• Vita's Commitment to Environmental, Social, and Governance Strategic Initiatives

    Vita is committed to advancing sustainable business practices and driving positive impact for our customers and communities. We advance our Environmental, Social, and Governance (ESG) strategic initiatives through policies, procedures, and collaboration, both internally and externally with business partners. To support these sustainability initiatives, we have partnered with EcoVadis, the world’s largest and most trusted provider of business sustainability ratings, to conduct Vita’s sustainability performance assessment.
    The EcoVadis assessment rated Vita on four sustainability themes: Environment, Labor & Human Rights, Ethics, and Sustainable Procurement. After completing a comprehensive evaluation, reviewing Vita’s internal documentation and processes, data privacy and security standards, ethical conduct, and benchmarking against industry regulations and certifications, we are proud to say that EcoVadis has awarded Vita a Silver medal for ranking in the 80th percentile of insurance brokers in the United States.


    Vita EcoVadis Silver Medal
     
    While there is room for improvement in each factor, Vita is proud of the sustainability initiatives we have implemented so far, and we are excited to continue working towards our dedication to social and environmentally responsible business practices. Vita is committed to performing this assessment annually and sharing our progress with our clients and community.
  • Annual Employee Benefit Plan Limits

    The last of the 2023 employee benefits annual limits and numbers have now been finalized by the IRS. Here is a recap of all the finalized 2023 numbers:

    HDHP and HSA Limits

    2023

    2022

    HDHP Minimum Deductible – Self Only

    $1,500

    $1,400

    HDHP Minimum Deductible – Family

    $3,000

    $2,800

    HDHP OOP Limit – Self Only

    $7,500

    $7,050

    HDHP OOP Limit – Family

    $15,000

    $14,100

    HSA Contribution Limit – Self Only

    $3,850

    $3,650

    HSA Contribution Limit – Family

    $7,750

    $7,300

    HSA Contribution Limit – Catchup (55+)

    $1,000

    $1,000

    ACA Limits

    2023

    2022

    Health Plan OOP Limit - Self Only

    $9,100

    $8,700

    Health Plan OOP Limit - Family

    $18,200

    $17,400

    ACA Affordability Threshold

    9.12%

    9.61%

    Flexible Spending Accounts (FSA)

    2023

    2022

    Health FSA Election Maximum

    $3,050

    $2,850

    Health FSA Rollover Maximum

    $610

    $570

    Dependent Care Election Maximum (not indexed)

    $5,000

    $5,000

    HRA Limits

    2023

    2022

    QSEHRA - Self Only

    $5,850

    $5,450

    QSEHRA - Family

    $11,800

    $11,050

    EBHRA

    $1,950

    $1,800

    Commute

    2023

    2022

    Transit Pass Maximum (Monthly)

    $300

    $280

    Parking (Monthly)

    $300

    $280

    Bicycle (Monthly)

    $20

    Retirement Plans

    2023

    2022

    Elective Deferral Maximum

    $22,500

    $20,500

    Catch-up Maximum (50+)

    $7,500

    $6,500

    Total Contribution Limit (<50)

    $66,000

    $61,000

    Total Contribution Limit (50+)

    $73,500

    $67,500

    401(a) Compensation Limit

    $330,000

    $305,000

    Compensation Thresholds

    2023

    2022

    Highly Compensated Employee (HCE)

    $150,000

    $135,000

    Key Employee Officer Comp

    $215,000

    $200,000

    Key Employee 1% Owner Comp

    $150,000

    $150,000

    Other Limits

    2023

    2022

    Educational Assistance (not indexed)

    $5,250

    $5,250

    Adoption Assistance

    $15,950

    $14,890

    Social Security Wage Base

    $155,000

    $147,000

    Terms


    HSA

    The HSA is an individual Health Savings Account that is owned by the employee and may be used for the payment of medical expenses that are not covered by a qualified High Deductible Health Plan (HDHP), including expenses that go toward satisfying the deductible. This maximum is inclusive of employer and employee contributions.

    FSA

    A Health or Dependent Care Flexible Spending Account (FSA) allows participating employees to reduce their earnings on a pre-tax basis to pay for certain qualified expenses. Salary reductions provide significant tax savings to both the employee and the employer.

    FSA Rollover (Carryover)

    Employers may offer employees the option of rolling over a portion of their remaining Health FSA balance each year, to be used in the same type of plan during the following plan year. The final balance that is available for rollover will be determined after the current plan year’s claim submission deadline.

    Transit

    The Transit Plan allows employees to set money aside on a pre-tax basis for mass transit expenses. Employees get to use tax-free money for their commuting expenses when traveling to and from work.

    Parking 

    The Parking Plan allows employees to set money aside on a pre-tax basis for work-related parking expenses. Employees get to use tax-free money for parking at or near an office location or mass transit hub.

    Tuition Reimbursement

    With a Tuition Reimbursement Plan, the IRS allows employees to generally exclude from income amounts received from an employer-sponsored tuition assistance or educational assistance program (EAP) used to fund employee education-related expenses, subject to the maximum limit.

  • Fixing the “Family Glitch” in the ACA

    Under the ACA, people who do not have access to “affordable” health insurance through their employer may qualify for a premium tax credit to purchase coverage through the ACA’s health insurance marketplaces (CoveredCA in California). Current regulations define employer-based health insurance as “affordable” based solely on the lowest cost plan’s employee contribution, not on the full contribution to insure their family members. This has the consequence of deeming family members ineligible for premium tax credits, even though the cost of employer-sponsored coverage for family members could be well above the affordability threshold. This problem has been dubbed the “family glitch.”
     

    Final Regulations Released

    The Treasury Department and the IRS released proposed regulations in April to eliminate the family glitch. Those regulations have just been finalized. The new regulations allow family members of workers who are offered affordable self-only coverage, but unaffordable family coverage would no longer be disqualified from receiving premium tax credits to purchase ACA coverage.
     

    Are we surprised by this?

    No. This change is not a surprise. The regulations flow from an executive order on the ACA and Medicaid issued by President Biden in January 2021, which hinted at the possibility of fixing the family glitch. Critics have long argued that the family glitch interpretation is inconsistent with the text, structure, and goals of the ACA and unfairly penalizes family members of lower-income workers. In addition, it has long been the intention of the current administration to beef up the ACA where possible, with the goal of providing greater access to healthcare and to lower individuals’ costs were possible.
     

    Fixing the Family Glitch

    The proposed rule would reinterpret how affordability of employer health care coverage is determined for purposes of premium tax credits with respect to family members who are offered employer-sponsored coverage.

