Employers must stay vigilant about upcoming regulatory updates affecting their employee benefit programs. Several key compliance items are on the horizon, with some that require immediate attention to ensure a smooth transition into the new year.
Let’s look at the most important updates you need to be prepared for.
Medicare Part D Changes Coming in 2025
The Medicare Part D program is set to undergo significant changes in 2025, introducing a new enhanced benefit design. These updates could impact the creditable status of the prescription drug coverage provided under employer-sponsored group health plans. Employers must determine whether their plans will be deemed creditable or non-creditable for the upcoming plan year. This process involves analyzing whether the coverage meets Medicare’s standards and informing employees accordingly. Planning ahead will allow for a smooth transition and avoid potential penalties.
Nondiscrimination Testing for Cafeteria and Self-Insured Plans
Employers offering §125 cafeteria plans, health and dependent care FSAs, HRAs, and other self-insured plans must conduct nondiscrimination testing before the end of the year. Failing to perform these tests could lead to imputed income issues and damage employee relations. Employers should ensure that their plans do not disproportionately benefit highly compensated employees, as this could result in tax liabilities. Remember, corrections cannot be made after the year ends, so proactive action is essential.
HIPAA Privacy Manual Updates Required by the End of 2024
HIPAA compliance remains a top priority for any health plan subject to privacy rules, including self-funded medical plans, health FSAs, and HRAs. New regulations require updates to HIPAA Privacy Manuals by the end of 2024, particularly those securing rights related to reproductive healthcare information. Employers must ensure their privacy manuals reflect these changes to avoid penalties and protect employees’ personal health information.
ACA Reporting: The Most Heavily Enforced Provision
The Affordable Care Act (ACA) reporting continues to be one of the most heavily enforced regulatory requirements for large employers. If you employ an average of 50 or more full-time equivalent employees, you are considered an applicable large employer (ALE) and must complete ACA reporting for your workforce. Forms 1094-C and 1095-C must be filed electronically, so preparing to e-file for 2024 in in the first quarter of 2025 will help avoid fines and penalties for non-compliance.
Form 5500 Filing for Large Health & Welfare Plans
If your health or welfare plan has 100 or more employees participating on the first day of the plan year, you are required to file a Form 5500. Small plans with fewer than 100 participants may be exempt, but large plans must meet this requirement. The filing deadline is the last day of the seventh month following the end of the plan year, so be sure to plan ahead to stay compliant. This applies to all ERISA plans.
Don’t wait—start preparing today!
Employee benefits compliance can be complex, but staying informed is the key to success. As these regulatory updates approach, employers must ensure their plans align with the new requirements. Whether it’s Medicare Part D changes, ACA reporting, or HIPAA privacy updates, proactive planning can help avoid penalties and ensure a smooth transition into 2025.
Our team is here to help—don’t hesitate to reach out for guidance and support as you navigate these important compliance updates. Let us assist you in staying ahead of the curve and ensuring your benefits program remains compliant and competitive.
