At its core, ERISA Wrap mandates that plan fiduciaries act solely in the best interests of plan participants and beneficiaries. This requirement can be perplexing. Does this imply that employers must always act in the best interests of their employees? Not quite. Employers can act in their best interests when setting up a plan—these decisions are known as “settlor” functions. During this phase, employers can prioritize their own interests. However, once they begin administering the plan, they assume a fiduciary role and must act in the best interests of the plan participants.

When acting on behalf of participants, employers must make sound decisions and demonstrate that those decisions are prudent. In the realm of retirement plans, many sponsors are already proficient in this practice. They often have investment committees that convene quarterly with investment advisors to ensure that their plans are well-managed, services are adequate, fees are reasonable, and investment objectives are met. So, what distinguishes health and welfare benefit plans?

Recent Events

The answer is: fundamentally, nothing. A recent lawsuit against Johnson & Johnson, filed on February 5, 2024, alleged breaches of fiduciary duty in managing the company’s prescription drug benefits. The suit claims that Johnson & Johnson and their benefits committee failed to act prudently, particularly in selecting and overseeing their Pharmacy Benefit Manager (PBM). Notably, the committee members were personally named in the lawsuit.

What stands out is that Johnson & Johnson had a health and welfare benefits committee that met regularly to evaluate and make decisions related to their plan. Many plans, however, do not have such committees, making them more vulnerable to legal challenges. Plan sponsors cannot delegate their fiduciary responsibilities to advisors, Third-Party Administrators (TPAs), or other solution providers. The responsibility rests solely with the sponsors.

What should plan sponsors do?

To fulfill these obligations, plan sponsors should consider establishing a fiduciary committee to make critical decisions on behalf of plan participants. This committee should operate under a formal corporate charter and meet regularly. Meetings should be well-documented to defend the decision-making process if ever questioned.

Additionally, a document repository should be created. This repository ensures the organized storage of plan documents, committee charters, meeting schedules, compliance calendars, proposed agenda items, and executive meeting summaries and transcriptions.

It’s crucial to note that fiduciary duty applies to all plan sponsors, regardless of the plan’s size or funding status. The complexity of decisions may vary, but the fundamental principles remain constant. For a small, fully insured plan, the primary fiduciary decision might be selecting the insurance carrier. In contrast, sponsors of large, self-funded plans might make numerous decisions annually.

Be proactive!

Now, more than ever, it is essential for plans and their fiduciaries to address these blind spots. To facilitate this transition, CXC Solutions has developed the Fiduciary Services program. This program offers individualized training to establish the necessary processes and infrastructure to meet fiduciary duties in compliance with ERISA Wrap. It includes a full-service solution with a Compliance Specialist available to answer questions and provide ongoing support.

By implementing these measures, plan sponsors can ensure they meet their fiduciary responsibilities, protect themselves from legal challenges, and, most importantly, act in the best interests of their plan participants.

For Fiduciary assistance , CXC Solutions is here to assist with all your compliance needs.  For more information, please contact us at info@cxcnetwork.com.

The post The Fiduciary Blind Spot appeared first on CXC Solutions.

As of 2021, per the Consolidated Appropriations Act (CAA), Prescription Drug Data Collection (RxDC) is now required for all insurance companies, pharmacy benefit managers (PBMs), and employers sponsoring group health plans. While administrators and PBMs are well versed in healthcare and benefits compliance, employers may need a helping hand with their legal obligations regarding this new requirement. Information that is not available to their administrator or PBM like overall plan information, enrollment, and premiums are left blank resulting in potential noncompliance. That’s where CXC Solutions comes in.

CXC now has a solution that takes care of the RxDC filing that administrators and PBMs may have missed in filing on behalf of our partners either by missing certain questionnaire deadlines or simply not asking at all. With our help, these two filings—P2 and D1—are taken care of for employers with just a few details and a few clicks of a mouse.