    The Old Way: Employer coverage is defined as unaffordable for a single employee if the employee contribution for self-only coverage is more than the affordability threshold (9.61% in 2022 of household income, 9.12% in 2023). An oddity emerges in that calculation with respect to family coverage because affordability for family members is also determined with respect to the contribution for self-only coverage (not the contribution for family coverage).

    The New Way: The affordability test for single employees will remain unchanged. Employees would still be barred from accessing marketplace subsidies if their employer offered affordable employee-only coverage. However, the calculation will change for employees with families. Under the new rules, affordability would be calculated separately for family coverage and would be deemed unaffordable for family members if the required family contribution is greater than the affordability threshold (9.61% of household income in 2022, 9.12% in 2023). When this affordability threshold is exceeded, family members would no longer be barred from accessing premium tax credits and thus could seek subsidized coverage through the Exchange.
     

    Key Employer Takeaways

    There is a lot in here . . . What do I really need to know as an employer? The good news is that there is little that is newly actionable for employers in these proposed regulations. It impacts access to premium tax credits for dependents who may have been previously disqualified. The following are the key takeaways for employers:

    No Impact to Employer Shared Responsibility Penalties: The proposed rule will not affect Shared Responsibility liability under the employer mandate. Why? The employer mandate requires certain ALEs to offer coverage to employees and dependents. However, penalties for violating the mandate are triggered only when an employee receives premium tax credits through the marketplace. Therefore, extending marketplace tax credits to family members of employees (who are not offered affordable employer-sponsored family coverage) would not impact the eligibility of employees and thus would not trigger a shared responsibility payment.

    No Impact to 1095 Reporting: These regulations have no impact on 1095 reporting. It is important to remember that affordability and minimum value for premium tax credit eligibility is different than for purposes of potential employer shared responsibility penalties. No doubt the new proposed rule will create some confusion given the similar terminology. However, the regulations do not change the affordability calculation or minimum value determination as it relates to annual ACA reporting or assessment of penalties.

    Conforming Cafeteria Plan Change: A change was also made to allow an employee to make a mid-year election change to their health insurance coverage (not FSA coverage) when a dependent becomes newly eligible for a premium subsidy under the Exchange.

    Marketplace Notice: Employers can expect the standard Marketplace Notice to be revised to reflect these changes and should plan on updating the version that is distributed to employees once a new version has been released.
     

    Two Nitty Gritty Clarifications

    The regulations also addressed two additional items as follows:
     
    1. Minimum Value Rule: The minimum value rule is extended to dependent coverage. This means that employers must provide an offer of minimum value coverage to dependent children as well as to employees (to avoid Shared Responsibility penalties). The definition of minimum value coverage retains the requirement that plans provide 60% of the total allowed cost of benefits and newly adds the clarification that plan benefits must include substantial coverage of inpatient hospital and physician services. To the extent that minimum value coverage is not being offered to dependent children, employers will need to address this issue.
       
    2. Marketplace Responsibilities: The marketplace would be required to assess:
      • Whether an employee has an offer of affordable employee-only coverage,
      • Whether family members have an offer of affordable family coverage, and
      • Whether any of those family members have an offer of affordable coverage from more than one employer (either as an employee or a dependent).
     

    What is the effective date?

    The new rule becomes effective for tax years beginning in 2023. This means that dependents who are offered unaffordable employer-sponsored family coverage would be eligible for premium tax credits beginning in 2023 (with enrollment to begin in November 2022).
  • Paid Leave Oregon: Everything Employers Need to Know

    The state of Oregon has enacted a new paid family and medical leave program which goes into effect on January 1, 2023. The program is known as Paid Leave Oregon. Paid Leave Oregon is a state-run wage replacement program meant to provide short-term compensation to employees who need to take time off work for medical or family reasons. Covered employers will want to start preparing for and understanding the new law now.
     

    Basics of the Program

    Who are Covered Employers? Employers with 25+ employees anywhere in the world with at least one eligible employee in Oregon are subject to the new law. Importantly, “one employee in Oregon” does include remote employees.

    What are the Qualifying Leave Reasons? Taking time off for any of the following reasons qualifies under this law:
     
    • Family Leave
      • To care for and bond with a child following the child’s birth, adoption, or foster care placement (must be taken within 12 months of birth/placement)
      • To care for a family member with a serious health condition
    • Medical Leave
      • To recover from a serious health condition or care for a family member with a serious health condition
    • Safe Leave
      • To take leave if the employee or an employee’s family member has experienced domestic violence, sexual assault, harassment, or stalking.

    Who is Eligible? Oregon employees may be eligible to take leave whether they work full-time, part-time, a seasonal job, or for more than one employer. The following criteria must be met for an employee to be eligible for Paid Leave Oregon benefits:
     
    • Must be employed in Oregon.
    • Must have earned at least $1,000 in wages in the four out of five quarters before starting leave under Paid Leave Oregon.
    • Cannot simultaneously receive workers’ compensation and/or unemployment insurance benefits.
    • Independent contractors, volunteers, and work training/work-study program participants are not considered employees and, thus, are excluded from the program.

    Who are Covered Family Members? The law includes an expansive list of family relationships that qualify as individuals needing care for whom an employee may take Paid Leave. This includes:
     
    • Child (of any age)
    • Spouse or Domestic Partner
    • Sibling (including step-siblings and in-laws)
    • Parents (includes step-parents and in-laws)
    • Grandchild
    • Grandparent
    • Any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family relationship
     

    Program Benefits

    What are the Benefits? Paid Leave Oregon benefit highlights include:
     
    • Employees may take up to 12 weeks of paid leave per year.
    • In certain situations, an employee may take an additional two weeks (for a total of 14 weeks)
    • Leave may be taken continuously or in partial increments (one week, one day, etc.).
    • Benefit amounts are based on a formula that considers the income of the individual.
    • Leaves are job-protected for employees who have been employed with an employer for at least 90 days.

    What is the Benefit Amount? Paid Leave Oregon is responsible for calculating benefit amounts paid to employees. The below information is for general education purposes. The benefit payable under the law depends on the ratio of the individual’s Average Weekly Wage (AWW) to the State Average Weekly Wage (SAWW).
     
    • If AWW <= 65% of SAWW, benefit = 100% of AWW
    • If AWW > 65% of SAWW, benefit = 65% of the SAWW + 50% of the AWW above that amount
    • Benefit Cap = 120% of SAWW (Initial benefit cap: $1,469.78 per week for 2023)
    AWW: Defined as the total wages earned in the base year divided by the number of weeks in the base year.
    SAWW: $1,224.82 for 2022 and 2023.

