On April 22, 2022, the Centers for Medicare and Medicaid Services (CMS) proposed a rule to simplify and expand Medicare enrollment rules for Part A and B. In particular, new rules have been proposed which would change how effective dates are assigned, and new special enrollment periods would apply to individuals who meet exceptional conditions.

Enrollment Simplification for Medicare Part A & B

Under current rules, the date when an individual’s coverage becomes effective depends on when they enroll. There is a 7-month window to sign up for Medicare during an Initial Enrollment Period (IEP). It starts 3 months before turning age 65, includes the month an individual turns 65, and ends 3 months after turning age 65.

• If an individual enrolls during any of the first 3 months of their IEP, their coverage becomes effective on the first month of eligibility (i.e., the first of the month before turning age 65).
• If an individual enrolls during their IEP in the month they become eligible, their coverage will be effective on the first of the month after they sign up (i.e., the first of the month after turning age 65).
• If an individual enrolls during any of the last 3 months of their IEP, their coverage will be effective on the first of the month 2-3 months after they sign up.
• If an individual does not enroll during their IEP but enrolls during the General Enrollment Period (GEP), which runs from January 1st through March 31st of each year, coverage is effective on July 1st.

Under the proposed rule, coverage will become effective on the first of the month after enrollment for individuals enrolling in the last 3 months of their IEP or during the GEP. If finalized as proposed, these enrollment changes will be effective as of January 1, 2023.

New Special Enrollment Periods for Part A & B

Currently, there is only a Special Enrollment Period (SEP) for individuals who delay enrollment in coverage because they are covered by a group health plan due to their own active employment or a spouse’s active employment. An SEP is needed to avoid any potential late enrollment penalty. CMS is proposing to expand the SEPs available to individuals who meet exceptional conditions and who missed a Medicare enrollment period, without having to wait for the GEP and without having to pay a late enrollment penalty.

Specifically, CMS is proposing the following SEPs:

• An SEP for individuals impacted by an emergency or disaster that would allow CMS to provide relief to those beneficiaries who missed an enrollment opportunity because they were impacted by a disaster or emergency declared by a federal, state, or local government entity.
• An SEP for health plan or employer error that would provide relief in instances where an individual can demonstrate that their employer or health plan materially misrepresented information related to enrolling in Medicare timely.
• An SEP for formerly incarcerated individuals that would allow individuals to enroll following their release from correctional facilities.
• An SEP to coordinate with termination of Medicaid coverage that would allow individuals to enroll after termination of Medicaid eligibility.
• An SEP for other exceptional conditions that would, on a case-by-case basis, grant an enrollment period to an individual when circumstances beyond the individual’s control prevented them from enrolling during the IEP, GEP, or other SEPs.

On April 19, 2022, the Department of Labor (DOL), Department of Health and Human Services (HHS), and the Department of Treasury (DOT) issued some Frequently Asked Question (FAQ) guidance pertaining to the new Transparency in Coverage (TiC) rules that will start to be enforced beginning on July 1, 2022 (and applicable to plan years starting on or after January 1, 2022).

The TiC rules require health insurance carriers providing fully insured, non-grandfathered group and individual plans to disclose on a public website information regarding in-network rates for covered items and services and out-of-network allowed amounts and billed charges for covered items and services. This disclosure is also required of employers who offer a non-grandfathered level funded or self-funded group health plan. Disclosures are not required for dental-only or vision-only plans.

These disclosures must be made available as machine-readable files. This means the files must conform to a non-proprietary, open standard format, such as XML or JSON. Formats such as PDF or DOCX are not acceptable file formats. The files also must be free to access, and there can be no conditions placed to access the files (e.g., no ID or Password or a requirement to submit personally identifiable information). The files must also be updated on a monthly basis.

In almost all instances, the health insurance company or third-party administrator will prepare these files for their level funded and self-funded group health plan clients even though the liability to provide these files rests with the employer. Although these files may be hosted on a third-party public website (e.g., the health insurance company’s website), it is currently unclear as to whether an employer must also post a link to these files on their own public website. The cautious approach would be to do so, and at least one major health insurance company is telling their level funded and self-funded clients to do this.

