Capitol Benefits Group News & Updates
IRS Finalizes Deadline Extension for Furnishing ACA Statements & Finalizes Forms and Instructions for ACA Reporting
On Dec. 12, 2022, the IRS released a final rule that extends the annual furnishing deadlines for Sections 6055 and 6056 reporting under the Affordable Care Act (ACA). The final rule also confirms the availability of an alternate method for furnishing statements to individuals under Section 6055 for every year in which the individual mandate penalty is zero. This rule finalizes guidance that was proposed by the IRS in December 2021. Due to the deadline extension, employers subject to ACA reporting have until March 2, 2023, to furnish statements for the 2022 calendar year.
Additionally, the IRS has released final 2022 forms and instructions for ACA reporting under Code Sections 6055 and 6056. No significant changes were made to the forms for 2022 reporting. However, the instructions have been updated for the permanent, 30-day automatic extension of time for furnishing individual statements. Due to this extension, individual statements for 2022 must be furnished by March 2, 2023. No changes have been made to the deadlines for filing forms with the IRS under Sections 6055 and 6056.
As a reminder, the ACA employer mandate affordability percentage was adjusted for inflation has decreased significantly from 9.61% in 2022 to 9.12% in 2023. This means that, effective the first day of the 2023 plan year, the lowest cost, employee-only plan option providing minimum value cannot exceed 9.12% of a full-time employee’s income to be considered affordable
Also beginning January 1, 2023, dependents could start qualifying for government subsidized health insurance if they are not offered affordable coverage through an employer-sponsored plan, even if the coverage offered to their parent or spouse (who is the employee) is affordable for that employee. This does not mean that employers are required to offer affordable family-level coverage; rather, the measure seeks to expand access to subsidized coverage from the dependent’s perspective without changing any requirements under the ACA’s employer mandate. Employers may see decreased enrollment in their group plans as qualifying individuals switch to Marketplace coverage.
In conjunction with this change, the IRS revised the Section 125 cafeteria plan rules so that any employer, if they so choose, can begin allowing employees to drop family-level medical coverage midyear in order to enroll in exchange-based coverage.
Telehealth Relief Included in End-of-Year Ombnibus Bill
On December 23, 2022, the Consolidated Appropriations Act, 2023 (CAA23) was signed into law. It includes the anticipated relief on telehealth coverage offered through qualified High Deductible Health Plans (HDHPs) that pair with Health Savings Accounts (HSAs).
Typically, HSA-qualified HDHPs cannot pay for covered services, except for specified preventive care, until the participant meets the plan’s deductible. The CAA23 extends a protection that originated with the Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act) which allows people who have coverage through a HDHP to receive telehealth care at no cost, regardless of the plan’s annual deductible, without impacting their eligibility to contribute to an HSA. This protection was set to expire on December 31, 2022. However, the CAA23 creates a safe harbor for first-dollar telehealth coverage offered through an HDHP for plan years beginning after December 31, 2022, through December 31, 2024.
The wording of this extension creates a small gap in relief for non-calendar year plans. The old relief will expire on December 31, 2022, and plan sponsors can only begin taking advantage of this new relief once their plan renews after that date. This means that groups with plans renewing on January 1, 2023, can offer the relief immediately, whereas groups with plans that renew in a different month of the year will need to wait until the start of their 2023 plan year to begin offering it. For example, a group plan year that begins on April 1, 2023, cannot offer this relief until that date. Similarly, groups with non-calendar year plans that have already been offering the relief available under previous legislation will have to cease allowing participant access to telehealth on a first-dollar basis from January 1, 2023, until the start of their 2023 plan year.
This relief is optional for plan sponsors and insurers. Group plan sponsors are not required to offer their participants access to telehealth coverage at all nor do they have to offer it on a first-dollar basis for any type of plan offering, including HDHPs. If a group or insurer decides to adopt this relief, they also need to make sure their plan documents are amended accordingly. Specifically, the definition of care that can be accessed pre-deductible for purposes of HDHPs should reflect this latest relief offered by the CAA23.
IRS Announces 2023 Standard Mileage Rates
On Dec. 29, 2022, the IRS announced the 2023 optional standard mileage rates, which are used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
FTC Announces Proposed Rule Banning Noncompete Agreements
On Jan. 5, 2023, the Federal Trade Commission (FTC) announced a proposed rule that would prohibit employers from imposing or enforcing noncompete clauses on workers. The proposed rule was published in the Federal Register on Jan. 19, 2023, and will accept public comments through March 20, 2023.
National Health Observances Calendar for 2023
This 2023 calendar includes an overview of popular national health observances. As you look for monthly newsletter content and communications support as well as plan the current year’s wellness activities for your business, please be mindful of these opportunities for employee engagement.
2023 HR Compliance Calendar
An HR compliance calendar is a valuable tool to help your business stay on track with key employment-related deadlines throughout the year. Use this calendar to keep track of important compliance tasks for 2023.
The content herein is provided for general information purposes only, and does not constitute, legal, tax, or other advice or opinions on any matters. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy.
WEBINAR ARCHIVE
As we head into 2023, there are a number of compliance and HR issues for employers to consider. In this webinar, our legal content attorneys will review key compliance topics that will affect employers in the upcoming year and address frequently asked questions.
Watch the Replay HERE