    For example, assume an average weekly wage of $1,000. This example illustrates how the formula works when the AWW exceeds 65% of the SAWW:
     
    Step #1: Take 65% of $1,224.82 (SAWW) = $796.13
    Step #2: Subtract the Step #1 result from the AWW ($1,000 - $793.13) = $203.87
    Step #3: Calculate 50% of the Step #2 result ($203.87*0.50) = $101.93
    Step #4: Add the Step #1 result to the Step #3 result ($796.13 + $101.93) = $898.06

    Program Funding and Contribution Details

    How is it Funded? Employers and employees must contribute to the Paid Leave Oregon state fund. The total contribution rate will be determined annually by the Oregon Employment Department (OED). There is a statutory maximum of 1% of wages.

    How is the Funding Split? The law outlines a split contribution between employers and employees as follows:
     
    • Employees contribute 60%
    • Employers contribute 40%

    Can Employers Pay More? Yes. Employers may choose to go beyond the statutory requirement of 40% and pay both the employer and employee contributions, as an employee benefit. If employers pay the employee portion of contributions, a written agreement with the employee must be in place.

    What is the Initial Contribution Rate? The contribution rate for 2023 is 1%. Contributions are paid on all compensation up to the wage base ($132,900 for 2023).

    What are the Contributions and Benefits? The following chart illustrates the contributions and benefits at various income levels:
     

    Annual Earnings

    Average Weekly Wages

    Annual Employee Contribution

    Annual Employer Contribution

    One Week’s Paid Leave Benefit

    Minimum Wage Employee

    $28,080

    $540.00

    $168.48

    $112.32

    $540.00

    Median Income Employee

    $67,058

    $1289.58

    $402.35

    $268.23

    $1,032.86

    High Income Employee

    $132,900

    $2,555.78+

    $797.40

    $531.60

    $1,469.78



    Who Collects Contributions? Employers are responsible for collecting and submitting employee contributions as well as their employer contributions.

    Who Pays the Benefits? Income replacement benefits while an employee is on a leave are paid by Paid Leave Oregon (not by employers).

    How Are Contributions Made? Employer contributions will be made through Frances Online, the Oregon Employment Department’s new employer portal for reporting employer taxes, unemployment insurance taxes, and Paid Leave Oregon contributions.

    What Must be Done Now? Employers should consider two action items for implementing this new law:
     
    • Register with Frances Online
    • Coordinate with the payroll service provider to ensure that correctly calculated employee contributions are withheld from paychecks starting January 1, 2023.
     

    Employer Obligations

    Employers have four important obligations in the administration of the Paid Leave Oregon program.
     
    Notice Requirement: Employers must display a notice in a public space at the worksite containing the disclosure information outlined below. The Oregon Employment Department will release a sample poster in the near future. Posters must display the following information:
     
    • Benefits of the program
    • Claims process
    • Notice requirements for leave
    • Rights to job protection and benefits continuation
    • Protection against retaliation
    • Right to appeal a decision
    • Confidentiality of information received related to a leave

    Job Protection and Anti-Retaliation: These protections apply to employees employed by their employer at least 90 days before taking leave:
     
    • Right to restoration to the same position (or equivalent if the position no longer exists)
    • No employee benefits loss, including seniority or pension rights, accrued before the date on which the leave commenced.

    Health Benefits: Employers must maintain health care benefits during the leave period on the same basis as if continuously employed.
     

    Important Dates to Know

    • January 1, 2023: Employee contributions start
    • January 1, 2023: Employer contributions start
    • September 3, 2023: Employees may begin applying for Paid Leave Oregon benefits
       

    Claims Administration

    What Must Employees Do? To request leave, employees must initiate a claim under the Frances Online system. Standard claimant information, identification verification, employment information, and leave details must be provided. Employees must provide their employer with 30 days’ notice if the leave is foreseeable or 24 hours’ notice if the leave is unforeseeable.

    What Must Employers Do? Employers must engage with Paid Leave Oregon to administer the claims for employees who have filed a claim. Upon being notified of a claim (by Paid Leave Oregon), employers must provide verification details within 10 days.
     

    Private Plan Arrangements

    Can Employers Establish a Private Plan? Yes. Employers are permitted to opt-out of making contributions to the Paid Leave Oregon program if they establish an “equivalent” private program that is approved by the Oregon Employment Department.

    What is an Equivalent Plan? An equivalent plan is a plan the Oregon Employment Department approved, which provides benefits that are equal to or greater than the benefits Paid Leave Oregon provides. Employers who already offer paid leave to their employees can apply for it to be considered an equivalent plan. To be an equivalent plan, the following criteria must be met:
     
    • Offer the same or more benefits than Paid Leave Oregon offers
    • Employee contributions less than or equal to contributions to the Paid Leave Oregon program
    • Be approved by the Oregon Employment Department.

    What is the Application Process? The Paid Leave Oregon website provides detailed information on the requirements for private/equivalent plans and on submitting an application (Paid Leave Oregon Website). Plans may be fully insured or employer-administered (proof of solvency is required for employer-administered plans). The approval process takes approximately 30 days, so the Oregon Employment Department recommends that applications be submitted by November 30, 2022, to avoid withholding contributions as of January 1, 2023. Approved plans must then reapply annually for the first three years. The Oregon Employment Department has released an Equivalent Plan Checklist and an Equivalent Plan Guidebook to assist employers in the application process.

    What is a Declaration of Intent? If an employer intends to submit an application but is not yet ready, it may submit a Declaration of Intent form through Frances Online certifying that the employer will have an approved equivalent plan by May 31, 2023.

    By submitting a declaration of intent, the employer will not have to withhold contributions starting January 1, 2023. However, if the employer’s equivalent plan application is denied, the employer will be liable for contributions from January 1, 2023, until an approved plan is in effect. The last day an employer may file a declaration of intent is November 30, 2022.

    If an employer does not use an equivalent plan in 2023, it may submit equivalent plan applications in future years. Similarly, employers may choose to cease using an equivalent plan and use Paid Leave Oregon in future years.

    When is an Equivalent Plan Most Advantageous? As a rule, smaller employers will likely not establish an equivalent plan or apply to have an existing paid leave/disability insurance program approved as an equivalent plan. Larger employers are more likely to engage in this process. Also, to the extent that disability insurance premiums plus the cost of self-funded paid leave programs (for non-disability related leaves) exceed the initial 1% premium, an employer may be better served by simply participating in the Paid Leave Oregon program, especially in the initial years as the program establishes itself and actual claims experience becomes solidified.

    Are there Insurance Company Solutions? Many insurance companies are working to put together consolidated solutions for employers that handle leave management, combining both the disability element and the leave management for non-disability leaves. Expect to see new solutions in this space to address this growing need for employers.