We’ve developed the following FAQs on RxDC to help employers understand what’s required, when it’s required, and a little more about the process that will get this information where it needs to go:

In a nutshell, CXC will work with employers, brokers, TPAs, and others to prepare and submit the D1 and P2 files on your organization’s behalf. We will collect the necessary data from you, perform calculations to complete the required fields, prepare written narratives that explain our process (if needed), deliver the results to you, then file everything with CMS. Once the submission is accepted, we’ll provide you with confirmation details so that you have proof that this component of RxDC reporting has been completed.

You can click here to learn more about our services and get in contact with a member of our team. We will be in touch with pricing and sign-up details as soon as they are available, which will be no later than April.

The post Prescription Drug Data Collection (RxDC) Reporting appeared first on CXC Solutions.

What are NQTL’s

NQTLs, or non-quantitative treatment limitations, are a type of limit on insurance coverage for mental health services that are not based on a numerical threshold, such as a limit on the number of visits or treatments covered. Instead, NQTLs can include a wide range of restrictions or conditions that affect access to mental health services.

Determining whether a particular restriction or condition is an NQTL can sometimes be challenging. However, the Mental Health Parity and Addiction Equity Act (MHPAEA) guides what types of limitations are considered NQTLs and must be equivalent to limitations applied to medical and surgical benefits. Additionally, the U.S. Department of Labor, which is responsible for enforcing MHPAEA, has issued guidance on NQTLs to help ensure that insurers are complying with parity requirements.

Examples of NQTLs:

1. Prior authorization requirements: Insurers may require individuals to obtain pre-approval before receiving certain mental health treatments, which can delay or prevent access to care.
2. Limitations on network providers: Insurers may limit the number or type of mental health providers that are covered under a plan, which can make it difficult for individuals to find a provider who is in-network and able to provide the care they need.
3. Medical necessity reviews: Insurers may conduct reviews to determine whether a particular mental health treatment is medically necessary, which can result in delays or denials of coverage.
4. Cost-sharing requirements: Insurers may require individuals to pay a higher percentage of the cost of mental health services compared to physical health services, which can create financial barriers to accessing care.

NQTLs can be more complex and varied. Insurance plans may use NQTLs to place limits on mental health services in ways that are not immediately apparent, which can make it more difficult for individuals to access the care they need.

By understanding NQTLs, employers can avoid…

1. Legal Compliance: Employers are required to comply with the Mental Health Parity and Addiction Equity Act (MHPAEA) and Affordable Care Act (ACA) regulations that require equal treatment of mental and physical health conditions. Failure to comply with these regulations can lead to penalties and lawsuits.
2. Avoiding Litigation: Employees who feel they have been denied access to mental health services or have been subject to discriminatory NQTLs may file lawsuits against their employers. Employers who do not understand NQTLs risk being exposed to legal action and costly settlements.
3. Employee Retention: Employees who feel that they are not being treated fairly and equitably may leave their jobs, which can result in a loss of talent and productivity for the employer. Understanding and properly implementing NQTLs can help improve employee morale and retention.
4. Positive Employer Branding: Employers who are seen as supportive of mental health care and who provide equitable access to such care can enhance their brand reputation, which can help attract top talent and improve customer loyalty.

It is crucial for employers to ensure compliance with legal requirements, avoid litigation, retain employees, and enhance their brand reputation.

If you need assistance with MHPAEA regulations and testing, CXC Solutions is here to assist with all your compliance needs.  For more information, please contact us at info@cxcnetwork.com.

The post Why is understanding NQTLs so important? appeared first on CXC Solutions.

A variable hour employee is an individual who, upon their date of hire, the employer cannot reasonably determine whether they will be working on average at least 30 hours per week.  In this case, their hours would be measured monthly to determine if they should be deemed full-time and eligible for benefits.  It’s important to only classify an employee as variable hour if their hours are unknown or highly likely to change.  If an employee is expected to work full-time hours, they should be classified as such and offered benefits after a waiting period of no longer than 90 days.  There are two measurement methods for variable hour employees: the Look-Back Measurement Method, and the Monthly Measurement Method.

What is the Look-Back Measurement Method?

This method uses the following periods to measure an employee’s hours over a duration of time to determine their eligibility.

