January 29, 2013
Authored by: Chris Rylands
On January 24, the Departments overseeing health care reform implementation issued additional FAQs. (Despite this being the 11th installment of FAQs, the Departments still has yet to address the most frequently asked question we receive from clients about the Affordable Care Act, which is, “Are you kidding me?” A.: “No.”).
The Departments addressed the following issues in the FAQs:
- Under health reform, employers were supposed to provide a notice of the availability of coverage through health insurance exchanges by March 1. That deadline has been pushed back until after regulations can be issued.
- The FAQs also talk about HRAs. Essentially, unless the health reimbursement arrangement is truly and completely integrated with a group health plan (meaning the participant only gets the HRA if he or she is also enrolled in major medical coverage from the employer that complies with PPACA), it will be noncompliant beginning January 1, 2014. Readers may recall that the CCIIO (part of the alphabet soup under HHS) gave HRAs a pass on the rules eliminating lifetime and annual limits until January 1, 2014.
- The Departments clarified that nothing in the act prohibits a health care provider from asking his/her patient about guns. Under PPACA, wellness and health promotion programs are prohibited from asking about the legal ownership and use of firearms and some individuals were concerned that this provision would restrict conversations with their providers regarding guns.
- Regarding Medicare Part D, some self-insured plans that offer additional drugs beyond what Medicare Part D requires could potentially be required to comply with health reform. This would only be the case of the Part D benefit was aggregated with or part of the active group health plan. (If it was retiree-only, it would be exempt.) While there is an exception for Medicare supplemental coverage that is insured, no similar exemption exists for self-funded plans. The Departments said they would not take enforcement action against those self-funded plans for non-compliance with health reform, pending further guidance.
- Interestingly, there are apparently some people who were confused as to what “fixed indemnity” insurance was. These plans pay a fixed dollar amount per day or other period regardless of expenses incurred (e.g., $100/day while you’re in the hospital). They don’t pay based on service, but based on time. However, some plans marketed as “indemnity” plans apparently varied the rate of pay based on types or occurrences of procedures or the setting of treatment. That’s not indemnity; that’s a mini-med plan. While indemnity plans are exempt from health reform, no similar categorical exemption exists for mini-med plans. The FAQs were basically a shot across the bow that the Departments will be coming after those mini-meds-in-indemnity-clothing plans.
- Finally, the Departments confirmed that a multiemployer health plan can pay the PCORI Fees from trust assets, unless the plan document for the plan specifies another source for the fee. This was important since usually the boards of trustees (who are the plan administrators of these plans) for these plans do not have any independent funds. However, the Departments stressed that this conclusion cannot be applied to an association plan or a single-employer plan that is funded through a VEBA as a where plan sponsor or other funds are available to satisfy the fee.