Health and Welfare Plans Archives - Page 2 of 7

The Annual Form 5500 Audit: DOL Broadens Criteria for Independent Qualified Public Accountants

The Department of Labor (DOL) recently removed one regulatory hurdle for public companies that maintain employee benefit plans subject to the Form 5500 requirement. Specifically, the DOL has relaxed the criteria for who qualifies as an “independent qualified public accountant,” or “IQPA.” This matters to employers because it will open the market to new accounting firms that can issue the accountant’s report for the Form 5500 annual filing. IQPAs are the auditors who issue the annual accountant’s report. While not all Form 5500-filers are subject to the accountant’s report requirement, ERISA-covered retirement plans (except for certain small retirement plans) and funded welfare plans must provide the accountant’s report annually.

Revising and restating its 1975 Interpretive Bulletin on the Independence of Employee Benefit Plan Accountants with new Interpretive Bulletin 2022-01, the DOL has changed its guidelines for determining the “independence” of an IQPA. Previously, an auditor could not be an IQPA for a plan if they, the accounting firm, or certain other “members” of the firm owned any direct or indirect financial interest in the plan sponsor during the period covered by the financial statements that are the subject of the audit or during the period of the professional engagement.

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ERISA Litigation Roundup: Seventh Circuit Confirms DOL’s Broad Subpoena Power

In Walsh v. Alight Solutions, LLC, — F.4th —, 2022 WL 3334450 (7th Cir. Aug. 12, 2022), the Seventh Circuit affirmed a district court order requiring Alight Solutions to produce documents in response to a Department of Labor (“DOL”) subpoena, confirming that the DOL has broad authority to issue subpoenas to investigate possible ERISA violations, even against non-fiduciaries.

Alight provides recordkeeping services for employers who sponsor ERISA-governed health and welfare and retirement plans. In 2019, the DOL began investigating Alight on the basis of alleged cybersecurity breaches that resulted in unauthorized distributions of plan benefits from plans for which Alight provides recordkeeping services. The DOL served Alight with an administrative subpoena duces tecum requesting 32 categories of documents dating back to 2015.

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Supreme Court Decides Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc.

On June 21, 2022, the Supreme Court decided Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc., No. 20-1641, holding that a group health plan that uniformly provides limited benefits for outpatient dialysis to all plan participants does not violate the Medicare Secondary Payer statute (MSPS).

Individuals enrolled in Marietta Memorial Hospital’s employer-sponsored group health plan (the “Plan”) sought treatment from DaVita for end-stage renal disease (ESRD). After DaVita treated those patients, it submitted claims to the Plan for payment. The Plan paid only a small portion of those claims based on terms in its plan document applicable to all plan participants that purported to limit the reimbursement rates for renal dialysis treatments. DaVita sued the Plan and alleged that the Plans’ reimbursement limitations violated the MSPS.

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Deadline Approaches for Employers to Post Machine-Readable Files on a Public Website

The July 1st deadline is quickly approaching for non-grandfathered group health plans and issuers to publicly disclose, in accordance with the Transparency in Coverage Final Rules, price information in machine-readable files for the plan year beginning on or after January 1, 2022. The two machine-readable files must show (1) in-network negotiated provider rates for covered items and services and (2) out-of-network allowed amounts and billed charges for covered items and services.

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Temporary Reinstatement of Relief for Telemedicine Coverage in HDHPs

The Consolidated Appropriations Act 2022 (“CAA 2022”), signed by President Biden on March 15, 2022, reinstated temporary relief for high deductible health plans (“HDHPs”) to provide pre-deductible coverage of telehealth services from April 1 through December 31, 2022, without impacting HDHP participants’ eligibility to contribute to their health savings accounts (“HSAs”).

In general, HDHP coverage of telehealth services at no or low cost before the participant satisfies the minimum HDHP deductible (in 2022, $1,400 for single-only coverage and $2,800 for family coverage) would cause HDHP participants to become ineligible to make HSA contributions.

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Federal District Court Invalidates Some Surprise Billing Rules: What It Means for the No Surprises Act

On February 23, 2022, the United States District Court for the Eastern District of Texas invalidated portions of Part II of the interim final rule (“IFR”) issued by the U.S. Departments of Health and Human Services, Labor, and Treasury (“Tri-Agencies”), implementing the dispute resolution provisions of the No Surprises Act (“NSA”). While the ruling in the case, Texas Medical Association v. U.S. Department of Health & Human Services, may impact medical plan costs, it does not substantively affect the consumer protections against surprise medical billing added by the NSA, which took effect in 2022.

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New COVID-19 Guidance: Government Requires Health Plans to Cover At-Home COVID-19 Tests

On January 10, 2022, the Departments of Health and Human Services, Labor and Treasury issued guidance addressing a group health plan’s obligation to cover the cost of over-the-counter, at-home COVID-19 tests starting January 15, 2022. The new coverage requirement means that enrolled individuals can go online or to a pharmacy and buy an over-the-counter FDA-approved COVID-19 diagnostic test and either have it paid for up front by their health plan or be reimbursed by submitting a claim without any cost-sharing requirements (such as deductibles, co-payments or co-insurance). The guidance provides that beginning January 15, 2022 through the end of the declared public health emergency, plans must cover at least eight (8) over-the-counter at-home tests per enrolled individual per 30-day (or calendar-month) period without an assessment or provider involvement. This does not affect the obligation to provide coverage for COVID-19 tests with a provider’s involvement or prescription.

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Benefit Plan Descriptions May Create Unilateral Contracts in Pennsylvania

Written descriptions of employee benefits may expose Pennsylvania employers to additional contractual obligations and liabilities. According to a three-judge Pennsylvania Superior Court panel, providing written descriptions to employees regarding various benefits, incentives and rewards may form a binding, unilateral contract creating rights and obligations separate from an employee’s at-will relationship with the employer.

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Employers – Check Your Severance Arrangements Now!

If employees are required to provide proof of COVID-19 vaccination or a timely negative COVID-19 test, and/or wear a mask as a condition of employment (COVID-19 Policies), and an employee is terminated for violating a COVID-19 Policy, will that employee be entitled to severance benefits?

The answer depends on what the employer intends and the terms of the applicable severance arrangement which, for example, can be in the form of a severance plan, a severance agreement, or an employment agreement.

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