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gardenQues­tion:

Our self-fund­ed plan includes exclu­sions for haz­ardous activ­i­ties and hob­bies, includ­ing injury or ill­ness aris­ing from use of snow­mo­biles, per­son­al air­craft, per­son­al water­craft, four wheel recre­ation­al vehi­cles, etc. Does the Afford­able Care Act (ACA) pro­hib­it this type of exclu­sion or lim­i­ta­tion for grand­fa­thered and non­grand­fa­thered plans?

Answer:

Fed­er­al reg­u­la­tions under the Health Insur­ance Porta­bil­i­ty and Account­abil­i­ty Act (HIPAA) per­tain to these types of ben­e­fit exclu­sions, which are called “source of injury restric­tions.” Under HIPAA, a group health plan may exclude ben­e­fits for the treat­ment of cer­tain injuries based on the source of that injury, except that the plan may not exclude ben­e­fits oth­er­wise pro­vid­ed for treat­ment of an injury if the injury results from an act of domes­tic vio­lence or a med­ical con­di­tion. The Depart­ment of Labor guid­ance on this mat­ter pro­vides the fol­low­ing examples:

  • Exam­ple of a per­mis­si­ble source-of-injury restric­tion: A plan pro­vi­sion that pro­vides ben­e­fits for head injuries gen­er­al­ly, but excludes ben­e­fits for head injuries sus­tained while par­tic­i­pat­ing in bungee jump­ing, as long as the injuries do not result from a med­ical con­di­tion or domes­tic violence.
  • Exam­ple of an imper­mis­si­ble source-of-injury restric­tion: A plan pro­vi­sion that gen­er­al­ly pro­vides cov­er­age for medical/surgical ben­e­fits, includ­ing hos­pi­tal stays that are med­ical­ly nec­es­sary, but excludes ben­e­fits for self-inflict­ed injuries or attempt­ed sui­cide. This is imper­mis­si­ble because the plan pro­vi­sion excludes ben­e­fits for treat­ment of injuries that may result from a med­ical con­di­tion (depres­sion).

The next issue is whether source of injury restric­tions that com­ply with HIPAA also com­ply with the Afford­able Care Act (ACA) pro­vi­sions for essen­tial health ben­e­fits. Essen­tial health ben­e­fits (EHBs) are health care items and ser­vices with­in 10 ben­e­fit cat­e­gories, such as “emer­gency ser­vices” and “hos­pi­tal­iza­tion.” Large group insured plans and self-fund­ed plans are not required to cov­er EHBs. If an EHB is cov­ered by the plan, how­ev­er, the cov­er­age must con­form to applic­a­ble ACA pro­vi­sions, includ­ing the ACA’s pro­hi­bi­tion against life­time and annu­al dol­lar lim­its (and, if non­grand­fa­thered, the ACA’s lim­its on patient cost-sharing).

The reg­u­la­to­ry guid­ance cur­rent­ly avail­able regard­ing EHBs and self-fund­ed health plans does not specif­i­cal­ly address source of injury restric­tions. It appears that restric­tions per­mit­ted under HIPAA (if designed appro­pri­ate­ly) would also be con­sid­ered com­pli­ant with the ACA, but there is no spe­cif­ic guid­ance for confirmation.

Please note that plan pro­vi­sions must be applied and admin­is­tered con­sis­tent­ly for all sim­i­lar­ly sit­u­at­ed indi­vid­u­als. Many claims admin­is­tra­tors find source of injury restric­tions very dif­fi­cult to admin­is­ter. You should ensure that claims can be admin­is­tered effec­tive­ly before decid­ing to imple­ment any source of injury restric­tions. Claims denied in whole or in part based on a source of injury restric­tion are deemed an adverse ben­e­fit deter­mi­na­tion under the Depart­ment of Labor’s claim appeal and review guide­lines for group health plans.

Please work with your ben­e­fits legal coun­sel and/or pose this ques­tion to one of the car­ri­ers mar­ket­ing large group insured plans in your state. If the source of injury restric­tion would be per­mis­si­ble for the carrier’s insured busi­ness, then it would also be per­mis­si­ble for your self-fund­ed plan.

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