• Measurement Period:  A measurement period must be between 3 and 12 months.  During this time, the employee’s hours are tracked then averaged to determine whether the employee worked at least 30 hours per week, or 130 hours per month, to be deemed full-time.
• Administrative Period:  The administrative period is optional and must be between 0 and 90 days.  However, the combined initial measurement and administrative periods cannot exceed 13 months.  This period is used to perform administrative tasks such as calculating hours worked, determining eligibility, and offering coverage to those deemed eligible.
• Stability Period:  The stability period must be between 6 and 12 months and must be at least the duration of the measurement period.  During this time, an employee’s status of full-time or part-time determined from their measurement period will apply.  If the employee is deemed full-time from their measurement period, they should be offered benefits for the duration of their stability period.  If the employee is instead deemed part-time, they would be ineligible for benefits for the duration of their stability period.  Their status of either full-time or part-time is locked in for the duration of the stability period, regardless of if their hours change during this time.

Standard measurement, administrative, and stability periods will occur on set dates each year, typically with the first stability period lining up with the employer’s plan year start date for benefits.  Each measurement period will immediately proceed the previous measurement period so that an employee’s hours are always being tracked.  If the durations of the measurement and stability periods are the same, each stability period will also immediately proceed the previous stability period.  If the duration of the stability period is longer than the duration of the measurement period, the stability periods will overlap, and the employee should be offered coverage during the months that overlap if they were deemed full-time for either of the stability periods.

New employees will enter an initial measurement period that will either begin on their date of hire or on the first day of the preceding month. They will then begin their first standard measurement period that begins after their date of hire.  Their initial measurement, administrative, and stability periods will typically overlap with their first standard measurement, administrative, and stability periods.  During the months that overlap within the measurement periods, any hours worked would be counted for each measurement period respectively.

What is the Monthly Measurement Method?

This method tracks an employee’s hours on a monthly basis.  If an employee works at least 130 hours during the calendar month, they would be deemed full-time and would be eligible for benefits that month.  If the employee instead works under 130 hours during the calendar month, they would be deemed part-time and would not be eligible for benefits that month.  Employers could instead use the optional Weekly Rule to calculate hours of service, where hours are counted for the week instead of the month.  For months calculated using four week-long periods, an employee with at least 120 hours of service is considered a full-time employee.  For calendar months calculated using five week-long periods, an employee with at least 150 hours of service is considered a full-time employee.

Which Measurement Method should I use?

The default method that is automatically elected with variable hour employees is the Monthly Measurement Method.  If an employer does not have a measurement period listed in their plan documents, they should use the Monthly Measurement Method.  If they would like to use the Look-Back Measurement Method instead, they would need to state this as their measurement period within their plan documents first.

The Look-Back Measurement Method is useful for employers with variable hour employees whose hours are highly volatile and subject to change each week.  Although it will take longer for employees to become eligible for benefits using this method, it will provide exact calculations of who should be eligible and when.

The Monthly Measurement Method is useful for employers with variable hour employees whose hours are relatively stable within a month but vary between months.  This method could provide employees with benefits sooner than using the Look-Back Measurement Method but is less exact since it will track hours for the month to determine whether the employee should be eligible for benefits that month.  Because of this, the Monthly Measurement Method is at a greater risk of falling out of compliance and can be more of an administrative burden, so it is typically not recommended over the Look-Back Measurement Method.

When can variable hour employees adjust their benefit elections?

In general, benefit elections can only be modified either during open enrollment or due to a qualifying event.  The same rules will apply for variable hour employees.  For all variable hour employees who are deemed full-time and eligible for benefits during open enrollment, they should be allowed to adjust their benefit elections with open enrollment.  Whenever they are deemed eligible for benefits for the first time, they should also be allowed to select their benefit elections for the remainder of the plan year, even if their eligibility begins after open enrollment.  Similarly, if an employee loses their eligibility, then regains it later within the same plan year, this would count as a qualifying event for them to select their benefit elections instead of simply resuming their prior elections from earlier in the year.

