As we step into 2024, employers with self-funded or level-funded health plans face a series of important compliance deadlines and requirements. From Section 105(h) nondiscrimination testing to the latest updates on Machine-Readable Files and Medicare Part D Disclosure, staying on top of these obligations is crucial. This blog provides an overview of the key deadlines and what they entail, helping employers ensure they remain compliant throughout the year.

Key Deadlines and Compliance Requirements

Jan. 1st: Section 105(h) Nondiscrimination Testing

• Applicability: Employers with self-funded health plans.
• Requirement: This rule prohibits discrimination in favor of highly compensated individuals (HCIs) regarding eligibility and benefits.
• Action Steps: Employers should review their plans for compliance. HCIs must include excess benefits in gross income. Non-compliance may result in an excise tax or penalty of up to $100 per day per discriminated individual.

Jan. 1st: Transparency in Coverage (TiC) Machine-Readable Files

• Applicability: Employers with Self-funded/Level-Funded health plans.
• Requirement: Update three Machine-Readable Files (MRFs) disclosing in-network rates, out-of-network allowed amounts, billed charges, negotiated rates, and historical net prices for prescription drugs.
• Action Steps: Collaborate with a third-party administrator for compliance. Non-compliance can lead to a $100 per day per participant penalty.

Jan 31st: Individual Mandate Reporting

• Applicability: Employers with employees in Massachusetts (6 or more employees).
• Requirement: Provide Form MA 1099-HC to all Massachusetts resident employees.
• Penalty: $50 per individual, up to $50,000 maximum.

Feb. 28th: Section 6055 Reporting (Paper Filing Deadline)

• Applicability: Employers that are not Applicable Large Employers (ALEs) and offer Self-Insured / Limited Premium Plans.
• Requirement: File Form 1094-B and 1095-B with the IRS (electronic filing deadline is March 31st).
• Penalty: $280 per form for inaccurate filing.

Mar. 1st: Medicare Part D Disclosure to CMS

• Applicability: Group health plans offering prescription coverage to individuals eligible for Medicare Part D.
• Requirement: Disclose to CMS whether coverage is creditable or non-creditable using CMS’s Online Disclosure Form.
• Note: No penalties for failing to file timely.

Mar. 1st: Form M-1 Filing for MEWAs

• Applicability: Multiple Employer Welfare Arrangements (MEWAs).
• Requirement: File an annual Form M-1.
• Penalty: Up to $1,881 per day for late filing.

Mar. 1st: Section 6055/6056 Individual Statements

• Applicability: Employers that are not ALEs offering Self-Insured / Limited Premium Plans.
• Requirement: Furnish Form 1095-B to employees (extended from Jan 31st deadline).
• Penalty: Up to $280 per form for failing to furnish accurate forms.

The subsequent months bring additional deadlines, including electronic filing requirements for Section 6055/6056 reporting, individual mandate reporting for specific states and cities, the Prescription Drug Reporting (RxDC), the PCOR Fee, Form 5500 filing, and the Medical Loss Ratio (MLR) Rebates.

Conclusion

Staying ahead of these compliance deadlines is essential for employers with self-funded health plans. Each requirement and deadline carries its own set of challenges and potential penalties. Employers should work closely with their HR teams, legal advisors, and third-party administrators to ensure all aspects of their health plan comply with these federal and state regulations. Proactive compliance not only avoids penalties but also ensures the smooth operation of health benefits for all employees.