While making a shopping list for the holidays, let’s not forget a list of first quarter compliance deadlines fast approaching! Compliance is an ever-changing landscape with complex year-round deadlines and legislative procedures. The first quarter presents several action items employers need to know; some are the same from year-to-year, and some are newer compliance issues related to transparency requirements.
We’ve continued, for this first quarter reminder, to separate our entries into three categories: standard federal deadlines, select state and local deadlines, and pandemic-related reminders. Within each category, we follow our typical chronological approach. Deadlines may or may not be applicable to your group depending on employer and plan characteristics.
We’ve made our list, and checked it twice, but of course, if you have any questions on the reporting and disclosure responsibilities below, please reach out to your Lockton account service team.
Here are potential action items for the first calendar quarter (through March 31, 2023).
STANDARD FEDERAL DEADLINES
Jan. 1 - Ensure medical plan ID cards reflect cost-sharing information
For calendar year plans; non-calendar year plans must distribute by the first day of the plan year.
Applies to all group medical plans (the obligation applies to non-calendar year plans as of the first day of the plan year beginning in 2022), but not excepted benefits such as most dental plans, most vision plans, and most health flexible spending accounts (FSA). The Consolidated Appropriations Act requires group health plans to disclose, on any physical or electronic insurance identification card issued, the enrollee’s deductible and out-of-pocket maximums and the telephone number and internet website address where the enrollee may receive assistance. For plan years beginning in 2022, employers may apply a good faith interpretation of the statutory requirement, absent additional federal guidance.
Jan. 1 - Distribute notice of grandfathered status
For calendar year plans; non-calendar year plans must distribute by the first day of the plan year.
Applies to ERISA and non-ERISA grandfathered plans subject to health reform.
Presumably, notice must be given to all participants no later than the first day of each plan year with respect to which the plan maintains grandfathered status. This is most often included in open enrollment or other plan materials supplied to participants. Lockton has model notice language available upon request.
Jan. 1 - Price Comparison Tool
As part of the Consolidated Appropriations Act (CAA) and the Transparency in Coverage (TiC) final rules, the Departments of Labor, Health and Human Services, and Treasury issued a list of codes for 500 items and services required to be included under the price comparison tool. The TiC rules include a requirement for plans and carriers to make available an Internet-based self-service tool to participants, beneficiaries, and enrollees for price comparison purposes. The information also must be provided in paper form and by telephone if requested.
Jan. 31 - Reflect imputed taxable income on Forms W-2
Imputed income might be an issue where health coverage is provided to non-dependent domestic partners and/or their children, or to an employee’s non-dependent adult, biological, step, adopted or foster child beyond the year the child attains age 26, or to other individuals with respect to whom coverage supplied to them is taxable to the employee, for federal tax purposes.
Health coverage supplied to a same-sex spouse is nontaxable (for federal tax purposes) to the employee.
Imputed income may also arise under group-term life insurance and some long-term disability programs.
Depending on state law, state income taxation may vary from federal taxation.
Jan. 31 - Report health plan coverage values on Forms W-2
W-2 reporting of health plan coverage values is merely informational and applies to employer sponsors of both grandfathered and non-grandfathered plans. This obligation applies with respect to reportable coverage, whether taxable or nontaxable.
Stand-alone dental and vision coverage, health reimbursement arrangement (HRA) contributions, and health FSAs funded solely by employee pretax contributions are exempt from this reporting requirement. Other exclusions also apply depending on the specific facts and circumstances.
Employers are excused from reporting if they file fewer than 250 Forms W-2 for the prior calendar year.
Feb. 28 - Submit Forms 1094-C and/or 1095-B to IRS with Forms 1094-C or 1094-B
If filing paper forms; see entry below for March 31 if e-filing.
Employers must transmit copies of these forms to the IRS, with one or more Forms 1094-C or 1094-B transmittal documents.
This deadline is for submission of paper forms only; We expect the IRS, in the near future, to require e-filing of these forms if, when aggregating the number of these forms with Forms W-2, 1099s, and similar, the total number is at least 100 forms. The previous standard was at least 250 of the same form. Employers that obtained a waiver of the e-filing requirements must file paper forms by the deadline at left.
