On Decem­ber 20, 2016, fed­er­al offi­cials released FAQs About Afford­able Care Act Imple­men­ta­tion Part 35 (FAQ #35) in an ongo­ing series of infor­mal guid­ance regard­ing the Afford­able Care Act (ACA). This FAQ address­es sev­er­al topics:

  • Spe­cial enroll­ment rules.
  • Pre­ven­tive services.
  • Qual­i­fied small employ­er health reim­burse­ment arrangements.

A sum­ma­ry of the key points from FAQ #35 follows.

Special Enrollment Rules

Group health plans are sub­ject to rules under the Health Insur­ance Porta­bil­i­ty and Account­abil­i­ty Act (HIPAA) requir­ing plans to offer a spe­cial enroll­ment (mid-year enroll­ment) oppor­tu­ni­ty for per­sons who are not enrolled when first eli­gi­ble but then expe­ri­ence cer­tain events. Exam­ples of qual­i­fy­ing events include acquir­ing a new depen­dent through mar­riage, birth or adop­tion (includ­ing place­ment for adop­tion) of a child, or los­ing cov­er­age under anoth­er plan. The require­ments are referred to as the HIPAA spe­cial enroll­ment rules.

One of the events trig­ger­ing a spe­cial enroll­ment oppor­tu­ni­ty is the invol­un­tary loss of oth­er cov­er­age, such as los­ing cov­er­age under the spouse’s plan, unless the loss is for cause or due to fail­ure to pay premiums.

UPDATE: FAQ #35 con­firms that per­sons are enti­tled to a spe­cial enroll­ment if they are oth­er­wise eli­gi­ble for the group plan, had oth­er cov­er­age (includ­ing indi­vid­ual insur­ance obtained inside or out­side of a Mar­ket­place) when the group plan cov­er­age was pre­vi­ous­ly offered, and now have lost eli­gi­bil­i­ty for that oth­er cov­er­age. Fur­ther, the spe­cial enroll­ment rule applies whether or not the indi­vid­ual is eli­gi­ble for oth­er indi­vid­ual mar­ket cov­er­age, though or out­side of a Marketplace.

Coverage of Preventive Services

The Afford­able Care Act (ACA) requires that non­grand­fa­thered health plans pro­vide 100 per­cent cov­er­age with­out deductibles or co-pays for cer­tain pre­ven­tive ser­vices. Some excep­tions are allowed regard­ing ser­vices received out­side the net­work when they are avail­able from in-net­work providers and for brand-name drugs when equiv­a­lent gener­ics are avail­able (unless the physi­cian deter­mines a med­ical neces­si­ty). See the fol­low­ing cur­rent lists of required pre­ven­tive services:

For women’s health ser­vices, the cur­rent list of required pre­ven­tive ser­vices includes pre­scribed con­tra­cep­tives (includ­ing ster­il­iza­tion pro­ce­dures, and patient edu­ca­tion and coun­sel­ing). At this time, there are 18 FDA-approved con­tra­cep­tive meth­ods and the plan must cov­er at least one item in each method at 100 per­cent. Plans also must have an “excep­tions process” to ensure 100 per­cent cov­er­age of any item with­in the method based on med­ical neces­si­ty as deter­mined by the physician.

The pre­ven­tive ser­vices require­ments are devel­oped based on rec­om­men­da­tions from the U.S. Pre­ven­tive Ser­vices Task Force (USPSTF), the Cen­ters for Dis­ease Con­trol (CDC), the Health Resources and Ser­vices Admin­is­tra­tion (HRSA), and oth­ers, and are sub­ject to change from time to time.

UPDATE: FAQ #35 explains that updat­ed HRSA rec­om­men­da­tions for women’s pre­ven­tive ser­vices will apply for plan years begin­ning on or after Decem­ber 20, 2017 (e.g., Jan­u­ary 1, 2018 for cal­en­dar-year plans). Plans may adopt the new guide­lines ear­li­er if they choose. The updat­ed guide­lines address sev­er­al women’s health ser­vices, includ­ing breast can­cer screen­ing, cer­vi­cal can­cer screen­ing, ges­ta­tion­al dia­betes, breast­feed­ing ser­vices and sup­plies, and well-woman pre­ven­tive visits.

