Source: https://slphrbenefitsupdate.com/2014/03/04/agencies-clarify-applicability-of-aca-out-of-pocket-versus-deductible-cost-sharing-limitations/
Timestamp: 2019-04-22 22:25:38+00:00

Document:
Non-grandfathered self-insured and large group health plans must comply with the out-of-pocket limits in 2014 but pending further guidance are excused from the duty to comply with deductible limitations imposed by the cost-sharing limitations of the Patient Protection & Affordable Care Act (ACA) according to new guidance jointly published February 20, 2013 by the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the “Departments”) in “FAQS About Affordable Care Act Implementation (Part XII)” (hereafter, the “FAQ”). However, the FAQ includes a transitional rule that allows plans to apply separate out-of-pocket maximums to prescription drug coverage and other group health plan for 2014, to allow them time to adjust contracts in response to the requirement.
Public Health Service (PHS) Act § 2707(b), as added by the ACA, requires a group health plan to ensure that any annual cost-sharing imposed under the plan does not exceed the limitations provided for under ACA §§1302(c)(1) and (c)(2). § 1302(c)(1) of ACA requires that group health plans limit out-of-pocket maximums while ACA § 1302(c)(2) limits deductibles for employer-sponsored plans.
The FAQ clarifies that pending further guidance, self-insured group health plans and large group health plans currently are not generally required to comply with ACA’s deductible limitations. According to the FAQ, the Departments currently view the deductible limits as generally applicable only to non-grandfathered small group insurance coverage and qualified health plans offered in the small group market. Additionally, the FAQ notes that pursuant to ACA § 1302(c)(2)(C), small group market health insurance coverage may exceed the annual deductible limit if it cannot reasonably reach a given level of coverage (metal tier) without exceeding the deductible limit.
In contrast, the FAQ states about self-insured and large group health plans, the Departments intend to engage in future rule making to implement PHS Act § 2707(b) with respect to self-insured and large group health plans. However, the FAQ reports that the Departments continue to believe that only plans and issuers in the small group market are required to comply with the deductible limit described in ACA § 1302(c)(2).
The Departments invite interested parties to submit comments or other input relative to these deliberations no later than April 22, 2013 to e.ohpsca-2707.ebsa@dol.gov.
Until that rule making is promulgated and effective, however, the FAQ states that a self-insured or large group health plan can rely on the Departments’ stated intention to apply the deductible limits imposed by § 1302(c)(2) of the ACA only on plans and issuers in the small group market. Accordingly, only plans and issuers in the small group market currently must comply with the ACA deductible limitations pending further guidance.
In contrast, the FAQ confirms that all non-exempt, non-grandfathered group health plans – including self-insured and large and small insured group health plans must comply with ACA’s annual limits on out-of-pocket maximums.
The FAQ reaffirms statements in the preamble to the HHS final regulation on standards related to essential health benefits that the Departments read PHS Act § 2707(b) as requiring all non-grandfathered group health plans subject to ACA to comply with the annual limitation on out-of-pocket maximums described in ACA § 1302(c)(1).
The plan complies with existing regulations implementing Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) which prohibit a group health plan (or health insurance coverage offered in connection with a group health plan) from applying a cumulative financial requirement or treatment limitation, such as an out-of-pocket maximum, to mental health or substance use disorder benefits that accumulates separately from any such cumulative financial requirement or treatment limitation established for medical/surgical benefits.
Accordingly, while the FAQ generally allows plans using separate vendors to separately apply out-of-pocket maximums to prescription drug coverage from medical benefits generally, this is not allowed to be accomplished where the effect would be to impose an annual out-of-pocket maximum on all medical/surgical benefits and a separate annual out-of-pocket maximum on all mental health and substance use disorder benefits in violation of the MHPAEA.
The FAQ is one of many clarifications and other guidance implementing the ACA Rules. Compliance with these requirements as implemented is critical, as group health plans and insurers, their fiduciaries and sponsors face a myriad of exposures for violating these and other health plan rules. In the case of these and many other federal health plan rules, this includes an often overlooked obligation imposed under Internal Revenue Code § 6039D to self-identify, self-report and pay excises taxes under that provision in the event of a violation, as well as traditionally applicable ERISA exposures for violating federal benefit and coverage mandates. In light of these risks, health insurers, group health plan sponsors, fiduciaries and service providers are urged to act diligently to amend their plans and take other necessary arrangements to administer their programs in accordance with the applicable rules.
Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health care providers, health plans, their business associates and other health industry clients to establish and administer medical privacy and other compliance and risk management policies, to health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns. She regularly designs and presents HIPAA and other risk management, compliance and other training for health plans, employers, health care providers, professional associations and others.
This entry was posted on Tuesday, March 4th, 2014 at 7:50 PM and is filed under Employers, Health Plans, HIPAA, Human Resources, Insurance.	You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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