Health and Welfare

DOL Revises Emergency Leave Rule Following Court Decision

The Department of Labor (DOL) has issued a revision and clarification to the temporary rule it issued April 1, 2020, guidance that implemented emergency paid sick leave and expanded family and medical leave under the Families First Coronavirus Relief Act (FFCRA), also known as the Emergency Leave Rule. As previously communicated, a lawsuit brought by the State of New York in federal court challenged certain parts of the Emergency Leave Rule. On August 3, 2020, the court ruled that the following parts of the Emergency Leave Rule were invalid.

  • Requirement that the employer must have work for the employee as a prerequisite for eligibility for emergency leave
  • Employer approval authority for an employee to take intermittent emergency leave
  • Definition of an employee who is a “healthcare provider”
  • Requirement for employees to provide certain documentation to their employers before taking emergency leave

In light of the court’s decision, on September 11, 2020, the DOL issued a revision and clarification to the Emergency Leave Rule, which does the following.

  1. It reaffirms—in effect, challenging the court ruling—that paid sick leave and expanded family and medical leave may be taken only if the employee has work from which to take leave. This requirement applies to all qualifying reasons to take paid sick leave and expanded family and medical leave.
  2. It reaffirms that where intermittent FFCRA leave is permitted by the DOL’s regulations, an employee must obtain his or her employer’s approval to take paid sick leave or expanded family and medical leave intermittently.
  3. It revises the definition of “healthcare provider” to mean those employees who are healthcare providers under FMLA regulations, and other employees who are employed to provide diagnostic services, preventive services, treatment services, or other services that are integrated with—and necessary to—the provision of patient care.
  4. It revises the FFCRA rule to clarify that the information the employee must give the employer to support the need for his or her emergency paid leave should be provided to the employer as soon as practicable. Also, the notification requirement is revised for expanded family and medical leave to clarify that, similarly, notice from the employee is required as soon as practicable, including before taking the leave if the employee is able.

Based on the foregoing, the original FFCRA rule, as revised by this temporary rule, remains unchanged for workability requirements and intermittent leave. But the definition of “healthcare provider” is revised to limit the extent of employees who can be excluded from emergency leave eligibility and notification timing requirements are eased in accordance with the court’s decision.

In addition to the revised temporary rule and an accompanying news release, the DOL added three new Q&As (101-103) to the Families First Coronavirus Response Act: Questions and Answers addressing the effects of the New York court ruling. Additional court challenges to this revision and clarification rule might be on the horizon.

 

 

 


Legislation Introduced to Expand HSA Access

Senator Rand Paul (R-KY) has introduced the Health Savings Accounts for All Act of 2020 (S.4367). The legislation is intended to expand access and reduce restrictions on health savings accounts (HSAs).

According to details of Senator Paul’s press release, the bill proposes to eliminate the annual limit on tax-deductible contributions to HSAs by individuals and their employers. The requirement to be enrolled in a high deductible health plan in order to contribute to an HSA would also be eliminated. Additionally, HSA balances could be used for the payment of health insurance premiums, direct care service arrangements, and expenses incurred during the prior or current tax year before the establishment of the HSA. Another provision would allow for the tax-free transfer of HSAs upon death to certain family members.


Washington Pulse: New COVID-19 Relief for Employee Welfare Benefit Plans

During the last few months, the Department of Labor (DOL), Treasury Department, and Department of Health and Human Services (DHHS) have jointly issued multiple pieces of guidance intended to provide much needed relief to those suffering economic hardships from the coronavirus (COVID-19) pandemic. In this article, we’ll explain how the most recent relief affects employee welfare benefit plans.

 

Overview of New Relief

To help overcome the financial hardships facing millions of Americans, the DOL and the Treasury Department published a final rule on May 4, 2020. The final rule extends and suspends various employee welfare benefit plan and COBRA deadlines that fall between March 1, 2020, and the end of a 60-day period following the close of the COVID-19 National Emergency (known as the Outbreak Period), which has yet to be announced.

The DOL and Treasury Department also worked with the DHHS to create EBSA Disaster Relief Notice 2020-01. This guidance extends deadlines for providing notices, disclosures, and documents that are due to plan participants and beneficiaries between March 1, 2020, and the end of the Outbreak Period. The relief applies to plan fiduciaries that act in good faith to provide this information as soon as administratively practicable. The EBSA notice also confirms that Form 5500 filing deadlines that occur between April 1, 2020, and July 14, 2020, must now be filed by July 15, 2020 (calendar-year plans are not affected).