The new guide­lines also will require plans to cov­er all 18 of the FDA-approved con­tra­cep­tive meth­ods. Plans may con­tin­ue to impose cost-shar­ing require­ments on brand­ed drugs for which gener­ic equiv­a­lents are avail­able. Note that the ACA pro­vides cer­tain excep­tions regard­ing con­tra­cep­tives with respect to plans spon­sored by reli­gious employ­ers and non­prof­it reli­gious-affil­i­at­ed employ­ers; those excep­tions will continue.

See the HRSA’s Women’s Pre­ven­tive Ser­vices Guide­lines for more information.

Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)

Sec­tion 18001 of the recent­ly-enact­ed 21st Cen­tu­ry Cures Act cre­ates an oppor­tu­ni­ty for small employ­ers to offer a new type of health reim­burse­ment arrange­ment for their employ­ees’ health­care expens­es, includ­ing indi­vid­ual insur­ance premiums.

Employ­ers of all sizes cur­rent­ly are pro­hib­it­ed from mak­ing or offer­ing any form of pay­ment to employ­ees for indi­vid­ual health insur­ance, whether through pre­mi­um reim­burse­ment or direct pay­ment. Employ­ers also are pro­hib­it­ed from pro­vid­ing cash or com­pen­sa­tion to employ­ees if the mon­ey is con­di­tioned on the pur­chase of indi­vid­ual health insur­ance. (Some excep­tions apply; e.g., retiree-only plans, dental/vision insur­ance.) Vio­la­tions can result in excise tax­es of $100 per day per affect­ed employee.

The new law does not repeal the exist­ing pro­hi­bi­tion, but rather it pro­vides an excep­tion for a new type of tax-free ben­e­fit called a Qual­i­fied Small Employ­er Health Reim­burse­ment Arrange­ment (QSEHRA). Small employ­ers meet­ing cer­tain con­di­tions may begin offer­ing QSEHRAs in 2017. Our Decem­ber 9, 2016 blog post, New Law Allows Small Employ­ers to Pay Pre­mi­ums for Indi­vid­ual Poli­cies, sum­ma­rized the require­ments for small employ­ers to offer QSEHRAs.

Sep­a­rate­ly, the 21st Cen­tu­ry Cures Act offers small employ­ers cer­tain relief from excise tax­es for vio­lat­ing the exist­ing pro­hi­bi­tion against employ­er pay­ment of indi­vid­ual health insur­ance. The relief applies retroac­tive­ly and con­tin­ues through the 2016 plan year (whether or not the employ­er offers QSEHRAs in 2017), but cer­tain con­di­tions must be met. FAQ #35 clar­i­fies the con­di­tions for tax relief, as follows:

  • The relief applies only to plan years begin­ning on or before Decem­ber 31, 2016;
  • The relief applies only to employ­ers that employed on aver­age few­er than 50 full-time and full-time-equiv­a­lent employ­ees. In oth­er words, for the rel­e­vant peri­od, the employ­er must not have been an applic­a­ble large employ­er (ALE) as defined under the ACA; and
  • The relief is lim­it­ed to employ­er arrange­ments that pay or reim­burse only indi­vid­ual health insur­ance pre­mi­ums (or Medicare Part B or D pre­mi­ums, in some cas­es). The relief does not extend to stand-alone health reim­burse­ment arrange­ments that pay or reim­burse med­ical expens­es oth­er than indi­vid­ual health insur­ance premiums.

Last­ly, note that an employ­er arrange­ment that qual­i­fies for relief from excise tax­es gen­er­al­ly will be con­sid­ered min­i­mum essen­tial cov­er­age and pre­clude cov­ered per­sons from qual­i­fy­ing for pre­mi­um tax cred­its (sub­si­dies) at a Mar­ket­place (Exchange).

More Information

Employ­ers and their advi­sors are encour­aged to review the com­plete FAQ #35 to ensure their group health plans con­tin­ue to com­ply with the ACA’s require­ments. The spe­cial enroll­ment rule mere­ly con­firms exist­ing HIPAA require­ments. For pre­ven­tive ser­vices, the update regard­ing women’s health ser­vices applies for plan years begin­ning on or after Decem­ber 20, 2017 (e.g., Jan­u­ary 1, 2018 for cal­en­dar-year plans). Last­ly, small employ­ers may want to con­sid­er the new option for QSEHRAs start­ing in 2017.

 

By Lau­ra Kerekes, Orig­i­nal­ly pub­lished by ThinkHR — Read More