Agency FAQs on PPACA Implementation – Part III

November 23, 2010 (PLANSPONSOR.com) - Over the last two months, the Departments of Labor, Treasury, and Health and Human Services (the "Agencies") have issued a series of "FAQs" regarding implementation of PPACA. 
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This week we will address issues such as dental and vision benefits, the retiree-only exception, treatment of individuals on long-term disability, and out-of-network emergency services.

Dental and Vision Benefits 

A FAQ confirms that limited scope dental and/or vision benefits that constitute HIPAA excepted benefits are exempt from the PPACA insurance market reforms.  Dental and vision benefits generally constitute excepted benefits under this exception if they are (1) offered under a separate policy, certificate or contract of insurance, or (2) not an integral part of the plan (which generally means participants in a self-funded plan have the right to elect not to receive the coverage and must pay an additional premium to receive coverage).

Retiree-Only Exception and Treatment of Individuals on LTD

A FAQ confirms that plans with less than two current employees, including retiree-only plans, are exempt from the PPACA insurance market reforms.  The agencies had previously indicated in the preamble to the grandfathered plan interim final regulation (IFR) that the retiree-only exemption under the HIPAA group health plan rules generally applies for purposes of the PPACA insurance market reforms.

Another FAQ deals with the treatment under this exemption of individuals on long-term disability (LTD) benefits.  The FAQ states that, until future guidance is issued, a plan that covers retirees and individuals on LTD will be considered as satisfying the exemption for plans with less than two current employees.  It also states that the Agencies will issue a request for information soliciting comments on this issue in the near future, intend to issue further guidance in 2011, and, to the extent any future guidance is more restrictive, it will be prospective only. 

Grandfathered Plans

Another FAQ addresses the requirement in the grandfathered plan IFR that a grandfathered plan must include a statement that the plan “believes” it is grandfathered in any materials provided to a participant or beneficiary describing plan benefits.  The FAQ provides that a grandfathered plan will comply with this disclosure requirement if it includes the model language provided in the IFR (or a similar statement) any time a summary of benefits is provided to participants and beneficiaries – e.g., when providing a summary plan description upon initial eligibility or at open enrollment.

Out-Of-Network Emergency Services

A FAQ clarifies the minimum payment standards with respect to the rules on the coverage of out-of-network emergency services set forth in the Interim Final Regulation on various "patient protections" (see 75 Fed. Reg. 37188 (June 29, 2010)).  The FAQ states that if a State law prohibits balance billing, plans and insurers are not required to satisfy the payment minimums set forth in the regulation concerning out-of-network emergency providers.  Similarly, if a plan or insurer is contractually responsible for any amounts balance billed by an out-of-network emergency services provider, the plan or insurer is not required to satisfy the payment minimums set forth in the regulation. 

The FAQ notes, however, that in both situations, patients must be provided with adequate and prominent notice of their lack of financial responsibility with respect to any balance billed amounts, to prevent inadvertent payment by the patient.  In any event, even if State law prohibits balance billing -- or if the plan or insurer is contractually responsible for amounts balance billed -- the plan or insurer may not impose any copayment or coinsurance requirement that is higher than the copayment or coinsurance requirement that would apply if the services were provided in network.

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You can find a handy list of Key Provisions of the Patient Protection and Affordable Care Act and their effective dates at http://www.groom.com/HCR-Chart.html  

Contributors:

Christy Tinnes is a Principal in the Health & Welfare Group of Groom Law Group in Washington, D.C.  She is involved in all aspects of health and welfare plans, including ERISA, HIPAA portability, HIPAA privacy, COBRA, and Medicare.  She represents employers designing health plans as well as insurers designing new products.  Most recently, she has been extensively involved in the insurance market reform and employer mandate provisions of the health-care reform legislation.

Brigen Winters is a Principal at Groom Law Group, Chartered, where he co-chairs the firm's Policy and Legislation group. He counsels plan sponsors, insurers, and other financial institutions regarding health and welfare, executive compensation, and tax-qualified arrangements, and advises clients on legislative and regulatory matters, with a particular focus on the recently enacted health-reform legislation.

PLEASE NOTE:  This feature is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice. 

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