Compliance and Regulatory
Reminder: Employer Reporting for DC Parking Cashout Law Due January 15, 2023
By January 15, 2023, all employers with 20 or more employees who work at least 50% of their working time in the district (“covered employees”) must submit a report to the District Department of Transportation regarding their compliance with or exemption from the DC Parking Cashout Law of 2020. The report is due every two years thereafter.
The reporting system, called “Commutifi,” is now live. For instructions on how to complete and submit the reporting, please refer to the district’s DC Parking Cashout Law Toolkit, page 11 and 12. In addition to the reporting requirement, the DC Parking Cashout Law requires employers with at least 20 covered employees that offer free or subsidized parking to their employees to either offer a clean air fringe benefit to employees receiving the parking benefit, develop a transportation demand management plan, or pay a clean air compliance fee.
Please note that the Cashout Law is in addition to the Employer Commuter Requirement. Since January 1, 2016, employers with 20 or more employees in DC must offer access to one or more of the transit benefit options.
For additional information about the DC Parking Cashout Law, see the August 30, 2022, edition of Compliance Corner.
Commutifi (The Reporting Dashboard) »
DC Parking Cashout Law Toolkit »
Coverage for Medically Necessary Food
After passage by the DC Council in June 2022, approval by Mayor Bowser in July 2022, and the required review by the US Congress, Bill 24-0171 has become law. Under the new law, health insurance policies are required to provide coverage for medically necessary food as prescribed for certain diseases and conditions, including Crohn’s disease, ulcerative colitis, inflammatory bowel disease, gastroesophageal reflux disease that is nonresponsive to standard medical therapies, malabsorption due to liver or pancreatic disease, and food protein-induced enterocolitis syndrome. The coverage must be treated at least the same as other conditions regarding cost-sharing requirements.
Bill 24-0171 »
Transportation Program Requirements for Employers
By January 15, 2023, certain Washington, DC employers must report their compliance with the DC Parking Cashout Law of 2020. The reporting will cover future compliance. When available, the report templates will be available on the District Department of Transportation website.
The Cashout Law applies to employers with 20 or more employees in the district who offer free or subsidized parking benefits to employees. To comply, covered employers must implement one of the following compliance options:
Please note that the Cashout Law is in addition to the Employer Commuter Requirement. Since January 1, 2016, employers with 20 or more employees in DC must offer access to one or more of the transit benefit options. All employees working 50% or more of their service time in DC are counted in the following transit benefit options:
To comply, employers must:
DC employers should review both sets of requirements and comply as necessary.
Cashout Law Information and Reporting »
Employer Commuter Benefits Toolkit »
Paid Family Leave Expanded with Reduced Employer Contributions
Annually, the Office of the Chief Financial Officer (OCFO) is required to review the Universal Paid Leave Fund for solvency. On March 1, 2022, the OCFO announced that the current employer contribution rate and benefits would result in a surplus of $500 million. Subsequently, the OCFO announced a reduction in the employer contribution from 0.62% of wages to 0.26%.
The maximum leave will also increase from eight weeks per year to twelve weeks. As a reminder, eligible employees may take up to eight weeks for parental leave, six weeks for their own medical condition, and six weeks for family care. For those who qualify, there are two weeks specifically for prenatal/ pregnancy leave, which is in addition to the current eight weeks annual maximum and will be in addition to the newly increased 12 weeks maximum.
The changes are effective July 1, 2022, but the Department of Employment Services has indicated that they may not be ready to implement the changes that quickly.
Employers should revise their leave policies and payroll systems as necessary.
OCFC Memo »
Vaccination Leave Requirements Extended
Since March 2020, employers of all sizes have been required to provide unpaid leave under DCFMLA to employees for reasons related to COVID-19. Separately, since November 18, 2021, employers of all sizes have been required to provide two hours of paid leave for employees receiving (or their child receiving) a COVID-19 vaccination and an additional eight hours of paid leave in the following 24-hour period for vaccination recovery. Both requirements were set to expire on February 16, 2022, and were previously reported in Compliance Corner. On February 3, 2022, Mayor Bowser signed Act 24-319, which extends both provisions until May 4, 2022.
