Empowering HR leaders with insightful content.
Many plan sponsors have read about the lawsuit filed against Johnson & Johnson alleging that it breached its fiduciary duties with regard to the prescription drug component of its group health plan, causing participants to “overpay” for their prescriptions. Lewandowski v. Johnson & Johnson (Case No. 1:2024cv00671), filed February 5, 2024, in the federal district …
Continue reading “Why Establish a Fiduciary Committee for Welfare Benefit Plans?”
The IRS recently announced the ACA affordability threshold for 2021 at 9.83%, a small increase from the 2020 level of 9.78%. In order to avoid triggering a penalty under Section 4980H(b) of the Internal Revenue Code (the “Code”), an applicable large employer must offer full-time employees health plan coverage that provides minimum value and is …
Continue reading “ACA Affordability Threshold for 2021 Announced”
In Notice 2020-29, the IRS gave plan sponsors additional flexibility to allow participants to make certain mid-year cafeteria plan election changes during calendar year 2020 without regard to the restrictions that typically apply, and to adopt an extended claims period for flexible spending accounts (“FSAs”). In Notice 2020-33, the IRS has increased the $500 carryover …
The DOL and IRS recently issued final regulations (the “Final Rule“) that extend notice and premium payment periods for participants and plans under COBRA. Specifically, a group health plan must disregard the period from March 1, 2020 through 60 days after the announced end of the COVID-19 national emergency (the “Outbreak Period”) in determining, among …
Continue reading “Benefits Briefs in the Time of COVID-19, Part 8: COBRA Complications”
Section 125 cafeteria plan elections are irrevocable for the plan year unless the participant experiences a change in status or other event that allows an election change under the Section 125 regulations. Common status change events that may be occurring due to the pandemic include the following: A commencement of an unpaid leave of absence. …
Congress has reversed course and amended the Internal Revenue Code (“Code”) to provide that a health flexible spending account (“health FSA”), health savings account (“HSA”) and health reimbursement account (“HRA”) may reimburse employees for over-the-counter medications, effective January 1, 2020. Background For many years, health FSAs, HSAs and HRAs did not consider a non-prescription drug …
The CARES Act gives employers a way to pay employees’ student loan debt on a pre-tax basis during a portion of 2020 through an educational assistance program under Section 127 of the Internal Revenue Code (“Code”). Overview of an Educational Assistance Program Under a Section 127 educational assistance program, an employer may pay or reimburse …
Many of the nation’s largest insurers have announced that they will be waiving the deductible or other cost-sharing for testing or other expenses related to the 2019 Novel Coronavirus (“COVID-19”). Plan sponsors that offer coverage to employees through a high deductible health plan (“HDHP”) asked whether this waiver would affect the health plan’s status as …
Continue reading “High Deductible Health Plans and Expenses related to COVID-19”
The 2020 appropriations act, which was signed into law by the President on December 20, 2019, contains a mix of good and bad news for employer-sponsored health plans. On the good news side of the ledger, several taxes imposed by the Affordable Care Act have been repealed, as follows: To literally no one’s surprise, the …
Continue reading “Changes Affecting Employer-Sponsored Health Plans in the 2020 Appropriations Act”
A high deductible health plan (“HDHP”) is not permitted to pay for medical expenses until the plan’s deductible has been satisfied, with the exception of medical expenses incurred for preventive care. Preventive care did not generally include expenses for any service or benefit intended to treat an existing illness, injury or condition. In a welcome …