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  • May 2022

Blogs May 2022

  1. Transparency in Coverage Rules: Action Required for Self-Insured Health Plans

    System Administrator – Tue, 24 May 2022 15:00:00 GMT – 0
    The Transparency in Coverage final rule was issued in October of 2020 by the HHS, DOL, and Department of the Treasury. These rules require non-grandfathered group health plans (both fully insured and self-insured) to disclose information regarding in-network and out-of-network allowed amounts for billed services. The ultimate goal of the legislation is to reveal in real time the cost of health care services.
     

    Implemented in Phases

    The first phase of compliance requires the posting of three Machine-Readable Files (MRF) that disclose the cost of healthcare services. These are files that can be imported and read by computer systems. The three files disclose the following data:
     
    • In-Network Rate (negotiated rates with contracted providers)
    • Out-of-Network Allowed Rates (billed charges and allowed amounts)
    • In-Network Prescription Drug File

    These files must be updated monthly and must be accessible without login credentials or fees to access the files. The In-Network and Out-of-Network files must be posted and accessible by July 1, 2022. The prescription drug file has been delayed until further notice. It should be noted that the format of these files is not something that is decipherable at the consumer level.

    The second phase will include the rollout of an online cost estimator tool which will provide consumers with cost share estimates for all covered services. The first round of the consumer level disclosure requirement is effective January 1, 2023 and reflects a list of 500 designated services. The final phase will require costs for all services to be disclosed. This last phase is effective January 1, 2024.
     

    Fully Insured Plans – No Action Required

    For those employer groups with fully insured plans, it is the responsibility of the insurance carrier to comply with the MRF requirements. Vita is in the process of confirming that all insurance carriers will be in compliance with this requirement.
     

    Self-Insured Plans – Action Required for July 1, 2022

    Employers that offer self-insured health plans must take action to comply with these requirements. The specific requirement is to post somewhere on their public website a link to the MRF. Employers will be able to determine where, on their website, this file is posted as long as it is publicly facing and does not require login credentials. The requirements state that anyone in the United States should be able to locate this link.

    Employers should start working with IT resources now to ensure compliance by the July 1 deadline.
     

    Next Steps

    Vita clients with self-insured plans will receive an email with additional instructions based on the specifics of the health plans in place and recommendations on verbiage to assist in the process.

    Vita will continue to monitor the developments of the cost estimator tool and post further updates as information is solidified.

     
  2. 2023 Health Savings Account (HSA) Limits Announced

    System Administrator – Tue, 03 May 2022 15:02:00 GMT – 0

    The Internal Revenue Service has announced the 2023 dollar limitations for Health Savings Accounts as well as underlying qualifying High Deductible Health Plans. All limits are increasing significantly in response to the recent inflation surge.
     

    High Deductible Health Plan Policy Limits


    2023 Minimum Deductible

    • Individual: $1,500  (2022 - $1,400)
    • Family: $3,000  (2022 - $2,800)

    2023 Maximum Out of Pocket Limit

    • Individual: $7,500  (2022 - $7,000)
    • Famiily: $15,000  (2022 - $14,000)


    Health Savings Account Limits


    2023 Maximum HSA Contribution

    • Individual: $3,850  (2022 - $3,650)
    • Family: $7,750  (2022 - $7,300)

    Over Age 55 Catch-Up Contribution

    • 2023: $1,000  (2022 - $1,000)



    High Deductible Health Plan Policy Limits

    Any amount can be contributed to an HSA up to the maximum annual contribution, regardless of the actual deductible of the underlying HDHP plan.
     
    The general rule is that HSA contributions are calculated on a monthly basis (reflecting the number of months that an individual was covered under a qualified HDHP).

    For individuals covered under an HDHP for only a portion of the calendar year, there is a special rule that allows them to contribute the full annual maximum to an HSA. This is known as the “full contribution rule.” The catch is that individuals who make contributions in reliance upon the full-contribution rule must remain HSA-eligible (that is, covered under an HDHP without other disqualifying coverage) during a 13-month period from December of that year through the following calendar year) to avoid adverse tax consequences.
     

    A Reminder about Embedded Deductibles

    HDHPs are typically structured with an aggregate family deductible. This means that when any dependents are covered on the plan, the deductible applies collectively to all family members, and the individual deductible is not taken into account.

    However, there are some plans that have an embedded individual deductible. Notably, California law requires that HDHPs have an embedded individual deductible. This means that once an individual covered on a family plan meets the embedded individual deductible, the plan coinsurance would start to pay for that individual (but not for other family members). In order for such a plan to remain a qualified HDHP, the embedded individual deductible must be at least the minimum family deductible outlined above. As an example, the minimum embedded individual deductible on a family plan in 2023 would be $3,000.

     
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