On March 28, 2024, the Departments of Labor, Treasury, and Health and Human Services (the “Tri-Agencies”) issued final regulations on short-term, limited-duration insurance (“STLDI”), hospital and other fixed indemnity insurance (“Fixed Indemnity”), and the taxation of accident and health plan benefits (the “Final Rule”). The Final Rule’s STLDI provisions are substantially similar to the proposed regulations issued on July 7, 2023 (the “Proposed Rule”). In a surprising move, the Tri-Agencies did not finalize most of the Proposed Rule that imposed new requirements for Fixed Indemnity to be an excepted benefit and did not finalize any of the Proposed Rule provisions with respect to the taxation of accident and health plan benefits, including Fixed Indemnity, under Code section 105(b).