However, if the employer has multiple stability periods within the same plan year, a variable hour employee who simply maintains their eligibility from one stability period to the next would not qualify to adjust their elections at the start of the new stability period.  In other words, the beginning of a new stability period on its own would not count as a qualifying event within a plan year.  For example, if a variable hour employee is on a calendar year plan and deemed full-time for a stability period from January 1^st to June 30^th, then deemed full-time again for a stability period from July 1^st to December 31^st, their elections would simply continue to the end of the year, and they would not be able to adjust their elections for July 1^st.

How are variable hour employees reported under the Affordable Care Act?

Any variable hour employees of an applicable large employer (ALE) who are deemed full-time and thus eligible for benefits at any point during the tax year should receive a 1095 form for that year.  For months that they were in an initial measurement period or initial administrative period, they should be indicated to be in a waiting period for that month.  Any months that they were eligible for coverage, they should have the appropriate codes for either enrolling in coverage or waiving coverage unless they were not offered coverage.  Any months that they were deemed part-time, they should be indicated to be part-time for those months.

If you need assistance with tracking the eligibility of your variable hour employees to complete your ACA Reporting, CXC Solutions is here to assist with all your compliance needs.  For more information, please contact us at info@cxcnetwork.com.

The post Understanding Variable Hour Employees appeared first on CXC Solutions.

Featured Guest: Keyashia Barkins Grissom, Esq

Question:

When the Department of Labor evaluates a company for compliance, what is included in a full-scale investigation?

Answer:

CXC Solutions offers comparative analyses and remedies for plans not in compliance with MHPAEA. If your organization is seeking assistance, please contact us at info@cxcsolutions.com or go to Contact Us – CXC Solutions.

Please join us next time when the Department of Labor looks into a company or corporation, how far or deep do they go when looking for compliance!?

The post Mental Health Parity (MHPAEA) Educational Interview Episode 2. appeared first on CXC Solutions.

Featured Guest: Keyashia Barkins Grissom, Esq.

Recorded March 2022

Question:

When did the Department of Labor shift the focus from retirement to health plans and mental health and your advice or opinion on what this shift entails?

Answer:

CXC Solutions offers comparative analyses and remedies for plans not in compliance with MHPAEA. If your organization is seeking assistance, please contact us at info@cxcsolutions.com or go to Contact Us – CXC Solutions.

Please join us next week as we dive deeper into what happens when the Department of Labor initiates a full-scale investigation!

The post Mental Health Parity (MHPAEA) Educational Interview Episode 1. appeared first on CXC Solutions.

What is MHPAEA?

The Mental Health Parity Act of 1996 (“MHPA”) mandated large group health plans (those with more than fifty employees) cannot impose annual or lifetime dollar limits on mental health benefits that are less favorable than limits imposed on medical/surgical benefits. The Mental Health Parity and Addiction Equity Act of 2008 (hereinafter “MHPAEA”) conserves MHPA protections and adds parity requirements to substance use disorders. MHPAEA requires group health care plans ensure financial requirements and treatment limitations on mental health or substance use disorder (MH/SUD) benefits are no more restrictive than medical or surgical (M/S) benefits. MHPAEA also sets minimum standards for group health plans and issuers on parity requirements. Further, the Consolidated Appropriations Act of 2021 (hereinafter “CAA”) amended MHPAEA requiring group health plans that offer both M/S and MH/SUD benefits to perform and document comparative analyses of Quantitative Treatment Limits (hereinafter “QTL”) or Non-Quantitative Treatment Limits (hereinafter “NQTL”) that apply to the plan.

To whom does this apply?

MHPAEA requires the vast majority of group health care plans, along with group and individual health insurance issuers to comply. If a plan offers any MH/SUD benefits, the plan will need to ensure that the treatment of all MH/SUD benefits are in parity with M/S benefits. Some states require plans to offer certain MH/SUD benefits, which means plans in those states will not have the option to exclude all MH/SUD benefits, meaning they are subject to MHPAEA.

Why Should I Comply?

