How to Get Your Free At-home COVID-19 Tests

If you participate in a health plan—through an employer or otherwise—you are likely eligible for free, over-the-counter COVID-19 tests for home use.

 

Depending on your plan, your COVID-19 tests will be paid for directly by insurance, or you will be reimbursed later for the cost. The human resources (HR) department will be able to tell you which applies to you.

 

Keep reading to learn more about this cost-saving opportunity.

 

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In many instances, insurance companies are only required to reimburse you at a rate of up to $12 per individual test (or the cost of the test if it’s less than $12). This is typically the case when your insurance company has specific locations they want you to get your test from.

 

However, if your insurance company doesn’t specify where you may get a COVID-19 test, you may be able to be reimbursed for your full test cost, even if it exceeds $12. In all cases, keep your receipts!

 

Speak with HR to learn more about your plan’s cost limits and preferred purchasing locations.

 

Do I need to purchase the test at a certain location for it to be free?

 

Employer Plans may have specific locations (e.g., pharmacies) where you can pick up a free test that is paid for directly by your insurance. HR will be able to tell you.

 

However, you can also purchase a COVID-19 test from anywhere you like (i.e., online or in-person at a store) and still be reimbursed up to $12 for the test (or more, depending on your plan). Be sure to keep your receipts in order to be reimbursed.

 

How will I be reimbursed for my test?

 

If you need to be reimbursed for a COVID-19 test (i.e., it was not free at the point of sale), keep your receipts. Then, reach out to HR—they will be able to tell you how to submit the receipt for reimbursement from your insurance company.

 

How long will reimbursement take?

 

Reimbursement is typically prompt, but it may vary. HR will be able to provide a more accurate time estimate.

 

What if I cannot afford to pay for a test upfront and wait for reimbursement?

 

There are a number of low- or no-cost COVID-19 testing options. You can find community-based testing sites here.

 

Alternatively, COVID-19 tests are also available without cost sharing or limitations to covered individuals when administered by a health care provider (e.g., a nurse, doctor or pharmacist).

 

Can I be reimbursed for past COVID-19 tests I purchased?

 

Insurance companies are only obligated to reimburse you for COVID-19 tests purchased on or after Jan. 15, 2022. Any tests bought before then are not covered.

 

However, while the answer will generally be no, you still can speak with your plan sponsor about potential reimbursement for COVID-19 tests you bought previously.

 

Is there a limit on the number of tests I can be reimbursed for?

 

Your plan is required to provide reimbursement for eight tests per month, regardless of whether the tests are bought all at once or at separate times throughout the month.

 

My workplace requires weekly COVID-19 testing. Can I be reimbursed for these tests?

 

Plans are not required to provide coverage for testing (including at-home COVID-19 tests) that is for employment purposes.

 

Speak with your HR department to learn more about your employer’s testing requirements and your potential related costs.

 

Where can I learn more?

 

If you have any questions about the information in this article, reach out to your HR department.

 

This Know Your Benefits article is provided by gente and is to be used for informational purposes only and is not intended to replace the advice of an insurance professional. © 2022 Zywave, Inc. All rights reserved.

 


CDC Recommends Shorter COVID-19 Isolation and Quarantine

 

 

 

 

 

CDC Recommends Shorter COVID-19 Isolation and Quarantine

 

On Monday, Dec. 27, 2021, the Centers for Disease Control and Prevention (CDC) reduced its recommended periods for COVID-19 isolation (confirmed COVID-19 infection) and quarantine (potential COVID-19 exposure).

Asymptomatic individuals infected with COVID-19 have been told to isolate for five days from the day they test positive—down from the original 10. After, they should wear a mask when around others for an additional five days.

The CDC’s new quarantine guidance was similarly updated. People who are unvaccinated or are more than six months out from their second vaccine dose (or more than two months after getting the Johnson & Johnson vaccine) and not yet boosted should avoid others for five days after COVID-19 exposure. Then, they should diligently wear a mask for an additional five days afterward.

 

 

 

“Prevention is our best option: get vaccinated, get boosted, wear a mask in public indoor settings in areas of substantial and high community transmission, and take a test before you gather.”

 

-CDC Director Dr. Rochelle Walensky, in a statement

 

 

 

Notably, the CDC said those who have received COVID-19 booster shots don’t need to quarantine, but they should wear a mask around others for at least 10 days after potential exposure.

 In all cases of isolation and exposure, the CDC said it’s best to take a COVID-19 test as well.

What’s Next?

 

The CDC has shortened its quarantine and isolation timetables as health experts learn more about COVID-19 and its strains, such as the coronavirus Omicron variant. The agency’s decision was “motivated by science demonstrating that the majority of COVID-19 transmission occurs early in the course of illness, generally in the 1-2 days prior to onset of symptoms and the 2-3 days after.”

