Sarah Borders, CEBS January 3, 2023 9 min read

End of Year Reminders for January 1st Plan Years

As 2022 draws to a close, we wanted to provide employers with a list of some of the most important compliance obligations to consider for January 1 renewals. Many of these requirements don’t necessarily coincide with specific calendar dates, but since the majority of plans renew as of January 1st, there are several requirements that tend to get overlooked at this time of year.


  • RxDC Submissions: All group medical plans, both fully insured or self-insured, regardless of size, must submit the Prescription Drug Data Collection (RxDC) report. Reporting for the 2020 and 2021 reference years is due December 27, 2022 (non-enforcement delay to January 31, 2023), and then due each year by June 1 for the prior reference year.


  • Open Enrollment Rights: Employers must notify several unique groups of their right to change coverage elections during open enrollment, just as active employees:
    • Individuals enrolled under COBRA,
    • Those on state continuation (if applicable), including spouses or dependent children,
    • Employees out on FMLA or other approved leave, either paid or unpaid.


  • HSA-Eligibility: Employers must ensure that no one who is enrolled in a general-purpose health FSA or any other disqualifying coverage (such as Medicaid or Medicare) also opens and contributes to an HSA. As a reminder, a health FSA, including a spouse’s FSA, is considered disqualifying coverage that makes an individual ineligible for an HSA. Employers wishing to offer ‘first-dollar’ telehealth coverage may take advantage of the CAA 2023 relief for the 2023 and 2024 plan years.


  • Notices: Distribute required notices and the Summary of Material Modifications (SMM) if any changes are made to the plan document/SPD.


  • No Surprises Act Notice: Plan sponsors that maintain a public website for the group health plan (not the employer’s own public-facing website) must post the Surprise Billing notice by the 1st day of the plan year beginning on or after January 1, 2023. Employers without a public group health plan website should ensure the insurance carrier or TPA makes the Notice available on the carrier’s or TPA’s public website for the plan.


  • Proof of Dependent Status: If an employer requests proof of dependent status, either a signed employee attestation or documentation (e.g., marriage license, birth certificate, tax return, etc.) should be required for everyone on the same terms. In other words, the types of documentation requested should not vary from employee to employee.


  • 5500 Determination: As of the first day of the plan year, employers need to determine whether they need to file Form 5500 for the current plan year. To do so, they’ll need to count the exact number of plan participants enrolled, not including dependents, on the first day of the plan year. So, if you sponsor an employer-paid basic life plan that automatically includes all eligible employees, use the life plan enrollment for the count. Plans with under 100 participants are exempt from filing Form 5500 if unfunded, fully insured, or both.


  • Section 125 Cafeteria Plan Amendment: Cafeteria plans, regardless of plan year, can be amended to allow prospective midyear group health plan election changes from family coverage to employee-only coverage (or family coverage including one or more already-covered related individuals) so that one or more family members can enroll in a health plan through an Exchange (as a result of the ‘family glitch’ removal).


  • Participant Level Price Comparison Tool: Group health plans must provide an internet-based self-service price comparison tool disclosing an initial list of 500 shoppable items effective as of the plan year beginning on or after January 1, 2023. Employer plan sponsors will need to rely on their insurance carriers for fully-insured plans or their TPAs for self-insured plans to provide this tool. Employers may enter into a written agreement with the carrier or medical TPA to provide that they will comply with the transparency in coverage requirements.


  • Applicable Large Employer Determination: Employers must confirm if they are an applicable large employer, and therefore subject to the employer mandate for the current year by calculating the number of employees during the calendar year that just ended. Employers with 50 or more full-time employees plus FT equivalents must offer coverage to full-time employees and also file ACA reporting with the IRS. For reference, the IRS website provides resources to assist with ALE calculation.

Wrapping up the year is never easy – and this list isn’t meant to include everything an employer needs to consider during this time of year. However, we’ve seen that these are the most commonly missed compliance requirements during Q4, and a few new requirements for 2023 in particular. Keep these in mind along with the other tasks you’re managing to make sure you end the year on a positive note. Here’s to 2023!


Sarah Borders, CEBS

Principal, Benefits Compliance Solutions. Sarah has spent the last 15 years in the employee benefits industry, has numerous designations and serves on NAHU’s Employer Working Group Subcommittee and is an active board member of Austin AHU. She recently stepped down as Vice President of Benefits Compliance at one of the nation's largest brokerage firms to start her own compliance consulting practice. Her designations include an active license with the Texas Department of Insurance, CEBS (Certified Employee Benefits Specialist), Certified Health Care Reform Professional, HIPAA certification and Health Care Service Associate. She holds an MBA from Texas A&M Corpus Christi and a BA from University of Incarnate Word. Her consulting firm, Benefits Compliance Solutions, partners with employers to identify unknown risks and avoid hundreds of thousands of dollars in fines and lawsuits from failure to comply with their healthplan obligations.