    Now or Later? Many employers are taking a “wait and see” approach to the equivalent plan option, at least for the first year. Employers that have existing programs that would likely be deemed equivalent may want to amend their current plans to clarify that internal self-funded leave benefits will be integrated with the Paid Leave Oregon program. This is necessary to avoid paying directly for leaves (in addition to paying the employee/employer contributions for all or a portion of the leave).
     

    Small Employer Exemption and Grants

    What is the Small Employer Exemption? Small employers (with fewer than 25 employees) are exempt from making the 40% required contribution under the Paid Leave Oregon program.

    Do Small Employers Need to Do Anything? Yes. All Oregon employees participate in the Paid Leave Oregon program (regardless of the size of their employer). While small employers do not need to make the 40% employer contributions to the program, they still must collect and submit the required 60% employee contributions. Even though employers do not make contributions, employees of small employers still receive the same benefits.

    What are the Small Employer Assistance Grants? Small employers who elect to pay the 40% employer contribution (even though they are not required to do so), are eligible to receive assistance grants. Key elements of the assistance grants include:
     
    • If an employee takes family and medical leave, a small employer who pays their share of contributions may apply for one grant per employee, up to a maximum of 10 grants per year.
    • Employers must continue to pay their share of contributions for 8 consecutive calendar quarters.
    • Small Employer Assistance Grants provide up to $3,000 towards the cost of hiring temporary workers to replace employees on leave and up to $1,000 to reimburse the employer for significant additional wage-related costs incurred while an employee is on leave.
     

    Interaction with Other PTO/Sick Leave Benefits

    How does the Plan Interact with Other Programs? Paid Leave Oregon benefits are in addition to benefits payable under other leave programs such as the Oregon Family Leave Act (OFLA) and the Family and Medical Leave Act (FMLA.) Employees cannot receive Paid Leave Oregon benefits if they are receiving worker’s compensation or unemployment insurance benefits.

    How do the Programs Differ? Paid Leave Oregon’s requirements are similar, but not identical, to the requirements of the OFLA and the FMLA, which respectively provide protected but unpaid state leave and federal leave. For example, leave related to domestic violence survivors is covered under Paid Leave Oregon, but not under the OFLA or the FMLA.

    If an employer does not use an equivalent plan, the OED will administer Paid Leave Oregon benefits. The OED will notify the employer when an employee applies for or is approved to take leave under Paid Leave Oregon. The employer administers OFLA and FMLA benefits, and it must track an employee’s use of OFLA, FMLA, and Paid Leave Oregon leaves. Given the overlay of these three leave programs, employers would be prudent to review policies and procedures to see whether they need to be updated and/or how they need to be harmonized.

    How is Sick Leave and PTO Integrated? Employers may permit an employee to use accrued paid sick leave, vacation leave, or any other paid leave to top off Paid Leave Oregon benefits up to 100% of the employee’s weekly wages. Employees may not receive more than 100% of their average weekly wage.

    An employee may also use accrued paid time off and paid sick leave to top off Paid Leave Oregon benefits if the weekly benefits are less than the employee’s weekly wages.

    How Do Leave Programs Differ? There are differences in essentially every category of comparison between the Paid Leave Oregon program, the Oregon Family Leave Act, and FMLA as summarized below:
     

    Paid Leave Oregon
    Oregon Family Leave Act
    FLMA
    Covered Employer
    All employers
    25+ Oregon employees in 20+ calendar weeks
    50+ employees in 20+ workweeks in current or preceding calendar year
    Employee Eligibility
    • $1,000 in base period
    • 180 days tenure
    • 25 hours/week average
    • 12 months of service
    • 1,250 hours of service during preceding 12 months
    • 50+ employees within 75 miles
    Amount of Leave
    • 12 weeks
    • Additional 2 weeks for pregnancy-related limitations
    • 12 weeks
    • Additional 12 weeks for pregnancy disability
    • Additional 12 weeks for sick child if 12 weeks of parental/bonding leave used
    • 12 weeks
    Intermittent leave
    • May be taken in one workday increments
    • Not specified
    • Smallest increment allowed for other types of leave
    • No greater than one hour
    Reasons for Leave
    • Birth, adoption, or foster placement of a child
    • Serious health condition of employee
    • Care for family member with serious health condition
    • Safe leave
    • Birth, adoption, or foster placement of a child
    • Serious health condition of employee
    • Care for family member with serious health condition
    • Pregnancy disability leave
    • Sick child or if school or childcare provider is closed due to a statewide public health emergency
    • Military family leave
    • Bereavement leave (up to 2 weeks)
    • Birth, adoption, or foster placement of a child
    • Serious health condition of the employee
    • Care for family member with a serious health condition
    • Qualifying exigency for family member due to military active duty

     
    How Does it Interact with Other Paid Time Off? Employees may choose to exhaust their accrued paid time off or protected sick leave under the Oregon Paid Sick Time Law before applying for Paid Leave Oregon benefits. However, employers may not require employees to exhaust paid time off and paid sick time before applying for Paid Leave Oregon benefits.
     

    Annual Reporting Requirements

    All employers, including those using approved equivalent plans, must abide by Paid Leave Oregon’s reporting requirements related to employee population and contributions withheld from employee wages. Employers must renew their applications for equivalent plans every three years. All mandatory reports and applications must be submitted through Frances Online.
     

    Integration with Short-Term Disability

    Will Premiums be Reduced? Employers can expect the Paid Leave Oregon program to reduce the cost of insured short-term disability insurance premiums. It stands to reason that when a significant portion of the benefit under a disability insurance policy will now be integrated with the Paid Leave Oregon program, the premiums will be commensurately reduced. But how much of a premium reduction can employers expect? Importantly, only two of the four qualified reasons for a leave would be covered under a disability insurance policy (disabilities related to the birth of a child or the serious illness of an employee). The other qualified leave reasons wouldn’t trigger a disability benefit in the first place.

    How Much Might Premiums be Reduced? Because of the complexities outlined above, it is difficult to project at this early juncture how much of a premium reduction might be expected. Insurers have experience with integrating disability benefits with state-paid leave programs, such as those in CA, HI, NY, NJ, and RI. However, the actual experience of the Paid Leave Oregon program must ultimately be taken into consideration. Lastly, to the extent that average wages exceed or significantly exceed the Paid Leave Oregon income threshold, the impact of the program on disability premiums will be lessened. Said another way, the potential premium reduction will be higher to the extent that a higher percentage of wages will be replaced by the Paid Leave Oregon program.
     

    Action Items for Employers

    For Employers with No Employees in Oregon: Pay attention anyway. It is likely that other liberal states will follow Oregon’s example and pass new paid leave programs in the future. Both the program’s structure and administrative processes are likely to be mirrored, so there may be early lessons to be gleaned by observing and understanding Oregon’s program.

