State Updates
Latest State Updates
On April 25, 2024, Gov. Moore approved SB0485/HB0571 modification bills, which delay implementation of Maryland’s family and medical leave insurance (FAMLI) program, sometimes referred to as Time to Care Act of 2022. Implementation has faced several delays and modifications since inception, most recently as reported in our May 9, 2023, edition of Compliance Corner.
Most notably, contributions will now begin July 1, 2025 (previously October 1, 2024). Benefits will now be available to eligible employees beginning July 1, 2026 (previously January 1, 2026). Other notable modifications include:
- Expands list of qualifying events to include care for a service member (to better align with FMLA).
- The definition of “wages” is updated to match the Maryland Unemployment Insurance statute.
- Employers can choose to participate in the State Plan or can enroll in a private plan. However, workers cannot be charged more for a private plan than they would if the employer participated in the State Plan. Employers choosing a private plan may be assessed additional fees.
- Total contributions are based on employer size but cannot exceed 0.9% of covered wages (applied to all wages up to and including the Social Security wage base).
The Department of Labor will update its draft regulations and host a public engagement session prior to initiating the formal regulatory review process. Employers with at least one employee in Maryland should continue to monitor the state’s FAMLI website.
Effective January 1, 2024, fully insured group health plans issued in Maine that provide abortion coverage are not allowed to impose any deductible, copayment, coinsurance, or other cost-sharing requirement for the costs of abortion services. Notably, this new requirement does not apply to qualified HDHPs.
As background, a health plan issued in Maine that provides coverage for maternity services has been required to provide coverage for abortion services unless sponsored by a religious employer granted an exclusion.
Employers with fully insured Maine situs plans should be aware of this change and should communicate the necessary changes to their benefit's eligible employees and individuals.
Effective December 14, 2023, amounts paid or incurred by an employer for dependent care assistance provided to an employee under an IRC § 129 dependent care assistance program are not included in the employee’s taxable compensation for Pennsylvania personal income tax purposes. This includes:
(a) the fair market value of benefits provided in kind by the employer,
(b) an amount paid directly to a daycare facility by the employer or reimbursed to the employee to subsidize the benefit, or
(c) benefits from the pre-tax contributions made by the employee under a section 125 dependent care flexible spending account.
Dependent care expenses paid through a Code Section 125 plan are already not taxed by the federal government and most states up to $5000 per year. This will mean tax savings for both employers and employees.
Since the change was late in the year, employers have probably withheld taxes from Pennsylvania employees’ pay, and employees might have already received W-2s showing the amounts as taxable for 2023. This link will go to the PA Department of Revenue site with information about how to handle 2023 tax returns: Act 34 of 2023 – Dependent Care Plan (Section 129) – Employer Info.
Employers with employees in PA should consult with their tax advisors regarding the withholding of taxes for these types of dependent care as a result of the law change.
A rulemaking stakeholder meeting has been scheduled for February 29, 2024, at 9:00 a.m. PT to discuss amendments that clarify under which circumstances family leave can be taken to bond with a child as well as amendments that clarify under which circumstances decisions appealed to the Commissioner’s Review Office will be made available to the public.
The meeting will be held via Teams. The draft rules are available on the Rulemaking page. Information on how to participate in the meeting is available under “Current rulemaking” and in the “Upcoming meetings” section on that page.
The Department of Family and Medical Leave (DFML) recently announced that all approved MA PFML private plans (fully insured and self-insured plans) are required to furnish required data to DFML for the 2024 fiscal year. The submission form will open online on July 1, 2024, and the deadline for submission is August 31, 2024.
As background, employers with approved MA PFML private plans are required to maintain reports, information and records related to their approved plan and furnish required data to DFML on request. DFML is now collecting information from each private plan for the period from July 1, 2023, to June 30, 2024.
For fully insured MA PFML private plans, the insurer is responsible for submitting this report. Employers who sponsor self-insured and self-administered MA PFML private plans are responsible for submitting the report. If the private plan is self-insured and an insurer or TPA is administering the plan, the employer should consult their administrator regarding report submission.
