Affordable Care Act Implementation FAQs - Set 18

Periodically, The Departments of Health and Human Services (HHS) releases FAQs to clarify provisions related to the Patient Protection and Affordable Care Act (PPACA).  In an effort to keep our clients updated regarding PPACA requirements, below is a summary of the provisions by topic below. As always, feel free to contact us with any questions.

·         Preventive Services

·         Cost-sharing Requirements

·         Expatriate Health Plans

·         Wellness Programs

·         Fixed Indemnity Insurance

·         Mental Health Parity for group plans with 50 or fewer employees

We have summarized the relevant information in the FAQs.

Preventive Services

Effective upon plan renewals on or after September 24, 2014, all non-grandfathered and individual and group plans are required to cover prescriptions intended to reduce the risk of breast cancer, at no member cost-share, for women who are at increased risk.

Cost-sharing Requirements

Effective upon plan years beginning in 2014, the annual limitation on out-of-pocket costs applicable to non-grandfathered plans is $6,350 for self-only coverage and $12,700 for coverage other than self-only coverage. The annual cost-sharing limit applies only to Essential Health Benefits (EHBs). Self insured plans, which are not required to provide EHB’s, may define EHB’s in accordance with their situs state. Plans which have an independent vendor administering certain EHB’s may retain separate out-of-pocket maximums during their 2014 plan year.

The FAQ clarifies that for plan years beginning on or after January 1, 2015, a group health plan may have separate out-of-pocket maximums for different benefits as long as the combined out-of-pocket maximum does not exceed the annual limit.

The FAQ also confirmed that out-of-network expenses and non-covered services such as cosmetic surgery are not required to be counted toward the plan’s annual out-of-pocket maximum.

Wellness Programs

Group health plans can provide wellness incentives, including premium surcharges and reductions, and some employers have a defined election period and process for their wellness programs. If a plan participant declines to participate in a wellness program during the employer-defined election period, the employer is not required to provide a mid-year opportunity for that individual to enroll in the wellness program and earn the reward. However, employers that allow mid-year elections can provide rewards, including prorated awards, for mid-year participants in the program.

If an individual’s doctor indicates that an outcome-based wellness program is not medically appropriate for the individual and recommends an activity-only program instead, the plan must provide a reasonable alternative standard that accommodates the doctor’s recommendation. However, the plan can have a say in which activity-only program meets the plan’s requirement.

Plans must provide participants with a notice about the availability of reasonable alternative standards to meet wellness requirements. The sample language provided in the final regulations can be modified as long as it includes all the required content.

Fixed Indemnity Insurance

Fixed indemnity group health insurance, such as cancer and accident policies which pay a specific dollar amount per illness or injury, and is offered in conjunction with a PPACA-compliant group health plan , is an “excepted benefit” and not subject to PPACA requirements.

Mental Health Parity

Mental Health and Substance Abuse are Essential Health Benefits. As such, non-grandfathered small group and individual plans, which have previously been exempt from Mental Health Parity legislation, are required to meet parity requirements upon their plan’s 2014 renewal.