However, shortened isolation and quarantine times doesn’t mean the risk of COVID-19 is going away or that prevention measures should be relaxed.

In its release, the CDC urged all eligible Americans to get vaccinated and boosted if they haven’t been already.

Individuals interested in learning more about official COVID-19 guidance should visit the CDC website.

 

The content of this News Brief is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2021 Zywave, Inc. All rights reserved.

 


Court Reinstates OSHA Vaccination Mandate for Private Employers

Court Reinstates OSHA Vaccination Mandate for Private Employers
 
 
On Friday Dec. 17, 2021 the 6th Circuit Federal Court of Appeals reinstated the Occupational Safety and Health Administration’s (OSHA) federal emergency temporary standard (ETS) for COVID-19. The 6th Circuit decision reverses the stay ordered in November by the 5th Circuit and allows OSHA to resume ETS implementation and enforcement nationwide. 
 
The ETS establishes a mandatory vaccination policy requirement for private employers with 100 or more employees. ETS opponents have already filed an appeal with the U.S. Supreme Court challenging the 6th Circuit’s decision.
 
OSHA Response and Guidance
 
OSHA has published  the following guidance regarding the reinstatement:
 
To account for any uncertainty created by the stay, OSHA is exercising enforcement discretion with respect to the compliance dates of the ETS. To provide employers with sufficient time to come into compliance, OSHA will not issue citations for noncompliance with any requirements of the ETS before January 10 and will not issue citations for noncompliance with the standard’s testing requirements before February 9, so long as an employer is exercising reasonable, good faith efforts to come into compliance with the standard. OSHA will work closely with the regulated community to provide compliance assistance.
 
Impact on Employers
 
The 6th Circuit’s decision suggests the ETS may survive its legal challenges. Employers subject to the ETS should monitor legal developments closely. They should also consider what measures they would need to adopt to be considered to have made reasonable, good faith efforts to comply if the Supreme Court upholds the ETS.
 
 
Important Dates
 
Nov. 12, 2021
 
The 5th Circuit Court of Appeals blocked the ETS nationwide.
 
Dec. 17, 2021
 
The 6th Circuit court reinstated ETS.
 
Jan. 10, 2022
 
Planned enforcement deadline for most ETS requirements.
 
Feb. 9, 2022
 
Planned enforcement deadline for ETS testing requirements.
 
 
 
The 6th Circuit decision reverses the stay ordered in November and allows OSHA to resume ETS implementation and enforcement nationwide.
 
 
 
This Legal Update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2021 Zywave, Inc. All rights reserved.

Upcoming ACA Compliance Deadlines

 
gente is proud to offer the best value in employer reporting services – a full-service low cost alternative to “do-it-yourself” software, or expensive payroll integrations.  For more information on ACA reporting, click here.
 
 
Affordable Care Act (ACA) reporting under Section 6055 and Section 6056 for the 2021 calendar year is due in early 2022. Specifically, reporting entities must:
 
  • Furnish statements to individuals by March 2, 2022; and
  • File returns with the IRS by Feb. 28, 2022 (or March 31, 2022, if filing electronically).
 
Penalties may apply for reporting entities that fail to file and furnish required returns and statements by the deadline.
 
A proposed rule issued on Nov. 22, 2021, extended the annual furnishing deadlines under both Sections 6055 and 6056 for an additional 30 days. While this is a proposed rule, the IRS has indicated that taxpayers can rely upon it until a final rule is issued. As a result, the general furnishing deadline has been extended 30 days to March 2, 2022. In any case, reporting entities are generally encouraged to furnish statements to individuals as soon as they are able.
 
Action Steps
 
The IRS generally encourages reporting entities to furnish statements as soon as they are able.
 
Although penalty relief has been provided in prior years for reporting entities that make good faith efforts to comply with the reporting requirements, this penalty relief is not available for reporting for tax year 2021 and subsequent years. This good faith relief was intended to be transitional to accommodate public concerns with implementing new reporting requirements under the ACA. These reporting requirements have now been in place for six years, and the IRS has determined that transitional relief is no longer appropriate. Therefore, the IRS has discontinued the transitional good faith relief after tax year 2020.
 
Section 6055 and 6056 Reporting
 
  • Section 6055 applies to providers of minimum essential coverage (MEC), such as health insurance issuers and employers with self-insured health plans. These entities generally use Forms 1094-B and 1095-B to report information about the coverage they provided during the previous year.
  • Section 6056 applies to applicable large employers (ALEs)¬¬—generally, those employers with 50 or more full-time employees, including full-time equivalents, in the previous year. ALEs use Forms 1094-C and 1095-C to report information relating to the health coverage that they offer (or do not offer) to their full-time employees.
 