DFML indicated that it may withdraw approval of a private plan for refusing or failing to submit a required report. Employers who sponsor MA PFML private plans should work with their insurer or TPA or work internally to gather the required data and submit the report on time.
For further information, please refer to this MA PFML site.
On January 25, 2024, the Delaware Department of Insurance issued a bulletin (No. 134) to remind all insurers in Delaware that beginning on January 1, 2024, insurers are required to cover annual behavioral health well checks.
A “behavioral health well check” is defined in the law as a pre-deductible annual visit with a licensed mental health clinician with, at minimum, a master’s level degree. The behavioral health well check visit must include but is not limited to a review of medical history, evaluation of adverse childhood experiences, use of a group of developmentally appropriate mental health screening tools, and may include anticipatory behavioral health guidance congruent with the patient’s stage of life using the diagnosis of “annual behavioral health well check.”
The annual behavioral health well check generally must be reimbursed at the same rate that such common procedural terminology codes are imbursed for the provision of other medical care.
The Illinois DOL (IDOL) recently published the updated Illinois Consumer Coverage Disclosure Act (CCDA) template for 2024. The list of Essential Health Benefits (EHB) did not change from 2023 to 2024, but employers should begin using the 2024 template.
As a reminder, the CCDA requires employers to provide eligible employees with a disclosure that compares their coverage to essential health benefits required for coverage received through the Illinois marketplace. The disclosure must be provided upon hire, annually thereafter, and at the request of an employee.
The CCDA applies to all employers with employees in Illinois who provide group health insurance coverage. Importantly, this requirement applies to both fully insured and self-insured plans.
Employers who offer group health plans in Illinois should be aware of this ongoing requirement, review the updated 2024 template, and have discussions with carriers and TPAs, as applicable, to ensure compliance. Employers can also request a copy of NFP’s Illinois Consumer Coverage Disclosure Act publication from their consultant or advisor.
Massachusetts requires its residents (over the age of 18) to carry minimum creditable coverage (MCC) or pay a penalty. It is a similar requirement to the now-repealed ACA Individual Mandate; however, a MCC determination involves a more in-depth review. Employers providing MCC to Massachusetts residents must distribute Form MA 1099-HC to them and submit reporting electronically to the Department of Revenue (DOR) by January 31, after the end of the medical plan year. However, employers are not required to offer MCC, and there's no penalty if the coverage the employer offers does not meet the MCC standard. If an employer is unsure if its plan is considered MCC, the employer can request the Health Connector to make the determination.
For fully insured plans issued in MA, the insurers generally administer these requirements on behalf of the employers. Employers with self-insured (including level-funded) plans and non-Massachusetts employers are required to complete the distribution and filing requirements themselves. Note that Form MA 1099-HC only needs to be sent to primary enrollees and does not also need to be sent to dependents. Failure to distribute and file Form MA 1099-HC may result in a penalty of $50 per individual, up to a maximum of $50,000.
Covered employers: All employers with at least one Massachusetts-resident employee must comply with the Form MA 1099-HC requirement. Employers can obtain draft copies of Form 1099-HC on the DOR website.
Due date: January 31, following the end of the medical plan year.
Information reported on MA Form 1099-HC: A Form 1099-HC indicates the months that the employees and any dependents were enrolled in MCC in the reporting year.
Filing method: Employers must submit Form MA 1099-HC information to DOR electronically in properly formatted XML through MassTaxConnect. For additional information about how to file Form MA 1099-HC information, please refer to the state site: Submitting Information to DOR.
The Form MA 1099-HC needs to be sent only to the primary subscriber.