For more information on e-filing, see the March 31 deadline for e-filing below.
An automatic 30-day extension of time is available by filing Form 8809 on or before this due date.
March 1 - Submit annual notice of creditable and/or non-creditable coverage to Centers for Medicare and Medicaid Services (CMS)
For calendar year plans; non-calendar year plans must submit within 60 days following the first day of the plan year.
ERISA and non-ERISA plans must certify to CMS that prescription drug coverage offered under the plan is either Medicare Part D creditable or non-creditable.
The filing is made on the CMS.gov website.
March 1 - File Form M-1 on behalf of multiple-employer welfare arrangements (MEWAs) and certain other arrangements
Applies to some MEWAs, as defined in ERISA, and some collectively bargained, multiple-employer programs.
An annual report (M-1) is not required if between Oct. 1 and Dec. 1 of the prior year the MEWA experienced an origination or special filing event and timely filed the M-1.
Some exceptions to Form M-1 filing apply. See Form M-1 and its instructions for more details.
March 2 - Report coverage offers to ACA full-time employees on Forms 1095-C, and/or self-insured coverage to primary insureds on Forms 1095-C or 1095-B
Applies to employers subject to the ACA employer mandate, and to smaller employers providing self-insured medical coverage to employees, in the previous year.
The employer must provide a Form 1095-C with Parts I and II completed to each employee considered full-time (for ACA employer mandate purposes) for at least a month in 2022.
Self-insured employers must provide this Form, with Parts I and III completed, to each individual who had self-insured coverage for at least a day in 2022. Some employers will use Form 1095-B. Minor exceptions apply to this furnishing requirement with respect to individuals who at no time in the prior calendar year were ACA full-time employees. No extension to this deadline is available.
March 31 - E-file Forms 1095-C and/or 1095-B with IRS, with Form 1094-C and 1094-B
If e-filing; see entry above for Feb. 28 if filing paper forms.
Applies to employers providing to employees (or providing or making available to primary insureds) Forms 1095-C or 1095-B.
Employers providing to employees (or providing or making available to primary insureds) Forms 1095-C or 1095-B must transmit copies of these forms to the IRS, with one or more Forms 1094-C or 1094-B transmittal documents. We expect the IRS, in the near future, will require e-filing of these forms if, when aggregating the number of these forms with Forms W-2, 1099s, and similar, the total number is at least 100 forms. The previous standard was at least 250 of the same form.
The employer may apply for a waiver of the e-filing requirement (if it prefers to file paper forms) on IRS Form 8508. However, if the waiver is granted, the employer must submit its paper forms by Feb. 28, subject to a potential 30-day extension of time via Form 8809.
E-filing is accomplished through the IRS’s AIR platform (opens a new window).
An automatic 30-day extension of time is available by filing Form 8809 on or before March 31, 2023.
SELECT STATE AND LOCAL DEADLINES
Jan. 30 - Make San Francisco Healthcare Security Ordinance (HCSO) contributions for prior calendar quarter
For employers subject to the San Francisco HCSO.
Quarterly contributions, if due for the quarter ending Dec. 31, 2022, are due by Jan. 30. Self-funded employers have the option of utilizing an annual true-up method in lieu of quarterly contributions. The true-up contributions are due in February of each year for the prior year.
Jan. 31 - Distribute Massachusetts Forms 1099-HC
Massachusetts individual mandate disclosures
Applies to employers that, in 2022, had employees in Massachusetts who had creditable coverage (as defined under Massachusetts state law) under the employer’s plan, and to the Massachusetts Department of Revenue. The disclosure is made to the employees.
The employer has the obligation under state law to furnish the Form, but if the plan is insured and the contract was issued or delivered in Massachusetts, the carrier has the obligation.
The obligation on ERISA employers may be unenforceable due to ERISA preemption, but failure to provide an employee with a Form 1099-HC could trigger additional state taxes on the employee.
Jan. 31 Unless deferred by state authorities - Distribute Forms 1095-C to individuals who in the prior year were California residents and covered under the employer’s self-funded medical plan
Applies to employers who provided self-insured medical coverage to California residents in 2022.
