News
June 2016
|
Federal Proposal Amends Excepted Benefits Definition & Large Group Determination of EHBsThe following is a closer look at the Department of Labor (DOL), Internal Revenue Service (IRS) and Health and Human Services (HHS) proposed rule on “Expatriate Health Plans, Expatriate Health Plan Issuers, and Qualified Expatriates; Excepted Benefits; Lifetime and Annual Limits; and ShortTerm, Limited-Duration Insurance.” The proposed rule would revise excepted benefits definitions, but based on our reading, does not appear to amend the sections applicable to standalone dental plan benefits. Also, the proposed rule would clarify how large group health plans determine what are Essential Health Benefits (EHBs) for purposes of compliance with the ACA prohibition on lifetime and annual limits.
Excepted Benefits
The proposed rule offers amendments to excepted benefits definitions #3 and #4, motivated by similar concerns CMS addressed above regarding short-term coverage. Regarding #3, the preamble to the proposed rule highlights the Departments’ concern about misrepresentation of hospital indemnity and other fixed indemnity insurance: “The Departments are concerned that some individuals may incorrectly understand these policies to be comprehensive major medical coverage that would be considered minimum essential coverage.” For this, the Departments proposes two clarifications:
The Departments propose this notice for these plans (and a similar one is proposed for short-term plans): ‘‘THIS IS A SUPPLEMENT TO HEALTH INSURANCE AND IS NOT A SUBSTITUTE FOR MAJOR MEDICAL COVERAGE. THIS IS NOT QUALIFYING HEALTH COVERAGE (‘‘MINIMUM ESSENTIAL COVERAGE’’) THAT SATISFIES THE HEALTH COVERAGE REQUIREMENT OF THE AFFORDABLE CARE ACT. IF YOU DON’T HAVE MINIMUM ESSENTIAL COVERAGE, YOU MAY OWE AN ADDITIONAL PAYMENT WITH YOUR TAXES.’’ Regarding #4, and in order to be considered supplemental, a plan must supplement Medicare or TRICARE, or be “similar supplemental coverage provided to coverage under a group health plan.” Under current rules, to be similar supplemental coverage, the coverage must be specifically designed to fill gaps in primary coverage, such as coinsurance or deductibles. Similar supplemental coverage does not include coverage that becomes secondary or supplemental only under a coordination-of-benefits provision. Under the proposed regulations, if supplemental health insurance coverage provides benefits for items and services not covered by the primary coverage, the coverage would be considered to be designed “to fill gaps in primary coverage,” for purposes of being “supplemental excepted benefits” if none of the benefits provided by the supplemental policy are an EHB. The following are proposed amendments:
Large Group Determination of EHBs Final Rules issued in November 2015 required these plans (which are not required to provide EHBs) to define EHB for purposes of the lifetime and annual dollar limits prohibition. The 2015 rules refer to selecting a base-benchmark plan, as specified under 45 CFR 156.100, for purposes of determining EHBs. In the current proposed rules, however, the Departments note that a base-benchmark plan selected by a State or applied by default under 45 CFR 156.100 may not reflect the complete definition of EHB in a given state. The following are proposed amendments:
Resources |