A third disclosure under the TiC rules has been delayed. A disclosure for negotiated rates and historical net prices for covered prescription drugs was initially required, but this has been delayed while the regulatory agencies determine if it is appropriate. Regulatory agencies are expected to issue additional guidance pertaining to this disclosure requirement (or lack thereof) at a later date.

It is “to-be-determined” on the value and usefulness of these new disclosures. The intent is to provide more transparency around healthcare costs, but the sheer volume of information that will need to be disclosed may make it difficult for the average person to decipher. However, the TiC rules also require online price comparison tools to be made available so that that a person can estimate their costs by services or provider.

President Jospeh Biden has issued an executive order instructing the Department of Treasury (DOT) to review regulations that pertain to subsidy eligibility on the Health Insurance Marketplace (Marketplace). The primary purpose of the executive order is to determine if regulatory changes can be made to fix the so-called “family glitch.”

In part, eligibility for subsidies on the Marketplace is based on whether a person has access to affordable health insurance coverage through an employer. In 2022, coverage is considered affordable if a person has to pay no more than 9.61% of their income for the lowest-priced group health plan available to them. If coverage is affordable from the employer, then that generally eliminates access to subsidies for a Marketplace plan.

This is where the family glitch comes into play. When determining if coverage is affordable, the employee-only premium rate is utilized. If coverage is affordable to the employee, then the employee, their spouse, and their children are ineligible for subsidized coverage on the Marketplace.

The family premium is not used to determine affordability of coverage, hence the terminology “family glitch.” An employer may contribute very little or nothing towards coverage for a spouse or child, and that spouse or child may lose eligibility for subsidies because coverage is affordable at the employee-only premium rate.

The executive order “directs the Secretary of the Treasury to review all existing regulations and other agency actions to determine whether the actions are consistent with the policy to protect and strengthen the ACA and, in particular, review policies or practices that may reduce the affordability of coverage or financial assistance for coverage, including for dependents.”

According to some estimates, as many as 5.1 million people could gain access to coverage if the family glitch is closed. It is believed by many experts that changing the rules for determining how coverage is affordable to family members of an employee is the most significant change to the Affordable Care Act (ACA) that the Biden administration can make without requiring action from Congress.

Non-grandfathered health plans (i.e., health plans issued on or after March 23, 2010) are required to cover in-network preventive services at 100% with no cost-sharing to a member. This is a requirement that was imposed by the Affordable Care Act (ACA). The preventive services that must be covered are specified by the Health Resources and Services Administration (HRSA), the United States Preventive Services Task Force (USPSTF), and the Centers for Disease Control and Prevention (CDC).

Recently, the HRSA updated its guidelines for preventive services that non-grandfathered plans must cover for women without any cost-sharing. These services must be covered at 100% for plan years beginning on or after January 1, 2023. The new services that must be covered include:

• Counseling to prevent obesity in women aged 40 to 60 years with a normal or overweight body mass index.
• Double electric breast pumps, pump parts and maintenance, and breast milk storage supplies.
• The full range of women’s contraceptives listed in the recently updated FDA Birth Control Guide.
• Screening for HIV infection for all adolescent and adult women aged 15 and older at least once during their lifetime, and risk assessment and prevention education beginning at age 13.
• Pre-pregnancy, prenatal, postpartum, and interpregnancy well-woman visits.

The HRSA maintains information about current and updated preventive care guidelines which can be found by clicking here.

The Affordable Care Act (ACA) implemented some new reporting requirements for employers and insurance carriers. In general, employers who are subject to the Employer Mandate complete one Form 1095-C for each full-time employee. Insurance carriers complete one Form 1095-B for anyone covered by a fully insured plan, and some smaller employers with a level-funded or self-funded plan may also need to complete Form 1095-B for anyone covered under the plan.

As part of the reporting requirements, a copy of Form 1095-B and/or Form 1095-C must be provided to the employee or insured individual(s). Copies of the forms must be distributed by January 31st of each year; however, the Internal Revenue Service (IRS) has in the past provided 30-day automatic extensions for the form distribution deadlines. Normally, a 30-day extension is only granted by making a written request to the IRS.

In recently proposed regulations, the IRS has indicated that an automatic 30-day extension to distribute Form 1095-B and/or Form 1095-C would be made permanently. No written request to the IRS would be necessary moving forward. This generally means the new due date to distribute copies of the forms will be March 2nd of each year (March 1st if it’s a Leap Year). If March 2nd falls on a weekend, then the due date is the Monday following March 2nd.

