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.
Medicare Part D: Disclosure Notice to CMS
February 2025
Employers with health plans that provide prescription drug coverage to individuals who are eligible for Medicare Part D are subject to certain disclosure requirements. One of these requirements provides that plan sponsors must disclose to the Centers for Medicare and Medicaid Services (CMS) on an annual basis and at other select times, whether the plan’s prescription drug coverage is creditable or non-creditable.
This disclosure is required regardless of whether the health plan’s coverage is primary or secondary to Medicare. Plan sponsors are required to use the online form on the CMS Creditable Coverage webpage to make this disclosure.
The plan sponsor must complete the online disclosure within 60 days after the beginning of the plan year. For calendar year health plans, the deadline for the annual online disclosure is March 1 (Feb. 29 for leap years).
Links & Resources
Employers that are required to report to CMS should work with their advisors to determine whether their prescription drug coverage is creditable or non-creditable.
For more information, employers should also visit CMS’ Creditable Coverage webpage, which includes links to the online disclosure form and related instructions.
Annual Disclosure
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Each year, employers with health plans that provide prescription drug coverage to Medicare-eligible individuals must disclose to CMS whether that coverage is creditable or non-creditable.
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The annual disclosure must be provided within 60 days after the start of the plan year.​
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Creditable Coverage
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A group health plan’s prescription drug coverage is considered creditable if it is at least as generous as Medicare Part D prescription drug coverage.
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There are two permissible methods to determine whether coverage is creditable—a simplified determination method and an actuarial determination method.
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Disclosure to CMS
Group health plan sponsors are required to disclose to CMS whether their prescription drug coverage is creditable or non- creditable. This disclosure is required regardless of whether the health plan’s coverage is primary or secondary to Medicare.
If an employer’s group health plan does not offer prescription drug benefits to any Medicare Part D eligible individuals as of the beginning of the plan year, the group health plan is not required to submit the online disclosure form to CMS for that plan year.
Also, a plan sponsor who has been approved for the retiree drug subsidy is exempt from filing the CMS disclosure notice with respect to those qualified covered retirees for whom the sponsor is claiming the subsidy.
The disclosure must be made to CMS on an annual basis and whenever any change occurs that affects whether the coverage is creditable. More specifically, the Medicare Part D disclosure notice must be provided within the following time frames:
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Within 60 days after the beginning date of the plan year for which the entity is providing the disclosure to CMS;
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Within 30 days after the termination of a plan’s prescription drug coverage; and
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Within 30 days after any change in the plan’s creditable coverage status.
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Online Disclosure Method
Plan sponsors are required to use the online disclosure form on the CMS Creditable Coverage webpage. This is the sole method for compliance with the disclosure requirement, unless the entity does not have Internet access.
The disclosure form lists the required data fields that must be completed in order to generate the disclosure notice to CMS, such as types of coverage, number of options offered, creditable coverage status, period covered by the disclosure notice, number of Part D-eligible individuals covered, date the creditable coverage disclosure notice is provided to Part D-eligible individuals, and change in creditable coverage status. CMS has also provided instructions for detailed descriptions of these data fields and guidance on how to complete the form.
Newly Passed Legislation Modifies ACA Reporting Requirements
January 2025
On Dec. 23, 2024, President Joe Biden signed two bills into law that will streamline the Affordable Care Act’s (ACA)reporting requirements under Internal Revenue Code Sections 6055 or 6056. Under these reporting rules, certain employers and health coverage providers (reporting entities) must provide information to the IRS about the health plan coverage they offer (or do not offer) to their employees. They must also provide related statements to individuals regarding their health plan coverage.
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Individual Statements Only Required Upon Request
Under existing rules, reporting entities must provide annual statements to each individual who is provided minimum essential coverage (under Section 6055) and each full-time employee of an applicable large employer(under Section 6056). These statements are provided using Forms 1095-B and 1095-C; however, the IRS currently allows Forms 1095-B to be provided to individuals upon request if certain requirements are satisfied. ​
Effective Dates
​The changes apply for upcoming reporting that is due in early 2025. The specific effective dates are as follows:
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Statements Upon Request: These changes apply to statements with respect to returns for calendar years after 2023.
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Electronic Consent, Birth Dates: The changes related to electronic statements and substituting birth dates for TINs apply to returns and statements due after Dec. 31, 2024.
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Other ACA Provisions: The extended ALE response time will apply to assessments proposed in taxable years beginning after Dec. 23, 2024. The six-year time limit will apply with respect to returns due after Dec. 31, 2024.
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State Reporting Requirements: These changes apply to federal reporting requirements. Employers should continue to comply with applicable state requirements and monitor for changes.
The Paperwork Burden Reduction Act essentially codifies this alternative manner of furnishing Forms 1095-B and extends this flexibility to furnishing Forms 1095-C. Accordingly, reporting entities are no longer required to send Forms 1095-B and 1095-C to covered individuals unless a form is requested. Reporting entities must give individuals timely notice of this option in accordance with any requirements set by the IRS. Requests must be fulfilled by Jan. 31 of the year following the calendar year to which the return relates or 30 days after the date of the request, whichever is later.
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Electronic Consent for Individual Statements
The IRS currently allows reporting entities to offer Forms 1095-B and 1095-C to individuals electronically. The Employer Reporting Improvement Act codifies this flexibility and provides that statements can be provided electronically to individuals if they have affirmatively consented “at any prior time” (unless they have revoked such consent in writing).
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Substituting Birth Dates for TINs
The new legislation codifies the ability under Section 6055 to substitute a covered individual’s birth date in lieu of their taxpayer identification number (TIN). The legislation does not address whether reporting entities are still required to make reasonable efforts to obtain the TIN before doing so.
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Other ACA Pay-or-Play Provisions
Applicable large employers, or ALEs (generally those with 50 or more full-time employees), are subject to IRS penalties if they do not offer affordable minimum essential coverage under the ACA’s employer shared responsibility (“pay-or- play”) rules. The new legislation increases the time ALEs have to respond to IRS penalty assessment warning letters from 30 days to 90 days. The legislation also imposes a six-year time limit on when the IRS can try to collect assessments.