Below are two recent developments for employers and their health plans.
- Congress extends special rule allowing pre-deductible coverage for telemedicine benefits. In response to the pandemic, Congress amended Internal Revenue Code Section 223 to provide a special rule allowing an HDHP to provide telemedicine benefits prior to an individual meeting the minimum deductible, which would otherwise cause the individual to be disqualified from contributing to an HSA. This special rule was available for plan years beginning before January 1, 2022. As part of the omnibus funding bill recently passed by Congress, however, Congress has extended the special rule for the period from April 1, 2022 until December 31, 2022 (regardless of plan year). As a result, through the end of calendar year 2022, HDHPs may provide pre-deductible telemedicine benefits without losing HDHP status or making covered individuals unable to contribute to an HSA. Note, however, that the extension is not retroactive for the period of January 1 through March 31, 2022.
- Proposed rules would eliminate the ACA’s “family glitch” with affordability and exchange subsidies. Federal agencies have proposed rules that would expand exchange subsidy eligibility for employees’ family members by basing eligibility on the affordability of family coverage. Under current rules, family members eligible for coverage under an employer-sponsored plan are not eligible for exchange subsidies if the cost for employee-only coverage under the employer-sponsored plan is affordable under the ACA’s standards—even if the cost for family coverage under the employer-sponsored plan is unaffordable by ACA standards. While we think this may be welcome news for some plans if spouses and dependents elect exchange rather than group coverage, we also think it may give the federal agencies a new reason to expand the information they request from employers through ACA reporting.
Importantly, the proposed rules would not change how affordability is evaluated for purposes of potential employer mandate penalties. For that purpose, whether coverage is affordable would remain based on the lowest-cost, single-only coverage offered by the employer to the employee.
If you have questions or would like additional information about anything discussed in this Client Update, please contact a member of the Maniaci Team.