The Washington Report

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January 22, 2023

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

 

HHS Responds to President’s EO on Drug Prices; Releases Report Announcing Three New Models to Lower Drug Costs
On February 14, 2023, the Centers for Medicare & Medicaid Services (CMS) announced that the Secretary of the Department of Health and Human Services (HHS) selected three new models for testing by the CMS Innovation Center to help lower the cost of drugs, promote accessibility to life-changing drug therapies, and improve quality of care. The Secretary released a report describing these three models to respond to President Biden’s Executive Order (EO) 14087, Lowering Prescription Drug Costs for Americans, which complements the provisions in the Inflation Reduction Act of 2022 (IRA). The models are:

• The Medicare $2 Drug List;
• The Cell and Gene Therapy Access Model; and
• The Accelerating Clinical Evidence Model.

In addition to the three selected models, the Secretary identified additional areas for research with the potential to lower prescription drug costs.

The news release is available here.

A Fact Sheet is available here.

Frequently Asked Questions are available here.

The report is available here.

EO 14087 is available here.

HHS Releases COVID-19 PHE Transition Roadmap Fact Sheet
On February 9, 2023, HHS released a Fact Sheet: COVID-19 Public Health Emergency Transition Roadmap. HHS is planning for the federal Public Health Emergency (PHE) for COVID-19, declared under Section 319 of the Public Health Service Act, to expire on May 11, 2023. The purpose of the Fact Sheet is to provide information regarding what will and will not be affected after the PHE expires. According to HHS, “Addressing COVID-19 remains a significant public health priority for the Administration, and over the next few months, we will transition our COVID-19 policies, as well as the current flexibilities enabled by the COVID-19 emergency declarations, into improving standards of care for patients.” Please refer to the Fact Sheet for specific details.

The HHS Fact Sheet is available here.

CMS Announces Initial Guidance for Medicare Prescription Drug Inflation Rebate Program
On February 9, 2023, CMS announced initial guidance on the Medicare prescription drug inflation rebate program. As part of the IRA, drug companies will pay rebates to Medicare when their prescription drug prices increase faster than the rate of inflation for certain drugs dispensed to people with Medicare. The latest CMS guidance outlines next steps and details the initial requirements and procedures for the new program.

The news release is available here.

A Fact Sheet on the Medicare Prescription Drug Inflation Rebate Program Initial Guidance is available here.

The Medicare Part B Prescription Drug Inflation Rebate guidance is available here.

The Medicare Part D Prescription Drug Inflation Rebate guidance is available here.

Retirement

 

DOL Announces Reopening of Comment Period on Voluntary Fiduciary Correction Program
On February 13, 2023, the Department of Labor (DOL) announced that its Employee Benefits Security Administration (EBSA) will reopen the public comment period on amendments to its Voluntary Fiduciary Correction Program and the proposed amendment to the associated class Prohibited Transaction Exemption 2002-51. The program encourages plans to comply with ERISA and the Internal Revenue Code by self-correcting violations of the law. If plans voluntarily correct eligible transactions and meet the specified requirements, the program and exemption together allow the plans to avoid potential civil enforcement actions and penalties. According to the DOL, “Reopening the comment period will allow the Employee Benefits Security Administration to obtain important public input on implementing the changes mandated by Congress in the SECURE 2.0 Act of 2022 that impact the department’s Voluntary Fiduciary Correction Program.”

On November 21, 2022, EBSA published proposals and invited comments on the proposed program and exemption updates, including a self-correction component for employers who fail to send employee salary withholding contributions or participant loan repayments to retirement plans in a timely manner. The comment period for these proposals closed on January 20, 2023. After the proposals’ publication, the Consolidated Appropriations Act of 2023 was signed into law. The law includes a provision that requires the program to cover certain violations related to participant loans if self-corrected violations align with the Internal Revenue Services’ Employee Plans Compliance Resolution System. EBSA is reopening the comment period to gather additional comments on any issues related to the amendment of the program to implement the Act’s requirements. Comments are due by April 17, 2023.

The news release is available here.

The Federal Register announcement is available here.

Aon Publications

 

SECURE 2.0: Major Provisions Impacting Defined Benefit Plans
On December 29, 2022, President Biden signed the SECURE 2.0 Act of 2022 (SECURE 2.0) into law as part of the Consolidated Appropriations Act, 2023. SECURE 2.0 contains numerous provisions impacting qualified retirement plans, building on the foundation laid by the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) of 2019. The significant provisions of SECURE 2.0 relevant to qualified defined benefit retirement plans are generally set forth in this publication. For purposes of this Aon bulletin, we have categorized the provisions into sections addressing distribution provisions, use of plan assets, correction of plan errors, participant notices/compliance requirements, and other requirements. For a fuller understanding of some provisions, additional guidance may be needed from the Internal Revenue Service or other regulatory agencies.

The Aon bulletin, SECURE 2.0: Major Provisions Impacting Defined Benefit Plans, is available here.

Now Available: Legal Consulting & Compliance Quarterly Update
The Retirement Legal Consulting & Compliance practice is pleased to present its Quarterly Update of recent legal developments for the first quarter of 2023. In this issue you will find the following articles:

• SECURE 2.0 is Now in Effect!
• Individually Designed 403(b) Plans Finally Eligible for IRS Determination Letters
• Changes to Determination Letter Program for Qualified Retirement Plans
• Mark Your Calendars Now for Key Compliance Dates
• Final Rule on Proxy Voting/Use of ESG Factors: All You Want to Know!
• DOL Proposes Important Changes to VFCP
• Cybersecurity: More Litigation and DOL Interest
• Quarterly Roundup of Other New Developments
• Recent Publications

The first quarter 2023 issue of the Retirement Legal Consulting & Compliance Aon Quarterly Update is available here.

DOL Issues Long Overdue FMLA Guidance on Eligibility of Remote Employees
The Department of Labor (DOL) recently issued Field Assistance Bulletin 2023-1 on an eligibility issue that plagued employers and employees throughout the pandemic: how to determine if remote employees are eligible under the prong of the FMLA’s eligibility rules that requires an employee to work at a worksite where the employer has at least 50 employees within 75 miles.

The Aon bulletin is available here.

Round 2: RxDC Data Due June 1 With More Challenges for Employers
Employers sponsoring group health plans must prepare for the next Prescription Drug Data Collection (RxDC) submission, due June 1, 2023. Plans must submit more information regarding how the plan splits payments between the employer and the employee, and the responsible government agencies are less likely to offer relief. All employers, including those with fully insured medical or prescription drug benefits, should begin planning their approach to fulfilling this regulatory requirement as soon as possible, in case there are gaps in what the plan vendors will provide. The RxDC submission includes medical, prescription drug, and premium/premium equivalent information and likely will require assistance from more than one vendor.

This bulletin discusses:

• RxDC Submission Date
• Changes From the Initial Submission
• Refresher on the RxDC Submission
• Impact on Employers and Next Steps

The Aon bulletin is available here.