    For Employers with Employees in Oregon: There are important preliminary steps to take in the last months of 2022 to prepare for this law to become effective:
     
    • Confirm Covered Employer status
    • Register with Frances Online
    • Confirm if a private/equivalent option is right for you (submit an application if necessary)
    • Work with payroll vendor to implement payroll contribution process
    • Create an internal procedure for payment of ongoing employee/employer contributions
    • Communicate with employees regarding new payroll contributions that will be happening in 2023
    • Post required notifications in the workplace(s)


  • 125 Plans: Additional Election Change Opportunity for Non-Calendar Year Plans

    The IRS and Treasury department have released Notice 2022-41 which corrects an inconsistency in the regulations for non-calendar year plans. This inconsistency follows along with the regulatory corrections of the “family glitch” for ACA coverage that were just finalized by the DOL. 
     

    Which employers does the change apply to?

    The change is only relevant for employers with non-calendar year Section 125 plans. Employers who have a calendar year Section 125 plan do not need to pay attention to this.
     

    What is the change?

    The newly permitted election change applies to individuals covered under a non-calendar year cafeteria plan who have elected family coverage and have dependents who become newly eligible to enroll in a Qualified Health Plan under an Exchange. The new guidance allows plans to allow participants to revoke family coverage under the group health plan to enroll dependents in coverage through the Exchange (thus changing their own election to self-only coverage under the plan.) Note that the change only applies to health plan election changes; it does not allow participants to make a change in a health FSA plan.
     

    Why was this necessary?

    Existing regulations allow for this election change opportunity for calendar year plans; however, the wording of the regulations constricted a parallel election change opportunity for participants in non-calendar year plans. The issue here is that, when dependents become newly eligible for Exchange coverage, the tax credit available to the family may make it more advantageous for the participant to opt dependents off of the group health plan in favor of Exchange coverage. This type of election change was previously prohibited under non-calendar year plans. The newly issued regulations conform to this type of election change for non-calendar year plans.
     

    Effective Date

    The effective date of this guidance is January 1, 2023.
     

    Vita Plans

    Vita will amend all Vita-created Section 125 Plan Documents to reflect this updated guidance for medical plan election changes.
  • New San Francisco Public Health Emergency Leave Ordinance

    San Francisco repeatedly renewed its Public Health Emergency Leave Ordinance related to COVID-19 over the past two years. Public sentiment affirmed this direction when San Francisco voters passed Proposition G, a new Public Health Emergency Leave Ordinance (PHELO) which makes permanent the public health emergency leave requirement for employers operating within San Francisco.
     

    Ordinance Overview

    The following are the key tenets of the ordinance:
     
    • Effective Date: The ordinance becomes effective on October 1, 2022. 
    • Only for Public Emergencies: The leave is only available during a declared local or statewide health emergency related to a contagious, infectious, or communicable disease.
    • Covered Employers: Businesses with 100 or more employees worldwide are subject to the ordinance. 
    • Employees Covered: All employees who work in San Francisco for a covered employer are entitled to Public Health Emergency Leave (PHEL), regardless of the duration of employment or job title, including part-time, temporary, seasonal, and salaried employees.
    • Benefit Provided: Each employee who performs work in San Francisco must be provided up to 80 hours of paid Public Health Emergency Leave.
    • In Addition to PTO: The paid leave is in addition to any other paid time off, including paid sick leave under the San Francisco Paid Sick Leave Ordinance.
    • Teleworking Capacity: There are certain restrictions on using PHEL if an employee can telework without increasing exposure to disease or unhealthy air quality.
    • Declaration of Emergency: A qualifying public emergency may be declared by the City of San Francisco or California’s health officer or when the Bay Area Air Quality Management District issues a Spare the Air Alert.
     

    Leave Reasons

    Employees may use this leave when they are unable to work (or telework) due to the following reasons:
     
    • Order or Guidelines: The recommendations or requirements of an individual or general federal, state, or local health order (including an order issued by the local jurisdiction in which an employee or a family member the employee is caring for resides).
    • Symptoms: The employee, or a family member the employee is caring for, is experiencing symptoms, seeking a medical diagnosis, or has received a positive medical diagnosis for a possibly infectious, contagious, or communicable disease associated with the public health emergency.
    • Isolate or Quarantine: An employee, or a family member the employee is caring for, has been advised to isolate or quarantine by a healthcare provider.
    • School Closure or Unavailable Care Provider: The employee is caring for a family member whose school or place of care is closed or whose care provider is unavailable due to a public health emergency.
    • Air Quality Emergency: The employee is diagnosed with heart or lung disease, has respiratory problems, is pregnant, or is at least 60 years old and primarily works outside, and the Bay Area Air Quality Management District has issued a Spare the Air Alert.

    Special note on Teleworking Capability: If an employee can telework without increasing the employee’s exposure to disease or unhealthy air quality, the employee may not use PHEL if the declared reason is an order or guideline, advice from a health care provider, or in the event of air quality emergency. Teleworking employees may still utilize PHEL for other covered reasons.
     

    Benefit Calculations

    • Same Basis as SF Paid Sick Leave: The ordinance uses the same rate of pay calculations as San Francisco’s Paid Sick Leave Ordinance.
    • Exempt Employees: Employers pay PHEL in the same manner as they pay other forms of paid leave.
    • Non-Exempt Employees: Employers pay PHEL using one of two methods:
      • The regular rate of pay for the workweek in which the PHEL is used 
      • Divide total wages (not including overtime premium pay) by the total hours the employee worked in the pay periods for the 90 days of employment prior to the employee’s use of PHEL.
     

    Employer Obligations

    • Leave Payment Timing: PHEL payments must be made to employees by the next regular pay period after the leave is taken. 
    • Health Benefits: Health insurance benefits must be maintained while an employee is on a PHEL leave in the same manner as when the employee is an active employee.
    • No Rollover: Employers are not obligated to roll over any unused PHEL to the next year.
    • No Payout: Employers are not required to pay out any unused leave. 
    • Doctor’s Note Restrictions: Employers may require a doctor’s note or other documentation to confirm an employee qualifies to use PHEL for an air quality emergency. The ordinance does not provide for any other opportunities for an employer to require or request documentation of a need for PHEL. 
     

