2022 Benefits Compliance Questions and Answers

Our annual compliance preview webinar drew a lot of benefits professionals. And, a lot of questions!

We covered a lot of territory in our recent webinar, 2022 Benefits Compliance Preview. We’ll continue reporting on any new developments of the issues discussed, as well as any other new compliance issues that crop up. Just click that SUBSCRIBE button, and you’ll be among the first to know!

In the meantime, here’s a summary of the many questions we received during the webinar, accompanied by the best answers we have based on what we currently know. Click on the topics headers to jump directly to that section. And be sure to check out the slide deck, webinar recording, and supporting material, especially if you missed this exciting discussion as it happened.

Table of contents 

Vaccine Mandates 

Transparency in Coverage Rule 

Preparing for the End of COVID Relief 

State-Led Initiatives 

Affordable Care Act 

Legislative Action 

Agent and Broker Disclosure Requirements 

Vaccine Mandates

1. How aggressive are employers being when validating employee’s requests for religious or medical exemptions from the mandate?

Employers may ask probing questions to confirm the belief is valid, but many are understandably hesitant to challenge whether a religious belief is sincerely held. Many employers are seeing requests for religious exemptions from 5% to 10% of their population. Some employers—especially in industries hardest hit by the pandemic, such as airlines and restaurants—have opted for policies of 100% compliance, meaning they only need to provide a reasonable accommodation to those opting out if it does not present undue hardship on the employer. Those with employees who can work remotely may have greater flexibility.

2. Should employers that have a multi-state population have multiple vaccine policies for each state, or is there a viable national policy?

That is a scenario the OSHA guidance was seeking to avoid and one that plays a role in the legal challenges to the mandate. As the courts finalize their decisions regarding the mandate, we should have clarity around what the federal vs. state requirements may be. In many instances, state variances may focus only around what types of employee exemption requests must be allowed, while other aspects of the policies may remain consistent from state to state.

3. Can you repeat the employer’s responsibilities for tracking vaccination status and what kind of technology exists for this, especially regarding reporting, to ensure we stay compliant?

On Friday, Dec. 17—just one day after our annual compliance webinar—the U.S. Court of Appeals for the Sixth Circuit dissolved the Fifth Circuit’s stay of the Vaccination and Testing Emergency Temporary Standard (ETS). Because the ruling has already received multiple appeals, it will likely make its way to the Supreme Court in early 2022.

Unless the Supreme Court rules otherwise, employers with 100 or more employees determine the vaccination status of its employees and require proof of vaccination. The U.S. Department of Labor will begin enforcing this rule on Feb. 9, 2022.

Apart from the OSHA ETS, many employers have already begun tracking vaccination status and implementing their own vaccine mandates for employees coming into the workplace. Businessolver has developed the COVID-19 Tracker to help their clients stay compliant.

4. Have there been any developments at the federal level regarding responsibility for COVID-19 testing costs?

The OSHA ETS states that employers are not responsible under the ETS for paying for the costs of testing. The obligation to pay for COVID testing arises under state law, and some states’ laws make employers responsible for paying for the costs of employee COVID testing that they require.

5. What trends are you seeing in terms of surcharges for unvaccinated employees?

Although some employers have chosen to place a surcharge on the health care premiums for unvaccinated employees, this is not a widespread practice among employers.

6. There are so many state efforts to ban or enforce vaccine mandates. Where can I find an updated list of which states are taking which positions?

The National Academy for State Health Policy has an interactive map you can use to learn the status of individual states’ efforts to:

• • Ban or enforce private employer mandated vaccinations
  • Mandate vaccines for state employees and health workers
  • Implement vaccine passports

7. Where can I learn about the rapidly developing topic of vaccine mandates?

For more information, check out the Seyfarth Shaw COVID-19 Vaccine Resource Center or subscribe to the Businessolver Blog.

Transparency in Coverage Rule

1. Is it likely that carriers will be rolling out solutions in support of the rule? Will those be compliant/sufficient?

Carriers will undoubtedly be supporting this. However, they may seek to put a bare-bones solution in place that is compliant but that may not maximize the benefits of this new law for plan participants and plan sponsors. Having user-friendly systems and promoting the self-service tools required within the rule holds the potential to create considerably more engaged and more informed consumers. Carriers have had the data necessary to create such tools for years, but have chosen not to. So, many plan sponsors may look to third parties to provide a more comprehensive set of end-user tools.

2. Are the Transparency in Coverage Rule and No Surprises Rule part of the same legislation?

No, but combined they pack a one-two punch for creating more empowered consumers. Without the Transparency Rule, plan participants wouldn’t know how much certain health care procedures would cost at different providers. And without the No Surprises Act, they couldn’t trust the information required by the Transparency Rule; that is, the possibility of a surprise bill would alter the final amount owed, regardless of what the patient had seen in the cost tool. So, while these regulations are unrelated, they combine to create a very different dynamic within health care consumerism.

3. When does the No Surprises Act become effective?

January 1, 2022.