Act 24-319 »
Paid Vaccination Leave
On November 18, 2021, Mayor Bowser signed the COVID Vaccination Leave Emergency Amendment Act of 2021 into law, which contains two primary provisions.
First, it extends the existing requirement for employers to provide unpaid leave under DC FMLA for reasons related to COVID-19. This requirement has been in place since March 2020, was set to expire November 5, 2021, and was previously featured in Compliance Corner. It applies to employers of all sizes.
Employees are eligible for up to 16 weeks of unpaid leave in a 24-month period if they have worked for the employer for at least 30 days and experience one of the following qualifying reasons: the employee or a household member is under a government or health care provider’s order to quarantine, or the employee needs to care for a child whose school or daycare center is closed due to COVID-19. (Note: DC FMLA generally applies only to employers with 20 or more employees working in the district, with employees eligible only after 12 months and 1,000 hours of service.)
Secondly, the Emergency Amendment Act requires employers of all sizes to provide two hours of paid leave for employees receiving (or their child receiving) a COVID-19 vaccination and an additional eight hours of paid leave in the following 24-hour period for vaccination recovery. This requirement was effective November 18, 2021, and is set to expire February 16, 2022, unless extended.
Employers with employees working in the district should be aware of these requirements.
COVID Vaccination Leave Emergency Amendment Act of 2021 »
Expansion of D.C. PFML Benefits; Extension of Offsetting Prohibition
As part of the Fiscal Year 2022 Budget Support Emergency Act of 2021, the following changes were made to D.C. Paid Family and Medical Leave benefits effective October 1, 2021 – September 30, 2022:
The Emergency Act also extends the prohibition of short-term disability policies reducing benefits (also known as offsetting benefits) based on an insured’s receipt of medical leave benefits from the district. As previously reported, this prohibition was initially effective May 2021 and was temporary. Under the new law, the prohibition will remain in place until at least September 30, 2022.
The Department of Employment Services is expected to publish a revised PFML poster in the coming weeks. Employers should revise their leave policies as necessary.
D.C. Fiscal Year 2022 Budget Support Emergency Act of 2021 »
Coordination of Short-Term Disability and PFML Benefits
On May 26, 2021, DC Mayor Bowser signed B24-0185 into law. Enacted as Emergency Act 24-0090, which is effective immediately and expiring August 24, 2021, the new law prohibits short-term disability policies issued in DC from offsetting or reducing benefits based on DC Paid Family and Medical Leave payments.
Unfortunately, we have no additional guidance at this time as to how this provision will be administered. It is common for either the short-term disability policy or the state PFL program to offset benefits so that the employee does not receive more than 100% of their normal wages while on leave. In DC, an employer cannot interfere with an employee's right to PFML benefits. Thus, DC PFML benefits do not coordinate with short-term disability policies. In other words, DC PFML pays primary. This has resulted in short-term disabilities policies paying secondary to PFML with reduced benefits. However, the new law prohibits this practice.
We will continue to monitor this issue and report any developments. Employers should work with their advisor and short-term disability insurers to make any necessary changes to leave policies, documents and operations.
Emergency Act 24-0090 »
Pregnancy as a Qualifying Event
The DC Council has adopted an ordinance that creates a new qualifying event for an insured to enroll in coverage mid-year based upon pregnancy. The enrollment period extends to 30 days following the date of pregnancy confirmation, as certified by a healthcare professional. It appears that the event would extend to any individual eligible under the group health plan who becomes pregnant including the employee, domestic partner, spouse or child. After review by Mayor Bowser and the US Congress, the law was effective October 20, 2020.
Importantly, pregnancy is not a recognized qualifying event under Section 125. Thus, if an employee adds coverage mid-year under this event, any associated employee contributions will likely need to be deducted on a post-tax basis.
D.C. Law 23-135. Pregnancy as a Qualifying Event Act of 2020 »
Declaration of Emergency Leave
On March 17, 2020, the City Council approved the COVID-19 Response Emergency Amendment Act. The act added a new category of leave to the existing D.C. FMLA. The declaration of emergency (DOE) leave is available to employees who are unable to work during a period of time where the mayor has declared a public health emergency; and the employee has self-quarantined or isolated due to a recommendation or order by a health care provider, federal/state official, or the mayor.