The tri-agencies (Departments of Labor (“DOL”), Health & Human Services (“HHS”), and Treasury) are responsible for MHPAEA enforcement. In 2021, the Employee Benefits Security Administration (“EBSA”) investigated 148 healthcare plans with 74 plans subject to MHPAEA including 17 fully insured plans, 41 self-insured plans, and 16 plans that offered both fully insured and self-insured options. EBSA cited 14 MHPAEA violations in 12 of the investigations. In August 2021, United Healthcare settled at $15.6 million over MHPAEA violations. If the DOL deems your plan noncompliant, the plan must notify all individuals enrolled in the plan of this noncompliance with MHPAEA and participants can sue the plan sponsor under ERISA for violating MHPAEA. The Departments will also share findings of noncompliance with the State where the group health plan is located.

When is the Deadline?

Per a prior investigator with the DOL, once the DOL requests a comparative analysis from the plan sponsor, it is already too late. The CAA required group health plans and health insurance issuers to conduct comparative analysis and make available upon request by February 10, 2021. Upon review if the DOL, Health and Human Services, and Treasury found the plan out of compliance with MHPAEA, the plan would have 45 days for corrections. If the plan remained out of compliance, the plan was to notify all enrolled individuals of noncompliance within seven days.

The 2022 MHPAEA Report to Congress highlights recent emphasis on greater MHPAEA enforcement.

How do I comply?

Group health plans and health insurance carriers are required to perform comparative analyses to demonstrate compliance with mental health parity requirements and modify plans, as needed. These analyses include identification and classification of all treatment limitations within the plan documents and identification of treatment limitations in operation. Moreover, the analyses must establish parity by citing specific examples of treatment limitations and how treatment limitations are applied equally between M/S and MH/SUD benefits. These comparative analyses must be detailed and specific.

Where do I start?

CXC Solutions offers comparative analyses and remedies for plans not in compliance with MHPAEA. If your organization is seeking assistance, please contact us at info@cxcsolutions.com or go to Contact with us – CXC Solutions.

The post What is Mental Health Parity or MHPAEA appeared first on CXC Solutions.

New Year, New Forms!

In July of 2021, the IRS released an updated draft of the 1095-C Forms for 2022. With the IRS reporting deadline approaching in early 2022, it is important for employers to make note of a few updates to their employee 1095-C forms.

So what are 1094/1095-C Forms, and what is their purpose?

In 2010, the Affordable Care Act, or ACA, was enacted to make affordable health insurance available to more people. With the passing of the Affordable Care Act, all employers with 50 or more employees (known as Applicable Large Employers or ALE’s) are now required to offer health coverage to all eligible employees. This coverage information is submitted to the IRS via the 1095-C Form for each eligible employee, even if the employee chose not to enroll in an employer health plan. The 1095-C form includes employee-specific information, including:

• Employee’s first and last name
• SSN
• Full Address
• Employer name, Employer Identification Number (EIN), Employer Address, Employer Contact Phone Number
• Offer of coverage codes by month, Employee Monthly Contribution Amount, and Affordability Safe Harbor Code

Then what is the 1094-C Form?

The 1094-C Form, submitted at the same time as the employee 1095-C Forms, is used to submit employer information to the IRS, including:

• The total number of employees in an organization
• The number of 1095-C forms that are being filed for the tax year
• Employer name, Employer Identification Number (EIN), Employer Address, Employer Contact Phone Number
• Certifications of eligibility
• Minimum essential coverage offer indicator
• Any additional employer names associated with the ALE

So what’s new to the 1095-C Forms?

The IRS has added two additional codes to the 1095-C Form for 2022, which will apply to the 2021 reporting year. The new codes are 1T and 1U. The code 1T will apply when an Individual Coverage HRA (ICHRA) is offered to an employee and spouse without dependents, and plan affordability is determined by the employee’s ZIP code. The Code 1U will also apply when an ICHRA is offered to an employee and spouse without dependents, except plan affordability is instead determined by the ZIP code of the employee’s primary employment site. If an employer does not offer ICHRA coverage to it’s employees, then the new 1Tand 1U codes will not need to be used on the employee 1095-C Forms. Employers should note that the form codes first introduced during the 2020 tax year are still present in the 2021 forms, in addition to the new 1T and 1U codes.  

Source: https://blog.bernieportal.com/irs-releases-draft-2021-form-1095c

The post New 1095-C Forms for 2021 ACA Filings appeared first on CXC Solutions.