On May 12, 2020, the IRS issued Notice 2020-29 and Notice 2020-33. Notice 2020-29 allows employees to make election changes relating to employer-sponsored group health coverage, health flexible savings accounts (FSAs), and dependent care FSAs mid-year with no special enrollment events. The notice also allows for health FSA and dependent care FSA participants to submit new claims for reimbursement up to December 31, 2020, from amounts that remained in accounts as of a plan year end or the end of the grace period that occurred at any time in 2020.

Notice 2020-33 increases the maximum $500 health FSA carryover amount to an amount that is equal to 20 percent of the maximum salary reduction contribution for the plan year. The increase takes effect immediately, making the maximum amount that can be carried forward for the 2020 plan year $550 (20 percent of $2,750).

 

How the Final Rule Affects Employee Welfare Benefit Plans

The most significant impact of the final rule involves providing certain individuals extended deadlines for performing certain acts. When calculating the new extended deadlines, the final rule disregards the Outbreak Period.

  • Filing a benefit claim: The final rule extends the deadline for filing claims for benefits under welfare benefit plans. Importantly, this relief will also include calendar-year health FSAs and health reimbursement accounts (HRAs) that had a runout period ending on March 1, 2020 or later. Although this provision will help individuals with existing claims, it does not allow them to incur new claims applicable to an old plan year.
    • Example: An employee terminated employment and lost health coverage on May 1, 2020. Because the plan has a 90 day-runout period for terminated participants, the employee would normally have until July 30, 2020, to submit claims for reimbursement of eligible expenses incurred before the employee terminated employment. The period between the date of termination and the end of the Outbreak Period is now disregarded. If March 2, 2021 is the end of the Outbreak Period, the 90-day runout period will start on March 3, 2021, and end on May 31, 2021.
  • Filing an appeal and requesting a review: The final rule extends the period to file an appeal of an adverse benefit determination. This period must be at least 60 days (for welfare benefit plans) or 180 days (for group health plans) following notification of the adverse benefit determination. The final rule also extends the four-month period for filing a request for external or internal review.
  • Special Enrollment Periods: Employees and their eligible dependents now have more time to enroll in a group health plan following a special enrollment event. Usually individuals must elect coverage during a 30-day period (or a 60-day period, depending on plan provisions) following a special enrollment event.
    • Example: An employee had a child on March 20, 2020. The employee would normally have 30 days to elect coverage for the child. The period between the birth and the end of the Outbreak Period is now disregarded. If October 10, 2020, is the end of the Outbreak Period, the 30-day period would start on October 11, 2020, and end on November 9, 2020.

 

How Notice 2020-29 Affects Employee Welfare Benefit Plans

IRS Notice 2020-29 gives plans additional deadline flexibility and eases restrictions associated with various plan requirements found in the Internal Revenue Code and associated Treasury Regulations. The extensions provided by the Notice are described below.

  • Modified rules on irrevocable elections: Notice 2020-29 eliminates certain restrictions that limit the ability of participants to revoke and make new plan elections after the start of the plan year. During the 2020 plan year, elections pertaining to employer health coverage, health FSAs, and dependent care FSAs can now be made at any time on a prospective basis. This relief is not automatic. An employer will be required to amend its plan to allow participants to take advantage of this relief.
    • Example: A participant elected to defer $1,200 into an FSA during open enrollment for a plan year that began on January 1, 2020. The participant is now permitted to change her election at any time and defer a different amount (e.g., $2,200) if she so chooses.
  • Extended the deadline for incurring claims: Plan participants in health FSAs and dependent care FSAs may now incur and submit new claims for reimbursement up to December 31, 2020, based on amounts that remained in their FSA as of the end of a plan year or the end of a grace period that occurred at any time in 2020. This relief is not automatic. An employer will be required to amend its plan to allow participants to take advantage of this relief.
    • Example:  An employee was a participant in a 2019 calendar year FSA with a grace period that ended on March 15, 2020. He had $1,200 remaining in his account as of that date. He had not incurred any claims that he could submit for reimbursement through March 15, 2020. On June 29, 2020, the participant received medical services in excess of $1,200. He can submit his claim and be reimbursed for that amount.

