Side Affects Episode 166 | Compliance in Minutes July

Speaker A: Hello everyone. I'm Hayden Parsons, the marketing producer at UM, McGo and Brabender, bringing you the July 2026 edition of Compliance in Minutes. When employees hear the words employee benefits, they might think of healthcare perks, wellness programs, ptl. The list goes on. But when HR professionals hear the words employee benefits, they're likely thinking about cost management, compensation, open enrollment, and most importantly, compliance. Compliance is the cornerstone of today's insurance landscape, and for good reason. As your broker, MB is committed to delivering timely compliance updates, empowering our clients to operate efficiently, overcome challenges and and remain aligned with the ever evolving laws and regulations. With that in mind, let's dive into your July 2026 compliance updates. First up, um, the IRS has released its annual cost of living adjustments for 2027. There are several updates employers should be aware of HSA contribution limits are increasing to $4,500 for individual coverage and and $9,000 for family coverage, while minimum deductibles for high deductible health plans are also increasing. Expected benefit HRAs will increase to $2,250 next year. One interesting change, or rather lack of one, is that the direct primary care monthly fee limits are staying exactly the same. They remain capped at $150 per month for individuals and $300 per month for families, making this one of the few indexed benefit limits that didn't increase for 2027. If your organization offers HSAs, HDHPs, direct primary care arrangements, or expected benefit HRAs, now is a great time to begin planning for next year's enrollment materials and contribution limits. Next HIPAA enforcement continues to make headlines just two months after a large employer agreed to a, uh, $245,000 HIPAA settlement. Another employer has now agreed to pay $450,000 following a ransomware attack that exposed protected health information. In both cases, investigators found many of the same no comprehensive risk analysis, weak security policies, insufficient monitoring of systems containing protected health information, and storing more employee health information than was actually necessary. The biggest takeaway is that employers should only maintain the minimum information needed to administer their health plans. In many situations, de identified data is enough and when protected health information is necessary, it should be encrypted, actively monitored, and securely removed when it's no longer needed. These back to back settlements send a clear message that regulators are increasing their focus on employer sponsored health plans and and expect organizations to take HIPAA privacy and security obligations seriously. Moving on, Trump accounts officially become available for contributions beginning July 4th. These new accounts are designed as retirement saving vehicles for children under age 18 and may eventually allow both employer and employee contributions under specific tax rules. While contributions may begin this summer, the There are still several unanswered questions surrounding implementation. Because of that, many employers are expected to wait for additional IRS guidance before deciding whether to offer a Trump account contribution program. For employers considering this new benefit, it's worth monitoring future guidance before making any plan changes. Next is an important reminder for employers sponsoring self funded health plans. PCORI fees are still due by July 31, but there's one important catch. Employers should wait until the IRS releases the updated Second Quarter Form 720 before filing and paying the fee. Filing too early could mean using outdated fee amounts, since the revised form needs to include this year's updated rates. Once the new form becomes available, employers should complete the filing, submit payment and keep proof of both for at least four years in case questions arise later. Another item worth watching involves pharmacy benefit managers or PBMs. Earlier this year, the Department of Labor proposed a new transparency requirement for PBMs serving self funded health plans. However, since Congress passed additional PBM reforms through the Consolidated Appropriations act, the proposed rule appears to be on hold for now. Even though those proposed regulations haven't moved forward, employers with self funded ERISA health plans should already be receiving annual compensation disclosures before entering into PBM contracts. Additional reporting requirements may still be coming in the future years, so employers should continue monitoring developments in this area. Finally, two quick updates to keep on your radar. First, employers who filed claims in the Blue Cross Blue Shield antitrust settlement are finally beginning to receive settlement checks. While settlement material suggests employers may retain the payments, ERISA UH rules may require that a portion be shared with plan participants, depending on how the plan was funded. Employers should work with legal counsel before deciding how those funds are handled and if any money belongs to participants, it's generally expected to be distributed within 90 days. And one final update. The Department of Labor announced that several health plan penalty amounts will remain unchanged for 2026 because last year's government shutdown delayed the inflation calculations normally used to update those penalties. That's a wrap for, uh, our July 2026 compliance in minutes. Thanks for tuning in. And don't forget to subscribe for monthly updates on compliance, employee benefits and health.