Mass Healthcare - Frequently Asked Questions for Employers »
Health Connector - Employer Advisory »
Health Connector - HDHPs and MCC Requirements »
The Department of Health posted the 2024 covered-lives assessment (CLA) rates for professional education under the Health Care Reform Act (HCRA). These rates are applicable to health claim payers (including self-insured plans) that elect to pay the assessment directly to the state rather than facing higher surcharges for in-state hospital expenses. The annual amount owed by the payer is calculated based on the number of covered individuals residing in the state.
The HCRA was enacted to provide financial assistance to hospitals through special taxes on health plans and medical services. The CLA is intended to support the funding of graduate medical education. CLA rates (or alternative surcharges) vary by state region. Accordingly, the applicable charge is based on where the covered individual resides or receives in-state care.
The CLA rates are in addition to the indigent care surcharge on services at state hospitals, diagnostic and treatment centers, and ambulatory surgery centers. The indigent care surcharge is payable regardless of the residency of the covered individual or group health plan sponsor. The current rate, which is effective for services rendered through December 31, 2026, is 9.63% for insurers and self-insured plan payors electing to pay the amount directly to the state Public Good Pool and an additional 28.27% for non-electing payers that pay the surcharge to healthcare providers.
Group health plan sponsors should be aware of the 2024 HCRA rates and surcharges applicable to medical and dental services provided at HCRA-designated facilities. Sponsors should consult with their carriers or third-party administrators, as applicable, for additional information regarding the rates, surcharges, elections, and related reporting requirements.
2024 Regional Covered Lives Assessment Rates
Indigent Care and Health Care Initiatives Surcharges by Payor
On December 21, 2023, the Department of Financial Services (DFS) issued a circular letter to advise health insurers of the coverage reimbursement requirements for treatment provided by school-based mental health clinics.
Specifically, for comprehensive health insurance policies and contracts issued, renewed, amended, modified, or altered on or after January 1, 2024, insurers must provide reimbursement for covered outpatient care when provided by a school-based mental health clinic licensed at a pre-school, elementary school, or secondary school, regardless of whether the school-based mental health clinic furnishing such services is a participating provider with respect to such services. Such reimbursement must be at either the negotiated rate or a rate that is no less than the Medicaid rate.
Although the letter is directed at insurers, sponsors of insured plans with policies issued in the state may want to be aware of this coverage requirement.
On December 13, 2023, the Chicago City Council voted to amend and delay the effective date of its upcoming paid leave and paid sick leave ordinance. Originally effective December 31, 2023, the ordinance’s effective date is delayed until July 1, 2024. The ordinance will replace the existing paid sick leave laws in Chicago and will provide additional paid time off for eligible employees.
It is important to note that this delay does not affect the upcoming Illinois Paid Leave for All Workers Act (the “Act”), which begins January 1, 2024, and applies to employers outside of Cook County and/or Chicago. As we’ve discussed before (Illinois Issues FAQs for Paid Leave for All Workers Act | NFP), the Act is a state law and interestingly does not preempt the Cook County and Chicago paid sick leave ordinances.
Employers with employees in Chicago should consult with their employment attorney for compliance with any changes in the amended ordinance and the delayed effective date.
Hawaii's Department of Labor and Industrial Relations recently announced the 2024 Temporary Disability Insurance (TDI) maximum weekly benefit and contribution amounts.
The weekly benefit amount remains 58% of an employee's average weekly wages. However, the maximum benefits amount was increased to $798 per week in 2024 from $765 per week in 2023.
Further, an employer may withhold TDI contributions of one-half the premium cost but not more than 0.5% of the employee's weekly wage, with the maximum not exceeding $6.87 per week in 2024 (increased from $6.59 per week in 2023).
Employers with employees in Hawaii should consult with their payroll vendors and disability insurers to ensure that the appropriate contributions will be withheld starting January 1, 2024, and that the new maximum weekly benefit is reflected for the claims paid in 2024.
For further information, please ask your NFP consultant for a copy of our Quick Reference Chart: Statutory Disability & Paid Family and Medical Leave Programs publication.
State of Hawaii – 2024 Maximum Weekly Wage Based and Maximum Weekly Benefit Amount »
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