Group health plans are generally subject to ERISA (including HIPAA portability provisions) and Affordable Care Act (ACA) regulations. However, benefit plans that provide only a limited scope of coverage and satisfy certain other conditions qualify as “excepted benefits” that are not subject to HIPAA and ACA provisions. Dental and vision plans may be considered excepted benefits because they only provide a limited scope of coverage. Health care flexible spending accounts are also excepted benefits when there is no (or very limited) employer contribution and they are offered along with a group medical plan to employees.
On December 24, 2013, the Employee Benefits Security Administration, Internal Revenue Service, and Health and Human Services Department jointly issued a Proposed Rule to amend the regulations on excepted benefits.
The Proposed Rule would expand the definition of excepted benefits to include:
- Self-insured limited-scope dental or vision benefits provided at no cost to the employee;Without the Proposed Rule, self-insured dental or vision benefits are only considered excepted benefits if there is additional premium or contribution beyond the health plan cost charged to the participant.
- Wraparound health insurance to supplement an employee’s individual Marketplace coverage; and
Wraparound health insurance would be a new employer benefit offering for 2015. This product is not yet available, but would theoretically be designed to supplement a Marketplace policy purchased by an employee. The combined coverage would be comparable to the employer’s group health plan. Keller will advise our clients if and when insurance companies offer such a product.
- Employee Assistance Programs (EAPs) not providing significant medical benefits.EAP are not currently considered excepted benefits. The Proposed Rule details four criteria for an EAP to qualify as an excepted benefit: the EAP cannot 1) provide significant medical benefits, 2) coordinate benefit coverage with another group health plan, 3) require employee premiums or contributions, or 4) include employee cost sharing. Most employer-sponsored EAPs that are offered by our clients meet these criteria.