Essential Compliance Deadlines for Employers: Navigating Q4 2023 Benefits Obligations

The final quarter of the year is a busy time for benefits teams, particularly as open enrollment season approaches. However, employers must also be acutely aware of a myriad of compliance obligations that run parallel to the open enrollment process. As outlined by the ERISA compliance team at Lockton, a detailed roadmap of deadlines for employee benefits compliance is essential for navigating the complex landscape of federal and state requirements. With the end of the year fast approaching, understanding these obligations can safeguard employers from potential legal pitfalls and ensure that employee plans remain compliant.

Compliance deadlines begin as early as October and extend through December, with several critical requirements that employers must address to avoid significant penalties. This article delves into the key deadlines and compliance obligations that employers need to be aware of, from required notices to annual attestations, ensuring that they are prepared for the upcoming year.

Key Compliance Deadlines in October

The first wave of compliance obligations arrives in the first two weeks of October, particularly for those employers providing health reimbursement arrangements. For instance, if an employer is offering a qualifying small employer health reimbursement arrangement (QSEHRA) or an individual coverage health reimbursement arrangement (ICHRA) for the upcoming 2027 plan year, they must distribute the required participant notices by October 2. These notices serve an important purpose: they inform employees about the benefits of the arrangement and clarify how ICHRA coverage impacts their eligibility for federal subsidies in the individual market.

This requirement applies to all eligible employees, irrespective of whether they are currently enrolled in the plan. This added tracking obligation underscores the importance of maintaining compliance with broader ACA guidelines, especially for large employers transitioning to ICHRAs.

Subsequent Deadlines on October 15

As October progresses, employers face multiple deadlines on the 15th. Firstly, employers must distribute Medicare Part D creditable or non-creditable coverage notices to Medicare-eligible individuals who are enrolled in their group plan. Most employers include this notice within their open enrollment materials, which are crucial for compliance and are treated by the Centers for Medicare and Medicaid Services (CMS) as sufficient for the entire following year, provided there are no significant changes to prescription drug coverage.

Additionally, calendar-year ERISA plans that received a 2.5-month extension from the initial July 31 Form 5500 deadline must submit their filings by this date. It is essential to remember that open enrollment materials must include a summary of benefits and coverage (SBC), which needs to be distributed at the start of the open enrollment period when employees are making active elections. The 30-day advance notice requirement is applicable solely in cases of automatic re-enrollment.

Understanding the Importance of Compliance Notices

In addition to the SBC, several critical notices must be included in the open enrollment packet. These include:

• The HIPAA special enrollment notice, which informs employees of their rights regarding health coverage.
• The HIPAA privacy notice, essential for self-insured plans to maintain transparency about how employee health information is used.
• Michelle’s Law notice, targeted at plans covering full-time students past age 26 to ensure they understand their coverage options.
• A notice for wellness programs, informing employees that an alternative standard is available for those unable to meet the standard terms.

Failure to include any of these notices can expose an employer to audits and potential litigation under ERISA regulations, emphasizing the need for thoroughness in compliance efforts.

The Gag Clause Prohibition Attestation

Among the compliance obligations often overlooked is the annual gag clause prohibition compliance attestation (GCPCA), which is due by December 31. This attestation is part of the transparency provisions enacted under the Consolidated Appropriations Act (CAA) of 2021, which prohibits group health plans and issuers from entering into contracts with providers or network partners that restrict their ability to share specific cost or quality data.

The GCPCA must confirm that the plan is compliant with these regulations. The first filing, which covers the period from December 27, 2020, through the attestation date, was due on December 31, 2023. For subsequent filings, they must cover the period since the last attestation and should be submitted through the CMS’s online HIOS portal. It is essential for self-insured plans to note that while they can authorize a third-party administrator (TPA) to file on their behalf, the legal responsibility for compliance remains with the plan sponsor.

Additional December Compliance Deadlines

In addition to the GCPCA, two other compliance deadlines fall on December 31 for calendar-year plans. Employers are required to distribute the Women's Health and Cancer Rights Act notice to all employees, regardless of their eligibility or enrollment status in the health plan. Additionally, employers covered by Section 1557 of the ACA must provide or publicly post a nondiscrimination notice, particularly those receiving Medicare Part D reimbursements for providing post-65 retiree drug coverage.

Employers operating in multi-state environments must also remain vigilant about state-specific compliance obligations as they approach year-end. For example, Washington state mandates that both fully insured and self-insured ERISA plans file a report and remit Q3 employee payroll withholdings by October 31. Similarly, San Francisco’s Health Care Security Ordinance requires contributions for Q3 expenditure shortfalls by October 30.

State-Specific Compliance Obligations

Furthermore, Massachusetts presents a unique set of compliance obligations in Q4. Employers must be aware of three separate deadlines: the Managed Care Organization Payor Assessment, which is due October 1, November 2, and December 1, and the Health Insurance Responsibility Disclosure (HIRD) reporting, which runs from November 15 through December 15 for employers with six or more employees reported in any Massachusetts unemployment wage report over the prior year.

Additionally, various states such as New Mexico, Rhode Island, Vermont, Alaska, Maine, New Hampshire, and Washington have quarterly vaccine assessment program filings due in either October or November. These obligations further emphasize the need for employers to stay informed and compliant with both federal and state regulations.

Key Takeaways

• October 2: Distribute QSEHRA and ICHRA participant notices.
• October 15: Send Medicare Part D notices and file Form 5500 for extended plans.
• December 31: Complete the GCPCA and distribute mandatory notices for Women’s Health and Cancer Rights.
• State-specific compliance deadlines may vary significantly and should not be overlooked.
• Maintaining compliance is essential to avoid legal ramifications and ensure employee benefits are effectively managed.