The Washington Report

October 30, 2024

Note to Subscribers

While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change after our publication deadline.

Health

 

Departments Release Proposed Rules and FAQs on Enhancing Coverage of Preventive Services and Expanding Birth Control Coverage Under the ACA
On October 21, 2024, the Departments of Health and Human Services, Labor, and Treasury (Departments) released proposed rules entitled Enhancing Coverage of Preventive Services Under the Affordable Care Act (ACA). These proposed rules would expand access to coverage of recommended preventive services without cost-sharing in the commercial market, with a particular focus on reducing barriers to coverage of contraceptive services, including over-the-counter (OTC) contraceptives. As part of this proposal, most group health plans and health insurance issuers would be required to cover OTC contraceptives without cost-sharing or requiring a prescription. Additionally, plans and issuers would have to provide consumers with more choices of covered contraceptives, such as a broader array of contraceptive drugs and drug-led combination products. The proposed rules also further reinforce plans’ and issuers’ responsibility to cover Food and Drug Administration approved, cleared, and granted birth control methods without cost-sharing. Comments on the proposed rules are due by December 27, 2024.

On the same day, the Departments also published Frequently Asked Questions (FAQs) About ACA and Women’s Health and Cancer Rights Act (WHCRA) Implementation Part 68. These seven questions ask:

• Q1: What changes must plans and issuers make to comply with the 2023 United States Preventive Services Task Force recommendation for pre-exposure prophylaxis? 
• Q2: If a plan or issuer receives a claim from an in-network provider that identifies an item or service as a recommended preventive item or service using industry-standard coding practices, should the plan or issuer cover the item or service without cost-sharing, consistent with Public Health Service (PHS) Act Section 2713 and its implementing regulations? 
• Q3: If a plan or issuer receives a claim from an in-network provider that identifies an item or service as a recommended preventive item or service using industry-standard coding practices, but has individualized information that allows the plan or issuer to establish that the item or service is not a recommended preventive item or service with respect to the participant, beneficiary, or enrollee, is the plan or issuer expected to cover the item or service without cost-sharing (consistent with PHS Act Section 2713 and its implementing regulations)?
• Q4: Should a plan or issuer cover an item or service without cost-sharing (consistent with PHS Act Section 2713 and its implementing regulations) if, using industry-standard coding practices, the claim identifies the item or service as a recommended preventive item or service, but the plan or issuer has separate information that suggests (but does not establish) that the item or service may not have been furnished as a recommended preventive item or service with respect to the participant, beneficiary, or enrollee? 
• Q5: What steps are plans and issuers expected to take to ensure that participants, beneficiaries, and enrollees are not improperly denied coverage or charged cost-sharing for recommended preventive items and services furnished by in-network providers?
• Q6: Can the Departments provide examples to illustrate the guidance in Q2–Q4 above? 
• Q7: Are group health plans and issuers offering group or individual health insurance coverage that cover mastectomies required to provide coverage for chest wall reconstruction with aesthetic flat closure as a type of breast reconstruction under WHCRA?

The proposed rules are available here.

The ACA Implementation FAQs Part 68 are available here.

The news release is available here.

A Department Fact Sheet is available here.

A White House Fact Sheet is available here.

Retirement

 

PBGC Announces Guarantee Limit
On October 18, 2024, the Pension Benefit Guaranty Corporation (PBGC) announced that as a result of the indexing rules provided by law, the maximum guarantee limits for single-employer plans that fail in 2025 will be 4.56 percent higher than the limits that applied for 2024. A table showing the 2025 guarantee limits for various ages and payment forms is now available. The guarantee limits for multiemployer plans are not indexed and have not changed.

The table is available here.

Other HR/Employment

 

IRS Provides Tax Inflation Adjustments for 2025
On October 22, 2024, the Internal Revenue Service (IRS) announced in Revenue Procedure 2024-40 the tax year 2025 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2024-40 provides details about all these annual adjustments. Items that may be of interest to employers are provided below. Please refer to the actual Revenue Procedure for all tax information. 

Qualified Transportation Fringe Benefit: For tax year 2025, the monthly limitation for the qualified transportation fringe benefit is $325, as is the monthly limitation for qualified parking. This amount increased $10 from the tax year 2024 benefit of $315.

Health Flexible Spending Arrangements: For the taxable years beginning in 2025, the dollar limitation for employee salary reductions for contributions to health flexible spending arrangements is $3,300, an increase of $100 from the 2024 tax benefit of $3,200. For cafeteria plans that permit the carryover of unused amounts, the maximum carryover amount is $660, an increase of $20 from taxable years beginning in 2024.

Medical Savings Accounts: For tax year 2025, participants who have self-only coverage in a Medical Savings Account, the plan must have an annual deductible that is not less than $2,850, up $50 from tax year 2024; but not more than $4,300, an increase of $150 from tax year 2024. For self-only coverage, the maximum out-of-pocket expense amount is $5,700 up $150 from 2024. For tax year 2025, participants with family coverage, the floor for the annual deductible is $5,700, up from $5,550 in 2024; however, the deductible cannot be more than $8,550, up $200 from the limit for tax year 2024. For family coverage, the out-of-pocket expense limit is $10,500 for tax year 2025, an increase of $300 from tax year 2024.

Qualified Adoption Expenses: The maximum credit allowed for adoptions is the amount of qualified adoption expenses up to $17,280 for taxable years beginning in 2025, up from $16,810 for 2024.

IRS Information Release 2024-273 is available here.

IRS Revenue Procedure 2024-40 is available here.

Aon Publications

 

If Your Health Plan Includes a Tobacco Surcharge, It’s Time for a Checkup
The latest trend in health plan litigation suggests that employers with wellness programs, including a program that includes a surcharge for using tobacco, should review the program against the requirements of the Health Insurance Portability and Accountability Act (HIPAA), the Affordable Care Act, and other applicable laws.

Several health plan sponsors have recently been sued by plan participants claiming that the employer’s wellness program does not comply with the appropriate wellness plan requirements, particularly as related to tobacco surcharges. Employers that have or are considering such programs should review the plan design to make sure it complies with the applicable requirements.

This Aon bulletin discusses:

• Background
• HIPAA Requirements for Outcomes-Based Programs
• Red Flags Plans Should Look For 

The Aon bulletin is available here.

Aon’s Year-End Update: Opportunities for Retirement Plan Sponsors and Fiduciaries
Aon’s Retirement Legal Consulting & Compliance practice is pleased to present its Year-End Update: Opportunities for Retirement Plan Sponsors and Fiduciaries. This Update focuses on many of the plan sponsor and fiduciary issues that may be of concern for the remainder of 2024 while presenting some risk mitigation and planning opportunities to consider for 2025. These areas can include planning ahead for various pension-related transactions, as well as risk mitigation and other “best practice” strategies.

Aon’s Year-End Update: Opportunities for Retirement Plan Sponsors and Fiduciaries is available here.