On October 1, 2014, the US Department of Treasury issued final regulations (the "Regulations") regarding limited-scope vision and dental benefits and employee assistance programs as excepted benefits for purposes of the Affordable Care Act.
Limited scope vision and dental benefits
The Regulations eliminate the requirement that participants must pay an additional premium or contribution for limited-scope vision or dental benefits to qualify as excepted benefits. The Department of Treasury indicated that without this change, an employer that establishes or maintains a self insured plan could be required to charge a nominal contribution from participants simply for limited-scope vision and dental coverage to qualify as excepted benefits.
The Regulations also clarify that limited-scope vision or dental benefits do not need to be offered in connection with a separate offer of major medical or "primary" group health coverage under the plan in order to meet the statutory criterion that such benefits are "otherwise not an integral part of the plan." To meet this criterion, limited-scope vision or dental benefits can be provided without connection to a primary plan, or the limited-scope vision or dental benefits can be offered separately from the major medical or "primary" coverage under the plan. The Regulations provide that this criterion is satisfied if participants may decline coverage or the claims for benefits are administered under a contract separate from the claims administration for any other benefits under the plan.
Coverage for long term care benefits are also subject to the "not an integral part of a group health plan" standard in order to be classified as excepted benefits. Accordingly, the revisions discussed in the Regulations also apply to coverage for long term care benefits.
Employee Assistance Programs
The Regulations provide that for an Employee Assistance Program ("EAP") to constitute excepted benefits, the EAP must satisfy four requirements. First, the EAP must not provide significant benefits in the nature of medical care. For this purpose, the amount, scope, and duration of covered services are taken into account. The preamble to the Regulations indicate that future regulations may provide additional clarification regarding when an EAP provides significant benefits in the nature of medical care.
The second requirement for an EAP to constitute excepted benefits is that its benefits cannot be coordinated with the benefits under another group health plan. This requirement has two elements: (1) participants in the other group health plan must not be required to use or exhaust benefits under the EAP before an individual is eligible for benefits under the other group health plan; and (2) participant eligibility for benefits under the EAP must not be dependent on participation in another group health plan.
The third requirement for EAPs to constitute excepted benefits is that no employee premiums or contributions may be required as a condition of participation in the EAP. Fourth, the EAP may not impose any cost sharing requirements.
The Regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015. They do not apply to health insurance issuers offering individual health insurance coverage.