Before open enrollment begins, all group health sponsors should know about legal changes that will affect the design and administration of their health plans for plan years beginning on or after January 1, 2022. Once HR is aware of the legal changes, it’s time to review all plan documents to make sure they include all the changes and create an updated summary plan description (SPD) or a summary of material modifications (SMM) for plan participants.
Legal Changes Affecting Group Health Insurance Open Enrollment 2022
ACA Affordability Standard
The shared responsibility provisions (also called the employer mandate or “pay or play” rules) under the Affordable Care Act (ACA) require applicable large employers (ALEs) to offer affordable, minimum value health coverage to their full-time employees (and dependent children). If they fail to do so, they may face a penalty.
The 2022 affordability percentage is 9.61%, which is actually a decrease from the 2021 plan year affordability percentage of 9.83%. What this means is that employee contribution amounts for self-only coverage cannot exceed 9.61% of their household income in 2022.
If you are an ALE, you must ensure that you are offering at least one health plan to full-time employees (and their dependent children) that meets the ACA’s affordability standard.
Preventive care benefits
Non-grandfathered health plans are required by the ACA to cover a list of preventive health services at no cost to plan members. You will need to confirm that your plan covers – at no cost – the preventive care services that are included in the latest preventive care recommendations. Find the list here: U.S. Preventive Services Task Force.
Employers and employees share the costs of essential health benefits (EHB). Legally, there is an annual limit on the amount an enrollee can be asked to pay for their health insurance. For plan years beginning on or after Jan. 1, 2022, that out-of-pocket maximum limit is $8,700 for self-only coverage and $17,400 for family coverage. The only exception to this rule is for grandfathered health plans.
As group health administrator, you should review each plan’s out-of-pocket maximum to ensure that it complies with the ACA’s limits. If your plan uses multiple service providers to administer benefits, you will need to confirm that the plan coordinates all claims for EHB across the plan’s service providers or that it divides the out-of-pocket maximum across each category of benefits to create a combined amount that falls under the 2022 maximum limit.
HDHP and HSA limits
There are several out-of-pocket maximums that must legally be adhered to for employers that offer HDHPs in combination with HSAs.
1. The out-of-pocket maximum limit for a high deductible health plan (HDHP) used in combination with a health savings account (HSA) is $7,050 for self-only coverage and $14,100 for family coverage.
2. The HDHP minimum deductible for 2022 HDHPs is $1,400 for self-only coverage and $2,800 for family coverage.
3. The HSA contribution limit for 2022 HSA plans is $3,650 for self-only coverage and $7,350 for family coverage.
Plan administrators should check to see if the HDHP’s cost-sharing limits need to be adjusted to be in compliance with 2022 limits. In addition, 2022 HSA contribution limits should be communicated with employees during the open enrollment process.
Health FSA contributions
The ACA sets a dollar limit on the amount an employees’ salary may be reduced for contributions to a health flexible spending account (FSA) offered under a cafeteria plan. The dollar limit may change from year to year. The limit was $2,750 for 2021 plan years, but, as of the writing of this article the FSA limit for 2022 plan years has not yet been announced.
Group health administrators should watch out for an announcement on the 2022 limit and then ensure that their health FSA will not allow employees to make pre-tax contributions above that limit. The health FSA limit should also be communicated to employees during the open enrollment process.
*This post is meant to give a brief overview of legal changes coming for the 2022 plan year and is not intended to be a comprehensive list.
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