The ACA’s individual mandate penalty was reduced to zero beginning in 2019. As a result, the IRS has been studying whether and how the Section 6055 reporting requirements should change, if at all, for future years. Despite the elimination of the individual mandate penalty, Section 6055 reporting continues to be required. A proposed rule described below would provide that individual statements do not have to be furnished if certain requirements are met. However, this proposed rule has not been finalized.
 
Annual Deadlines
 
Generally, forms must be filed with the IRS annually, no later than Feb. 28 (March 31, if filed electronically) of the year following the calendar year to which the return relates. In addition, reporting entities must also furnish statements annually to each individual who is provided MEC (under Section 6055) and each of the ALE’s full-time employees (under Section 6056). Individual statements are generally due on or before Jan. 31 of the year immediately following the calendar year to which the statements relate.
 
Proposed Extended Furnishing Deadlines
 
The proposed rule would provide an automatic extension of 30 days to furnish statements (Forms 1095-B and 1095-C) to individuals under Sections 6055 and 6056. Because the extension is automatic, reporting entities would not need to formally request an extension from the IRS.
 
Under the proposed rule, statements furnished to individuals will be timely if furnished no later than 30 days after Jan. 31 of the calendar year following the calendar year to which the statement relates. If the extended furnishing date falls on a weekend day or legal holiday, statements will be timely if furnished on the next business day.
 
This rule is in proposed form and has not been finalized. As a result, until the rule is finalized, the general furnishing deadline (Jan. 31) continues to apply.
 
Impact on Filing Deadline
 
The proposed rule does not extend the due date for filing Forms 1094-B, 1095-B, 1094-C or 1095-C with the IRS. This due date remains Feb. 28, if filing on paper, or March 31, if filing electronically. Because the due dates are unchanged, potential automatic extensions of time for filing information returns are still available under the normal rules by submitting Form 8809. Additional extensions of time to file may also be available under certain hardship conditions.
 
Proposed Alternative Method of Furnishing Under Section 6055
 
The individual mandate penalty has been reduced to zero, beginning in 2019. As a result, an individual does not need the information on Form 1095-B in order to calculate his or her federal tax liability or file a federal income tax return. However, reporting entities required to furnish Form 1095-B to individuals must continue to expend resources to do so.
 
For all years that the individual mandate penalty is zero, the proposed rule would provide an alternative manner for a reporting entity to furnish statements to individuals under Section 6055. Under this alternative manner of furnishing, the reporting entity must post a clear and conspicuous notice on its website stating that responsible individuals may receive a copy of their statement upon request. The notice must include an email address, a physical address to which a request may be sent and a telephone number to contact the reporting entity with any questions. Reporting entities must generally retain the website notice until Oct. 15 of the year following the calendar year to which the statement relates.
 
ALEs that offer self-insured health plans are generally required to use Form 1095-C, Part III, to meet the Section 6055 reporting requirements, instead of Form 1095-B. Self-insured ALEs may use this relief for employees who are enrolled in the ALE’s self-insured plan and who are not full-time employees of the ALE, as well as for nonemployees (such as former employees) who are enrolled in the self-insured plan. However, ALEs may not use the alternative method of furnishing for full-time employees who are enrolled in the self-insured plan.
 
If, in the future, the individual mandate penalty is not zero, the IRS anticipates that reporting entities will need adequate time to develop or restart processes for preparing and mailing paper statements to responsible individuals. If the individual mandate penalty is modified in the future, the IRS anticipates providing guidance, if necessary, to allow sufficient time for reporting entities to restart the reporting process.
 
Elimination of Good Faith Transition Relief from Penalties
 
For each prior year of reporting, the IRS has provided transitional good faith penalty relief for reporting entities that could show that they made good faith efforts to comply with the information reporting requirements. However, the transitional good faith relief from penalties for reporting incorrect or incomplete information on information returns or statements is not available for reporting for tax year 2021 and subsequent years.
 
This good faith relief was intended to be transitional to accommodate public concerns with implementing new reporting requirements under the ACA. These reporting requirements have now been in place for six years, and the IRS has determined that transitional relief is no longer appropriate. Therefore, the IRS has discontinued the transitional good faith relief after tax year 2020.

2022 FSA Limits

 
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2022 Limits Announced

Today, the IRS announced the 2022 limits for Healthcare Flexible Spending Accounts and Commuter Benefits. You can find more details in Revenue Procedure 2021-45. The IRS released HSA amounts earlier this year in Revenue Procedure 2021-25.

