Compliance

The Affordable Care Act (ACA) presents many new compliance challenges that range from ensuring plan designs incorporate the required benefits to notifying employee’s about the public Exchange.

Plans Exempt from ACA Mandates

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Certain plans are not required to comply with some of the mandates (e.g., the prohibition on annual dollar limits) required by the Affordable Care Act (ACA).  In general, the ACA mandates apply to group health plans and issuers but not to plans that do not meet the definition of a group health plan or provide only excepted benefits.  The following outlines some types of plans that may be exempt from certain ACA mandates.

Excepted Benefits

The Health Insurance Portability and Accountability Act (HIPAA) includes mandates to improve access to health coverage and to ensure a minimum level of coverage.  However, plans providing certain types of excepted benefits are not required to comply with many of these mandates.  These plans are also not required to comply with many of the additional ACA mandates.  The following are examples of excepted benefits:

  • Limited scope dental and vision plans
  • Health Flexible Spending Accounts

Specific requirements (such as being offered under a separate policy or not being an integral part of a group health plan) must be satisfied in order to be an excepted benefit and, therefore, exempt from the HIPAA and ACA mandates.  If the requirements are not met, the plan is not excepted benefit and will be subject to the HIPAA and ACA mandates.

Health Savings Accounts (HSAs)

Health Savings Accounts are not subject to the requirements of HIPAA because they are not group health plans.  However, High Deductible Health Plans offered along with HSAs are subject to the HIPAA and ACA mandates.

Health Reimbursement Arrangements (HRAs)

In general, HRAs are group health plans and will be subject to the HIPAA and ACA mandates.  However, an HRA may be exempt if it falls within one of the following categories:  (1) a retiree-only HRA; (2) an HRA that meets the definition of a health Flexible Spending Account; or (3) an HRA structured to provide a HIPAA excepted benefit (e.g., limited scope dental or vision).

Retiree-only Health Plans

Retiree-only plans are exempt from the HIPAA and ACA mandates.  A group health plan is a retiree-only plan if, on the first day of the plan year, it had less than two active employee participants.

Wellness Programs

A wellness program that is part of, or relates to, a group health plan will be subject to the HIPAA and ACA mandates to the extent that the group health plan is subject to the mandates.  Certain stand-alone wellness programs that are not part of a group health plans may be exempt from the mandates.  Examples include wellness programs that provide information only or pay health club dues.

Employee Assistance Programs (EAPs)

In general, EAPs providing medical benefits are group health plans.  However, the Departments of Labor, Health and Human Services and the Internal Revenue Service issued guidance indicating that EAPs will be considered excepted benefits if the following requirements are met:

  • The EAP does not provide significant benefits in the nature of medical care or treatment
  • Benefits under the EAP are not coordinated with benefits under another group health plan
  • No employee contributions are required as a condition for participation in the EAP
  • The employee cannot be required to pay co-pays, deductibles or co-insurance for services received through the EAP

As for determining whether an EAP provides significant benefits in the nature of medical care or treatment, the amount, scope and duration of covered services are taken into account.  For example, an EAP that only provides limited, short-term outpatient counseling for substance use disorder without requiring prior authorization or review would not provide significant benefits in the nature of medical care.  However, a program that provides disease management services for individuals with chronic conditions, such as diabetes, does provide significant benefits in the nature of medical care.

If an EAP meets the requirements of an excepted benefit, it will be exempt from the HIPAA and ACA mandates.