The IRS released interim guidance on how certain provisions of the Affordable Care Act apply to expatriate health plans under the Expatriate Health Coverage Clarification Act of 2014. The guidance provides additional time for expatriate plans to modify their plans to meet exemption requirements under the new law. It also clarifies that the Patient-Centered Outcomes Research Institute fee does not apply to plans that cover qualified expatriates as defined by the act. The interim guidance applies to policies issued or renewed on or after July 1, 2015 and plan years starting on or after that date.

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Willis Human Capital Practice, National Legal & Research Group
In Notice 2015-43, the Internal Revenue Service (IRS) with the support of the Departments of
Labor (DOL) and Health and Human Services (HHS) released interim guidance on the
application of certain provisions of the Patient Protection and Affordable Care Act (PPACA) to
expatriate health plans under the Expatriate Health Coverage and Clarification Act of 2014
(EHCCA). The interim guidance provides applicable plans, employers and insurers with
additional time to modify their expatriate health plans and policies to meet the exemption
requirements under the EHCAA. The interim guidance also clarifies the application of the
Patient Centered Outcomes Research Institute funding fee (the PCORI fee) to expatriate health
plans. The notice applies to polices that are issued or renewed on or after July 1, 2015 and plan
years that start on or after July 1, 2015.
Background
As was previously reported in Willis’ HR Focus, February 2015, “Certain Expatriate Plans
Exempt From Many Health Care Reform Requirements,” the EHCCA exempts expatriate health
plan from certain provisions of PPACA. The exemptions under the EHCCA apply to expatriate
health plans issued or renewed on or after July 1, 2015. In order to meet the definition of an
expatriate health plan under the EHCCA, the plan must be a group health plan (which includes a
self-funded plan) or health insurance coverage in which substantially all primary enrollees are
“qualified expatriates. Under the EHCCA, qualified expatriates are (1) certain foreign employees
transferred or assigned to the U.S. for a specific and temporary employment purpose or
assignment, (2) individuals working outside the U.S. for at least 180 days in a 12-month period,
and (3) individuals who are members of certain groups, “similarly situated individuals,” such as
students or religious missionaries. The plan or policy must also meet certain coverage standards,
including, among other requirements, coverage for inpatient hospital services, outpatient facility
services, physician services and emergency services.
Expatriate health plans meeting the EHCCA requirements, are deemed to meet the requirements
under the employer pay or play mandate and the individual mandate (i.e. deemed minimum
essential coverage) and are exempt from complying with many of the PPACA mandates,
including prohibition on annual and lifetime dollar limits on essential health benefits, prohibition
on excessive waiting periods, out-of-pocket maximums, preventive services without participant
cost sharing, PPACA’s internal claim and appeal and external review requirements, preexisting
condition exclusions, prohibition on rescission (retroactive termination of coverage except in
WEEK OF JULY 6, 2015:
Health Care Reform Update - IRS Issues Interim Guidance on
Expatriate Plans

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Health Care Reform Update | Willis Human Capital Practice, National Legal & Research Group
cases of fraud), and distribution of summaries of benefits and coverage (SBCs) and uniform
glossaries.
Conclusion
Until the issuance of further guidance, the interim guidance in Notice 2015-43 allows plan
sponsors and insurance issuers to apply the requirements of the EHCCA using a reasonable good
faith interpretation of the EHCCA Specifically, plan sponsors and insurance issuers may rely on
the Affordable Care Act Implementation FAQs Part XIII, Q&A-1, and FAQs XVIII, Q&A-6 and
Q&A-7, for purposes of interpreting the requirements of the EHCCA in good faith. However,
employers may not rely on the good faith rules with respect to the application of PCORI fees to
expatriate health plans. The interim guidance specifically provides that for insurance policies
issued or renewed on or after July 1, 2015, or for plan years starting on or after July 1, 2015 (for
self-insured plans), issuers and plan sponsors may determine the PCORI fee by excluding lives
covered under a specified plan if the facts and circumstances demonstrate that the plan or policy
covers qualified expatriates, as defined under the EHCCA.
This information is not intended to represent legal or tax advice and has been prepared solely for informational
purposes. You may wish to consult your attorney or tax adviser regarding issues raised in this publication.