IRS_desk.jpg

2022 Limits

 

2022

2021

Difference

Healthcare Flexible Spending Account

$2,850

$2,750

+$100 per year

Maximum Healthcare FSA Carryover

$570

$550

+$20 Carryover

Monthly Maximum Mass Transit

$280

$270

+$10 per month

Monthly Maximum Parking

$280

$270

+$10 per month

HSA Contribution Limit

Self Only:

$3,650

 

Family:

$7,300

Self Only:

$3,600

 

Family:

$7,200

Self Only:

+$50

 

Family:

+$100

HSA Catch-up Contribution

(age 55 or older)

$1,000

$1,000

No change

HDHP Minimum Deductibles

Self-Only:

$1,400

 

Family:

$2,800

Self-Only:

$1,400

 

Family:

$2,800

No change

HDHP Maximum-Out-Of-Pocket

Self-Only:

$7,050

 

Family:

$14,100

Self-Only:

$7,000

 

Family:

$14,000

Self-Only:

+$50

 

Family:

+$100

Upcoming Events

11/12 – ACA Reporting – 1095-C Template Training

It’s time to get ready for 1095-C reporting. If you’re not using our service, join us to see how our easy template works to simplify your reporting process. If you are using our service, this will be a good refresher from last year.

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11/19 – Mandatory Sexual Harassment Training and Your Organization.

New York requires employers to provide mandatory sexual harassment training to employees, and New Jersey looks to be following suit. We’ll talk about legislative developments and our solution to provide employees with meaningful training.

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12/3 – ERISA – Wraps and Reporting

Once those carrier booklets come in, it’ll be time to update Plan Documents and SPDs. Calendar year 5500s may be due in July, but you don’t have to wait until then to get that filing off your list. Join us to learn how ERISA impacts health and welfare benefit plans.

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Video: IRS issues COBRA Guidance

 

 

 

IRS Notice 2021-58 clarifies the application of certain COBRA deadline extensions for electing COBRA coverage and paying COBRA premiums under prior relief that was issued as a result of the COVID-19 outbreak (“Emergency Relief”). Under the Emergency Relief, up to one year must be disregarded in determining the due dates for individuals to elect COBRA coverage and pay COBRA premiums during the Outbreak Period (i.e., 60 days after the announced end of the National Emergency). 

Notice 2021-58 clarifies that the disregarded periods to elect COBRA coverage and make initial and subsequent COBRA premium payments generally run concurrently. The guidance provides the following rules to illustrate the applicable time frames:

  • If an individual elected COBRA coverage within the initial 60-day COBRA election time frame, they will have one year and 45 days after the date of the election to make their initial COBRA premium payment.
  • If an individual elected COBRA coverage outside of the initial 60-day COBRA election time frame, they generally will have one year and 105 days after the date the COBRA notice was provided to make the initial COBRA premium payment (subject to transition relief).

The guidance also addresses the interaction of the Emergency Relief with the COBRA subsidies that were made available for certain eligible individuals under the American Rescue Plan Act (ARPA).  

Action Steps

Employers should carefully review the guidance and consult benefits counsel to ensure their ongoing compliance with the Emergency Relief, as clarified by Notice 2021-58.

Application of Emergency Relief to COBRA Elections and Paying COBRA Premiums

Individuals must make the initial COBRA election by the earlier of:

  • One year and 60 days after the individual’s receipt of the COBRA election notice; or
  • The end of the Outbreak Period.

Applying the disregarded periods in this way means that individuals who delay electing COBRA may not have more than one year of total disregarded time for the COBRA election and initial COBRA payment. For example, an individual generally may not delay electing COBRA coverage for six months and then add another full year to the disregarded period for purposes of determining the deadline for making the initial COBRA premium payment (resulting in a total of 18 months of disregarded time for both the COBRA election and initial COBRA payment). Instead, the maximum disregarded period of one year is applied concurrently to the timeframe for the COBRA election and initial COBRA premium payment. However, these timeframes are subject to the transition relief provided below.

For each subsequent COBRA premium payment, the maximum time an individual has to make a payment while the Outbreak Period continues is one year from the date the payment originally would have been due in the absence of the Emergency Relief (including the mandatory 30-day grace period), but subject to the transition relief provided below.

Notice 2021-58 Transition Relief

Because some individuals may have assumed that the disregarded period for making the initial premium payment begins on the date of the COBRA election, individuals who made elections more than 60 days after receipt of the election notice may have less time than they anticipated to make their initial premium payment. Thus, Notice 2021-58 provides that in no event will an initial COBRA premium payment be due before Nov. 1, 2021 (even if Nov. 1, 2021 is more than one year and 105 days after the date the election notice was received), as long as the individual makes the initial COBRA premium payment within one year and 45 days after the election date.

This transition relief is an exception to the general rule that disregarded periods for COBRA elections and initial COBRA payments run concurrently with respect to each individual.

Interaction with the ARPA COBRA Subsidy

The extensions under the Emergency Relief do not apply to the timeframes for electing COBRA coverage with ARPA premium subsidies, or for providing the required notice of the ARPA extended election period. An individual who has a disregarded period under the Emergency Relief may elect retroactive COBRA coverage, subject to the clarifying guidance in Notice 2021-58, and may elect COBRA coverage with ARPA premium subsidies for any period for which the individual is eligible for premium assistance. However, the disregarded periods under the Emergency Relief continue to apply to payments of COBRA premiums after the end of the ARPA premium subsidy period, to the extent that the individual is still eligible for COBRA coverage and the Outbreak Period has not ended.