If you haven’t started with ACA reporting, now is the time.

Who does the IRS require to report?

There are two sections of the IRS Code that defines who is required to report health insurance coverage information to the IRS. 

Under Section 6055, any individual or organization that provides minimum essential health insurance coverage to individuals must report this information to the IRS. Few examples are government sponsored plans, individual market plans and employer self funded plans. These entities are generally required to file 1095B forms to the IRS

Under Section 6056, any employer with 50 or more full-time/ full-time equivalent employees (ALE) is required to provide minimum essential coverage health insurance and report this coverage both to the IRS and the respective employees. ALEs are required to file coverage information on 1095C forms.

When are the deadlines for reporting?

All paper filed forms must be filed with the IRS no later than February 28, 2022, however, if you choose to e-file, the forms are not due until March 31, 2022. Employers filing over 250 forms are required to e-file.

Are there any changes to reporting requirements for 2021?

IRS Adds New ICHRA Codes on Line 14 of 2021 ACA Form 1095-C. In 2021, the IRS released a Form 1095-C draft, which adds two new 1095-C codes for employers to meet the ICHRA reporting requirements.

Are you ready to get started? 

CXC is ready to help fulfil your ACA requirements for tax year 2021. We offer a comprehensive Full-Service solution for your ACA needs.

We can help you determine employee eligibility for coverage, track variable hour employees, calculate and generate codes based on employee records or generate forms and e-file.

CXC Solutions offers the industry standard in ACA compliance services. If your organization is seeking assistance for your ACA filing needs please contact us at info@cxcsolutions.com or go to https://www.cxcsolutions.com/contact/

The post Understanding Your ACA Reporting Requirements Ahead of the Season appeared first on CXC Solutions.

Starting the 4th Quarter

Have you ever received an email that started off with something along the lines of “Happy 4th Quarter!”? Were you tempted, like I’ve been, to respond and say something like “actually, it’s 8th quarter from last year – it never stopped!”?

No matter your position within your Broker or Consulting team, you know firsthand that the concept of the “busy season” is a forgotten one. In fact, based on my years as a Sr. Account Manager at one of the largest consulting firms, I’d be willing to bet that you’re triaging umpteen carrier renewals, multiple open enrollments, pricing negotiations, employee claims issues, vendor integrations, and complex benefits compliance tasks – all at the same time!

Questions, Questions & more Questions

If I had to be completely honest, it’s that last piece, the benefits compliance stuff, that could really throw my clients (and me) for a loop. Does the client have over 50 Full-Time Equivalent Employees? Oh great, that means they’re subject to annual ACA Reporting – when is that due again? Do they have 100 or more enrolled employees in any one ERISA plan? Mark your calendars because we can’t forget about Form 5500 filing! Speaking of which, are all their plans ‘wrapped’ within a WRAP Document for ease of filing, cost savings, and for ERISA language compliance across all their ERISA benefits? Speaking of benefits, they just added that new pretax plan for their executive class – what if that would fail annual Nondiscrimination Testing? And where in the WORLD is their written Cafeteria Plan Document?

Identifying these key compliance tasks isn’t even half the battle. Even when you have every client’s compliance needs identified, your calendar of events laid out, and key deadlines mapped, you still have to find a trusted vendor that can service each and every one of these complex tasks; often choosing multiple vendors to service a single client!

The Answer

Well, what if I told you there’s a solution? What if I told you that we at CXC Solutions are the premier, one-stop shop for all things benefits compliance related? What if we could not only service all your clients’ benefits compliance needs, but also help you identify those needs to begin with, and map out a comprehensive list of compliance tasks for each of your clients throughout the year? That my friends is exactly what we do and that is why we are the go-to solution for hundreds of Broker Agencies, Consulting Firms, General Agencies, and TPA’s nationwide!

CXC Solutions offers the industry standard in benefits compliance services. If your organization is seeking a one-stop shop for your or your clients’ compliance needs please contact us at info@cxcsolutions.com

The post CONFESSIONS OF A FORMER SR. ACCOUNT MANAGER appeared first on CXC Solutions.