    Phased In Allocation of Hours

    • October 1 – December 31, 2022: The allocation must equal or average (depending on the employee’s schedule) the number of hours worked over a one-week period that the employee regularly worked, not to exceed 40 hours.
    • Beginning in 2023 Employees Working Full Time, Regular, or Fixed Schedules: The allocation must be equal to the number of hours the employee regularly works over a two-week period, not to exceed 80 hours.
    • Beginning in 2023 Employees Working a Variable Schedule: The allocation must be equal to the average number of hours the employee worked over a two-week period or since the employee’s start date if after the beginning of the previous calendar year, not to exceed 80 hours.
    • Future Employees: Future hired employees (who are not employed on these dates), must be allocated the maximum amount of PHEL available to the employee when a public health emergency commences.

    Notice and Recordkeeping Requirements

    • Employer Poster: Employers must post a poster notice in a conspicuous location. The poster should be posted in all available languages in the workplace and emailed to workers who do not frequent the workplace. 
    • Employer Leave Balance Notice: Employers must provide notice of the amount of PHEL available to each employee in the same way they provide notice of regular California Paid Sick Leave (whether on a wage statement or other writing). If the employer offers unlimited paid leave or paid time off, the employer must note “unlimited” on the employees’ wage statements.
    • Employer Recordkeeping: Employers must keep records documenting the hours worked and PHEL was taken for four years.
    • Employee Foreseeability: If the employee’s need for PHEL is foreseeable, the employer can require employees to follow reasonable notice procedures.

    Exemptions and Limitations

    • Healthcare Worker Limitation: An employer of health care providers or emergency responder employees may elect to limit the employee’s use of this leave but may not prevent the employee from using it if the employee is unable to work due to due to an order or guidelines, advice from a health care provider, or in the event of air quality emergency.
    • Non-Profit Exemption: The PHELO exempts certain non-profit organizations that do not engage in specific health care operations, and government entities other than the City of San Francisco.
    • Collective Bargaining Exemption: The only exception for otherwise covered employers is for employees subject to a collective bargaining agreement that expressly waives PHEL in clear and unambiguous terms.

    Penalties and Enforcement

    • Non-Retaliation: Employees who assert their rights to receive Public Health Emergency Leave are protected from retaliation. 
    • Governing Authority: San Francisco’s Office of Labor Standards Enforcement is responsible for the enforcement of the ordinance.
    • Penalties: If PHEL is unlawfully withheld, the employee will be awarded an administrative penalty of the dollar amount of PHEL withheld multiplied by three or $500, whichever amount is greater. Penalties also exist for failing to post the PHEL notice and for failing to retain records.

    Action Item for Employers

    Employers impacted by the San Francisco PHELO should address the following action items prior to October 1, 2022:
     
    • Update Policies: Review (and revise, if necessary) their leave of absence policies and processes.
    • Address Recordkeeping: Update leave record-keeping practices (in the payroll system or other methods).
    • Post Notice: Post the required Poster Notice.
  • Medicare Part D Creditability Annual Employee Disclosure

    U.S. Department of Health and Human Services regulations require annual notice to all plan participants regarding the Medicare Part D Prescription benefit “creditability” of your group health plan. This notice must be provided by October 14 to coincide with the annual Medicare open enrollment period which runs from October 15 to December 7. This notification provides Medicare-eligible employees with important information to help determine whether they need to enroll in Medicare Part D.
     

    Again?  Didn’t I just do this after my medical plan renewal? 

    Not quite. Same law, different requirement. In addition to this annual employee disclosure requirement each fall, plan sponsors must report creditability information directly to the Centers for Medicare and Medicaid Services (CMS) within 60 days of the first day of the medical policy year. Many Vita clients have a January 1 plan renewal, so for many employers, the deadline is the end of March.
     

    How Do We Know If Our Prescription Benefit Is “Creditable”?

    A prescription drug plan is considered "creditable" if the prescription drug benefits are expected to pay as much as or more than standard Medicare Part D prescription drug coverage. If a plan will not pay out as much as Medicare prescription drug plans pay, it is considered "non-creditable".

    If you are a Vita client, you can confirm the creditability of your own plan(s) by referring to your ERISA Welfare Plan Summary Plan Description (SPD).

     

    Employer Action Item

    The ERISA SPD that Vita provides to clients has been designed to incorporate all of the necessary disclosure language for the Medicare Part D Creditability requirement.  If you have distributed this SPD to your employees in 2022 (or since October 15 of last year), you are already in compliance with the annual disclosure requirement. Not a Vita client and need some help? Let's chat!

    If you prefer to send a separate Medicare Part D creditability notice, you may use the sample documents (model notices) available through the Center for Medicare & Medicaid Services website. There you can find sample documents for plans that are creditable or non-creditable for Medicare Part D purposes. Please note that the vast majority of group health plans include prescription benefits that are creditable.

  • Vita Achieves HITRUST Security Certification

    At Vita, protecting the data entrusted to us is among our top priorities. We are pleased to demonstrate to our clients the highest standards for data protection and information security by achieving HITRUST certification for key implemented services and platforms.
     

    /HITRUST-Certified-r2 LogoThe HITRUST Risk-based, 2-year (r2) Certified status demonstrates that Vita has met key regulations and industry-defined requirements and is appropriately managing risk. This achievement places Vita in an elite group of organizations worldwide that have earned this certification. By including federal and state regulations, standards, and frameworks, and incorporating a risk-based approach, the HITRUST Assurance Program helps organizations address security and data protection challenges through a comprehensive and flexible framework of prescriptive and scalable security controls.

    The following is an overview of the critical standards and protocols of the Vita Security Program. These tenets outline Vita’s strong technical controls and commitment to maintaining best security practices: 
     

    1. Formal, Well-Documented Security Program

    Vita’s information security policies are documented and aligned with NIST Cybersecurity Framework v1.1 standard for cyber defense and information security policies. In addition, Vita incorporates HIPAA privacy and security best practices. A comprehensive Information Security Program has been adopted to guide the organization in compliance and cyber safety.
     

    2. Prudent Annual Risk Assessments

    Vita performs and documents a comprehensive annual risk assessment. This process meets the standards of the DOL’s Cybersecurity best practices guidance for annual risk assessments.
     

    3. Reliable Annual Third-Party Audit of Security Controls

    Vita’s external third-party auditor performs bi-annual attestations of adherence to our security controls to confirm HITRUST Certification reports. This certification is the industry standard for healthcare businesses as proof of compliance and security program thoroughness.
     

    4. Defined and Assigned Information Security Roles and Responsibilities

    Vita has clearly defined and assigned roles and responsibilities, including strategy and operational management from our Chief Compliance Officer, Chief Information Security Officer, and the Vita Leadership Team.
     

    5. Strong Access Control Procedures

    At Vita, access to information is provisioned on the principle of least privilege (PoLP). Vita employs strong data access controls, including multi-factor authentication (MFA). Unique user IDs are issued and forced password complexity rules are enabled that include, but are not limited to, minimum length, invalid attempts, password history, and a mixture of characters and numbers.
     

