In today's video, we talk about a recent final rule issuance from the Departments on the subject of short-term insurance plans.
Short-Term Limited Duration Insurance Plan Rules
The final rules have brought about changes in these plans that counteract changes made by the Trump administration. Previously, these plans could extend beyond four months with continual renewals, but now they are restricted to a maximum duration of four months. This shift may prompt employees enrolled in such plans to consider enrolling in employer group insurance under HIPAA special enrollment rights.
For employers, it's crucial to proactively inform employees about these changes, especially for policies starting on or after 9/1/24.
Impact on the Group Insurance Market
The limitations imposed on short-term limited duration plans will have a small impact on the overall group market, as the plans are rare. However, employers need to be aware of how the altered rules may prompt employees to switch to group insurance for longer-term coverage when it does apply.
Fixed Indemnity Plans Updates
Fixed Indemnity plans, which offer specific fee payments for various treatments or critical illnesses, will also see changes in terms of taxability. While final rules concerning the tax implications of these plans are pending, a notable update is the requirement for a notice on policies. This notice must clarify that the plan is a fixed Indemnity plan and not a major medical plan.
Employers don't need to provide this notice themselves, as it is the responsibility of the policy issuers to include it on their documentation.
Final Thoughts
The evolving landscape of employee benefits compliance demands vigilance from both employers and employees. Stay informed about these regulatory changes, as the final rules are expected to be solidified in the coming months.
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