 

How the Final Rule Affects COBRA Coverage

The Consolidated Omnibus Budget Reconciliation Act (COBRA) helps employees going through a qualifying event (such as termination of employment) maintain health coverage, often at a lower cost than they might find in the marketplace. To assist those who have lost health insurance coverage because of the pandemic, the final rule extends several COBRA-related deadlines. When calculating the new extended deadlines, the final rule disregards the Outbreak Period.

Delayed COBRA Election Deadline

To assist those who have lost health insurance coverage through termination of employment or a reduction of hours, the final rule extends the deadline to elect COBRA coverage. Normally, the election period ends 60 days following the later of 1) the qualifying event or 2) the date the plan provides the COBRA election notice to the qualified beneficiary.

  • Example: An employee is terminated on April 10, 2020, and loses coverage on April 30, 2020. If the terminated employee receives the COBRA election notice on May 5, 2020, he would normally have until July 4, 2020, which is 60 days, to elect COBRA coverage. But the Outbreak Period is now disregarded. If November 14, 2020, is the end of the Outbreak Period, the 60-day election period would start on November 15, 2020, and end on January 13, 2021.

This provision also gives employees flexibility in determining whether to spend money to continue coverage based on the type of medical issues they have during the extended deadline. Some people may choose to not enroll in COBRA coverage unless some type of expensive medical event makes it necessary. Normally, they would have a shorter window to determine the necessity of enrollment.

While the extended deadline helps individuals, it also creates risk for insurers and employers who may see employees taking advantage of the deadlines to enroll only if they incur significant costs. Healthy employees who would normally elect coverage, pay the premiums, and incur limited costs, will not have incentive to enroll during the window and will not be able to help offset costs as they normally would.

Delayed COBRA Payments

The final rule extends the amount of time that a qualified beneficiary has to submit a COBRA premium payment before coverage under the plan will cease. To be considered timely, the payment deadline is normally 30 days after the due date (or 45 days for the initial payment). While it is possible for qualified beneficiaries to take advantage of this relief in order to minimize expenses and avoid paying their premiums during the Outbreak Period, it is important to note that once the Outbreak Period is over, qualified beneficiaries must fully pay all prior months’ premiums in order to retain coverage. This could be a substantial financial burden. But if a qualified beneficiary has a major medical event, it could be cheaper to make up the costs of numerous months of premiums than to pay for the medical expenses.

Delayed COBRA Notices

  • Extended qualified event notification deadline: The final rule extends the date by which a covered employee or qualified beneficiary must notify the plan administrator of the following qualifying events: divorce (or legal separation) or a dependent child ceasing to be a dependent child. The normal deadline is 60 days after the date of the qualifying event.
  • Extended disability notification deadline: Covered employees and qualified beneficiaries have more time to notify the plan administrator of a disability determination. The normal deadline is 60 days after the date of being determined to be disabled.
  • Extended COBRA rights notification deadline: Plan administrators have more time to notify qualified beneficiaries of their COBRA rights following a qualifying event. The normal deadline is 14 days following the qualifying event (or 44 days when the employer is the plan administrator). Although plan administrators are not required to provide the COBRA election notice during the Outbreak Period, they must provide COBRA coverage if a participant elects it. Plan administrators will likely want to provide timely notices to encourage qualified beneficiaries to elect and pay for COBRA coverage.

 

Previous Relief Affecting Employee Welfare Benefit Plans

In March 2020, the IRS released Notice 2020-18, postponing the due date for all Federal income tax returns normally due on April 15, 2020, to July 15, 2020. Although not mentioned, contribution deadlines were expected to be delayed as well. A few weeks later, these expectations were met when Notice 2020-23 officially extended multiple deadlines that fell on or after April 1, 2020, and before July 15, 2020, to July 15, 2020—including deadlines for

  • making 2019 HSA contributions;
  • completing a 60-day rollover;
  • providing Form 5498-SA to HSA owners and to the IRS;
  • forfeiting unused FSA benefits;
  • receiving cash for unused vacation days; and
  • electing benefits in a noncalendar-year cafeteria plan.

 

Watch for Future Guidance

The last few months have seen a flurry of new guidance. This trend may continue for the duration of the pandemic. In fact, at the time of this writing the House of Representatives had just introduced a fourth stimulus package. Ascensus will be closely monitoring all future guidance. Visit ascensus.com for the latest updates.

 

Click here for a printable version of this issue of the Washington Pulse.


