The Departments of Health and Human Services, Labor, and the Treasury (the “Departments”) recently issued their 18th round of Frequently Asked Questions addressing important matters that plan sponsors should consider when implementing the Affordable Care Act (ACA). Certain sections of the FAQ will impact employer-sponsored health plans and thus deserve attention.
A key section of this FAQ addresses the out-of-pocket maximums that a plan may impose for certain benefits. The ACA places limits on out-of-pocket costs on all essential health benefits (EHB) covered under a plan. Under the FAQ, the Departments require that non-grandfathered group health plans comply with the out-of-pocket limits for plan years beginning on or after January 1, 2015. The FAQ further clarifies what services a plan may disregard for purposes of the plan’s out-of-pocket maximum. For example, the ACA will not require a plan to subject out-of-network services and certain non-covered items (like cosmetic services) to the annual out-of-pocket limits.
The FAQ also addresses the employer design of wellness programs under the ACA. The Departments issued final wellness regulations in 2013 that allowed employers to reduce premiums for participants who participate in a wellness or tobacco cessation program. With respect to tobacco cessation programs, the FAQ clarified that an employer may, but is not required to, eliminate the surcharge it imposes on a participant who initially declines to participate in the tobacco cessation program but enrolls in the middle of the plan year. Further wellness-related guidance in the FAQ explains how a plan must provide a participant with a reasonable alternative standard for obtaining a premium reduction where a physician advises that a program is inappropriate for the participant.
The FAQ also answers questions involving the Mental Health Parity and Addiction Equity Act of 2008, the application of the ACA to expatriate health plans, and the prohibition on cost-sharing requirements for certain preventive services related to breast cancer.