October 2022 | SSG Compliance Recap

Each year, just as the leaves turn to the fiery shades of autumn, the Internal Revenue Service (IRS) announces how much more “green” will be available during the coming year under various employee benefit programs.

This month's recap includes:

• IRS Announces Increased Limits for Certain Employee Benefits, Higher Fines for ACA Reporting Failures
• ACA Reporting Forms and Draft Instructions Available with Limited Changes for 2022
• Final Rule Resolves “Family Glitch” for ACA Marketplace Coverage
• December 27 Due Date for Prescription Drug Cost Reporting is Approaching
• Question of the Month

IRS Announces Increased Limits for Certain Employee Benefits, Higher Fines for ACA Reporting Failures

The IRS recently released Revenue Procedure 2022-38 in which it has updated many key employee benefit limits based on annual inflation or cost-of-living adjustments. The good news is that recent higher inflation trends have led to the IRS providing for higher-than-typical increases in both the amount that individuals can contribute to a health flexible spending arrangement (HFSA), as well as the amount they can carry over in a plan including that feature.

ACA Reporting Forms And Draft Instructions Available With Limited Changes for 2022

The Affordable Care Act (ACA) information reporting forms and draft instructions for 2022 are now available.

• Forms 1094-B and 1095-B are filed by minimum essential coverage providers (insurers, government-sponsored programs, and some self-insuring employers and others).
• Forms 1094-C and 1095-C are filed by applicable large employers (ALEs) to provide information that the IRS needs to administer employer shared responsibility penalties and eligibility for premium tax credits.

Final Rule Resolves "Family Glitch" for ACA Marketplace Coverage

The Department of the Treasury recently issued final regulations to make the premium tax credit (PTC) for Marketplace health coverage available to more individuals starting in 2023. The new rule changes the IRS’s interpretation of group health coverage affordability for determining PTC eligibility for family members. Whereas the IRS previously only considered the affordability of employer-offered individual health coverage, the new rule looks at the affordability of family coverage to decide whether spouses and dependents can elect Marketplace coverage and receive a PTC. The Biden Administration estimates that the change will result in more than one million individuals qualifying for a PTC for the first time.

December 27 Due Date for Prescription Drug Cost Reporting is Approaching

As part of the Consolidated Appropriations Act of 2021 (CAA), group health plans and carriers will soon be required to report certain demographic and spending information about a plan’s prescription drug expenditures. The Departments will use this data to publish public reports on prescription drug reimbursements, pricing trends, and the impact of prescription drug costs on premium costs. The pharmacy reporting requirement generally applies to group health plans (both fully insured and self-insured) and carriers.

Question of the Month | What are the Medicare Part A and Part B enrollment periods?

A: You can only sign up for Part B (and/or Part A if you have to buy it) during these enrollment periods.