More Details on IRS Guidance for Cafeteria Plan Flexibility

On Tuesday, the IRS issued two Notices (2020-29 and 2020-33) that provide additional flexibility to participants in cafeteria plans as a result of the coronavirus (COVID-19) pandemic. The following provides additional details on the contents of these Notices.

Permitted Election Changes

Cafeteria plan elections must be made prospectively in advance of the plan year and can only be changed in limited circumstances due to certain events, as detailed in Treasury Regulation (Treas. Reg.) 1.125-4. The IRS has recognized that the permitted election changes in Treas. Reg. 1.125-4 are not extensive enough to accommodate plan participants’ needs, given the unprecedented circumstances of the COVID-19 pandemic. IRS Notice 2020-29 permits additional, temporary flexibility to make prospective, mid-year election changes during the 2020 calendar year for health coverage, health flexible spending arrangements (FSAs), and dependent care assistance plans (DCAPs).

An employer will be permitted (but is not required) to amend its plan to allow for prospective election changes that would not have to satisfy the requirements of Treas. Reg. 1.125-4. The following election changes will be permitted.

  • Make a new election for employer-sponsored health coverage on a prospective basis, if the employee initially declined to elect employer-sponsored health coverage
  • Revoke an existing election for employer-sponsored health coverage and make a new election to enroll in different health coverage sponsored by the same employer on a prospective basis (including changing enrollment from self-only coverage to family coverage)
  • Revoke an existing election for employer-sponsored health coverage on a prospective basis, provided that the employee attests in writing that the employee is enrolled, or immediately will enroll, in other health coverage not sponsored by the employer (note that the employer can rely on the employees’ attestation that they are enrolled or will enroll in other coverage, unless the employer has actual knowledge to the contrary; a sample attestation of other coverage is included in Notice 2020-29 for use in satisfying this requirement)
  • Revoke an election, make a new election, or decrease or increase an existing election regarding a health FSA on a prospective basis
  • Revoke an election, make a new election, or decrease or increase an existing election regarding a DCAP on a prospective basis

Employers can use discretion in amending for election changes and not be required to provide for all changes on an unlimited basis. But they will still need to comply with Internal Revenue Code nondiscrimination rules. Also, as long as they comply with existing rules, employers can design the plan election changes to prevent adverse selection.

Employers will have to provide all applicable notices to participants if they change the terms of the plan; this would include distributing a summary of material modifications (SMM) for ERISA plans.

If amounts have already been reimbursed from an FSA, employers can limit a participant’s ability to change an election amount so that the new election cannot be an amount below what has already been reimbursed.

This guidance can be applied retroactively to January 1, 2020, to plans that have already permitted election changes outside the scope of Treas. Reg. 1.125-4 and have been operating in accordance with the requirements of Notice 2020-29.

These permitted election changes are not mandatory, they are options. Employers that want to offer them must amend their plans to allow for the relief as permitted by Notice 2020-29. The amendment (which will apply only for the 2020 plan year) must be adopted on or before December 31, 2021, and may be effective retroactively to January 1, 2020. In the interim, a plan that permits these changes should operate in accordance with Notice 2020-29 and the employer must inform all eligible employees of the changes to the plan. Notice 2020-29 does not provide details on the required timing to notify participants; presumably participants should be informed as soon as practicable.

Extended Claims Period for Health FSAs and DCAPs

Because of unanticipated requirements to stay at home and associated business closures that came about early in the year, employees may have had difficulty using their FSA funds. For example, they may have been unable to see a doctor or no longer needed to use daycare. As a result, they are more likely now than under normal circumstances to have unused amounts remaining in their FSAs or DCAPs when their plan year or grace period ended.

Notice 2020-29 permits employees to submit new claims for reimbursement of the amounts that remained in their health FSAs or DCAPs as of the end of a plan year, or end of the grace period, as long as the end date was any time in 2020 (this will affect 2019 calendar year plans that had a grace period with an end date any time in 2020 but not 2019 calendar year plans with no grace period). Employees will be able to be reimbursed for expenses that are incurred through December 31, 2020, with the funds remaining in the account that would otherwise have been forfeited. Regardless, the dollars that are in health FSAs and DCAPs must still be used for the same purposes and cannot be applied to other expense types as a result of this guidance.

The extension of time for incurring claims is available to cafeteria plans that have a grace period and plans that provide for a carryover, as long as the end of the plan year or end of the grace period was in 2020.

