The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued the latest in its series of Frequently Asked Questions (FAQs) on the Affordable Care Act’s (ACA) implementation.  The latest guidance (Part XVIII) addresses questions on coverage of preventive services and limitation on cost-sharing requirements under the ACA. The FAQs also provide guidance on expatriate plans, wellness programs, fixed indemnity insurance and the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

Preventive Services:

With respect to preventive services, the ACA requires non-grandfathered group health plans and health insurance coverage offered in the individual or group market to provide benefits for, and prohibit the imposition of cost-sharing requirements with respect to, the following:

• Evidenced-based items or services that have in effect a rating of "A" or "B" in the current recommendations of the United States Preventive Services Task Force (USPSTF) with respect to the individual involved, except for the recommendations of the USPSTF regarding breast cancer screening, mammography, and prevention issued on or around November 2009, which are not considered current;
• Immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention (CDC) with respect to the individual involved;
• With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and
• With respect to women, evidence-informed preventive care and screening provided for in comprehensive guidelines supported by HRSA, to the extent not already included in the current recommendations of the USPSTF.

On September 24, 2013, the USPSTF issued new recommendations with respect to breast cancer. Accordingly, the FAQ explains that for plan or policy years beginning one year after September 24, 2014, non-grandfathered group health plans and non-grandfathered health insurance coverage offered in the individual or group market will be required to cover such medications for applicable women without cost sharing subject to reasonable medical management.

Cost-Sharing Limitations

The FAQs include a number of questions about the application of the ACA’s cost-sharing limitation.  For plan years beginning in 2014, the annual limitation on out-of-pocket costs applicable to non-grandfathered group health plans and group health insurance coverage is $6,350 for self-only coverage and $12,700 for coverage other than self-only coverage. For subsequent plan years, the annual limitation on out-of-pocket costs will increase by the premium adjustment percentage described in the ACA. A previous FAQ provided guidance on out-of-pocket maximums for the first year of applicability where a group health plan or group health insurance issuer utilizes more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket costs. This latest guidance explains that for plan years beginning on or after January 1, 2015, non-grandfathered group health plans and group health insurance coverage must have an out-of-pocket maximum that limits overall out-of-pocket costs on all essential health benefits (EHB).  In addition, plans and issuers are permitted to structure a benefit design using separate out-of-pocket limits, provided that the combined amount of any separate out-of-pocket limits applicable to all EHBs under the plan does not exceed the annual limitation on out-of-pocket maximums for that year. The FAQs clarify that a plan that includes a network of providers is not required to count an individual's out-of-pocket expenses for out-of-network items and services toward the plan's annual maximum out-of-pocket limit. A plan is not required to count an individual's out-of-pocket costs for non-covered items or services (such as cosmetic services) toward the plan's annual maximum out-of-pocket limit either.

Expatriate Plans

The FAQs include clarification of the temporary transitional relief exempting expatriate health coverage from certain ACA provision. For purposes of the transitional relief, an insured expatriate health plan is an insured group health plan for which enrollment is limited to primary insureds for whom there is a good faith expectation that such individuals will reside outside of their home country or outside of the United States for at least six months of a 12-month period and any covered dependents, and also with respect to group health insurance coverage offered in conjunction with the expatriate group health plan.   

Wellness Programs

Final regulations regarding nondiscriminatory wellness programs in group health increased the maximum permissible reward under a health-contingent wellness program from 20% to 30% of the cost of coverage, and further increased the maximum permissible reward to 50% for wellness programs designed to prevent or reduce tobacco use. The DOL explains that the FAQs address several issues that have been raised since the publication of the final regulations.

If a participant is provided a reasonable opportunity to enroll in the tobacco cessation program at the beginning of the plan year and qualify for the reward (i.e., avoiding the tobacco premium surcharge) under the program, the plan is not required (but is permitted) to provide another opportunity to avoid the tobacco premium surcharge until renewal or reenrollment for coverage for the next plan year.

The FAQs describe a scenario in which a plan participant's doctor advises that an outcome-based wellness program's standard for obtaining a reward is medically inappropriate for the plan participant and the doctor suggests a weight reduction program (an activity-only program) instead. The FAQs explain that the plan does have a say with respect to how a weight reduction program is selected. The plan must provide a reasonable alternative standard that accommodates the recommendations of the individual's personal physician with regard to medical appropriateness.  Many different weight reduction programs may be reasonable for this purpose, and a participant should discuss different options with the plan.

The final wellness regulations provided sample language that may be used to satisfy the requirement to provide notice of the availability of a reasonable alternative standard. The FAQs state that plans and issuers are permitted to modify this sample language to reflect the details of their wellness programs, provided that the notice includes all of the required content.  

Mental Health Parity

With respect to mental health parity requirements, the guidance states that the ACA builds on the MHPAEA and provides that mental health and substance use disorder services are one of 10 EHB categories. Under the EHB rule, non-grandfathered health plans in the individual and small group markets are required to comply with the requirements of the parity regulations to satisfy the requirement to provide EHB.

FAQs Part XVIII can be found here.