Unlike existing D.C. FMLA, the DOE leave applies to employers of any size with an employee performing work in the district. Additionally, employees do not have to meet any service requirements to be eligible. The amount of unpaid leave is indefinite for the period of the public health emergency.
COVID-19 Response Emergency Amendment Act »
Order on COVID-19 Coverage
On March 20, 2020, the Department of Insurance published Commissioner’s Order 01-2020, relating to COVID-19 screening, testing and treatment. The order requires carriers to cover all medically necessary screening, testing and treatment for COVID-19 or suspected COVID-19 or respiratory diseases/illnesses detected in the course of seeking screening, testing or treatment for COVID-19 without cost sharing of any kind (including deductibles, copayments and coinsurance). This includes all associated costs, such as processing fees and clinical evaluations. In addition, carriers may not require any preauthorization for any COVID-19-related screening, testing or treatment, and carriers must cover all out-of-network charges (including cost sharing and balance billing) unless the employee was first offered the service in-network without unreasonable delay. Further, if and when an immunization or vaccine becomes available for COVID-19 per CDC guidelines, carriers must immediately cover the cost for those services without cost sharing.
In addition, the order states that carriers must enhance their coverage of telehealth services, and are directed to review their telehealth programs with participating providers; cost sharing for telehealth must not be more than for in-person services. Also, with respect to prescription drug access, carriers must allow enrollees to obtain refills of their prescription medications before the scheduled refill date, and should waive any additional costs associated with accessing prescriptions from a mail-order pharmacy.
The order is directed towards carriers, but employers should be aware of the DC order’s requirements, and should work with their carrier on any questions relating to COVID-19-related coverage.
Commissioner’s Order 01-2020 »
Revised FAQs on Insurance Issues Related to COVID-19
On March 24, 2020, the Department of Insurance published revised FAQs on insurance issues related to COVID-19. The revised FAQs are meant to help employers, carriers and DC residents better understand some of the challenges and questions associated with COVID-19-related coverage. Some FAQs are more aimed toward employees/DC residents, including where an employee/resident can go to get tested for COVID-19, who is responsible for the cost, whether preauthorization is required, and whether testing/treatment for COVID-19 must be done at in-network facilities. The FAQs also address the interaction between COVID-19 testing without cost sharing and an employee’s HSA eligibility.
The revised FAQs contain no new employer compliance obligations, but can serve as a great resource for employees who might have questions on their insurance and generally with respect to COVID-19.
Revised FAQs »
Paid Family Leave Poster and Resources Published
As reported previously, D.C.’s paid family leave law becomes effective July 1, 2020. That is the date that eligible employees will become entitled to up to eight weeks of paid leave to bond with a new child, six weeks to care for a seriously ill family member, or two weeks for their own serious illness. Employers have been submitting the required tax assessment since July 1, 2019, in preparation for the new requirement. As a reminder, the new law applies to any employer with an employee who performs at least 50% of their work within the District.
The Department of Employment Services (DOES) has published a Paid Family Leave Employee Notice. The notice must be posted in the worksite with other employment posters by February 1, 2020. The notice must be provided in electronic or physical form to all existing D.C. employees at least once between February 1, 2020, and February 1, 2021, and annually thereafter. All new employees must receive a copy at the time of hire. Finally, the employer must distribute the notice to any employee who notifies the employer on or after February 1, 2020, of their need for leave for an event that could qualify for PFL benefits.
Further, DOES has posted an Employer Toolkit, which is designed to answer frequently asked questions and assist employers revise their leave policies.
DOES PFL Employee Notice »DOES PFL Employer Toolkit »
Employer Reporting Responsibility Related to Individual Health Insurance Mandate
Since the beginning of 2019, D.C. residents must have minimum essential health care coverage or pay a tax penalty. As a result, employers will have reporting responsibilities to the District. The responsibility will be satisfied by submitting the same IRS Forms 1094-B, 1095-B, 1094-C, and 1095-C to the D.C. Office of Tax and Revenue (OTR). In other words, employers will file them with the IRS to comply with their federal responsibility under the employer mandate. They will then file the same forms with the OTR to satisfy their District responsibility.
