Compliance Bulletin | December 2024

Welcome to the December 2024 edition of the Baldwin Bulletin, a compliance newsletter by the Baldwin Regulatory Compliance Collaborative (“BRCC”).

The Baldwin Bulletin serves as a monthly guide to important regulatory developments, legal news, and employee benefits-related industry happenings designed to keep you abreast of the latest developments.

This month’s issue focuses on important upcoming compliance deadlines and includes our timeline of upcoming compliance requirements, in addition to providing information regarding certain hot-button compliance issues significantly impacting employers.

Upcoming Compliance Deadlines.

For information regarding upcoming 2024 and 2025 compliance deadlines for employer-sponsored group health plans, read more here.

2024 HIPAA Privacy and Security Rule Training Calendar.

This year’s BRCC HIPAA training calendar is available here.

2024 BRCC Educational Webinar Calendar.

The BRCC’s monthly educational webinar series calendar for 2024 is available here.

2024-2025 Affordable Care Act (“ACA”) Reporting Office Hours with BRCC Compliance Experts.

The BRCC announces a new series of open office hours with our ACA compliance experts, designed specifically for the 2024-2025 reporting season. Whether you are looking for guidance on the latest regulatory changes or need help with ACA reporting forms, our experts are here to assist.  More information is available here.

Summary Annual Report (“SAR”) due December 15th for Calendar Year Plans with Form 5558 Extensions.

Employers who are required to submit a Form 5500 for their employee benefit plans also have an obligation to distribute a summary annual report (“SAR”) to those participating in the plan. Essentially, the SAR provides a condensed version of the details contained within the Form 5500.

For calendar year plans, typically the SAR is provided by September 30th – this is two months after the filing deadline of a calendar year 5500 (July 31st). However, if the employer received an extension of time to file its Form 5500 (which would be from July 31st to October 15th), the deadline for providing the SAR to plan participants is December 15, 2024.

The Department of Labor (“DOL”) has issued a template SAR relevant to welfare plans for those plan years commencing in 2023 and beyond. The SAR can be delivered via U.S. mail, personal delivery, or electronically, provided specific criteria are met. Read more here.

Internal Revenue Service (“IRS”) Releases Draft Publication 15-B (Fringe Benefits).

The Internal Revenue Service (“IRS”) issued an early release draft of their annual Publication 15-B. The draft contains tax forms, instructions, and other resources provided to the public for information only purposes. The IRS requests that those subject to file forms under any topic presented in 15-B not file any draft form. The IRS provides an overview of significant changes on the coversheet, but please be aware future legislation or regulation may be subsequently passed or published. All IRS forms and instructions are subject to Office of Management and Budget (“OMB”) approval before they can be officially released. Draft Publication 15-B covers the rules for Fringe Benefits and for the purposes of this Bulletin, we will focus on the commuter benefits. Read more here.

Nondiscrimination in Action, Part III: Group Term Life Insurance Plans.

The third white paper article from the Baldwin Regulatory Compliance Collaborative “Nondiscrimination in Action” series, is published here on the topic of group term life insurance coverage deductibility.  Group term life insurance coverage is deductible by employers as a business expense, unless the employer is a beneficiary of the policy. Employees may also generally exclude coverage up to $50,000 from their income. Coverage above that amount must be included in an employee’s income and is subject to Social Security and Medicare taxes. Read more here.

IRS Expands List of Preventive Care Benefits for High Deductible Health Plans (“HDHP”).

On October 17, 2024, the IRS issued Notice 2024-75 (“Notice”) to expand the list of preventive care benefits permitted to be provided by a high deductible health plan (“HDHP”) on a pre-deductible basis (or with a deductible below the minimum deductible) to include new services such as over-the-counter medications and certain birth control, mammogram services and diabetic products. These rules apply to fully insured, level-funded, and self-insured plans. Read more here.

HHS Office for Civil Rights Settles 2 Ransomware Cybersecurity Investigations totaling $590,000.

On October 6 and 31, 2024, the Department of Health and Human Services (“HHS”) and the Office for Civil Rights (“OCR”) announced settlements with Plastic Surgery Associates of South Dakota in Sioux Falls (“PSASD”) and Bryan County Ambulance Authority (“BCAA”), respectively, concerning potential violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Security Rule. PSASD agreed to a $500,000 settlement following an OCR investigation into a ransomware attack breach, while BCAA settled for $90,000 in relation to a similar ransomware attack on its information systems. Read more here.

California Corner: California Enhances Oversight of Recordkeeping and Claim Reimbursement Requirements for Health Care Service Plans.

On September 27, 2024, Governor Newsom signed Assembly Bills AB 3221 and AB 3275 into law. These laws aim to enhance accountability, transparency, and compliance for health care service plans regulated by the Department of Managed Health Care (“DMHC”) under the Knox-Keene Act of 1975 (as amended). California defines a “health care service plan” as any entity or person that arranges for health care services for enrollees, pays for or reimburses some or all of the costs of those services, or receives a prepaid or periodic charge from enrollees or on their behalf in exchange. Common examples include Health Maintenance Organizations (“HMOs”) and Medi-Cal managed care plans. It should also be noted that self-funded plans are excluded from these legislative changes. Read more here.

Mandatory Extension of Certain Deadlines for Health Benefit Plans Due to Recent Natural Disasters.

On November 8, 2024, the Employee Benefits Security Administration, the Department of Labor, and the Internal Revenue Service, Department of the Treasury (collectively, the “Departments”) issued a joint notice that included deadline relief to ensure that employee benefit plans (covered by Title I of the Employee Retirement Income Security Act (“ERISA”) or the Internal Revenue Code (“IRC”), participants, beneficiaries, qualified beneficiaries and claimants in disaster areas are not further adversely affected by Hurricane Helene, Tropical Storm Helene and Hurricane Milton. Read more here.

Navigating FMLA Compliance During Mergers and Acquisitions (a BRCC White Paper).

Mergers and acquisitions (“M&As”) are complex transactions with far-reaching implications, including potential impacts on compliance obligations, liabilities and rights. One crucial area where compliance must be carefully managed is under the Family and Medical Leave Act (“FMLA”). The analysis delves into a detailed understanding of the FMLA and offers guidance with the complexities of maintaining compliance and performing due diligence during M&A transactions. This includes particularized emphasis on the concept of ”successor in interest” and provides real-world scenarios relating to FMLA compliance. The aim is to ensure protection of employees’ rights and mitigate potential legal and financial risks for the buying company. Read more here.

The Mental Health Parity and Addiction Equity Act (“MHPAEA”) Final Rule and its Intersection with the ACA §1557 Final Rule.

The Mental Health Parity Addiction and Equity Act (“MHPAEA”) provides regulations designed to ensure parity between employee benefit plans covering Mental Health and Substance Use Disorders (“MH/SUD”, or collectively “Behavioral Health”) and plans covering Medical and Surgical benefits (“M/S”). Section 1557 of the Affordable Care Act (“ACA”) was designed to prevent discrimination in health programs and activities based on race, color, national origin, sex (including pregnancy, sexual orientation, gender identity, and sex characteristics), and age.

These two final rules intersect with one another on the topic of treatment of the Behavioral Health condition of gender dysphoria. Read more here.

Question of the Month.

Our “Question of the Month” concerns determining applicable large employer (“ALE”) status under the Affordable Care Act (“ACA”). Read more here.