Examples

Notice 2021-58 provides 10 comprehensive examples to illustrate how COBRA elections and premium payments are treated under Notice 2021-58, including how to apply the ARPA premium subsidies. All of the examples assume that the group health plans have calendar month coverage periods, with premium payments due by the first of the month, and that the plans provide that qualified beneficiaries must make COBRA premium payments within the statutory 30-day grace period.


Did you miss our webinar on ACA Reporting Changes? (Video Inside)

On Friday, October 1st, we hosted a webinar explaining some of the changes coming to this year’s 1094-C/1095-C reporting cycle.  Employers should start planning now to avoid headaches later.  Specifically, employers should ensure that they’re capturing accurate data and reporting correctly to avoid significant (often six-figure) penalty assessments.

To watch the video, click here.

Feel free to contact us with any questions at (973) 995-1000 or sales@gente.solutions


IRS Reminder: Cost of home testing for COVID-19 is eligible medical expense; reimbursable under FSAs, HSAs

IR-2021-181, September 10, 2021

WASHINGTON — The Internal Revenue Service reminds taxpayers today that the cost of home testing for COVID-19 is an eligible medical expense that can be paid or reimbursed under health flexible spending arrangements (health FSAs), health savings accounts (HSAs), health reimbursement arrangements (HRAs), or Archer medical savings accounts (Archer MSAs). That is because the cost to diagnose COVID-19 is an eligible medical expense for tax purposes.

The IRS also reminds taxpayers that the costs of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of COVID-19 are eligible medical expenses that can be paid or reimbursed under health FSAs, HSAs, HRAs, or Archer MSAs. Additional information is available on IRS.gov.

For more information regarding details and requirements on deductibility of medical expenses, taxpayers can review Can I Deduct My Medical and Dental Expenses? and Publication 502, Medical and Dental Expenses.


Compliance Overview: Medicare Part D Creditable Coverage Disclosure Notices

 

 

 

 

Compliance Overview

Brought to you by: gente

 

 

Medicare Part D: Creditable Coverage Disclosure Notices

 

Employers with group health plans that provide prescription drug coverage to individuals who are eligible for Medicare Part D must comply with certain disclosure requirements.

 

Group health plan sponsors must disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether their prescription drug coverage is at least as good as the Medicare Part D coverage (in other words, whether their prescription drug coverage is “creditable”). These disclosures must be provided on an annual basis and at certain other designated times.

 

There are no specific penalties for employers that fail to comply with the Medicare Part D disclosure requirements, except for employers that are claiming the Retiree Drug Subsidy. However, by not providing creditable coverage disclosure notices, employers may trigger adverse employee relations issues.

 

Links and Resources

 

CMS’ creditable coverage webpage includes information and resources regarding the Medicare Part D disclosure requirements, including:

 

 

Disclosure to Individuals

 

Plan sponsors must provide creditable coverage disclosure notices to individuals each year before Oct. 15—the start date of the annual enrollment period for Medicare Part D.

The disclosure notice alerts individuals as to whether their plan’s prescription drug coverage is creditable.

Model notices are available for employers to use.

 

Disclosure to CMS

 

The disclosure to CMS is due within 60 days after the start of each plan year.

For calendar year plans, this deadline is March 1 of each year (Feb. 29 for leap years).

Plan sponsors are required to use CMS’ online disclosure form.

 

Disclosure to Individuals

 

Medicare Part D Enrollment

 

In order for Medicare Part D eligible individuals to make informed and timely enrollment decisions, group health plan sponsors must disclose the status (creditable or non-creditable) of the plan’s prescription drug coverage. If an individual’s enrollment in Part D is to be considered timely, the individual must enroll before the end of his or her Initial Enrollment Period.

 

The Initial Enrollment Period for Part D is concurrent with the individual’s Initial Enrollment Period for Medicare Part B. The Initial Enrollment Period is seven months long. It includes the month in which an individual first meets the eligibility requirements for Medicare Parts A and B, as well as the three months before and after the month of first eligibility.

 

In general, after the Initial Enrollment Period, the individual may only enroll in a Part D plan during the Annual Coordinated Election Period or under certain circumstances that would qualify the individual for a special enrollment period. The Annual Coordinated Election Period begins on Oct. 15 and goes through Dec. 7 of each year.

 

An eligible individual who fails to enroll in Medicare Part D during the Initial Enrollment Period must maintain “creditable coverage” or pay a late enrollment penalty. The late enrollment penalty will be imposed after a break in creditable coverage that lasts for a period of 63 days or longer (after the Initial Enrollment Period) and will apply for as long as the individual remains enrolled in Part D.