The requirement applies to employers with 50 or more employees, one of whom resides in D.C. The forms will need to be filed electronically through the MyTax.DC.gov website. For this first year, the filing deadline for the 2019 forms will be June 30, 2020. In future years, the deadline will be 30 days following the IRS deadline for submitting forms.
There is no mention of the requirement only applying to self-insured employers. It appears that both fully insured and self-insured large employers would need to comply, even though the carrier for a fully insured plan will already be submitting the Forms 1094-B and 1095-B on behalf of the plan. Hopefully, future guidance will be issued prior to June 2020. We will keep you updated on any developments. In the interim, employers should work with reporting vendors and internal personnel to prepare for the new requirement.
D.C. OTR Notice 2019-04 »
Enforcement of Employer Commuter Benefit Requirement
On August 16, 2019, the D.C. Department of Employment Services published final regulations related to the enforcement of the existing commuter benefits requirement.
Since January 1, 2016, employers with 20 or more employees in D.C. must offer access to one or more transit benefit options. All employees working 50% or more of their service time in D.C. are counted. Those options are:
The employer must:
Under the final regulations, effective November 14, 2019, the penalties for failure to comply are: $100 for the first offense; $200 for the second; $400 for the third; and $800 for the fourth and subsequent offenses. Please note: an offense is considered each employee per month that is not offered at least one qualified transportation program benefit.
Notice of Final Rulemaking »
Universal Paid Leave
As previously reported, employers with employees who perform at least 50 percent of their work in D.C. will be required to contribute to the Universal Paid Leave Program. Employers must pay 0.62 percent of all wages for such employees to fund the program, which will provide paid leave to eligible employees for leaves on or after July 1, 2020.
The employer contributions are scheduled to begin July 1, 2019. NFP’s Benefits Compliance team has received confirmation from D.C. Department of Employment Services, Office of Paid Family Leave, that the employers will owe the 0.62 percent assessment on the second quarter earnings, which is payable in July. In other words, employers need to be working with their payroll provider now to collect the tax on wages beginning April 1, 2019. The office will release final regulations and further clarification soon. They are exploring the option to include the wage reporting and tax payment in the Employer Self Service Portal, which is used for unemployment insurance reporting.
Department of Employment Services, Paid Family Leave Information
Protecting Pregnant Workers Notice
The Office of Human Rights has issued a revised notice regarding The Protecting Pregnant Workers Fairness Act (PPWFA). The notice must be posted in the workplace in a conspicuous place. Employers must also provide employees with notice of the law within 10 days of an employee notifying them of their pregnancy or related condition.
As a reminder, the PPWFA requires District employers of all sizes to provide reasonable accommodation for employees whose ability to perform job duties is limited because of pregnancy, childbirth, breastfeeding or a related medical condition. Reasonable accommodations include unpaid time off, modifying work equipment, providing more frequent or longer breaks and modifying work schedules.
Revised PPWFA Poster »
Universal Paid Leave Guidance
The D.C. Department of Employment Services (DOES) has published guidance on the Universal Paid Leave (UPL) Act in the form of two FAQs that are divided into employer and employee questions. As a reminder, the new law will provide employees with paid leave beginning July 1, 2020. The leave is administered by DOES, but is funded by employers who will contribute 0.62 percent of payroll starting July 1, 2019. Eligible employees will be entitled to up to:
The employee FAQ clarifies the following issues:
The employer FAQ clarifies the following issues:
DOES will be providing a notice that will need to be posted in the workplace. They have already provided a calculator and a chart to assist employees in estimating paid weekly benefits. Lastly, a chart comparing the provisions of federal FMLA, DC FMLA, DC UPL (also called Paid Family Leave or PFL) and Accrued Sick and Safe Leave is also available.
D.C. Universal Paid Leave, Employee FAQ »
D.C. Universal Paid Leave, Employer FAQ »
Coverage of Women’s Preventive Care Services
On April 24, 2017, Mayor Bowser approved emergency Act 22-0049, Defending Access to Women's Health Care Services Emergency Amendment Act of 2017. The Act amends D.C.’s insurance laws to require insurers to provide coverage for certain women’s preventive health services without cost sharing. A group health plan will be required to provide such coverage for:
While group health plans issued in D.C. are already subject to this requirement because of the federal requirement under the ACA, this action would require policies to comply regardless of whether they are grandfathered and regardless of whether the federal law changes. In other words, it has become a local insurance mandate.