For general-purpose health FSAs, this additional extension will cause individuals to be health savings account (HSA)-ineligible for the extent of the extended claim period. This is something that employees may not have anticipated, and will affect those who may have started to make HSA contributions, believing that their FSA was no longer covering them.

These extensions are not mandatory, they are options. Employers who want to offer them must amend their plans to allow for the extensions as permitted by Notice 2020-29. An amendment for the 2020 plan year (that will apply only for the 2020 plan year) must be adopted on or before December 31, 2021, and may be effective retroactively to January 1, 2020. In the interim, the plan should operate in accordance with Notice 2020-29, and the employer must inform all eligible employees of the changes to the plan.

HSA/HDHP Impact

The IRS has provided guidance in previous Notices that COVID-19 testing and treatment costs can be provided before satisfying a health plan deductible and not affect an individual’s eligibility to make HSA contributions. Notice 2020-29 clarified that the previously-released guidance applies to all costs for testing and treatment incurred on or after January 1, 2020. It also specified that the panel of diagnostic testing for influenza A and B, norovirus and other coronaviruses, respiratory syncytial virus (RSV), and any items or services required to be covered with zero cost sharing will be considered expenses for testing and treatment and will not affect HSA eligibility.

Telemedicine arrangements are generally viewed by the IRS as plans that provide coverage before a minimum annual deductible is met, and generally disqualify an individual from making HSA contributions. But recent legislation temporarily allows HSA-compatible high deductible health plans (HDHPs) to cover telehealth and other remote care services before satisfying a deductible. Notice 2020-29 confirms that HSA-eligible individuals who have received telehealth or other remote care services on or after February 15, 2020, that might otherwise have disqualified them, will be HSA-eligible for 2020.

Increased FSA Carryover Limit

IRS Notice 2020-33 increases the maximum $500 FSA carryover amount to an amount that is equal to 20 percent of the maximum salary reduction contribution for the plan year. The increase takes effect immediately, making the maximum amount that can be carried forward for the 2020 plan year $550 (20 percent of $2,750).

A plan that wants to adopt the provision will have to be amended. For the 2020 plan year, the amendment must be adopted on or before December 31, 2021, and may be effective retroactively to January 1, 2020, provided that the employer informs all individuals eligible to participate in the plan of the changes. In future years, amendments would have to be adopted at any time on or before the last day of the plan year.

ICHRA Relief

Notice 2020-33 also provides relief for the new individual coverage health reimbursement arrangements (ICHRAs). Plans that run on a calendar plan year may reimburse a substantiated premium for health insurance coverage that begins on January 1 of that plan year, even if the covered individual paid the premium for the coverage before the first day of the plan year. This relief is designed to ease administrative issues, given that premiums for insurance coverage would generally be due before the effective date of the coverage.


IRS Provides Additional Cafeteria Plan Flexibility in Response to Pandemic

The IRS has issued two notices that provide additional flexibility to participants in cafeteria plans as a result of the coronavirus (COVID-19) pandemic. Notice 2020-29

  • permits mid-year election changes on a prospective basis for elections made during calendar year 2020;
  • permits unused amounts in health flexible spending arrangements (FSAs) and dependent care FSAs that remain at the end of a grace period or plan year that ends in 2020 to be used for expenses incurred through December 31, 2020; and
  • provides additional detail and confirmation that individuals enrolled in high deductible health plans (HDHPs) providing COVID-19 testing and telehealth services prior to the satisfaction of a deductible will continue to remain HSA-eligible.

Notice 2020-33 increases the maximum amount permitted for FSA carryover to $550, to be adjusted for inflation, for plan years beginning in 2020.


FAQs Affirm Employee Benefits Eligible as “Payroll” for Payroll Protection Program Loans

Scheduled to be published in the Federal Register is an interim final rule issued by the federal Small Business Administration (SBA), guidance that includes frequently-asked-questions (FAQs) on Payroll Protection Program (PPP) loans available to small businesses to help them maintain their workforce during the coronavirus (COVID-19) pandemic. Businesses with no more than 500 employees—including not-for-profits and sole proprietorships—can apply for these low interest and potentially forgivable SBA loans if certain conditions are met.

The FAQs answer many potential employer questions on eligibility, calculating amount of loan available, and—especially important—what expenses qualify as “payroll” costs for purposes of the program. Similar to Treasury Department guidance previously issued and announced here, these SBA FAQs affirm that eligible payroll costs include a number of employee benefits; among them are the following.