In addition, the proposed regulations would permanently allow Form 1095-B to be distributed only upon request. The employer or insurance carrier must post prominently on its website that Form 1095-B can be provided upon request, and the employer or insurance carrier must provide an email address, physical address, and phone number where the request can be made. Form 1095-B must be distributed within 30 days of the request. If meeting these requirements, then the employer or insurance carrier will not be subject to any penalty for failing to timely distribute copies of Form 1095-B. Form 1095-C still must be distributed to all employees.

The reporting deadlines for filing Form 1095-B and Form 1095-C with the IRS continues to be the same. If filing manually, the due date is February 28th. If filing electronically, the due date is March 31st. Reporting entities filing 250 or more forms must file electronically.

When the proposed rules are finalized, they will apply to the 2022 calendar year, but employers and insurance carriers may choose to apply them to the 2021 calendar year.

The 2022 contribution limits for certain employee benefit programs were released by the Internal Revenue Service (IRS) this November. Here is a summary of some of those contribution limit adjustments for Health FSAs, Dependent Care FSAs, Commuter Programs, and Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs).

Health Flexible Spending Accounts (Health FSAs)

• The payroll deduction contribution limit for 2022 plan years is $2,850 (an increase of $100)
• Up to $570 of unused funds can be carried over to the 2023 plan year (an increase of $20)

Note: Plan years ending in 2021 may optionally allow unlimited carryover to the 2022 plan year because of a temporary provision that was included in the Consolidated Appropriations Act of 2021 (CAA).

Dependent Care Flexible Spending Accounts (Dependent Care FSAs)

• The maximum contribution is $5,000 for the calendar year (or $2,500 if married filing taxes separately)

Note: The $10,500 contribution limit (or $5,250 if married filing taxes separately) for the 2021 calendar year was a one-year temporary provision that was included in the American Rescue Plan Act (ARPA).

Commuter Programs

• The monthly contribution limit for mass transit is $280 (an increase of $10)
• The monthly contribution limit for qualified parking is $280 (an increase of $10)

Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)

• The maximum annual contribution for single-only coverage is $5,450 for 2022 plan years (an increase of $150)
• The maximum annual contribution for family coverage is $11,050 for 2022 plan years (an increase of $350)

One Last Thing

Earlier this year, the IRS issued a separate Revenue Procedure with the limits for High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs). To read through those limits again, please click here.

We are officially in the thick of the 2022 open enrollment period (OEP) season! With so many OEPs occurring during the 4th quarter, the health insurance industry has become much more seasonal over recent years, and it is expected to be a very busy time in the industry.

October 15th marked the start of the OEP season for Medicare, and November 1st marked the start of the OEP season in the individual market.

Below, we’ve summarized all the key dates and information you need to take note of.

Medicare Market

• Runs from October 15th to December 7th.
• Allows for enrollment or changes in any Part D or Medicare Advantage plan available in the service area.
• Changes and enrollments are effective as of January 1, 2022.
• Not applicable to Medicare Supplement (Medigap) plans.

Individual Market

• Runs from November 1st to January 15th.
• Allows for enrollment or changes in on-Exchange and off-Exchange plans.
• Changes and enrollments are effective as of January 1, 2022 if applying by December 15th.
• Changes and enrollments are effective as of February 1, 2022 if applying after December 15th.

Small Group Market

Businesses can buy small-group plans at any time of the year, directly from an insurance company, via a broker or private exchange. In most states, insurers can impose participation requirements as well as employer contribution requirements. But there’s a one-month window each year, from November 15 to December 15, when small group coverage is guaranteed-issue even to small groups that don’t meet the normal participation or contribution requirements.

• Runs from November 15th to December 15th.
• Health insurance carriers must waive participation and contribution requirements.
• Enrollments are effective as of January 1, 2022.
• Some health insurance carriers may extend the length of the OEP and/or make other effective dates available.

Large Group Market

• No mandatory required OEP.
• Many large employers renew their health plans and benefits on January 1st, and as a result, they have an OEP that occurs during the fourth quarter.

As you look forward to next year and start thinking about your health coverage, we’d like to make your life just a little bit less complicated.

We can guide you through the enrollment process, and compare health insurance plans to find one that’s the best value and right for your needs.