As with all emergency action, it is effective for 90 days and expires on July 23, 2017.
Act 22-0049 »
Specialty Drug Copayment Limitation Act
On April 7, 2017, B21-0032, the Specialty Drug Copayment Limitation Act, became law. The new law restricts the amount that a health insurance plan may charge for a specialty tier drug. The plan may charge no more than $150 per month for a 30-day supply or $300 for a 90-day supply. A specialty drug for this purpose is defined as a drug prescribed for a disease or condition that affects fewer than 200,000 persons in the U.S. and has a total monthly cost of $600 or more. The law is effective for health insurance policies that provide prescription drug coverage and that are renewed or issued on or after Jan. 1, 2018.
Universal Paid Leave Act
On April 7, 2017, the Universal Paid Leave Act became law in the District of Columbia. It was originally introduced as Bill B21-0415 in October 2015. It was approved by the city council on Dec. 20, 2016. Mayor Bowser opposed the bill and returned it unsigned on Feb. 2, 2017. Unique to the District, any approved acts are subject to a 30 day review by the U.S. Congress. If no action is taken by Congress, the act becomes law, which is what happened with this bill. The act became law on April 7, 2017 after no action from the Mayor or Congress.
The new law establishes a paid leave system for all individuals who work within the District at least 50 percent of their work time. Employees of the federal government are excluded from eligibility. Employees will be eligible for up to a total of 16 weeks of paid leave for absences related to a serious health condition of the employee (two weeks), serious health condition of a family member (six weeks) and parental bonding time with a new child (eight weeks). The term family member includes a biological, adopted, foster or stepchild; a domestic partner and child of a domestic partner; parent, stepparent, grandparent or parent-in-law; and sibling. It also includes an individual who stood in loco parentis to the employee or a child for whom the employee stands in loco parentis.
Benefits will be paid by the Family and Medical Leave Fund, which will be funded by employers. Beginning in July 2019, employers will contribute an amount equal to 0.62 percent of employee wages. Employees will be eligible to file for claims beginning July 1, 2020 with a maximum weekly benefit of $1,000.
The benefits run concurrently with FMLA and D.C. FMLA and the new act does not provide additional job protection beyond that provided by those laws.
Proposed regulations, which will provide greater detail, are to be released by October 2017. We will report any developments in future issues of Compliance Corner.
July 26, 2016
On March 3, 2016, the District of Columbia (DC) council enacted DC Act 21-324, which extends temporary provisions of the DC law to permit time off as a reasonable accommodation for pre-birth complications. The law is meant to protect employees who are absent from work because of such pre-birth complications or other pregnancy-related conditions. The extension is temporary, taking effect on April 20, 2016, and expiring on Dec. 1, 2016. Employers should work with outside counsel in developing and implementing their leave policies to meet the DC rules for pregnant employees.
DC Act 21-324 »
March 8, 2016
On Feb. 18, 2016, the District of Columbia (D.C.) Council enacted D.C. Act 21-314. The new law temporarily amends the Protecting Pregnant Workers Fairness Act of 2014 to require an employer to make a reasonable accommodation for an employee whose ability to perform the functions of their job is affected by a pre-birth complication. The new law prohibits employers from taking adverse action against employees who are absent from work as a result of pre-birth complications. The new law is effective Feb. 18, 2016, until May 18, 2016. The council is considering legislation to make the amendments permanent. While the law does not specifically address benefits, D.C. employers that have pregnant employees affected by a pre-birth complication should consider state and federal regulations that may require the employer to continue health coverage during any leave relating to the pregnancy. Because those situations implicate other areas of law, including labor and employment, employers should work with outside counsel in addressing leave and benefit policies with respect to pregnant employees.