    6. Comprehensive Due Diligence Program

    Vita deploys a rigorous and formal vendor management program for third-party vendors, partners, and cloud data storage platforms to ensure data security is prioritized and maintained at compliant levels. Extensive security reviews are conducted for critical suppliers and partners and risk is assessed prior to contracting. This includes a review of financial, technical, and operational controls as well as specific management elements such as background checking of employees, data security reviews, business oversight of performance, service level agreements (SLAs), and system and organization controls that meet the standards of SOC2 Type 2, ISO 27001, or HITRUST certification. All vendors and partners must meet or exceed minimum security practices, policies, and protocols.
     

    7. Cybersecurity Awareness Training

    Vita team members are systematically assigned mandatory security awareness, privacy, and fraud awareness training on an annual basis. In addition, security training and alert programming is provided throughout the year to reflect risks identified from assessment and the cyber security community.
     

    8. Secure System Development Life Cycle Program (SDLC)

    Vita has implemented a systems development life cycle (SDLC) methodology, which covers analysis, design, build and test, quality assurance and installation, and governs the development, implementation, and maintenance of application systems. Elements of the SDLC include procedures, guidelines, and standards that ensure all in-house applications are developed securely, comprehensive change management tracking, a vulnerability management plan, and annual penetration testing.
     

    9. Encryption of Sensitive Data

    Vita encrypts all sensitive data at rest (stored) and in transit. Data is encrypted using the advanced encryption standard (AES-256). All Vita laptops and desktops are fully encrypted. Vita does not allow the copying of data to USB drives or any such portable media.
     

    10. Sophisticated Layers of Security

    Vita employs industry-leading technology and sophisticated layers of security measures designed to defend against security threats and safeguard client and participant-sensitive information. Protection methods and resources include, but are not limited to:
     
    • Network and application firewalls
    • Virus and vulnerability scans
    • Intrusion Detection and Prevention system
    • Data Loss Prevention solutions
    • Endpoint security measures
    • Malicious code and anti-virus protection
    • Access controls programming
    • Change management controls
    • Dual controls and separation of duties
    • Secure destruction of data
    • Team member background checks
    • External audits
    • Threat intelligence resources
    • Routine patch management
    • Network segregation
    • Routine data backup

    11. Business Continuity and Disaster Recovery Plan

    Vita has an established and mature Security Incident Response Team, documented a business continuity/disaster recovery plan (BC/DR), and Incident Response Plan to help ensure that business services remain available in the unlikely event of a major business interruption. The BC/DR plan incorporates business impact analyses and contingency planning at multiple levels, incident management guidelines, emergency notification protocols, clearly defined roles, responsibilities and authority levels, and disaster declaration processes.
     

    12. Responsiveness to Cybersecurity Incidents or Breaches

    Vita’s Incident Response Plan ensures a rapid and comprehensive response should a cybersecurity incident or breach occur. A Vita-wide security incident response team (SIRT) has been trained and provided with action guides. All response activities are coordinated with internal and external stakeholders.
     

    13. Culture of Safety and Security

    Vita is committed to creating a culture of safety and security in every respect. Vita maintains high standards of security commitment for all team members, vendors, and partners. The commitment to security is reflected in cutting-edge technology resources being deployed to protect client and participant data and the Vita network and system. Lastly, Vita’s comprehensive Security Program addresses and manages not only cyber security risks but also physical and organizational security realities.
     

    14. Certification to Prove It

    Vita maintains HITRUST CSF® v9.4 Risk-based, 2-year (r2) certification of security practices. This external assessment both reflects and validates Vita’s commitment to security.
  • ACA Preventive Care Challenge Covering PrEP Ruled to Violate Religious Freedom

    In litigation involving the Affordable Care Act's (ACA's) preventive health services requirements, a Texas district court held that the coverage mandate for preexposure prophylaxis (PrEP) to prevent HIV infections violated an employer's rights under the Religious Freedom Restoration Act of 1993.

    On September 7, 2022, U.S. District Judge Reed O’Connor ruled that the ACA’s requirement for employers and insurance companies to provide free coverage of HIV prevention drugs was unconstitutional. The judge’s rationale for his decision rested on the fact that he deemed it a violation of a Christian business owner’s freedom of religion.

    For context, according to the U.S. Centers for Disease Control and Prevention, medications can reduce a person’s risk of getting HIV from sexual activity or intravenous drug use and is a highly effective preventive treatment for HIV. PrEP drugs reduce the risk of getting HIV from sex by 99% and from injectable drug use by 74%. The cost for a PrEP prescription can run as high as $22,000 annually.

    The district court also found that the appointment process for the entities that determine which preventive services must be covered under the ACA is unconstitutional.
     

    Background of Preventive Health Services Under the ACA

    The ACA requires group health plans and health insurers to cover preventive care and screenings without cost-sharing. Plans and insurers must provide first-dollar coverage for the following four categories of preventive health services:
     
    • Evidence-Based Services: Evidence-based items or services with a rating of "A" or "B" under current recommendations from the S. Preventive Services Task Force (USPSTF), including PrEP drugs to prevent HIV infections.
    • Immunizations: Routine immunizations are recommended by the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC), including the human papillomavirus (HPV) and the COVID-19 vaccine.
    • Preventive Care and Screenings through Age 21: Preventive care and screenings for infants and children through age 21 under guidelines supported by the Health Resources and Services Administration (HRSA), including screenings and counseling related to tobacco use, obesity, alcohol abuse, and sexually transmitted infections.
    • Preventive Care and Screenings for Women: Preventive care and screenings for women under HRSA guidelines, including contraceptives.


     

    Details of the Case

    Braidwood Management v. Becerra involved a small business owner who was joined by six individuals and one other business. The plaintiff objected on religious grounds to obtaining or providing health insurance coverage that included HPV vaccines, STI and drug-related screenings and counseling, PrEP, and contraceptives.

    The plaintiff claimed that he did not want to “facilitate and encourage homosexual behavior, intravenous drug use, and sexual activity outside of marriage between one man and one woman” and that he felt he would be complicit in behaviors he believed to be immoral if he provided insurance coverage for PrEP medications to his employees under his self-insured plan. The business owner further claimed that this was due to his Christian beliefs and how he interpreted the Bible.

    Government lawyers argued that it was wrong to assume that PrEP drugs “facilitated or encouraged” these behaviors. However, the Court found the argument to be irrelevant as the “correctness” of beliefs does not matter. Only the “sincerity” of those held beliefs matters. Ultimately, the Court ruled that this mandate imposed a substantial burden on the religious freedom of the small business owner that was not permitted under the Religious Freedom Restoration Act (RFRA). The RFRA requires that the government use the least restrictive means of promoting a compelling governmental interest when it burdens religious freedom. In this case, the Court determined that requiring coverage for PrEP was not the least restrictive means to promoting a compelling governmental interest.

