conditions of the employee.
Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act)
The PUMP Act, which amends the Fair Labor Standards Act, expands employee “access to breastfeeding accommodations in the workplace, and for other purposes.” Employers will need to provide accommodations for an employee and other types of workers not covered under existing law. The PUMP Act requires employers, among other things, to provide:
(1) a reasonable break time for an employee to express breast milk each time such employee has need to express breast milk for the 2-year period beginning on the date on which the circumstances related to such need arise; and
(2) a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.
The PUMP Act also requires employers to compensate employees who take such breaks if the employee is working during the break. Time spent to express breast milk must be considered hours worked if the employee is also working. Note that the PUMP Act does not apply to employers with less than 50 employees if it would cause such employers an undue hardship and contains specific exemptions for some workers in the transportation industry.
Looking Ahead: HHS Proposes Increase to Out-of-Pocket Limits for Health Plans in 2024
Under the Affordable Care Act, each year the Department of Health and Human Services (HHS) adjusts the maximum out-of-pocket limits for fully insured and self-funded health plans based on inflation. HHS recently announced the proposed maximum out-of-pocket limits applicable to non-grandfathered health plans for plan years beginning in 2024. The current limits applicable to 2023 plan years are $9,100 for self-only coverage and $18,200 for family coverage. Under the HHS proposal, the 2024 maximum out-of-pocket limits will be raised to $9,450 for self-only coverage and $18,900 for family coverage.
Massachusetts Department of Family and Medical Leave Announces 2023 Updates to Its Website Guidance, Workplace Posters and Workforce Notifications
The Massachusetts Department of Family and Medical Leave (DFML) last week announced a listing of the changes and updates that have been made to reflect 2023 guidance. The following are links to the most recent updates available on its website to educate you on and guide you through Paid Family and Medical Leave (PFML).
- Updated: 2023 workplace posters and workforce notifications
- Updated: PFML 2023 Maximum Benefit Amount
- Updated: Paid Family and Medical Leave (PFML) videos – translated into Spanish and Portuguese
- Updated: How PFML weekly benefit amounts are calculated and/or changed
- Updated: Filling out the Certification of Your Serious Health Condition form
- New: Paid Family and Medical Leave (PFML) Instructional Webinars
- New: Add or remove leave administrators from your organization(s) on the PFML dashboard
- New: Change email associated with your PFML account
- New: 2022 PFML Annual Report
- New: PFML coverage for statutorily excluded employers
- Updated: PFML 2023 employer contribution rates and calculator
Note: This alert constitutes compliance advice from the Fred C. Church Agency as your employee benefits broker and does not establish an attorney-client relationship with the recipient, who is free to consult with legal or tax counsel of their own choosing.