Benefits Bulletin: Health and Welfare Plans – May 2022 – Employee Benefits and Compensation
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EMPLOYER GROUP HEALTH PLANS AND ABORTION COVERAGE
Employers who sponsor self-insured group health plans for their employees are wondering if they should take action in light of the recent leak of the Supreme Court’s draft opinion quashing Roe v. Wade and Planned Parenthood of Southeastern Pennsylvania v. Casey. If Roe and Casey are canceled, whether or not abortion is legal will be up to each state and will be governed state by state.
An issue as politically charged as abortion could impact trustees of group health plans. For example, trustees of group health insurance plans have a fiduciary duty to act in the best interests of their members and beneficiaries. If the group health plan decides whether or not to cover abortion or abortion-related services, how will such a decision be considered from a fiduciary perspective? The United States Department of Labor, one of the entities that regulates group health insurance plans, may issue additional guidance on the fiduciary issue.
Employers who operate their businesses in multiple states will likely face different coverage rules when it comes to abortion coverage for their employees and dependents, depending on where those employees and dependents live, work and receive health care. Given that this question involves strong opinions on both sides, the question of whether the group health plan covers abortion and/or abortion-related services, and under what circumstances, could give rise to problems employee relations, including consideration of an employee’s hiring decision. Depending on whether the group health plan covers abortion or abortion-related services, this could also impact customers and whether they use or continue to use the products and services provided by the company. In addition, publicly traded companies and their boards could face potential lawsuits from investors.
Some states already have laws that will go into effect if the draft opinion is in fact the opinion issued by the Supreme Court. For example, in Texas, under a law passed last year, Texas would make abortions illegal except in cases where the mother risks death or serious impairment, while in Illinois abortions will remain legal. Navigating these different rules in different states will be very difficult from a plan administration perspective.
We are currently working with employers to holistically review their group health plan coverages. If an employer wishes to preserve the ability to provide current coverage, we suggest benefit changes that are more neutral in nature, rather than focusing on abortion coverage per se. Please contact us or your Winston & Strawn attorney to discuss these matters in more detail.
IRS RELEASES 2023 INFLATION ADJUSTED AMOUNTS FOR HSAS, HDHPS AND HRAS
The IRS recently released Rev. Proc 2022-24 listing 2023 indexed amounts for Health Savings Accounts (HSAs), High Deductible Health Plans (HDHPs), and Excluded Benefit Healthcare Reimbursement Plans (HRAs). The following table lists the current amounts for 2022 and the new amounts for 2023:
|Calendar year 2022||Calendar year 2023|
|Self-only coverage||Family coverage||Self-only coverage||Family coverage|
|Annual HSA contribution limit||$3,650||$7,300||$3,850||$7,750|
|Minimum annual deductible HDHP||$1,400||$2,800||$1,500||$3,000|
|Amount disbursed HDHP
(Deductibles, co-payments and other amounts, but not premiums)
The tax procedure also provides that for plan years beginning in 2023, the maximum amount that can be made available for the plan year for an excluded benefit HRA is $1,950 (compared to $1,800 in 2022).
The 2023 adjustments are significantly higher than previous years as they are based on the increase in CPI-U for the 12 month period ending March 31, 2022which was 8.5% for all items before seasonal adjustment.
winston take away: It is a welcome change to have these 2023 limits so early in 2022. Employers should review these new limits while planning benefits for 2023 open enrollment. Please contact a benefits and compensation attorney Winston & Strawn executives for any questions regarding these updates and their impact on your benefit plans.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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