 

Thus, the disclosure notice is essential to an individual’s decision regarding whether to enroll in a Medicare Part D prescription drug plan.

 

Providing the Disclosure Notice

 

Disclosure notices must be provided to all Part D eligible individuals who are covered under, or who apply for, the plan’s prescription drug coverage, regardless of whether the prescription drug coverage is primary or secondary to Medicare Part D. The disclosure notice requirement applies to Medicare beneficiaries who are active or retired employees, disabled or on COBRA, as well as Medicare beneficiaries who are covered as a spouse or a dependent.

 

An individual is eligible for Medicare Part D if he or she:

 

Is entitled to Medicare Part A and/or enrolled in Part B as of the effective date of coverage under the Part D plan; and

Resides in the service area of a prescription drug plan or Medicare Advantage plan that provides prescription drug coverage.

 

To simplify plan administration, plan sponsors often decide to provide the disclosure notice to all plan participants.

 

Content of Disclosures

 

CMS has provided model disclosure notices for plan sponsors to use when disclosing their creditable coverage status to Medicare beneficiaries. The model disclosure notices are available on CMS’ website. Plan sponsors are not required to use the CMS model disclosure notices. If a plan sponsor does not use the CMS model disclosure notices, its notices must meet the content standards described below.

 

Content of Creditable Coverage Disclosure Notices

 

When the prescription drug coverage offered by a plan sponsor is creditable, the disclosure notice must contain the following information:

 

A statement that the plan sponsor has determined that its prescription drug coverage is creditable;

An explanation of creditable coverage (that the amount the plan expects to pay, on average, for prescription drugs for individuals covered by the plan in the applicable year is the same or more than what standard Medicare prescription drug coverage would be expected to pay, on average); and

An explanation of why creditable coverage is important and advice that, even though coverage is creditable, an individual could be subject to higher Part D premiums if the individual subsequently has a break in creditable coverage of 63 continuous days or longer before enrolling in a Part D plan.

 

CMS also recommends that the following additional content be included in the creditable coverage disclosure notice:

 

A description of the beneficiary’s right to a notice (when a beneficiary can expect to receive a notice and when a beneficiary can request a copy of the notice).

An explanation of the option(s) available to beneficiaries when the Medicare Part D benefit becomes available, including, for example:

Individuals can retain their existing coverage and choose not to enroll in a Part D plan;

Individuals can enroll in a Part D plan as a supplement to, or in lieu of, the other coverage; or

Individuals cannot have both a Medigap prescription drug policy and a Part D plan.

An explanation of whether the covered individuals will still be able to receive all of their current health coverage if they choose to enroll in Medicare Part D.

A description of the circumstances (if any) under which an individual could get prescription drug coverage back if the individual drops the current coverage and enrolls in Medicare Part D. (For Medigap insurers, a clarification that the individual cannot get his/her prescription drug coverage back under such circumstances.)

Information about receiving financial assistance for Medicare Part D, including the contact information for the Social Security Administration.

 

Content of Non-creditable Coverage Disclosure Notices

 

When the prescription drug coverage offered by a plan sponsor is determined to be non-creditable, the disclosure notice must contain the following information:

 

Statement that the entity has determined that its prescription drug coverage is not creditable;

Explanation of non-creditable coverage (that the amount the plan expects to pay, on average, for prescription drugs for individuals covered by the plan in the applicable year is less than what standard Medicare prescription drug coverage would be expected to pay, on average);

Explanation that, in general, an individual may only enroll in a Part D plan from Oct. 15 through Dec. 7 of each year; and

Clarification of the importance of creditable coverage, and that the individual may be subject to higher Part D premiums if the individual fails to enroll in a Part D plan when first eligible.

 

CMS also recommends that the non-creditable coverage disclosure notice include the additional content outlined above for creditable coverage disclosure notices (for example, a description of the beneficiary’s right to a notice and an explanation of the options available to beneficiaries when Medicare Part D becomes available).

 

Personalized Disclosure Notices/Statements

 

CMS recommends that entities complete the personalized box on the model disclosure notices if an individual requests a copy of a disclosure notice. Individuals may submit a copy of a personalized disclosure notice as proof of prior creditable coverage when enrolling in a Part D plan. If the plan sponsor chooses not to use the model disclosure notices, the sponsor can provide a personalized statement of creditable coverage which contains all of the following elements:

 

Individual’s first and last name;

Individual’s date of birth or unique member identification number;

Entity name and contact information;

Statement that the entity determined that its plan is creditable or non-creditable coverage; and

The date ranges of creditable coverage.

 

Form and Manner of Delivering Disclosure Notices

 

Plan sponsors have flexibility in the form and manner of their disclosure notices. Disclosure notices do not need to be sent in a separate mailing. Disclosure notices may be sent with other plan participant information materials (for example, enrollment and/or renewal materials). If a disclosure notice is incorporated with other participant information, it must meet specific requirements for being prominent and conspicuous within the materials.

