On June 26, 2013, the US Centers for Medicare & Medicaid Services ("CMS") released its final rule outlining the "other" categories of coverage that satisfy the Minimum Essential Coverage ("MEC") requirement of the Affordable Care Act ("ACA"), draft regulations for which comments were accepted up to and including March 18, 2013. We are still reviewing the final rule but will note certain key points.

  1. Programs that are already structured to be exempt from the ACA remain exempt—the final rule does not alter the statutory exemptions. The final rule does, however, automatically relieve certain individuals from the Individual Mandate to the extent that certain coverages are deemed by the final rule to constitute MEC.
  2. For student health coverage (and state high risk pools), they will only be automatically deemed to be MEC for plan or policy years beginning on or before December 31, 2014. For coverage beginning on or after January 1, 2015, such coverage is not designated as MEC, such that sponsors must apply to HHS to seek a designation as MEC [or fall within an exemption to the ACA]. See Final Rule at pages 81 and 136.
  3. For coverage under AmeriCorps, such coverage is not designated as MEC, such that plan sponsors must apply for designation as MEC with no delayed implementation (i.e., applies to coverage beginning on or after January 1, 2014) [or fall within an exemption to the ACA]. See Final Rule at pages 83 and 93.
  4. Foreign health coverage (i.e., in-bound expatriate coverage) is not designated as MEC, such that sponsors of such plans must apply for their coverage to be recognized as MEC with no delayed implementation (i.e., applies to coverage beginning on or after January 1, 2014) [or fall within an exemption to the ACA]. See Final Rule at pages 82-83 and 93.
  5. The final rule outlines the requirements for applying for designation/certification as MEC (applicable to student health and state high risk pool coverage in 2015, and AmeriCorps and foreign health coverage in 2014). Such application includes certification that the coverage "substantially" complies with Title I of the ACA, and Title I includes items such as medical loss ratios, guaranteed issuance, and guaranteed renewal.

The final rule also outlines how/why the Exchanges will grant exemptions from the coverage requirement. The Internal Revenue Service has not yet released its final rule, which ultimately will work in tandem with this final rule to outline all of the possible Individual Mandate exemptions (exemptions from the Individual Mandate will be granted by the exchanges, IRS, or both, depending on the exemption).