QUESTION: We are considering offering a telehealth benefit to our employees that would be separate from our major medical plan. Will this arrangement be an ERISA plan? ANSWER: Telehealth benefits (also referred to as telemedicine benefits) are often offered under an employer’s group health plan, which is governed by ERISA if sponsored by a private sector employer. Even if telehealth benefits are offered separately from the employer’s group health plan, the benefits are likely subject to ERISA. In general, an arrangement is an ERISA welfare benefit plan if it is a plan, fund, or progr ..read more

Rev. Proc. 2023-23 (May 16, 2023) Available at https://www.irs.gov/pub/irs-drop/rp-23-23.pdf The IRS has released the 2024 cost-of-living adjusted limits for health savings accounts (HSAs), high-deductible health plans (HDHPs), and excepted benefit health reimbursement arrangements (EBHRAs). Here are the details: HSA Contribution Limits. The 2024 annual HSA contribution limit is $4,150 for individuals with self-only HDHP coverage (up from $3,850 in 2023), and $8,300 for individuals with family HDHP coverage (up from $7,750 in 2023). HDHP Minimum Deductibles. The 2024 ..read more

Priv. Ltr. Rul. 202311001 (Mar. 17, 2023) Available at https://www.irs.gov/pub/irs-wd/202311001.pdf In a heavily redacted private letter ruling, the IRS has concluded that the cost of a product that was “neither medicine nor a drug but rather food” was not a medical care expense under Code § 213(d). The product had been recommended by an infant’s doctor but was available without a prescription. The infant’s parents represented that the product was formulated to be safe for an infant’s consumption while providing an unspecified substance that would reduce the infant’s future risk ..read more

FAQs About Families First Coronavirus Response Act, Coronavirus Aid, Relief, and Economic Security Act, and Health Insurance Portability and Accountability Act Implementation Part 58 (Mar. 29, 2023) Available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-58 The DOL, HHS, and IRS have jointly issued FAQs addressing how group health plans and insurers will be impacted by the end of the COVID-19 national emergency (NE) and public health emergency (PHE). The Biden administration has announced that the NE and PHE will end on May 11, 2023 (see ou ..read more

Frequently Asked Questions About Medical Expenses Related to Nutrition, Wellness, and General Health (Mar. 17, 2023); IRS News Release IR-2023-47 (Mar. 17, 2023) FAQs News Release The IRS has issued FAQs that explain when certain costs related to nutrition, wellness, and general health are medical expenses under Code § 213 that may be paid or reimbursed under a health FSA, HSA, or HRA. As background, Code § 213 defines medical care as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting a structure or funct ..read more

QUESTION: Our company sponsors a high-deductible health plan (HDHP) in conjunction with employee HSAs. Can the medical expenses of our employees’ adult children who otherwise qualify for tax-free coverage under the HDHP be reimbursed tax-free from the employees’ HSAs? ANSWER: Not necessarily—it depends on whether the adult children qualify as tax dependents under the HSA rules. As group health plans, HDHPs that provide dependent coverage of children must make the coverage available until a child turns age 26. (The age 26 mandate does not generally apply to HSAs because they are not ..read more

Electronic-Filing Requirements for Specified Returns and Other Documents, 26 CFR Parts 1, 53, 54, and 301, 88 Fed. Reg. 11754 (Feb. 23, 2023) Regulations News Release The IRS has finalized regulations substantially expanding mandatory electronic filing of information returns. The regulations, which were proposed in 2021 to implement statutory changes made by the Taxpayer First Act of 2019 (see our Checkpoint article), establish lower thresholds for mandatory electronic filing of the following returns affecting employee benefit plans: Form 1094 Series; Forms 1095-B and 1095-C; Form 109 ..read more

IRS Publication 502 (Medical and Dental Expenses (for 2022 Returns)); IRS Publication 503 (Child and Dependent Care Expenses (for 2022 Returns)) Publication 502 Publication 503 The IRS has released updated versions of Publications 502 and 503 for the 2022 tax year. Publication 502 describes the medical expenses that are deductible by taxpayers on their 2022 federal income tax returns. Publication 503 explains the requirements that taxpayers must meet to claim the dependent care tax credit (DCTC) under Code § 21 for child and dependent care expenses. The 2022 version of Publication 502 is subst ..read more

IRS Notice 2023-03 (Dec. 29, 2022); IRS News Release IR-2022-234 (Dec. 29, 2022) Notice News Release The IRS has announced the optional 2023 standard mileage rates for business, medical, and other uses of an automobile, and the 2023 vehicle values that limit the application of certain rules for valuing an automobile’s use. For 2023, the business standard mileage rate is 65.5 cents per mile (a 3-cent increase from the 62.5-cent rate that applied during the second half of 2022—see our Checkpoint article). The rate when an automobile is used to obtain medical care—which may be deducti ..read more

Consolidated Appropriations Act, 2023, Pub. L. No. 117-328 (Dec. 29, 2022) Available at https://www.congress.gov/117/bills/hr2617/BILLS-117hr2617enr.pdf Congress has passed, and the President has signed, the Consolidated Appropriations Act, 2023 (CAA, 2023), containing provisions that impact both retirement and group health plan sponsors and advisors. Here are highlights of the provisions affecting group health plans: Telehealth/HDHPs. Tax-advantaged contributions generally cannot be made to an HSA unless the account holder is covered by an HDHP and does not have disqualifyi ..read more