The Departments of Health and Human Services, Labor and Treasury have issued a 35th set of answers to frequently asked questions (FAQs) regarding implementation of the Affordable Care Act (ACA). These FAQs address special enrollment periods for group health plans, coverage of preventive services and qualified small employer health reimbursement arrangements (QSEHRAs).
Under the Health Insurance Portability and Accountability Act, group health plans must allow employees and dependents to enroll in the plan if the employee and/or dependent(s) loses eligibility for other coverage. This FAQ clarifies that special enrollment applies to loss of individual health insurance, inside or outside of a Marketplace (also known as an Exchange). A special enrollment period does not apply if the loss of coverage is due to failure to pay premiums on a timely basis or termination for cause, such as fraud.
Under the ACA, non-grandfathered group health plans must cover preventive services without any cost-sharing provisions, such as deductibles, co-payments or coinsurance. Preventive services are defined to include evidence-informed preventive care and screenings for women provided for in comprehensive guidelines supported by the Health Resources and Services Administration (HRSA).
HRSA updated its Women’s Preventive Services Guidelines on December 20, 2016. The updated guidelines include screening for breast cancer, cervical cancer, gestational diabetes, HIV and domestic violence, among other things. The services identified in the updated guidelines must be covered without cost-sharing for plan years that begin on or after December 20, 2017. For fully insured plans, the insurance company will make the changes. Self-funded plans will be responsible for changing the covered services described in the summary plan description and making sure the claim administrator follows the new rules.
The FAQ regarding QSEHRAs provides limited guidance regarding QSEHRAs and focuses on the transition rules provided under IRS Notice 2015-17 and the continued application of the market reform rules for HRAs that do not qualify as QSEHRAs. There are still many issues regarding QSEHRAs that will need to be addressed in future guidance.
In 2013, the Departments issued guidance regarding HRAs and employer payment plans (EPPs), which are arrangements under which an employer reimburses an employee for individual health insurance premiums. The guidance indicated that these plans are subject to the group market reform provisions of the ACA. These provisions include a prohibition on annual dollar limits.
By their nature HRAs and EPPs have annual dollar limits and therefore fail to comply with the ACA. It is possible for HRAs to be integrated with a group health plan that does not have an annual dollar limit and such HRAs are allowed. EPPs and stand-alone HRAs not integrated with a compliant group health plan are not allowed.
Notice 2015-17 gave relief from excise taxes to EPPs for periods before July 1, 2015. The 21st Century Cures Act, which created QSEHRAs, extended that relief through December 31, 2016.
The FAQ also notes that the relief does not extend to stand-alone HRAs or other arrangements to reimburse employees for medical expenses other than insurance premiums.