To print this article, all you need is to be registered or login on Mondaq.com.
The Bottom Line
- Employers should carefully review and prepare for 2022
compliance modifications and new requirements, and should monitor
- In particular, the IRS may start more aggressively pursuing ACA
penalties and taxes against employers if the good faith
transitional relief for ACA reporting requirements is officially
removed. Additionally, plans should prepare for DOL audits
involving NQTL and other requirements under the MHPAEA.
- Plans should consult ERISA counsel in connection with these
changes. Certain new requirements are complicated and may require
significant effort to correctly implement.
The beginning of the year is always a good time for plan
sponsors to take stock of their benefits offerings and make plan
design decisions and updates for plan compliance. This year,
however, presents new challenges. Employers should take note of new
deadlines and requirements that apply to their employee benefit
plans during 2022. The below provides an overview of compliance
issues that will likely impact health and welfare plans in 2022 and
that plan sponsors and administrators should review with
New No Surprises Act/Transparency in Coverage Rules
On December 27, 2020, the No Surprises Act was signed into law
as part of the Consolidated Appropriations Act of 2021 (CAA). The
No Surprises Act institutes certain requirements for health plans
and issuers intended to protect against surprise medical bills,
increase transparency and enable patient awareness, including:
- Effective January 1, 2022, providers must not
“surprise” balance bill in certain instances when the
patient has not provided written consent in certain situations,
including when an individual seeks emergency care out-of-network,
or when receiving care from an out-of-network provider at certain
in-network facilities. Instead, in those cases, patients may only
be charged the applicable in-network cost-sharing amount, and plans
and providers will need to negotiate payment of the balance.
Additionally, both plan sponsors and issuers need to notify
employees about their rights, disclosing specific information about
the federal balance billing restrictions and any applicable state
laws. A model notice is available here.
- Also effective January 1, 2022, medical plan ID cards must show
deductibles and out-of-pocket caps, as well as phone numbers and
website addresses that patients can use to seek assistance.
The enforcement of certain other requirements of the No
Surprises Act/Transparency in Coverage rules will be deferred or
delayed (per FAQs released by the Departments of
Labor, Health & Human Services, and Treasury (collectively
Departments), as well as Interim Final Rules Part I and Part II), including:
- Publishing certain plans and issuers’ machine-readable
files related to prescription drug pricing (pending further
- Publishing other types of machine-readable files, including
those that relate to certain in-network and out-of-network
information (until July 1, 2022);
- Providing a price comparison tool (until January 1, 2023);
- Providing a good faith estimate of expected charges for health
care for insured patients submitting a claim (pending further
rulemaking); however, still effective January 1, 2022, certain
health care providers and facilities must generate good faith
estimates for the uninsured or for those not submitting a
- Providing an advanced explanation of benefits notification in
clear and understandable language to certain individuals (pending
further rulemaking); and
- Reporting of pharmacy benefit and drug costs (pending further
rulemaking, but with an eye on December 27, 2022 for reporting 2020
and 2021 data).
The Departments intend to issue future regulations. Until then,
plans and issuers should use good faith, reasonable interpretations
of the statute.
Mental Health Parity NQTL Analysis
The CAA requires that, as of February 2021, group health plans
providing mental health and substance abuse benefits and
medical/surgical benefits are able to provide (upon request) a
comparative analysis to the Department of Labor (DOL), to
demonstrate compliance with the nonquantitative treatment
limitations (NQTL) requirements of the Mental Health Parity and
Addiction Equity Act (MHPAEA). A MHPAEA self-compliance tool is available
on the DOL’s website as a resource for issuers and plan
sponsors (with Section F of the tool addressing the NQTL
The DOL has actively been auditing plans for NQTL compliance,
and a 2022 MHPAEA Report to Congress highlights
recent emphasis on greater MHPAEA enforcement. As a result, plan
sponsors should have ERISA counsel review a completed comparative
analysis, ready to be submitted upon request.
2022 Benefits Limits
The Internal Revenue Service (IRS) issued the 2022 limits for
qualified transportation fringe benefits, adoption assistance
programs, health care flexible spending accounts (FSAs), and
long-term care premiums. This year’s limits are
available here and generally reflect an increase
over 2021 limits.
- The dependent care FSA limit returned to its pre-2021 cap of
$2,500 for individuals or $5,000 for married couples filing jointly
(i.e., without effect of Congress’ special, increased limit in
place for 2021 only).
- Additionally, the IRS issued guidance increasing 2022 out-of-pocket
maximums for self-only and family high-deductible health plan
(HDHP) limits (to $7,050 and $14,100, respectively) and health
savings accounts annual contribution limits (to $3,650 for
self-only and $7,300 for family coverage).
- HDHP deductible limits and excepted benefit HRA limits have not
changed for 2022.
Plan Coverage of COVID-19 At-Home Tests
The Departments announced mandatory plan coverage of
FDA-approved over-the-counter COVID-19 at-home diagnostic tests,
effective January 15, 2022. Key takeaways on this at-home testing
coverage mandate can be found in our prior alert.
Broker and Consultant Compensation Disclosures
For contracts or arrangements entered into, extended or renewed
on or after December 27, 2021, the CAA now requires that brokers
and consultants anticipated to earn $1,000 or more in direct or
indirect compensation (related to group health plans of any size
subject to ERISA) must disclose such compensation to the plan
sponsor reasonably in advance of entering into or renewing the
triggering agreement or arrangement. The DOL’s December 30,
2021 Field Assistance Bulletin further details
this new disclosure requirement.
In tandem with this mandate, plan sponsors now have a fiduciary
responsibility to report to the DOL any such service providers who
fail to disclose their compensation appropriately.
Deadline Extension for Certain ACA Reports
The IRS recently issued proposed regulations targeting certain
reporting deadlines for health coverage issuers, including sponsors
of self-funded plans, and applicable large employers (generally
those with 50 or more full-time and full-time equivalent employees)
under the Patient Protection and Affordable Care Act (ACA). In
prior years, the IRS had extended the deadline for furnishing Forms
1095-B and 1095-C to individuals and employees, upon application to
the IRS and for good cause. These regulations now automatically and
permanently extend the deadline by 30 days (to March 2, except for
leap years). The separate deadline for providers and employers to
file Forms 1094-B and 1094-C with the IRS generally remains
February 28 (or March 31, if electronically filed).
The IRS removes the good faith transitional relief for reporting
entities whose ACA forms are incomplete or inaccurate. This means
that reporting entities need to ensure that they timely submit
accurate forms, as the IRS may more aggressively pursue penalties
and excise taxes related to incomplete or inaccurate forms.
While the regulations would become effective for coverage
beginning January 1, 2022, providers and employers may rely on them
for reports due for the 2021 calendar year (meaning Forms 1095-B
and 1095-C must be furnished by March 2, 2022).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
POPULAR ARTICLES ON: Employment and HR from United States