Benefits Brief November 2019

 

Open Enrollment Checklist

For employers operating their group health plans on a calendar year basis, now is the time of the year to prepare for open enrollment with respect to group health and welfare benefits.  Typically, the focus is on evaluating the services and performance of vendors, renewing rates and considering design changes.  In addition to these items, it is important for employers to address various legal requirements.

 

Inflation Adjustments in Annual Limits

Several annual limits apply to health and flex plans which may be adjusted each year for changes in the cost-of-living.  The new amounts should be considered upon renewal.

2019

2020

 

Maximum Annual Out-of-Pocket forNon-Grandfathered Health Plans for Non-HDHPs 

Individual $7,900 $8,150
Family $15,800 $16,300
 

Maximum Annual Out-of-Pocket for HDHPs

Individual $6,750 $6,900
Family $13,500 $13,800
 

Minimum Deductible for HDHPs

Individual $1,350 $1,400
Family $2,700 $2,800
 

Maximum Annual HSA Contribution

Individual $3,500 $3,550
Family $7,000* $7,100
Age 55 Catch-Up $1,000 $1,000
Maximum Medical FSA EmployeePre-Tax Contributions $2,700 $2,750

* Updated by the IRS (Rev.Proc.2018-18).

 

The above limits are all required to be followed except in the case of the medical FSA limit which is optional (employers can set a lower limit).  There are a couple of items to highlight the maximum out-of-pocket limit for non-grandfathered health plans.  First, the limit can be divided so a portion applies to the medical benefit and a portion applies to the prescription drug benefit.  This may be needed if the plan has separate medical and prescription drug administrators.  Second, if a plan has a family maximum out-of-pocket that is greater than the individual maximum out-of-pocket, there must be an embedded individual maximum out-of-pocket within the family limit so that no individual is subject to a maximum out-of-pocket greater than the individual amount.  For an HDHP, however, the embedded maximum out-of-pocket can’t be less than the minimum family deductible for HDHPs.

 

Preventive Care Benefits

Non-grandfathered plans must cover certain preventive care benefits at 100% with no participant cost-sharing.  The list of required preventive care is updated periodically on the Healthcare.gov website.  Employer group health plans must include any new items by no later than the beginning of the first day of the plan year starting one year after any new guidelines or recommendations are issued.  For example, employer group health plans operating on a calendar year must offer the following new preventive care items with no participant cost-sharing as of January 1, 2020:

Consult USPSTF Published Recommendations for Complete Listing

 

Annual Participant Notices

As you prepare the open enrollment materials do not forget about the required participant notices which must be furnished annually.

 

 

This Benefits Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

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