Oct 25, 2024
Compliance News Week Ending October 25, 2024
In this Article:
- IRS Announces 2025 Limits for FSAs, Transportation Benefits, Medical Savings Account, etc.
- Expanded §213(d) Definition – Condoms
- FAQs, Part 68 – Preventive Care Guidance
- Proposed Rules – Expanded Preventive Contraceptive Coverage for 2026
IRS Announces More 2025 Limits
Text of IRS Rev. Proc. 2024-40
Cafeteria Plans (Section 2.16 in Text)
- For taxable years beginning in 2025, the dollar limitation under Section 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements is $3,300.
- If the cafeteria plan permits the carryover of unused amounts, the maximum carryover amount is $660.
Qualified Transportation Fringe Benefit (Section 2.17 in Text)
- For taxable years beginning in 2025, the monthly limitation under Section 132(f)(2)(A) regarding the aggregate fringe benefit exclusion 13 amount for transportation in a commuter highway vehicle and any transit pass is $325.
- The monthly limitation under Section 132(f)(2)(B) regarding the fringe benefit exclusion amount for qualified parking is $325.
Expanded §213(d) Definition – Condoms
As set forth in IRS Notice 2024-71, amounts paid for condoms may now be treated as §213(d) qualifying medical expenses that are reimbursable on a tax-favored basis under a health FSA, HRA, or HSA.
FAQs, Part 68 – Preventive Care Guidance
The agencies released informal guidance that adds to the list of things that must be covered with no cost-sharing as preventive; explains a plan sponsor's responsibility for ensuring that preventive care is properly coded and covered; and also clarifies the reconstructive coverage that must be provided under the Women's Health & Cancer Rights Act (WHCRA).
- Coverage of Pre-Exposure Prophylaxis (PrEP) - For plan years beginning September . 1, 2024 or later, non-grandfathered group health plans must provide coverage with no cost-sharing for three FDA-approved PrEP formulations (two oral and one injectable), as well as specified baseline and monitoring, and are not permitted to use medical management techniques to direct individuals prescribed PrEP to utilize one formulation over another.
- Coding and Coverage for Recommended Preventive Care - Medical items or services coded as preventive care in accordance with PHSA §2713 (or any item or service that is integral to the furnishing of a recommended preventive item or service), must be covered without cost-sharing by non-grandfathered group health plans, unless the plan sponsor has individualized information that establishes that the item or service was not preventive care. If a medical item or service is coded as preventive, but the plan sponsor has information suggesting otherwise, the plan sponsor must ask the claimant and the provider for further information prior to imposing cost-sharing or denying the claim. Many medical items and services could potentially be for preventive care as well as for non-preventive care, and there have been many complaints of full coverage not being made available for preventive care. To address this, guidance recommends that plan sponsors regularly review the latest preventive care recommendations and published industry standards and then modify their coding guidelines, claims processing systems, and other relevant internal protocols if needed to ensure that claims for preventive care are coded appropriately and covered without cost-sharing.
- WHCRA Guidance - For any group health plans that provide coverage for mastectomies, the plan must also provide coverage for all stages of reconstruction of the breast on which the mastectomy was performed, surgery and reconstruction of the other breast to produce a symmetrical appearance, prostheses, and treatment of physical complications of the mastectomy, including lymphedema. The FAQ guidance clarifies that this coverage requirement includes coverage for chest wall reconstruction with aesthetic flat closure, if elected by the patient in consultation with the attending physician in connection with a mastectomy. NOTE: This coverage requirement is not preventive and does not have to be provided with no cost-sharing, but instead should be covered subject to applicable plan cost-sharing (e.g., deductible and co-insurance).
Proposed Rules – Expanded Preventive Contraceptive Coverage for 2026
The agencies released proposed guidance that could go into effect for 2026 plan years if finalized. The proposed rules address expanded OTC contraceptive coverage and reasonable medical management techniques.
Fact Sheet of the proposed rules
- Expanded OTC Contraceptive Coverage - The proposed rules would require non-grandfathered group health plans to cover the following as preventive with no cost-sharing, unless there is a valid religious or moral objection to providing the coverage:
- Recommended over-the-counter (OTC) contraceptives without requiring a prescription; and
- Certain recommended contraceptive items that are drugs and drug-led combination products, unless at least one therapeutic equivalent of the drug or drug-led combination product (as defined by the FDA) is covered without cost sharing.
- In addition, the proposed rules would require that all price comparison tools (internet-based, self-service tools for comparing the prices of all covered items and services required by the Transparency in Coverage rules) include a disclosure explaining that OTC contraceptive items are covered with no cost-sharing without requiring a prescription along with a phone number and hyperlink to where more information is available about the plan's contraception coverage.
While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice or services. Readers should always seek professional advice before entering into any commitments.