 

As a general rule, a single disclosure notice may be provided to the covered Medicare beneficiary and all of his or her Medicare eligible dependent(s) covered under the same plan. However, if it is known that any spouse or dependent that is Medicare eligible lives at a different address than where the participant materials were mailed, a separate notice must be provided to the Medicare eligible spouse or dependent residing at a different address.

 

Disclosure notices may be provided through electronic means only if the plan sponsor follows the requirements set forth in Department of Labor regulations addressing electronic delivery.

 

Timing of Disclosure Notices

 

At a minimum, disclosure notices must be provided at the following times:

 

1

Prior to the Medicare Part D annual coordinated election period—beginning Oct. 15 through Dec. 7 of each year

2

Prior to an individual’s initial enrollment period for Part D

3

Prior to the effective date of coverage for any Medicare-eligible individual who joins the plan

4

Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable

5

Upon a beneficiary’s request

 

If the creditable coverage disclosure notice is provided to all plan participants annually, before Oct. 15 of each year, items (1) and (2) above will be satisfied. “Prior to,” as used above, means the individual must have been provided with the notice within the past 12 months. In addition to providing the notice each year before Oct. 15, plan sponsors should consider including the notice in plan enrollment materials provided to new hires.

 

Disclosure to CMS

 

Plan sponsors are also required to disclose to CMS whether their prescription drug coverage is creditable or non-creditable. The disclosure must be made to CMS on an annual basis, or upon any change that affects whether the coverage is creditable. More specifically, the Medicare Part D disclosure notice must be provided within the following time frames:

 

Within 60 days after the beginning date of the plan year for which the entity is providing the disclosure to CMS;

Within 30 days after the termination of a plan’s prescription drug coverage; and

Within 30 days after any change in the plan’s creditable coverage status.

 

CMS has released additional guidance for making such disclosures (such as timing, format and model language). Plan sponsors are required to provide the disclosure notice to CMS through completion of the disclosure form on the CMS Creditable Coverage webpage. This is the sole method for compliance with the CMS disclosure requirement, unless a specific exception applies.

 

Creditable Coverage

 

A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit.

 

The determination of creditable coverage does not require an attestation by a qualified actuary, except when the plan sponsor is electing the retiree drug subsidy for the group health plan. However, employers may want to consult with an actuary to make sure that their determinations are accurate.

 

For plans that have multiple benefit options (for example, PPO, HDHP and HMO), the creditable coverage test must be applied separately for each benefit option.

 

There are two permissible methods to determine whether coverage is creditable for purposes of Medicare Part D—a simplified determination method and an actuarial determination method.

 

Simplified Determination

 

If a plan sponsor is not applying for the retiree drug subsidy, the sponsor may be eligible to use a simplified determination that its prescription drug coverage is creditable. The standards for the simplified determination, which are described below, vary based on whether the employer’s prescription drug coverage is “integrated” with other types of benefits (such as medical benefits).

 

A prescription drug plan is deemed to be creditable if it:

 

Provides coverage for brand-name and generic prescriptions;

Provides reasonable access to retail providers;

Is designed to pay on average at least 60 percent of participants’ prescription drug expenses; and

Satisfies at least one of the following:

The prescription drug coverage has no maximum annual benefit or a maximum annual benefit payable by the plan of at least $25,000;

The prescription drug coverage has an actuarial expectation that the amount payable by the plan will be at least $2,000 annually per Medicare-eligible individual; or

For entities that have integrated health coverage, the integrated health plan has no more than a $250 deductible per year, has no annual benefit maximum or a maximum annual benefit payable by the plan of at least $25,000 and has no less than a $1 million lifetime combined benefit maximum.

 

*The Affordable Care Act (ACA) prohibits health plans from imposing lifetime and annual limits on the dollar value of essential health benefits.

 

An integrated plan is a plan where the prescription drug benefit is combined with other coverage offered by the entity (for example, medical, dental or vision) and the plan has all of the following plan provisions:

 

A combined plan year deductible for all benefits under the plan;

A combined annual benefit maximum for all benefits under the plan; and

A combined lifetime benefit maximum for all benefits under the plan.

 

A prescription drug plan that meets the above parameters is considered an integrated plan for the purpose of using the simplified method and would have to meet Steps 1, 2, 3 and 4(c) of the simplified method. If it does not meet all of the criteria, then it is not considered to be an integrated plan and would have to meet Steps 1, 2, 3 and either 4(a) or 4(b).

 

Actuarial Determination

 

If a plan sponsor cannot use the simplified determination method to determine the creditable coverage status of the prescription drug coverage offered to Medicare eligible individuals, then the sponsor must make an actuarial determination annually of whether the expected amount of paid claims under the entity’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard Medicare prescription drug benefit. This determination involves the same standard as the first prong of the “gross value” test for the retiree drug subsidy.