    Importantly, the Court also ruled that the appointment process for the USPSTF, ACIP, and HRSA (entities that determine which items and services must be covered under the ACA's preventive health services rules) is unconstitutional. In short, according to the rules, the appointees needed to be nominated by the President and confirmed by the Senate, and, without such a formal appointment process, they would not be permitted to make these authoritative binding decisions. The court found that ACIP and HRSA appointments were valid, however, the USPSTF appointment process was not, leaving the question of the legality of the decisions made by that entity.
     

    The Potential Impact

    This ruling is significant in that it shows the increasing tension between the public health of employees and society at large on the one hand and the religious rights of private employers on the other.

    It is likely that this ruling will be challenged in a higher court. Notably, Judge O’Connor had previously faced off against the ACA when he ruled that the ACA was unconstitutional in 2018 based on the zeroed-out individual mandate penalty. That ruling was later overturned by the U.S. Supreme Court. Those disagreeing with the ruling would point out that Judge O’Connor’s reading of what is constitutional vs. not is likely seen through a biased filter.

    Public health officials have expressed concerns that if this ruling stands, it could weaken the ACA mandate to provide no-cost preventive care such as vaccines or cancer screenings like colonoscopies or mammograms. Some have postulated that coverage for contraception and Plan B could stand next in line to be challenged under the religious freedom argument.

    Opponents would argue that the religious freedom of an employer to deny lifesaving coverage to employees who have different beliefs is discriminatory. In addition, the Court failed to comment on the lack of factual support for the business owner’s statement that access to such medication could encourage behaviors like intravenous drug use and premarital sex.
     

    A Crystal Ball

    It is reasonable to wonder what we might see in response. Given the ongoing nature of the case, it is unlikely that insurers and group health plans will rush to drop coverage without cost sharing for 2023. However, should the ruling be finalized, it is likely that insurers and some group health plans would react by imposing copays and deductibles to many of the preventive services that are now required to be covered on a zero-cost basis. 

    We also might see more liberal states choosing to be proactive and try to recreate preventive mandates for fully insured plans (similar to how we saw states recreate the individual mandate). Recall, however, that states cannot govern self-funded plans, which would only create a partial solution. That solution might also be problematic, since, if certain preventive care measures are restricted on a federal level but mandated on a state level, plans would face a conflict relative to providing first-dollar coverage under an HDHP plan and then running afoul of the restrictions for HSA contributions.

    This is a complex issue, especially since the current mix in the high court would likely lean toward favoring the religious freedom argument. It is thus unlikely that challengers will rush to appeal the issue. Unfortunately, the crystal ball in this case is solidly cloudy. We think it is too early to say what we might expect in the future as this issue unfolds.
  • Employee Benefit COVID Deadline Extensions

    In the wake of COVID, both the Department of Labor (DOL) and the Health and Human Services (HHS) declared states of emergency and relaxed certain employee benefit deadlines. These states of emergency declarations, the extensions themselves, and the accompanying plan requirements can be confusing. This article outlines the two different COVID emergency declarations and the current states of the various extensions.
     

    How do National Emergency extensions work?

    Numerous employee benefit plan deadlines were extended by the DOL when the National Emergency due to COVID was declared on March 1, 2020. A National Emergency declaration continues until:
     
    • The emergency is not continued by the president (after the default one-year period)
    • The president terminates it
    • A joint resolution of Congress terminates it.

    The COVID National Emergency was most recently continued by the President on March 1, 2022. This means that absent a further continuation or early termination, the current COVID National Emergency will end on February 28, 2023.
     

    DOL Deadline Extensions

    The following DOL deadlines were extended pursuant to the National Emergency declarations:
     
    • The COBRA 60-day election period, COBRA payment due dates, and COBRA deadlines to notify the plan of a qualifying event or new disability.
    • The 30-day or 60-day window to submit a HIPAA special enrollment request.
    • The deadline to file, appeal or request an external review of a claim.

    The above extensions will end at the end of the defined “Outbreak Period” and runs until the earlier of:
     
    • 60 days after the announced end of the COVID National Emergency
    • One year from the date an individual is first eligible for deadline relief

    Employer Action Items: Plan sponsors must ensure these deadline extensions are followed for all participants and COBRA beneficiaries. In addition, eligible individuals will need to be tracked to ensure their personalized one-year deadline is followed. Lastly, participant communications should be reviewed and updated to reflect the reversion to regular deadlines.
     

    How do Public Health Emergency extensions work?

    In addition to the president’s declaration of a National Emergency, the HHS also declared a Public Health Emergency due to COVID in January 2020. Unlike the National Emergency, a Public Health Emergency may only exist in 90-day increments before it must be extended.
     
    The current COVID Public Health Emergency was extended by the HHS on July 15, 2022. This would mean, absent a further extension, the COVID Public Health Emergency will expire on October 13, 2022. However, HHS has announced it will provide at least 60 days advance notice prior to the end of the Public Health Emergency in order for plan sponsors to prepare.
     

    HHS Deadline Extensions

    The HHS Public Health Emergency required plans to:
     
    • Cover COVID-19 diagnostic testing and related services without cost sharing, prior authorization, or other medical management requirements
    • Cover COVID-19 vaccines and boosters (including from out-of-network providers) without cost sharing, prior authorization, or other medical management requirements

    Employer Action Item: The CARES Act provisions will continue to require plans to cover COVID vaccines from in-network providers at no cost as a preventive measure. However, in looking ahead to when these provisions will end, plan sponsors should address the following:
    1. Consider whether to continue covering COVID testing and out-of-network vaccines without cost sharing with participants.
    2. Review/update plan documents and participant communications
    3. Send communications to participants about any changes in benefits.
       

    CARES Act TeleHealth Provisions

    While not connected to either of the above emergency declarations, the CARES Act temporarily permitted telehealth services for individuals covered under HDHP plans prior to reaching the statutory deductible. This enabled first-dollar coverage of these services without jeopardizing HSA eligibility for plan years beginning on or before December 31, 2021.

    Effective April 1, 2022, Congress extended this first-dollar coverage relief through December 31, 2022.

    While many hope that this relief will become permanent, such a change would require legislative action. As such, employers should plan for this provision to sunset at the end of the year.

    Employer Action Item: Participants covered under HDHP policies likely have gotten used to this first-dollar telehealth coverage being provided under their plan. A review/update of plan documents and communication to plan participants that this provision will expire at the end of this year will be important.