  • Retirement benefits
  • Group healthcare coverage, including the payment of premiums
  • Payment of state and local taxes on employee compensation
  • Family, medical, or sick leave benefits

IRS Provides Guidance for Employers to Claim Tax Credits for Emergency Paid Sick Leave Act and Expanded FMLA Payments

The IRS has posted at its website much-anticipated guidance for claiming tax credits for amounts paid by employers under the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family and Medical Expanded Leave Act (Expanded FMLA), as provided in the Families First Coronavirus Response Act (FFCRA). The guidance contains 66 FAQs that cover all aspects of the tax credits.

The FFCRA was passed in response to the coronavirus pandemic and provides that employers may claim tax credits for amounts required to be paid for qualifying EPSLA or Expanded FMLA leave of absence that is taken April 1, 2020, through December 31, 2020.


DOL Provides Guidance to Implement Paid Sick Leave and Extended Family Medical Leave Provisions of FFCRA

As directed by the Families First Coronavirus Response Act (FFCRA) signed into law last week, the U.S. Department of Labor (DOL) issued its first round of guidance to help employers implement the paid sick leave and the extended family and medical leave included in the legislation. Also, the DOL issued a fact sheet to help employees understand the scope of the changes from the employees’ perspective.

The three DOL guidance documents issued are as follows.

Employers should review these guidelines to become familiar with how the FFCRA affects sick leave, and family and medical leave.

Ascensus’ team of experts will continue to monitor federal, state legislative, and regulatory responses to the coronavirus outbreak. Visit the ascensus.com newsroom to stay up to date on the latest guidance and what it means for you.

 

 


IRS Provides Guidance on HSAs and Associated HDHPs, and Coverage of COVID-19 Testing

The IRS has issued Notice 2020-15, addressing requests made to the agency for health savings account (HSA)-related guidance as the nation responds to the challenges of the COVID-19 (coronavirus) outbreak in the U.S. and worldwide.

The IRS was asked for confirmation that a high deductible health plan (HDHP) associated with an HSA could cover the cost of COVID-19 patient testing with no deductible—or a lower deductible—first being paid, and still remain an HSA-eligible health plan. An HDHP must generally meet certain plan deductible requirements in order for an individual to make HSA contributions. There are certain exceptions that allow health plan coverage without satisfying the plan deductible. One of these is for preventive care costs. There has been uncertainty as to whether COVID-19 testing would be considered preventive care.

In Notice 2020-15, the IRS states, “Until further guidance is issued, a health plan that otherwise satisfies the requirements to be a high deductible health plan (HDHP) under section 223(c)(2)(A) of the Internal Revenue Code (Code) will not fail to be an HDHP under section 223(c)(2)(A) merely because the health plan provides health benefits associated with testing for and treatment of COVID-19 without a deductible, or with a deductible below the minimum deductible (self only or family) for an HDHP. Therefore, an individual covered by the HDHP will not be disqualified from being an eligible individual under section 223(c)(1) who may make tax-favored contributions to a health savings account (HSA).”


Health Groups Sue to Block Hospital Price Transparency Rules

A group of health care associations and providers has filed suit in U.S. District Court for the District of Columbia to block Trump administration-backed guidance requiring hospitals to disclose their standard charges. The guidance was issued by the Department of Health and Human Services Center for Medicare and Medicaid Services (CMS), and published as final regulations in the Federal Register on November 27, 2019.

Under this guidance, hospitals operating in the United States would be required to “establish, update, and make public a list of their standard charges for the items and services that they provide.” The guidance further states that this CMS action was “…necessary to promote price transparency in health care and public access to hospital standard charges,” and that the public will thereby “have the information necessary to make more informed decisions about their care.” The effective date is January 1, 2021.

Plaintiffs in the suit include the American Hospital Association, Association of American Medical Colleges, Federation of American Hospitals, National Association of Children’s Hospitals, and several hospital groups located in California, Missouri, and Nebraska.

The plaintiffs allege that the CMS final regulations would require disclosure of confidential information, violate the speech protections of the First Amendment to the U.S. Constitution, would undermine competition and blunt innovation, and would financially “overwhelm many hospitals.” They further allege that the final regulations are arbitrary and capricious and “lack any rational basis.”