Due to California’s individual mandate requiring residents to have minimum essential coverage, employers that provided self-insured coverage to California residents during 2022 must furnish a federal Form 1095-C to the primary insured showing the period of coverage in 2022 for the primary insured and dependents.
Employers that furnish the Form 1095-C to satisfy IRS requirements are not required to again furnish the form to satisfy California requirements. However, state and IRS due dates may be different; for example, the IRS’ deadline for furnishing the form has been automatically extended to March 2.
Feb. 28 - Make San Francisco Healthcare Security Ordinance expenditures due for prior year for covered employees in self-insured health plans
For employers subject to the San Francisco HCSO.
Employers providing health insurance to San Francisco HCSO-covered employees under a self-insured plan and utilizing the annual method for determining the adequacy of healthcare expenditures under that plan have until the last day of February to make any required true-up contributions for 2022.
Feb. 28 - Distribute employee healthcare payment confirmation on employee’s behalf to Healthy San Francisco
Applies to employers subject to the San Francisco Healthcare Security Ordinance, who satisfy the obligations of the ordinance by making contributions to the city, on behalf of covered employees. Provide to a new employee or an employee newly enrolled in Healthy San Francisco or for whom payment was made to fund access to Healthy San Francisco. The notice to a given employee is required only once.
March 2 - Distribute coverage statements to individuals who in the prior year were New Jersey residents and covered under the employer’s self-insured medical plan
Applies to employers who provided self-insured medical coverage to New Jersey residents in 2022.
Due to New Jersey’s individual mandate requiring residents to have minimum essential coverage, employers that provided self-insured coverage to a New Jersey resident during 2022 must furnish to the primary insured a statement showing the period of coverage for the primary insured and dependents. A copy of IRS Form 1095-C satisfies the disclosure requirement, or the employer may instead utilize Form NJ-1095-C.
Employers that furnish the Form 1095-C to satisfy IRS requirements are not required to again furnish the form to satisfy New Jersey requirements.
March 2 Deferred by state authorities from Jan. 31 - Distribute coverage statements to individuals who in the prior year were Rhode Island residents and covered under the employer’s medical plan
Applies to employers who provided self-insured medical coverage to Rhode Island residents in 2022.
Due to Rhode Island’s individual mandate requiring residents to have minimum essential coverage, employers that provided self-insured coverage to a Rhode Island resident during 2022 must furnish to the primary insured a statement showing the period of coverage for the primary insured and dependents. A copy of IRS Form 1095-C satisfies the disclosure requirement.
Employers that furnish the Form 1095-C to satisfy IRS requirements are not required to again furnish the form to satisfy Rhode Island requirements.
Employers that provide insured coverage to a Rhode Island resident during the prior year are not required to provide the required coverage information to the resident as long as the insurer provides it.
March 31 - Submit Forms 1095-C and/or 1095-B, with Form 1094-C or 1094-B, to the California Franchise Tax Board
Applies to employers who provided medical coverage to California residents in 2022.
Employers that provided self-insured coverage to California residents in 2022 must file with the Franchise Tax Board copies of the IRS Forms 1095-C with respect to such residents that the employer filed with the IRS for 2022, along with the employer’s Form 1094-C.
Employers that provided insured coverage to California residents during the prior year are not required to file the required coverage information with the Franchise Tax Board as long as the insurer files it.
As of the date of this publication, California still indicates that it will only require the filing to be made electronically if the employer is submitting at least 250 of the same forms.
The California Franchise Tax Board has further indicated that no penalties will be levied with respect to forms filed on or before May 31, 2023.
March 31 - Submit coverage statements to the New Jersey Division of Revenue and Enterprise Services
Applies to employers who provided medical coverage to New Jersey residents in 2022.
Employers that provided self-insured coverage to New Jersey residents during 2022 must file with the Division of Revenue and Enterprise Services copies of the IRS Forms 1095-C with respect to such residents that the employer filed with the IRS for 2022, along with the employer’s Form 1094-C. Although New Jersey will accept the same sort of coverage information on Forms NJ-1095, employers will typically want to simply submit copies of the forms they filed with the IRS.
Employers that provided insured coverage to New Jersey residents during the prior year are not required to file the required coverage information with the Division of Revenue and Enterprise Services as long as the insurer files it.
