On February 20, 2013, the Departments of Labor, Health and Human Services and the Treasury (the “Departments”) jointly issued a set of Frequently Asked Questions (“FAQs”) About Affordable Care Act Implementation (Part XII). In the latest round of guidance, the Departments addressed the limitations on cost-sharing and the coverage of preventive services under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”). This guidance applies only to non-grandfathered group health plans. Large employers should be aware of these significant changes to the provision of health benefits and the limitations to the costs that may be borne by employees.
Limitations on Cost-Sharing for Large Employer Group Health Plans. Under Section 1302(a) of the Affordable Care Act, group health plans are prohibited from imposing annual limits on essential health benefits. On February 20, 2013, the Departments issued final regulations on the definition of “essential health benefits” and the standards for offering “qualified health plans” on a State Exchange (PDF).
Under Section 1302(c) of the Affordable Care Act, group health plans are required to limit the annual cost-sharing required of employees. Cost-sharing includes co-insurance and co-payments. The rule generally means that: (1) essential health benefits must be provided without any annual limitations on the cost of those benefits; and (2) employees may not be required to contribute out-of-pocket more than a certain annual dollar limit for the provision of such essential health benefits.
Out-of-Pocket Maximums. The prohibition on cost-sharing limitations under Section 1301(c)(1) applies to all non-grandfathered group health plans, including self-insured group health plans and large group insured health plans. The FAQs specifically address the annual limitation on the imposition of out-of-pocket maximums, which for 2014 will be limited to $5,000 for self-only coverage and $10,000 for non-self-only coverage.
- Many group health plans receive benefits through different services providers that impose different limitations. For example, a group health plan may have a major medical provider, a separate pharmacy benefit manager (PBM) and a separate mental health provider.
- The Departments have provided a safe harbor for different service providers. Although the Department stated that the providers must “talk” to each other, for the first plan year beginning on or after January 1, 2014, the annual limitation on out-of-pocket maximums will be considered satisfied if: (1) the major medical coverage satisfies the annual maximums; and (2) if the plan has coverage that applies a separate limit for other coverage (such as prescription drug coverage), a separate out-of-pocket maximum may be imposed as long as it does not exceed the annual dollar limitations.
- The Departments have noted that this safe harbor generally may not be applied to mental health and substance abuse disorder benefits because the Mental Health Parity and Addiction Equity Act of 2008 prohibits any separate out-of-pocket maximum between medical/surgical benefits and mental health and substance abuse disorder benefits.
- Deductibles. The FAQs make clear that the annual deductible limit under Section 1302(c)(2) of the Affordable Care Act, which for 2014 generally will be $2,000 for self-only coverage or $4,000 for non-self-only coverage, will not be enforced against self-insured and large employer group health plans.
Preventive Care Services. Non-grandfathered group health plans must offer certain preventive care benefits without cost-sharing. These preventive care benefits or services are based on recommended health guidelines developed by certain government agencies and medical studies, including the United States Preventive Services Task Force (“USPSTF”), the Centers for Disease Control and Prevention, the Health and Human Resources and Services Administration, among others. The group health plan may use reasonable medical management to determine the frequency, method, treatment or setting for a specific preventive service.
The FAQs address issues raised with respect to specific preventive services and certain identified medical conditions, as follows:
- In-Network. If a preventive service is not offered in-network and is obtained out-of-network, the out-of-network service must be provided with no cost-sharing.
- Aspirin. Aspirin may only be covered if it is prescribed by a doctor for health conditions.
- Colonoscopy. If during a colonoscopy a polyp is removed, it must be covered without cost sharing because it is an integral part of colonoscopy
- Breast Cancer. Genetic counseling and evaluation for the routine breast cancer susceptibility gene (“BRCA”) testing for breast cancer includes the BCRA test itself.
- High-Risk Population. Some of the USFT recommendations for services apply to certain high-risk populations susceptible to a specific illness for which the service is provided. The medical provider will make that determination and the service must be provided with no cost-sharing.
- Immunizations. The immunizations that must be covered without cost-sharing are those recommended by the Advisory Committee on Immunization Practices (“ACIP”), which may change from time to time. The FAQs make clear plans and issuers can review the ACIP recommendations and make updates annually prior to the beginning of each plan year.
Women’s Preventive Services. Plans and issuers have raised many questions over what types of women’s preventive services must be offered without cost-sharing. The recommendations for women preventive services are relatively new and certain provisions, such as the coverage of contraceptives without cost-sharing, have been controversial.
- Well-Woman Visits. Well-woman visits are intended to include all women preventive services that are age and developmentally-appropriate. Though more than one visit may be needed, plans are not required to provide for multiple visits and may provide for one annual well-woman visit.
- Domestic Violence. Screening and counseling for interpersonal and domestic violence may include open-ended questions and brochures, forms or other checklists or assessments.
- HPV DNA Testing. HPV DNA testing may be done every three years for women with normal cytology results who are 30 years of age or older.
- HIV Testing. Annual HIV screening as a preventive service includes HIV testing.
Contraceptives. Preventive services include the full range of FDA-approved contraceptive methods (and are not limited to coverage of oral contraceptives).
- Over-the-counter contraceptives are not covered unless prescribed by a health care provider.
- Contraceptives for men are not covered.
- FDA-approved IUDs and implants must be provided without cost-sharing if prescribed by a health care provider.
- Side effects of contraceptives, counseling and device removal are covered preventive services.
- Breastfeeding. Breastfeeding counseling is a required preventive service and includes prenatal and postnatal lactation support, counseling and equipment rental or purchase for the period of breastfeeding, but the scope of such services is subject to reasonable medical management. The Departments have declined to address reimbursement policies for such services as outside their scope of these rules.
The detail of the FAQs as to particular conditions and circumstances create challenges for plans and issuers in implementing the Affordable Care Act. Employers should be aware of these rules to ensure that their group health plans are in compliance and pay attention to the continuing onslaught of guidance from the Departments.