D.C. Act 21-314 »
On Feb. 18, 2016, the D.C. Council enacted D.C. Act 21-322. The new law temporarily amends the D.C. Accrued Sick and Safe Leave Act of 2008 to clarify that certain employees (those in the building and construction industry) covered by a collective bargaining agreement (CBA) are exempt from the paid leave requirements if the CBA states so. Specifically, to exempt those types of employees, the CBA must expressly waive the requirements “in clear and unambiguous terms.” The new law is effective for 225 days after Congress approves the law (which is expected on April 29, 2016). Employers in the building and construction industry that have previously entered into a CBA should review the CBA to see if the new law has any affect and the employer’s paid sick leave policies (including continuation of benefits during the leave). If questions arise, employers should work with outside counsel, since the issue involves other areas of law, such as labor and employment, which are beyond the scope of benefits.
D.C. Act 21-322 »
DC State Updates - 2015 Jan 03 No.01
On Oct. 20, 2015, the District of Columbia (DC) Department of Insurance published Bulletin 15-IB-07-10/20. The new bulletin relates to the definition of “small employer” under DC law, and states that as a result of the PACE Act, DC will retain the definition of small employer as an employer with 50 or fewer employees. The bulletin and definition apply for plan years that begin on or after Jan. 1, 2016. The bulletin also rescinds Bulletin 15-IB-05-04/28, “Small Employer” Transitional Policy for the 2016 Plan Year (issued April 28, 2015, and covered in the May 5, 2015, edition of Compliance Corner). The bulletin contains contact information for questions or concerns relating to the bulletin. Employers in the 51-100 group in DC should also work with their carriers concerning next steps with regard to the bulletin.
Bulletin 15-IB-07-10/20 »
DC State Updates - 2015 Jan 03 No.02
DC State Updates - 2015 Jan 06 No.04
On Sept. 17, 2015, DC Act 21-91 took effect. Enacted June 17, 2015, Act 21-91 is called the “Access to Contraceptives Amendment Act of 2015.” Under the new law, plans that provide coverage for prescription drugs must provide coverage for up to a 12-month supply of such drugs at one time. Specifically, ‘contraceptives’ means drugs or drug regimens approved by the U.S. FDA for the purpose of preventing pregnancy.
D.C. Act 21-91 »
DC State Updates - 2015 Jan 06 No.03
On Sept. 17, 2015, DC Act 21-90 took effect. Enacted June 17, 2015, Act 21-90 is called the “Healthy Hearts of Babies Act of 2015.” Under the new law, insurers must provide coverage for critical congenital heart disease screenings for newborns delivered in hospitals, maternity centers or in homes. Specifically, ‘critical congenital heart disease’ means a group of heart defects that cause serious, life-threatening symptoms and require intervention within the first day or first year of life. Under the law, screening must be performed using pulse oximetry (noninvasive procedures used to measure blood oxygen levels) until additional alternative tests are adopted by the American Academy of Pediatrics. The new law contains no new requirements for employers, but employers should be aware of the changes should questions arise relating to coverage of newborn congenital heart disease screenings.
D.C. Act 21-90 »
DC State Updates - 2015 Jan 06 No.02
DC State Updates - 2015 Jan 06 No.01
DC State Updates - 2015 Jan 19 No.02
On May 2, 2015, District of Columbia (DC) Act 20-593 took effect. The act, called the “Reproductive Health Non-Discrimination Amendment Act of 2014,” amends DC law to ensure that individuals are protected from discrimination based on an individual’s or dependent’s reproductive health decisions. As background, DC Code Sec. 2-1401.05 prohibits employers from discriminating against an employee (in employment decisions and benefits offerings) on the basis of pregnancy, childbirth, related medical conditions or breastfeeding. Act 20-593 amends that Code section by adding “reproductive health decisions” to the list of protections. That term is defined as a decision by an employee or an employee’s dependent (including a spouse) related to the use or intended use of a particular drug, device or medical service, including those related to contraception or fertility control or the planned intended initiation or termination of a pregnancy. The act was originally signed into law Jan. 23, 2015, but did not take effect until May 2, 2015, due to DC’s legislative process, which requires U.S. Congressional review.
DC State Updates - 2015 Jan 19 No.01
DC State Updates - 2015 Jan 05 No.01
On April 28, 2015, the District of Columbia (DC) Department of Insurance published Bulletin 15-IB-05-04/28 which relates to the change in the definition of ‘small employer’ for purposes of group health insurance coverage in DC.