March 31 Deferred by state authorities from Jan. 31 -Submit coverage statements to the Rhode Island Department of Revenue, Division of Taxation
Applies to employers who provided medical coverage to Rhode Island residents in 2022.
Employers that provided self-insured coverage to Rhode Island residents during 2022 must file with the Department of Revenue, Division of Taxation, copies of the IRS Forms 1095-C with respect to such residents that the employer filed with the IRS for 2022, along with the employer’s Forms 1094-C. Although Rhode Island will accept the same sort of coverage information on an equivalent statement, employers will typically want to simply submit copies of the forms they filed with the IRS.
Employers that provided insured coverage to Rhode Island residents during the prior year are not required to file the required coverage information with the Department of Revenue, Division of Taxation as long as the insurer files it.
PANDEMIC-RELATED REMINDERS – OUTBREAK PERIOD REQUIREMENTS
In April 2020, in February 2021, and in February 2022 federal authorities issued guidance under which welfare benefit plans are required to suspend the running of certain action periods related to COBRA elections and premium payments, HIPAA special enrollment requests, and submission of claims, appeals and requests for third-party review of denied medical claims. Generally, any given action period (e.g., the 60 days a COBRA qualified beneficiary has to elect COBRA after the plan sends the COBRA election packet) is suspended until the earlier of:
The date that is 12 months after the date the suspension began and
The date that is 60 days after the president rescinds the presidential national emergency declaration related to COVID-19. That declaration is still in effect, as of the date this publication was prepared.
The following disclosures relate to this outbreak period guidance.
As soon as practicable, if required - Reissue or supplement notices or disclosures regarding certain COBRA deadlines, HIPAA special enrollment request deadlines, and claims/appeals submission deadlines
Federal “outbreak period” guidance indicates that plan disclosures issued prior to or during the pandemic may need to be reissued or amended if such disclosures failed to provide accurate information regarding the time in which participants and beneficiaries are required to take action, specifically if the prior disclosures did not adequately describe the effect of federal “outbreak period” guidance on COBRA, HIPAA special enrolment and claims/appeals action periods and deadlines.
NOTE: While federal authorities made this admonition in their February 2021 guidance, it will be difficult to accomplish on account of vagaries in that guidance, particularly with respect to how to calculate the date on which the running of the relevant action periods, particularly with respect to COBRA premiums, begins again. Lockton has prepared a model notice for consideration by its clients. Contact your account service team.
As soon as practicable, if required - Alert individuals to the impending loss of protections, benefits or rights under a plan due to expiration of “outbreak period” protections, and provide notice of other healthcare coverage options, such as ACA marketplaces
Federal “outbreak period” guidance recommends where plan fiduciaries know, or should reasonably know, that the end of the relief provided under that guidance may cause a participant or beneficiary to lose protections, benefits or rights under the plan, that the administrator or other fiduciary should consider affirmatively sending a notice regarding the end of the individual’s relief period and reminding the individual of the availability of healthcare coverage in an ACA marketplace. Including with such notice the standard federal marketplace notice, which typically is provided within 14 days of new hire, should be adequate for this latter purpose.
Various times - Adjust COBRA election and premium payment, HIPAA special enrollment request, and plan claim, appeal and request for third-party review due dates
To accommodate and comply with the federal “outbreak period” guidance, plan administrators will need to adjust the running of relevant action periods and deadlines with respect to affected participants and beneficiaries.
Various times - Provide ERISA-related notices and disclosures
Federal “outbreak period” guidance gave plan administrators leeway, where that leeway is necessary, to provide ERISA-related notices and disclosures (e.g., COBRA election packets) to plan participants and beneficiaries later than would otherwise be required, as long as the administrator provides the notices and disclosures as soon as practicable. Administrators are also granted wider latitude to provide these notices and disclosures via email or a continuously available website. See our alert (opens a new window) for more information.
It seems unlikely, this late into the pandemic, that tardy notices and disclosures will be acceptable to federal regulators.
Not legal advice: Nothing in this alert should be construed as legal advice. Lockton may not be considered your legal counsel, and communications with Lockton's Compliance Consulting group are not privileged under the attorney-client privilege.