The Washington Report

January 22, 2025

Note to Subscribers

While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change after our publication deadline.

Health

 

Departments Withdraw Rule on Enhancing Coverage of Preventive Services Under the ACA
On January 14, 2025, the Departments of Health and Human Services (HHS), Labor, and the Treasury (Departments) withdrew a Notice of proposed rulemaking that appeared in the Federal Register on October 28, 2024, regarding coverage of certain preventive services, including contraceptive items, under the Affordable Care Act (ACA). The rule was withdrawn effective January 15.

The Notice withdrawing the proposed rule is available here.

Departments Release FAQs About Consolidated Appropriations Act, 2021 Implementation Part 69
On January 14, 2025, the Departments released nine Frequently Asked Questions (FAQs) regarding the implementation of certain provisions of Title I (the No Surprises Act) and Title II (Transparency) of division BB of the Consolidated Appropriations Act, 2021. The FAQs address: 

• Texas Medical Association et al. v. United States Department of Health and Human Services et al. and Related Guidance: Calculation of Qualifying Payment Amounts (QPAs);
• Requirements for Initial Payments or Notices of Denial of Payment and Related Disclosures;
• Requirements for Initiation of Open Negotiation Periods and the Federal Independent Dispute Resolution Process;
• Patient Cost-Sharing Under the No Surprises Act; and
• Gag Clause Prohibition and Attestation.

The FAQS Part 69 are available here.

IRS Releases Notice on Calculating QPAs in 2025
Also on January 14, 2025, the Internal Revenue Service (IRS) released Notice 2025-12, which provides the percentage increase for calculating the QPAs for items and services furnished during 2025 for purposes of Sections 9816 and 9817 of the Internal Revenue Code, Sections 716 and 717 of ERISA, and Sections 2799A–1 and 2799A–2 of the Public Health Service Act. These provisions, added by the No Surprises Act, provide protections against surprise medical bills in certain circumstances. The Notice was drafted in consultation with the Departments of Labor and HHS. Notice 2025-12 became effective January 1, 2025.

IRS Notice 2025-12 is available here.

HHS Issues Final Regulations on Benefit and Payment Parameters for 2026 and Basic Health Program
On January 13, 2025, HHS issued final regulations that set standards for the Health Insurance Marketplaces, as well as for health insurance issuers and brokers, as related to the ACA. Among other provisions, the final regulations include updates to the HHS-operated risk adjustment program; 2026 user fee rates for issuers; changes to calculations for the Basic Health Program; and annual public reporting of aggregated, summary-level information from the ACA Quality Improvement Strategy, a program that aims to incentivize improved health outcomes for plan enrollees. The final regulations became effective on January 15, 2025.

A Fact Sheet is available here.

The final regulations are available here.

Retirement

 

DOL Announces Improvements to VFCP
On January 14, 2025, the Department of Labor (DOL) through the Employee Benefits Security Administration, announced updates to its Voluntary Fiduciary Correction Program (VFCP), providing employers and other plan officials with more efficient ways to voluntarily correct compliance issues in retirement, health, and other employee benefit plans. The most significant change is a self-correction tool that employers and other plan officials can use to remedy delays in sending participant contributions, such as employee payroll deductions, and participant loan repayments to retirement plans. Employers and other plan officials can also correct mistakes related to participant loans from retirement plans, as provided by the SECURE 2.0 Act of 2022. The VFCP encourages employers and other plan officials to avoid potential civil enforcement actions and penalties under ERISA and the Internal Revenue Code by voluntarily correcting transactions that meet the program’s requirements. The related updates and guidance released on January 14 are provided in the links below. 

The news release is available here.

The 2025 Federal Register VFCP Notice is available here.

The Amendment to Prohibited Transaction Exemption 2002-51 is available here.

A Fact Sheet is available here.

IRS Issues Proposed Regulations on Automatic Enrollment Requirements Under Section 414A
On January 10, 2025, the Internal Revenue Service (IRS) released proposed regulations that would provide guidance on the automatic enrollment requirements that apply to certain retirement plans. The proposed regulations reflect statutory changes made by the SECURE 2.0 Act requiring that certain cash or deferred arrangements and salary reduction agreements be eligible automatic contribution arrangements that satisfy additional specified requirements. The proposed regulations would affect participants in, beneficiaries of, employers maintaining, and administrators of certain retirement plans that include cash or deferred arrangements or annuity contracts purchased under salary reduction agreements and other retirement plans that include eligible automatic contribution arrangements. The proposed regulations also provide notice of a public hearing. Comments on the proposed regulations are due by March 17, 2025. A public hearing on the proposed regulations has been scheduled for April 8, 2025. Requests to speak and outlines of topics to be discussed at the public hearing must be received by March 17, 2025. 

The news release is available here.

The proposed regulations are available here.

IRS Issues Proposed Regulations on New Roth Catch-Up Rule, Other SECURE 2.0 Act Provisions
On January 10, 2025, the IRS issued proposed regulations addressing several SECURE 2.0 Act provisions relating to catch-up contributions, which are additional contributions under a 401(k) or similar workplace retirement plan that generally are allowed with respect to employees who are age 50 or older. This includes proposed regulations related to a provision requiring that catch-up contributions made by certain higher-income participants be designated as after-tax Roth contributions. The proposed regulations provide guidance for plan administrators to implement and comply with the new Roth catch-up rule and reflect comments received in response to Notice 2023-62, issued in August 2023. The proposed regulations also provide guidance relating to the increased catch-up contribution limit under the SECURE 2.0 Act for certain retirement plan participants. Affected participants include employees between the ages of 60-63 and employees in newly established SIMPLE plans. Comments on the proposed regulations must be received by March 14, 2025. A public hearing on the proposed regulations has been scheduled for April 7, 2025. Requests to speak and outlines of topics to be discussed must be received by March 14, 2025. 

The news release is available here.

The proposed regulations are available here.

PBGC Publishes Comprehensive Premium Filing Instructions for 2025 Plan Years
The Pension Benefit Guaranty Corporation (PBGC) recently published the Comprehensive Premium Filing Instructions for 2025 Plan Years. There are two kinds of annual premiums: Flat-rate Premium, which applies to all plans, and Variable-rate Premium, which applies only to Single-employer Plans. This document provides information for plans paying premiums for plan years beginning in 2025, including instructions for each data element that must be reported.

The Comprehensive Premium Filing Instructions for 2025 Plan Years is available here.