 

CMS has issued guidance that addresses the extent to which account-based arrangements, such as health reimbursement arrangements (HRAs), may be considered in the creditable coverage determination. In general, this guidance provides that the HRA annual contribution may be taken into consideration when determining creditable coverage status. Existing funds in the HRA that have rolled over from prior years are not taken into account. Also, for HRAs that pay both prescription drugs and other medical costs, a portion of the year’s contribution should be reasonably allocated to prescription drugs.

 

Enforcement

 

In general, CMS does not have the authority to impose direct penalties or other sanctions in the event that an employer fails to provide the required creditable coverage disclosure notices. However, employers who are also claiming the Retiree Drug Subsidy will not qualify for the subsidy unless they provide the disclosure notices. Other federal laws (such as ERISA’s fiduciary duty provisions) may indirectly provide consequences to a noncompliant employer. Also, failing to comply with these requirements may have a negative impact on employee relations, especially if an individual later incurs a late enrollment penalty because he or she was unaware that their prescription drug coverage through the employer was not creditable.

 

 

This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2005-2007, 2009-2011, 2013-2017, 2019 Zywave, Inc. All rights reserved.

 


Why Starting Open Enrollment Early In 2021 Is More Important Than Ever

The COVID-19 pandemic shook the job market in ways never before seen. For one, it created so much uncertainty that employees who would’ve typically searched for a new job last year decided to stay put. For another, the pandemic prompted workers to take stock of their circumstances and consider what workplace perks matter most to them.
 
Due to these reasons and others, experts predict a “turnover tsunami” in the latter half of 2021, as workers no longer feel the need to cling to their current employers.
 
Reports suggest that employees who put off job searches during the pandemic are likely to resume them in earnest this fall. That’s because, among other reasons, workers are now more financially secure than they were a year ago and are willing to leave their employers for more favorable arrangements.
 
Employers should recognize that they have a massive opportunity if they begin open enrollment efforts early in 2021. Revamping benefit offerings can help demonstrate to employees they are valued and convince top performers who may be seeking a new job to remain.
 

Tailoring Benefits Options

 
Employee benefits can be powerful retention tools. However, that’s only true if employees see value in the offerings. That’s why employers need to tailor their benefits options to include perks that employees are looking for.
 
In the wake of the COVID-19 pandemic, the perks employees want may not typically be offered by many employers. These include benefits or arrangements that began out of necessity due to the pandemic, such as telecommuting. Now, many employees expect at least some of these benefits to become permanent.
 
According to various surveys and reports, the following are some of the top benefits employees are looking for right now:
 
  • Telecommuting
  • Flexible or hybrid scheduling
  • Greater compensation
  • Mental health resources
  • Caregiving benefits
  • Developmental opportunities
 
Employers should keep in mind that nearly 50% of employees are willing to change jobs for benefits that matter to them, such as hybrid working arrangements. That’s why it’s critical for employers to seriously consider speaking with employees about which perks provide the most value for their unique circumstances. Adding or tweaking a few benefits options may be enough to retain some workers.
 
Moreover, gaining employee feedback ahead of enrollment shows a meaningful interest in employee concerns. It can go a long way to proactively retaining employees by showing them that their quality of life matters.
 
 

Determining Key Messaging

 
After solidifying benefits options, employers need to plan their communication strategies. This plan includes figuring out key messaging. In 2021, that messaging should focus on new or updated benefits offerings as a way to incentivize employees to stay.
 
By putting benefits front and center, employees will be forced to weigh the advantages of searching for a new job against guaranteed perks. Employers should detail their offerings so employees understand everything they would potentially be losing by changing jobs. Touching on these details is particularly important considering that 1 out of 3 workers don’t understand the benefits they elected during open enrollment—meaning some employees may be job hunting for perks to which they already have access.
 
 
 

Getting the Word Out

 
Ultimately, employers will need to spread the word about their open enrollment and available benefits. Countless surveys show that employees want more help understanding their options. This means an open enrollment communication plan needs to start early, provide ample educational resources and have multiple channels.
 
A quality open enrollment communication strategy may include the following components:
 
  • Group meetings to discuss available benefits
  • One-on-one meetings to go over any questions
  • Multichannel communication methods, such as videos, printouts, guides, presentations, emails and comprehensive guides
  • Periodic enrollment reminders, including enrollment dates and workplace-specific instructions
  • Messaging that directs employees to designated points of contact for questions (e.g., HR)
 
Again, it’s important for employers to start open enrollment communication early. Not only does it provide employees with more time to understand their benefits, but it can also help retain employees who may be on the fence about changing jobs.
 
 
 

Conclusion

 
By showcasing all the perks that employees have available to them, employers can head off the expected “turnover tsunami” this fall.