Compliance Update: 2024 Fall Employee Benefits Changes Explained

By Erin Powell, RHU® | Seubert Compliance Officer

This update covers critical changes and new requirements affecting employee benefits. Key topics include the Affordable Care Act’s 2025 affordability percentage, Gag Clause Prohibition Compliance Attestation, Medicare Part D Creditable Coverage disclosures, new HIPAA reproductive health rights, and updates to the Mental Health Parity and Addiction Equity Act. Stay ahead of these developments to ensure your organization’s compliance with the latest regulations and avoid potential pitfalls.

Affordable Care Act
2025 Affordability Percentage
The Internal Revenue Service (IRS) has set the 2025 affordability percentage as 9.02% for applicable large employers (ALEs) who sponsor a group health plan renewing on or after January 1, 2025.  The single-only employee contribution must not exceed 9.02%, calculated using an affordability safe harbor method (W-2, Rate of Pay, or Federal Poverty Limit) to avoid ACA §4980H Penalty B amounts.

Forms 1095/1094
The IRS has issued 2024 final Forms 1094 and 1095.  There are no changes from 2023.  Applicable large employers (ALEs) and small employers who sponsor a self-insured group health plan, including level funded plans and individual coverage health reimbursement arrangements (ICHRAs), are required to issue employees with a Form 1095 by March 3, 2025.  Filing all Forms 1095 with a Form 1094 is required to be completed electronically with the IRS by March 31, 2025.  Please note that most employers cannot electronically file directly with the IRS AIR Program, use of third party software or vendor is needed.  Additional information can be found here.

Several states also have an employer reporting requirement, including California, the District of Columbia, Massachusetts, New Jersey, Rhode Island, and Vermont.  Further information on state filing requirements can be found here.

Gag Clause ProhibitionCompliance Attestation (GCPCA)
The Consolidated Appropriations Act, 2021 (CAA) included new transparency rules for group health plans that require an annual Gag Clause Prohibition Compliance Attestation (GCPCA) that the plan did not enter into any agreements with a healthcare provider, network or association of providers, third-party administrator, or other service provider offering access to a network of providers that would directly or indirectly contain a gag clause.

Plans and issuers must annually submit an attestation of compliance with these requirements to the Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments). The Centers for Medicare & Medicaid Services is collecting GCPCAs on behalf of the Departments.

Attestations are due by December 31 of each year.  Seubert is submitting the attestation on behalf of clients if the carrier or third party administrator does not complete the attestation. More information can be found here.

Medicare Part D Creditable Coverage
Group health plan sponsors must disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether their prescription drug coverage is at least as good as the Medicare Part D coverage (in other words, whether their prescription drug coverage is “creditable”). These disclosures must be provided on an annual basis and at certain other designated times. Employers should keep in mind that, beginning in 2025, the creditable coverage status of their prescription drug coverage may be impacted as a result of cost-reduction provisions affecting Medicare Part D plans as part of the Inflation Reduction Act of 2022.  Additional information can be found here.

HIPAA – New Reproductive Health Rights
Effective December 23, 2024, new HIPAA reproductive health rights impact employers with self-insured health plans and employers that have access to protective health information (PHI) other than enrollment and summary health information.  The new protections prohibit regulated entities from using or disclosing PHI related to lawful reproductive health care.  Employers with access to PHI are required to update their HIPAA polices and train affected members of their workforce.  Seubert is updating client HIPAA policies to comply with the new regulation.  More information can be found here.

New Mental Health Parity and Addiction and Equity Act (MHPAEA)
Federal regulators have issued a final rule to strengthen MHPAEA’s requirements.  The final rule makes changes to the existing nonquantitative treatment limitations (NQTLs) standard to prevent plans from using NQTLs to limit access to mental health and substance use disorder benefits to a greater extent than medical/surgical benefits.  The final rule requires health plans to collect and evaluate relevant data to access the impact of NQTLs.  Also, the final rule establishes new minimum standards for developing NQTL comparative analyses.   Seubert is working with our carrier and third party administrator partners to ensure compliance for the 2025 and 2026 effective dates.  More information can be found here.

Staying informed and proactive is essential for maintaining a compliant and effective benefits program for your business. By understanding and implementing the changes outlined in this update, your organization can better navigate regulatory requirements, support your employees, and minimize potential risks. If you have questions or would like to learn more about how partnering with an employee benefits broker like Seubert can support your compliance efforts, please feel free to reach out.