As background, on Jan. 1, 2016, under PPACA that definition changes from 1-50 employees to 1-100 employees. According to the bulletin, DC has adopted a transitional policy for small employers, as allowed by the CCIIO (outlined in a March 5, 2014, CCIIO bulletin, which allows transition relief for non-PPACA-compliant plans with years beginning on or before Oct. 1, 2016). The CCIIO transitional policy allows small employers with between 51-100 employees to renew their existing policies and remain in the large group market without violating PPACA. The bulletin is meant to explain the details of DC’s transitional policy and how it interacts with PPACA.
According to the bulletin, for employers with 51-100 employees the department will allow insurers to renew their current policies through policy years beginning on or before Oct. 1, 2016. Employers with 51-100 employees can continue to purchase large group market policies through Dec. 31, 2015. Under the transitional policy those large group policies may be renewed by Oct. 1, 2016. Importantly, all new policies sold to small employers (those with 1-100 employees) after Jan. 1, 2016, must comply with applicable PPACA and DC requirements. The bulletin includes a reminder that it is up to the insurer’s discretion as to whether a particular policy will be renewed under the small employer transitional policy. Thus, DC employers in the 51-100 group should work with their insurers to determine if they will be allowed to renew under DC’s transitional policy.
The new bulletin contains no new obligations for employers. However, DC employers, particularly those with 51 – 100 employees, will want to be aware of the transitional policy.
Bulletin 15-IB-05-04/28 »
DC State Updates - 2015 Jan 05 No.02
DC State Updates - 2015 Jan 13 No.01
On Dec. 17, 2014, the District of Columbia (DC) Department of Insurance, Securities and Banking published Bulletin 14-IB-01-12/17. The new bulletin is addressed to health insurers and relates to health insurance coverage sold to associations and MEWAs located in DC, as well as health insurance coverage sold to small DC employers by captive insurers domiciled outside of DC.
Regarding association coverage, the federal government (CMS) previously issued guidance in 2011 relating to PPACA’s individual and group insurance mandates when insurance is sold to, or through, associations. Under that guidance, CMS states that in most association situations, the group health plan exists at the individual employer level and not at the association-of-employers level. Thus, in these situations, the size of each individual employer participating in the association determines whether that employer’s coverage is subject to the small or large group market rules (most PPACA insurance mandates apply only to small groups).
A 'mixed' association is where different members have coverage that is subject to the individual, small, and/or large group market rules, as determined by each employer member’s status. According to the bulletin, an association cannot aggregate the employees of the member employers in an attempt to qualify as a large employer. Accordingly, each employer member of a mixed association must receive coverage that complies with the requirements arising out of their own status as an individual, small employer or large employer. Further, since under DC law individual and small group health plans must be sold only through DC Health Link (the DC-established health insurance exchange), each small employer association member must purchase insurance through DC Health Link.
Regarding MEWAs and captives, if a MEWA solicits or provides health benefits to one or more employers domiciled in DC, the MEWA is subject to DC insurance laws (regardless of whether the MEWA is regulated under ERISA or is domiciled in DC). DC law does allow an exemption for MEWAs maintained or established by a single employer that are self-insured (and that are not considered a governmental plan). The bulletin further describes allowable situations for fully insured MEWAs, including requirements for MEWAs that establish a trust in order to provide group health benefits.
Lastly, the bulletin addresses captive insurers, MEWAs and associations that are acting as insurers—selling or otherwise issuing or making available health insurance policies to more than one small employer located in DC. In that situation, the captive insurer, MEWA or association will be deemed to be engaged in the business of selling health insurance in DC, and therefore must obtain a certificate of authority from the Department. In addition, DC law requires a policy, certificate or coverage for a health benefit plan offered to a DC employer to be filed with the and approved by the Department—including coverage issues to an out-of-DC trust or association or by a captive.
Employers considering obtaining coverage through an association, MEWA or captive arrangement should carefully review the bulletin to better understand their rights and obligations relating to the coverage.
Bulletin 14-IB-01-12/17 »
DC State Updates - 2015 Jan 13 No.02