If you offer vision, dental and other similar additional benefits, you need to make sure they are offered as separate from your main health insurance policy to ensure they fall outside of certain health reform regulations.
The Obama Administration published this guidance in early October for so-called “excepted benefits” that many employers offer. Under the Affordable Care Act, certain rules apply to health plans, such as banning annual, lifetime limits and out-of-pocket limits, and requiring plans to cover preventative care services.
However, these rules are not supposed to apply to excepted benefits, such as dental, vision and long-term care benefits, as well as employee assistance programs.
The new rules on excepted benefits take effect for all plans incepting on or after Jan. 1, 2015.
Dental, vision and long-term care benefits
Specifically, the final rules provide that limited-scope dental, vision and long-term care benefits are considered not to fall under the ACA’s requirements as long as they are:
• Provided under a separate insurance policy, or
• Otherwise not an integral part of the group health plan.
The final rules are applicable to group health plans and issuers for plan years beginning on or after Jan. 1, 2015.
Benefits are not an integral part of a group health plan (whether the benefits are provided through the same plan, a separate plan, or as the only plan offered to participants) if:
• Participants may decline coverage whether or not a participant contribution is required for the coverage, or
• Benefit claims are administered under a separate contract unrelated to claims administration for any other benefits under the group health plan.
Also, the final regulations eliminate the need for employees to pay an additional premium for this coverage, and a self-insured plan can be “excepted” by not being an integral part of a major medical plan.
Employee assistance programs
Employee assistance plan (EAP) benefits are excepted as long as the following holds true:
1. The plan does not provide significant benefits in the nature of medical care.
2. The benefits are not coordinated with benefits under another group health plan, as follows:
– participants cannot be required to exhaust EAP benefits before becoming eligible for benefits under the other group health plan; and
– eligibility for the EAP benefits cannot be dependent on participation in another group health plan
3. The program cannot require employee premiums or contributions.
4. The program does not have a cost-sharing component.
In the end, employers and issuers are free to continue offering EAPs with major medical plans provided the program is ancillary to a major medical plan, it does not cost the employees anything and use of the program is not a “gatekeeper” to accessing the major medical benefits.
Non-coordinated excepted benefits
There is also a section in the new regulations about non-coordinated excepted benefits. These benefits include coverage for specific conditions, such as policies that cover only cancer, for example. They may also cover hospital indemnity or other fixed indemnity coverage.
Such policies pay out a fixed amount per diem if someone is hospitalized, for example, and that amount is not tied to treatment costs or service provided.
Non-coordinated benefits must meet <i>all</i> of the following conditions:
1. The benefits are provided under a separate policy, certificate or contract of insurance.
2. There is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor.
3. The benefits are paid with respect to any event without regard to whether benefits are provided under any group health plan maintained by the same plan sponsor.
The takeaway
What you should do before the 2015 policy year:
1. Review any vision, dental and long-term care policies and EAPs you may offer your staff to ensure that they meet the conditions for excepted benefits.
2. Review other benefits that may seem ancillary, but which could offer group health plan benefits.
3. If any of those benefits do not meet the conditions for the excepted benefits category, you need to coordinate with us to make sure they do.
4. Call us if you are concerned!