HRB 87 - Implementation Guidance FAQs
Released January 13, 2014I Download as a PDF January 13, 2014 --
The ACA’s governing agencies (Labor, HHS and IRS) have issued their 18th set of implementation FAQs
, further defining certain aspects of the Affordable Care Act, as well as how the law coordinates with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
(MHPAEA). Following are highlights of this guidance.
Women’s Preventive Health Services Expanded
The ACA requires individual and group health plans to provide coverage for certain preventive services without imposing any cost-sharing requirements (co-payment, co-insurance, or deductible), when such services are delivered by in-network providers. These rules apply to both non-grandfathered individual and group health plans, including both insured and self-funded plans; the rules do not apply to grandfathered plans.
The types of preventive services to be covered are those recommended by several agencies, including the United States Preventive Services Task Force. Last fall, this Task Force expanded its recommended guidelines relating to women’s health services to include coverage for certain medications for women who have a high risk for developing breast cancer. As such, women’s health preventive services must now include coverage for these risk-reducing medications without cost share where applicable as part of a medical management regime.
This will take effect for plan years beginning on or after September 24, 2014 (January 1, 2015 for calendar year plans).
Cost Sharing Requirement
These FAQs affirm that for plan years beginning on or after January 1, 2015, the out of pocket limit on essential health benefits must be satisfied, even if the plan uses different service providers. These FAQs do state that a plan may apply unique limits to certain benefits as long as in the aggregate, the out of pocket limit is satisfied. For 2014, the out-of-pocket limit (applicable to insured plans offered via the Marketplace, and insured and self-funded plans offered outside the Marketplace) is $6,350 for single coverage; $12,700 for coverage for more than one. The FAQs affirm previous guidance stating that out of pocket limits only apply to in-network benefits. A plan can, but is not required to impose the out of pocket limit on other network benefits.
These FAQs affirm previous guidance relating to insured plans covering ex-patriots living outside the United States. In a nutshell, for plans ending prior to December 31, 2015, expatriate plans are exempt from certain ACA provisions, including many of the market-type reforms, such as the dependent age restriction, prohibition of imposing annual and lifetime limits and preexisting condition exclusions, prohibition of plan rescission, coverage for preventive services, as well as certain reporting and disclosure obligations. For this exemption to apply, the plan must have been in compliance with the other benefit-related federal laws enacted prior to the ACA, such as ERISA and HIPAA. This exemption only applies to insured group health plans covering primary insureds and their covered dependents who live outside the United States for at least 6 months of the year. Further, the FAQs affirm that coverage provided under an insured expatriate health plan is considered to meet the minimum essential coverage requirement.
- Tobacco surcharges. Under an outcome-based wellness program, also known as a health-contingent wellness program, offered in connection with a group health plan, the maximum financial incentive offered to participants is 30% of the cost of coverage; or, up to 50% if the program relates to tobacco free standards. These FAQs affirm that as long as an individual is given an opportunity to achieve the reward at least once per year, the individual would not have to be given the reward at another time during the plan year, even if the conditions for receiving the reward are satisfied.
- Reasonable Alternative. If a participant’s health care provider states that an outcome-based program is not advised for him/her, and recommends an activity-only program, the FAQs affirm that the participant should be permitted to explore any available alternative options for achieving the goal that is appropriate for him/her.
Notice of Availability of Reasonable Alternative Options. A plan is required to include a notice of available alternative options in its plan materials of how to qualify for a reward if an alternative option is recommended by his/her health care provider, or is otherwise available through the wellness program. This FAQ affirms that the language of the model notice (below) can be modified as long as the substance of it is included. Following is some model language that can be used to satisfy the notice requirement:
“Your health plan is committed to helping you achieve your best health. Rewards for participating in a wellness program are available to all employees. If you think you might be unable to meet a standard for a reward under this wellness program, you might qualify for an opportunity to earn the same reward by different means. Contact us at [insert contact information] and we will work with you (and, if you wish, with your doctor) to find a wellness program with the same reward that is right for you in light of your health status.”
Fixed Indemnity Plans
Generally, a fixed indemnity plan is only deemed to be an excepted benefit, i.e., not subject to the ACA’s market reform provisions, if it reimburses a fixed dollar amount per day (or per other period) of hospitalization or illness, regardless of the amount of expenses incurred. Typically, these types of policies are provided under separate contract and are not coordinated with a group health plan.
According to these FAQs, the HHS is proposing to make modifications to individual fixed indemnity policy design such that benefits would not be paid solely on a per-period basis to qualify as an excepted benefit. As such, the policy would have to meet the following criteria:
- It is sold only to individuals who have other health coverage that is minimum essential coverage;
- There is no coordination between the provision of benefits and an exclusion of benefits under any other health coverage;
- The benefits are paid in a fixed dollar amount regardless of the amount of expenses incurred and without regard to the amount of benefits provided with respect to an event or service under any other health coverage; and
- A notice is displayed prominently in the plan materials informing policyholders that the coverage does not meet the definition of minimum essential coverage and will not satisfy the individual responsibility requirements of the ACA.
Coordination of ACA and Mental Health Parity Laws
FAQ 12 affirms that individual health insurance policies, both grandfathered and non-grandfathered, that provide mental health benefits, as well as non-grandfathered small group health insured plans are subject to the federal mental health parity laws (the Mental Health Parity Act (MHPA), as amended by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA)). These types of policies and plans become subject to the mental health parity laws for plan years beginning on or after July 1, 2014 (January 1, 2015 for calendar year plans). In effect, this leaves only small grandfathered group health insured plans exempt from the mental health parity laws. As a reminder, the federal mental health parity laws have applied to large group health plans (plans covering 50 or more employees) since its inception.
About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.
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