Benefits Monthly Minute
The February Monthly Minute addresses new IRS electronic filing requirements, the extension of pre-deductible telehealth coverage, and the end of the public health and national emergencies’ impact on benefit plan coverage and administration.
Final Rules on Electronic Filing Requirements
Earlier this month, the IRS released final regulations amending the rules for filing returns electronically. The rules dramatically reduce the number of returns a taxpayer may file without trigging the electronic filing requirement from 250 returns to 10 returns. Under the new rules, the threshold is determined by aggregating most information returns (e.g., W2, 1099, etc.). Accordingly, Form 5330 must be filed electronically if the filer must file at least 10 returns in the calendar year that the Form 5330 is due. Similarly, Form 5500 must be filed electronically if the filer is required to file at least 10 returns during the calendar year that includes the first day of the plan year. And, ACA reporting (Form 1094/1095) will need to be electronically filed if the number of ACA returns, aggregated with other information returns, is at least 10. These new rules generally apply to returns required to be filed in calendar year 2024.
KMK Comment: Considering the drastically reduced threshold for electronic filing, many smaller entities will be impacted by the new rules. While the delayed effective date is intended to give affected parties sufficient time to prepare and comply, plan sponsors should become familiar with the IRS’ new electronic filing requirements and procedures to ensure a smooth transition given the IRS will provide hardship waivers only in select circumstances.
Pre-Deductible Telehealth Coverage Extended
For plan years beginning before January 1, 2025, the Consolidated Appropriations Act of 2023 extended the ability of HDHP plan sponsors to reimburse telehealth services before meeting the deductible. As a reminder, the CARES Act had permitted HDHPs to cover telehealth service before the deductible is met, and this coverage was extended under subsequent legislation through December 31, 2022. This latest extension, generally applicable to the 2023 and 2024 plan years, signals an ongoing willingness to encourage the use of telehealth services by HDHP participants.
KMK Comment: HDHP plan sponsors should work with third party administrators to determine how telehealth coverage is being administered. Plan participants should also be informed about whether these services are covered before their deductible is met.
The End (of the Public Health and National Emergency) Is Near
The Biden Administration recently announced the public health emergency and the national emergency will come to an end on May 11, 2023. Notably, the end of the national emergency means the elimination of the outbreak period relief that applied to HIPAA special enrollment and COBRA deadlines, claim and appeal timeframes, and certain participant notices and disclosures. The end of the public health emergency means plans no longer have to cover, without a copay or prior authorization, either COVID vaccines from non-network providers or COVID testing.
KMK Comment: Plan sponsors will need to carefully weigh whether these changes will be implemented in full or in part, and when to implement these updates. For example, employers who wish to encourage COVID testing and/or vaccinations may opt not to apply prior authorization or copays to these services. It is also essential to coordinate coverage and plan administration changes with service providers and keep participants informed as modifications are made consistent with ERISA notice and disclosure requirements.
The KMK Law Employee Benefits & Executive Compensation Group is available to assist with these and other issues.
KMK Employee Benefits and Executive Compensation email updates are intended to bring attention to benefits and executive compensation issues and developments in the law and are not intended as legal advice for any particular client or any particular situation. Please consult with counsel of your choice regarding any specific questions you may have.