In a new form of outreach from the Center for Medicare and Medicaid Services, the U.S. Department of Treasury, and the U.S. Department of Labor, a letter was issued to employers, plan sponsors, and insurance issuers (the “Administrators”) on July 20, 2023. The letter requests that the Administrators not impose the 60-day limit on special enrollments for loss of Medicaid coverage on individuals losing Medicaid coverage due to the end of the COVID-19 public health emergency Medicaid expansion. Individuals and families will be losing coverage under Medicaid due to the loss of the expansion when their continuous enrollment ended on March 31, 2023, with the end of the pandemic, may have missed any notice from their state Medicaid or CHIP administering agency.
As Medicaid is administered by individual states, there is no federally mandated notice to individuals when they lose Medicaid coverage. Since the individuals may not know that they have lost Medicaid coverage until they seek health care from a health care provider, they will not know to seek coverage on a health care exchange from their employer, and no request for coverage may be issued in the form of a National Medical Support Notice from the state agency to the individual’s potential coverage from an employer within 60 days of the coverage loss. The letter requests that the Administrators permit the enrollment of these individuals in the health coverage they administer even if the request does not occur within 60 days of the loss of Medicaid and CHIP coverage.
The letter indicates that there are no legal impediments that would prevent a group health plan from allowing for a longer special enrollment period beyond the 60-day minimum period. Because the U.S. Department of Treasury was one of the issuing agencies, this change stating there are no regulatory barriers covers regulatory requirements, employers and plan sponsors should consider how their Code Section 125 (a/k/a cafeteria plans, flex plans, flexible benefit plans, or premium only plans) may include a limit on elections and if an interim amendment is necessary.
The letter also encourages employers to update their contact information with the state Medicaid agency, to ensure that eligible employees can enroll in their employment plan after losing Medicaid or CHIP coverage and ensure that the human resources and benefits staff assist employees in transitioning to the employer’s coverage and remind employees that they may be eligible for free or low-cost coverage through Healthcare.gov or the state marketplace for health insurance coverage. Employees can visit Staying covered if you lose Medicaid or CHIP | HealthCare.gov for more information.
Internal Revenue Service Gives Very Specific Relief on Required Minimum Distributions
he required minimum distribution age and other requirements have evolved since 2019 in the SECURE Act and most recently in the SECURE 2.0 Act. The age at which the distributions must commence has increased, and the rules regarding distributions post-death have also evolved. The relief in the guidance is just for 2023 distributions. This will focus solely on relief for qualified defined contribution plans.
For plan administrators or other parties distributing required minimum distributions in 2023, such payors will not be considered to have failed to comply with the distribution tax notice and mandated rollover or withholding requirements for payment of the amounts that were considered to be required minimum distributions between January 1, 2023 and July 31, 2023, provided that such amounts were paid to a participant born in 1951 or to that participant’s surviving spouse. This is for distributions that would have been required minimum distributions but for the changes in SECURE 2.0.
For persons who attain the age of 72 in 2023 (they were born in 1951) and who actually receive distributions characterized as required minimum distributions in 2023 (not considering certain changes from SECURE 2.0) between January 1, 2023 and July 31, 2023, which means they would be ineligible to be rolled over to an IRA, those incorrectly paid amounts may be rolled over to an IRA as long as they are paid into an IRA as a rollover by September 30, 2023.
Employers should contact their defined contribution plan record keepers and third-party administrators to determine how such parties are reaching out to the plan participants who may qualify for this relief.
The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice. For additional assistance related to health and retirement plans special enrollment periods, please contact Greta E. Cowart or a member of the Employee Benefits & Executive Compensation (ERISA) practice.
Greta E. Cowart has counseled employers for more than 30 years on best practices in human resources and employee relations related to benefits and executive compensation. In her practice, Greta routinely develops strategies for effective administration of claims and other disputes, including defense of grievances, and in ERISA claim litigation, while also considering applicable labor and employment laws. Greta also provides fiduciary training and review of fiduciary operations to improve the documentation of the fiduciary process.