New rule to help self-insured dental, hurt voluntary EAPs

New rule to help self-insured dental, hurt voluntary EAPs
By Allison Bell
The Obama administration has posted a 32-page batch of Patient Protection and Affordable Care Act regulations that could reshape some non-medical health benefits.
The rule was finalized Wednesday.
The package, Amendments to Excepted Benefits, affects one category of benefits that are free from most of the requirements that apply to major medical coverage: “limited excepted benefits.” The category includes dental benefits, vision benefits, long-term care benefits and some other types of benefits, such as employee assistance plans.
The Internal Revenue Service, the Employee Benefits Security Administration and the U.S. Department of Health and Human Services have decided to let employers with self-insured dental and vision plans treat the plans as excepted benefits without necessarily having to charge workers separate premiums for the benefits.
The excepted-benefits regulation changes that affect vision and dental benefits will also apply to employer-sponsored LTC benefits, such as long-term care insurance benefits or home care benefits, officials say in a preamble to the final rule.
The IRS, EBSA and HHS have decided that the provider of an EAP program with excepted benefits status cannot include wellness benefits, such as coverage for checkups and immunizations, in the benefits packages, and that the employer and EAP cannot charge the employees to participate in the EAP.
The rules do not apply to individual health coverage
The regulations are set to appear in the Federal Register Oct. 1, take effect 60 days later, and apply to group plans and group plan insurance issuers for plan years beginning on or after Jan. 1, 2015.
The federal government developed the “excepted benefits” system for the sake of administering the laws that came along before PPACA, such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In the past few years, Obama administration officials have been working to update the system to reflect the changes made by PPACA.
Letting PPACA apply to a benefit would have a much bigger effect than applying HIPAA requirements. HIPAA, for example, might require an employer and an insurer to give a worker a chance to keep a benefit after the worker leaves the employer. PPACA might require the provider of any affected benefit, even dental insurance, to cover at least 60 percent of the actuarial value of the major medical essential health benefits package.
Up until now, employers have not been able to treat their self-insured dental and vision plans as excepted benefits unless they charged extra premiums for the benefits, and they have been treating voluntary, employee-paid EAPs as HIPAA-excepted benefits.
The agencies that came out with the final rule released today noted that they promised when they released a proposed version of the regulations in December 2013 that they would continue to treat any dental, vision or EAP programs that qualified as PPACA-excepted benefits in the proposed regulations as excepted benefits through at least 2014.
Officials acknowledged in the preamble that the EAP rule changes could disrupt existing EAP arrangements.
In the proposed rule, the agencies talked about setting rules for a new type of “limited wraparound coverage,” aimed at workers who are getting individual major medical coverage from a PPACA exchange. The agencies said they will issue wraparound product regulations later.