On October 1, 2014, the Departments of Health and Human Services (“HHS”), Labor (“DOL”) and Treasury (collectively, the “Departments”) published regulations finalizing a proposed amendment to the “excepted benefit” rules, i.e., the rules that govern when certain types of benefits are exempt from HIPAA’s portability rules as well as various requirements under ERISA (including applicability of the Mental Health Parity and Addiction Equity Act) and the Affordable Care Act (“ACA”), including the ACA’s market reforms (such as the prohibition on lifetime and annual limits, etc.). These final rules largely adopted proposed rules from December 2013, with a few clarifications and changes.

After the enactment of the ACA, various stakeholders became increasingly concerned about whether or not an employee assistance program (“EAP”) would be considered to be a “group health plan” under the ACA, and thus subject to all of the ACA’s market reforms. Because the benefits provided under an EAP are generally very limited, most (if not all) EAPs would have difficulty meeting these market reforms (including, particularly, the ACA’s prohibition on annual dollar limits). The final rules largely adopted the provisions of the proposed rule that specify that EAPs will be considered to be excepted benefits (and thus not subject to the ACA’s market reforms) if they meet four criteria (which, the Departments make clear, are intended to ensure that EAPs are supplemental to other coverage offered by employers):

Continue Reading HHS, Labor, and Treasury Issue Proposed Amendments to “Excepted Benefit” Rules

On June 25, the Internal Revenue Service, Centers for Medicare & Medicaid Services, and Employee Benefits Security Administration, published final regulations clarifying the maximum allowed length of a reasonable and bona fide employment-based orientation period. Specifically, the regulations permit employers to impose a one-month orientation period on employees’ enrollment in their group health plans in addition to the 90-day waiting period.

The new regulations provide relief from the Affordable Care Act’s (ACA) prohibition on employers imposing a waiting period longer than 90 days for all individuals that are eligible to participate in the plan, for all plan years beginning on or after January 1, 2014. The ACA’s waiting period requirement states that coverage must be available to otherwise eligible employees by the 91st calendar day (including weekends and holidays) following plan eligibility. A “waiting period” is defined as the period that must pass before coverage for an otherwise eligible employee or dependent is able to enroll in the employer’s group health plan. And, an employee or dependent is “otherwise eligible” for plan participation if they have met all the employer’s eligibility conditions.

The 30-day orientation period allows employers to define their plan entry date for new employees as the first day of the month following 90 days of employment, so long as their administrative waiting period is not over 30 days, giving employers 90 days to enroll employees plus up to 30 days for orientation purposes.

Continue Reading 90-Day Waiting Period for Employee Enrollment in Group Health Plans: One-Month Orientation Period Permitted

On May 2, 2014, the Internal Revenue Service, Department of Health and Human Services, and Department of Labor (the “Departments”) collectively released the Affordable Care Act’s (ACA) nineteenth set of Frequently Asked Questions (FAQs). The FAQ addressed outstanding questions regarding Health Care Continuation Coverage (COBRA) and Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) releases, out-of-pocket maximums and limitations on cost-sharing, coverage of preventive services, FSA carryover and excepted benefits, and summary of benefits (SBA) requirements.

COBRA and CHIPRA

Following the Department of Labor’s (DOL) release of proposed COBRA regulations to better align COBRA with the ACA, the Departments issued FAQ guidance discussing COBRA’s general and election notice requirements, specifically when the notice is to be provided and the content of the notice. Although the proposed regulations eliminate the current model notice, although the FAQs state that the old version can still be used as good faith compliance with the notice requirement. (FAQ 1). Once the updated model notice is finalized it will be available on the DOL website. Additionally, the Departments noted that qualified beneficiaries may want to compare the price of COBRA coverage with coverage under the Health Insurance Marketplace (the Marketplace). The FAQs state that “[q]ualified beneficiaries may be eligible for a premium tax credit (a tax credit to help pay for some or all of the cost of coverage in plans offered through the Marketplace) and cost-sharing reductions (amounts that lower out-of-pocket costs for deductibles, coinsurance, and copayments), and may find that Marketplace coverage is more affordable than COBRA.”

The Department also clarified the CHIPRA notice requirement for group health plans located in a State that provides premium assistance. Under CHIPRA each employee must be provided notice of the potential opportunities for premium assistance in the State that the employee resides.

Continue Reading COBRA, Cost-Sharing, and Other Matters Clarified in the Affordable Care Act’s Nineteenth Set of FAQs

On November 25, 2013, the Department of Health and Human Services (HHS) released a Proposed Notice of Benefit and Payment Parameters for 2015 regarding the Affordable Care Act’s Transitional Reinsurance Program (TRP) fee.

The Proposed Notice includes the previously announced carve-outs from the TRP fee for the 2015 and 2016 years for certain self-insured, “self-administered” plans. The Proposed Notice also defines “contributing entity” differently than in prior years as it relates to self-insured group health plans. Under the new definition, to be a contributing entity, a self-insured group health plan must use a third-party administrator in connection with claims processing, adjudication, or plan enrollment. Moreover, the Proposed Notice states that self-insured plans that do not use a third-party administrator for their core administrative processing functions would be excluded from the obligation to make reinsurance contributions. Finally, there is a $44 per capita fee for the 2015 benefit year.

HHS is seeking comment on the types of core administrative functions it should consider in determining whether a self-insured group health plan using a third party administrator is a contributing entity. HHS is also seeking comment on whether a self-insured plan must perform core administrative functions for all health care benefits or only certain benefits.

The full text of the Proposed Notice can be found here.

On July 2, 2013, the Department of Health and Human Services (HHS) issued a final rule on coverage of certain preventive services under section 2713 of the Public Health Service Act, added by the Patient Protection and Affordable Care Act and incorporated into the Employment Retirement Income Security Act of 1975 and the Internal Revenue Code. Section 2713 requires coverage (without cost-sharing) of various preventive health services by group insurers. These services include women’s preventive health services and contraception, which is the focus of this final rule. This rule explains the process for religious employers and educational institutions to receive an exemption to the contraception coverage requirement. Religious organizations are nonprofit organizations and defined in the Internal Revenue Code. They may complete a self-certification form explaining their religious status and opposition to contraception. This allows them to exclude contraception from their health insurance coverage. Health insurance issuers of plans for these organizations must exclude contraception coverage from the group health insurance coverage and instead provide separate payments for contraceptive services. Issuers must also give notice to beneficiaries about the availability of separate payments for contraception and explain that the religious organization does not administer or fund contraceptive benefits itself.

The regulations also allow for financial support for contraception expenses for issuers of self-funded plans of exempt organizations. These issuers may pay a lowered Federally-facilitated Exchange user fee provided they give certain information to HHS, including their costs for contraceptive services for beneficiaries in health plans subject to the religious exemption. The final rule takes effect for plan years beginning on or after January 1, 2014, except for amendments to the religious employer exemption, which affect plan years beginning on or after August 1, 2014. The final rule can be found here.