Preparing for the End of COVID Relief

1. Which benefits-related forms of COVID relief are tied to the Public Health Emergency?

Many of the pandemic-related benefits initiatives have expired or are soon expiring (including the ARPA COBRA subsidy and the relaxation of many of the flexible spending plan rules), but other forms are tied to the Public Health Emergency. These include the tolling of deadlines for COBRA elections, COBRA premium payments, special enrollment and filing benefit claims. Further, health plans are required to cover COVID testing and vaccinations when provided out-of-network through the end of the Public Health Emergency.

State-Led Initiatives

1. Are California, Colorado, and Virginia the only states with their own data privacy regulations?

These are the only three to have adopted such comprehensive requirements. Many companies are finding that they must navigate a more complex set of data privacy rules, both in their roles as consumer-facing companies, and as employers. These three states are the first, but likely not the last to offer up more extensive data privacy requirements. We anticipate additional guidance in the months to come around Colorado and Virginia’s specific requirements.

2. What other state laws should we watch for?

The list is long, and ever-changing. Start by downloading the Businessolver Compliance Inventory and keeping an eye out for periodic updates. (Once you download it, we’ll send you notifications of new versions.) Also, many state insurance laws include additional continuation laws that would apply only to fully insured plans. While many carriers administer these continuation requirements, here’s a tip: if you offer fully insured plans, make sure to explore what the requirements are for each state these plans operate in.

3. Regarding the Illinois initiative, must the employer provide a comparison of the different medical plans offered within the company, or a comparison of procedures and services provided by other plans within the state that the company doesn't offer?

The disclosure notice requires that the employer provide the comparison of the plan-covered services to the Illinois Essential Health Benefit Listing. This comparison may vary by plan (if an employer offers more than one plan) so each plan will likely require a separate notice. To learn more, refer to the FAQ or the model notice.

4. With the Illinois requirement, what happens if you must answer, “No, our plan doesn't cover one of the listed benefits?”

This is a disclosure requirement, and not a coverage requirement. This notice requirement is to allow individuals to make informed decisions. It does not mandate that your plan offer this coverage. Note: fully insured plans within the state may have different coverage requirements than self-insured plans.

5. By what date must employers provide plan comparison information to employees?

This requirement became effective on the date it was signed by the governor on August 27, 2021.

6. Do the Illinois plan comparison requirements apply to all employees or just new hires?

The requirement is that this notice is provided upon hire, and annually thereafter. So, it applies to new hires and existing employees.

7. How do the Illinois plan comparison requirements impact employees who are covered by a union-based health and welfare plan? Is the employer required to provide this notice for their benefits?

This is not explicitly addressed in the requirements. They define an employer as “an individual, partnership, corporation, association, business, trust, person, or entity for whom employees are gainfully employed in Illinois and includes the State of Illinois, any State officer, department or agency, any unit of local government, and any school district.” And then later indicates that, “An employer that provides group health insurance coverage to its employees” must provide the notice. While the intent is likely to include these employers, the wording is subject to interpretation.

8. What is the penalty for failure to comply with the Illinois plan comparison requirements?

The state statutes outline the following:

Section 25. Penalties.

   (a) The Department may impose civil penalties as follows:

       (1) For an employer with fewer than 4 employees: a penalty not to exceed $500 for a first offense; a penalty not to exceed $1,000 for a second offense; and a penalty not to exceed $3,000 for a third or subsequent offense.

       (2) For an employer with 4 or more employees: a penalty not to exceed $1,000 for a first offense; a penalty not to exceed $3,000 for a second offense; and a penalty not to exceed $5,000 for a third or subsequent offense.

   (b) The appropriateness of the penalty to the size of the employer, the good faith efforts made by the employer to comply, and the gravity of the violation shall be considered in determining the amount of the civil penalty.

   (c) The amount of the penalty, when finally determined, may be recovered in a civil action brought by the Director of Labor in any circuit court. In this litigation, the Director of Labor shall be represented by the Attorney General.

   (d) Any administrative determination by the Department as to the amount of each penalty shall be final unless reviewed as provided in Section 20 of this Act.

Affordable Care Act

1. California requires employers to distribute 1095 forms (or at least that data) by January 31. Will the federal extension extend that timeline?

The California deadline won’t be automatically extended, although the state could align their deadlines with the federal ones. When Businessolver compliance experts spoke with the State of California last year, we asked about a possible extension. They replied that employers should remember there is no penalty for late notices. So, notices that meet the federal deadline wouldn’t incur a penalty in California.

2. When might we get confirmation whether the ACA reporting extension is made permanent?

At this point, the extension is considered permanent.

Legislative Action

1. What benefits-related items are included in the proposed “Build Back Better” Act?

The Act would reduce the affordability threshold for ACA purposes from 9.5% to 8.5%. This would require employers to revisit their premium structure to ensure coverage remains affordable.

Further, as currently proposed, the Act would include four weeks of paid family leave. Finally, the law would allow Medicare limited authority to negotiate prescription drug prices.

Agent and Broker Disclosure Requirements

1. What types of compensation are subject to the new agent and broker disclosure guidelines?

The CAA would apply to any service provider that reasonably expects to receive $1,000 or more in direct or indirect compensation for brokerage or consulting services for an ERISA welfare plan.

To view the deck, listen to the recording, and other resources, click the button below.