Compliance Corner
Welcome to Novo Connection's Compliance Corner, where transparency meets expertise in your new benefit program. We understand the evolving nature of compliance and how it can quickly become complex. At Novo Connection, our commitment to transparency ensures that you receive accurate and actionable information. Our webpage serves as a reliable resource for groups and advisors, offering insights, updates, and solutions tailored to navigate new compliance laws effortlessly.
Quarter 2 Compliance Updates
New Fiduciary Certification Requirement Under MHPAEA
April 1, 2025
In September 2024, federal agencies released a final rule to strengthen MHPAEA’s requirements. MHPAEA generally prevents health plans and issuers that provide mental health and substance use disorder (MH/SUD) benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical (M/S) coverage. In recent years, the U.S. Department of Labor has made MHPAEA compliance a top enforcement priority, with a primary focus being MHPAEA’s parity requirements for NQTLs. NQTLs are generally health plan provisions that impose nonnumerical limits on the scope or duration of benefits, such as prior authorization requirements, step therapy and provider reimbursement rates.
MHPAEA requires health plans and health insurance issuers to conduct comparative analyses of the design and application of NQTLs used for MH/SUD benefits compared to M/S benefits. Health plans and issuers must make their comparative analyses available upon request to federal agencies, as well as applicable state authorities and covered individuals.
Upcoming Deadlines
Form 5500 - July 31, 2025
For calendar year plans, the Form 5500 deadline (without extensions) is July 31, 2025.
PCORI Fee - July 31, 2025
Employers with self-insured health plans must report and pay fees to fund the Patient-Centered Outcomes Research Institute (PCORI) each year by July 31. Employers use IRS Form 720 to report and pay PCORI fees, which are based on the average number of lives covered under the plan. PCORI fees for plan years ending in 2024 are due by July 31, 2025.
The new final rule focuses on NQTLs to prevent health plans and issuers from using NQTLs to limit access to MH/SUD benefits to a greater extent than M/S benefits. The final rule also establishes minimum standards for developing comparative analyses to assess whether each NQTL, as written and in operation, complies with MHPAEA’s parity requirements. For health plans subject to ERISA, the comparative analysis must include a plan fiduciary’s certification confirming they engaged in a prudent process to select one or more qualified service providers to perform and document the plan’s comparative analysis and have satisfied their duty to monitor those service providers.
Employer-sponsored health plans must comply with new requirements for comparative analyses, beginning with the 2025 plan year (although some key requirements are delayed until the 2026 plan year). Employers with ERISA-covered health plans must ensure their comparative analyses include the required fiduciary certification that they have prudently selected and monitored their service providers. For more information regarding the new requirements or next steps, check out our recent webinar and as always reach out to your Client Experience team for more information.
RxDC Reporting
April 1, 2025
Group health plans must annually submit detailed information on prescription drug and health care spending to the federal government. This reporting is referred to as the prescription drug data collection (or RxDC report). The next RxDC report is due by June 1, 2025, covering data for 2024. Most employers rely on third parties, such as issuers, third-party administrators or pharmacy benefit managers, to prepare and submit RxDC files for their health plans. Your Client Experience team is actively working with the vendor partners to confirm what information may be required to complete this filing and will be reaching out to obtain any necessary information.