ACA

Final Regulations Issued on Excepted Benefits

Posted on by McKeogh Administrator

Final rules were released by the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury addressing limited scope vision and dental benefits and employee assistance programs (EAPs) as excepted benefits. These regulations should be reviewed so that plans may make any necessary changes effective for plan years beginning on or after January 1, 2015.

Background

Excepted benefits are generally excluded from the Affordable Care Act’s (ACA’s) requirements. There are four categories of excepted benefits:

  1. Benefits that are generally not health coverage (workers compensation, accidental death and dismemberment)
  2. Limited excepted benefits (some limited scope* vision or dental benefits, long-term care, home health care, health FSAs)
  3. Non-coordinated excepted benefits (coverage for a specific disease or illness, hospital indemnity insurance)
  4. Supplemental excepted benefits (Medicare Supplement plans)

*Limited scope means that benefits are limited to treatment of the eye (vision) or mouth (dental).

In December 2013, proposed rules were issued regarding excepted benefits. The rules proposed changes in the requirements affecting limited scope vision and dental coverage and recognition of both employee assistance programs and coverage that wraps around individual coverage as new forms of limited excepted benefits. The final rule is silent on wraparound coverage and makes minor modifications to the other proposals. Additional guidance on wraparound coverage is expected in the future.

Vision and Dental Benefits

The final rules clarify that limited scope vision and dental benefits are excepted benefits if they (1) are offered under a separate policy or insurance contract or (2) are not considered to be an integral part of the group health plan. These benefits are not an integral part of the group health plan if either (1) participants may decline coverage or (2) claims for the benefits are administered under a separate contract. The regulations eliminate the requirement that an additional premium be charged in order to qualify as an excepted benefit.

Employee Assistance Programs (EAPs)

The final rule also allows employee assistance programs to be recognized as excepted benefits if they:

  • Do not provide significant medical care benefits.
  • Do not coordinate their benefits with group health plan benefits.
  • Do not require employee premiums or contributions for participation.
  • Do not impose cost-sharing requirements.

Next Steps

These regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015. Plans should review the regulations and determine that benefits have been designed and are being administered appropriately to meet the definition of excepted benefits. If these requirements are not met, plans may face additional compliance under HIPAA, Mental Health Parity and the ACA as well as potential penalties for noncompliance.

PCORI Fee Announced for Year 3 of Program

Posted on by McKeogh Administrator

The Internal Revenue Service (IRS) issued Notice 2014-56 announcing the PCORI fees applicable to health plans for plan and policy years ending on or after October 1, 2014 and before October 1, 2015 is $2.08. These fees are calculated using an average number of covered lives and an annually announced applicable dollar amount. The applicable dollar amount for plan and policy years ending on or after October 1, 2012 and before October 1, 2013 was $1.00. This dollar amount was increased to $2.00 for plan and policy years ending on or after October 1, 2013 and before October 1, 2014.

For policy years and plan years ending October 1, 2015, through September 30, 2019, the adjusted applicable dollar amount will be published in future guidance in the Internal Revenue Bulletin.

Final Regulations for Basic Health Program Issued

Posted on by McKeogh Administrator

The Centers for Medicare & Medicaid Services (CMS) published final regulations on March 12, 2014 to establish the Basic Health Program (BHP) under the Affordable Care Act.  These regulations include eligibility and enrollment requirements for standard health plan coverage offered through the BHP, minimum benefits covered by such plans and federal funding available to states participating in the BHP.  These regulations are effective on January 1, 2015.  CMS also published a final methodology to determine the federal payments states may receive should they elect to participate in the BHP in 2015.

HHS Releases 2015 Benefit and Payment Parameters

Posted on by McKeogh Administrator

The Department of Health and Human Services (HHS) published on March 11, 2014 the final rule on benefit and payment parameters for 2015.  This rule includes oversight provisions related to the risk adjustment, reinsurance, and risk corridors programs as well as cost-sharing parameters and cost-sharing reductions.

In this rule, HHS finalized its provision that any self-insured group health plan that does not use a third party administrator for claims processing, adjudication, or plan enrollment for the 2015 and 2016 benefit years is excluded from making reinsurance contributions.

Cost-sharing limits for calendar year 2015 will be increased from $6,350 to $6,600 for self-only coverage. The limits for all other coverage will be increased from $12,700 to $13,200 for 2015.

These regulations are effective on May 12, 2014.

90 Day Waiting Period Final Regulations

Posted on by McKeogh Administrator

The U.S. Department of Labor (DOL), Treasury and Health and Human Services (HHS) jointly released final and proposed regulations on February 24, 2014 to implement the 90 day waiting period limit provision of the Affordable Care Act.

The final regulations state that a group health plan or group insurance issuer cannot impose a waiting period of more than 90 days from the date an individual becomes eligible for coverage.  Eligibility requirements which are based on number of hours worked are generally permitted as long as the maximum number of hours required is no more than 1200 hours in a 12 month period.

Enrollment may also be based on meeting other eligibility conditions such as being in an eligible job classification, attaining job-related licenses or completing an orientation period.  The departments issued a proposed rule limiting the maximum length of an orientation period to one month.

The final regulations are effective April 25, 2014.  The regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015.  For plan years that begin prior to that date, plans must comply with either the proposed rule or the final rule.

IRS Proposes Individual Mandate Regulations

Posted on by Megan England

The Internal Revenue Service (IRS) issued proposed regulations addressing the individual shared responsibility payment provisions of the Affordable Care Act. Beginning January 1, 2014, individuals are required to maintain minimum essential health coverage or pay a penalty known as a shared responsibility payment unless the individual qualifies for an exemption. Continue reading →