HHS, the Department of Labor (DOL) and the IRS (the Departments) released additional Frequently Asked Questions (FAQ) addressing questions regarding the implementation of the market reform provisions of the PPACA, the implementation of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and nondiscrimination based on a health factor and wellness program.
While much of the information released in the FAQs was not new information, the Departments did delay enforcement of two PPACA provisions.
First, compliance with the requirement that large employers (those with more than 200 full-time employees) automatically enroll new full-time employees and continue enrollment of current full-time employees is delayed until the DOL issues the corresponding regulations, which the DOL intends to issue by 2014.
Second, the PHS requires that if a group health plan or health insurance issuer makes any material modifications in any of the terms of the plan or coverage that is not included in the most recently provided summary of benefits and coverage, notice of the modification must be provided no later than 60 days prior to the date on which such modification will become effective. Plans are not required to comply with the 60-day prior notice requirement for material modifications until plans and issuers are required to provide the summary of the benefits and coverage explanation to the standards issued by the Departments. The Departments have not yet issued the standards.
Under the MHPAEA, criteria for medical necessity determinations made under a plan with respect to mental health or substance use disorder benefits must be made available by the plan administration not only to a current or potential participant or beneficiary, but to a contracting provider upon request.
The Health Insurance Portability and Accountability Act (HIPAA) prohibits discrimination in eligibility, benefits or premiums based on a health factor. An exception to this general rule is available for certain wellness programs that discriminate in benefits and/or premiums based on a health factor. For example, wellness programs that require individuals to satisfy a standard related to a health factor in order to obtain a reward. Such rewards are allowable if the program provides certain safeguards, including that the total reward for such wellness programs cannot exceed 20% of the total cost of employee-only coverage under the plan. PPACA revised the PHS to increase the maximum reward that can be provided under a health-contingent wellness program from 20% to 30%. This change is effective in 2014. However, the Departments intend to propose regulations that use existing regulatory authority under HIPAA to raise the percentage for the maximum reward to 30% before the year 2014. Since the Departments are likely to use their regulatory authority under HIPAA, all plans, including grandfathered plans, will be able to take advantage of this modification.