The Affordable Care Act (ACA) specifically sets aside certain benefits as “excepted” from the law’s key requirements. These excepted benefits include the ban on annual benefit limits and waiting periods exceeding 90 days, rules governing distribution of Summary of Benefit and Coverage statements and cost-sharing limits.

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New Rules Ease Limits on
Dental, Vision Plans

2. The Affordable Care Act (ACA) specifically sets aside certain benefits as
"excepted" from the law's key requirements. These excepted benefits include
the ban on annual benefit limits and waiting periods exceeding 90 days, rules
governing distribution of Summary of Benefit and Coverage statements and
cost-sharing limits. Now, new rules clarify and refine the definition of those
benefits, as well as establishing ground rules for a new category known as
"wraparound benefits.“
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Under the proposed regulations -- issued
jointly by the Departments of Labor, Treasury
and Health and Human Services -- some
provisions take effect this year, and others in
2015. Though they are in the "proposed"
phase, you can rely on them before they are
finalized. Typically, few major changes occur
between the proposed and final stage, except
when regulations are highly controversial.

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For the majority of employers, the most significant elements of the rules deal
with dental and vision benefits. This is particularly true if those benefits are
to be made available via a health care reimbursement account. Previously,
"limited" dental and vision benefits would only qualify for excepted status if a
premium was paid by employees for a self-funded vision or dental plan. That
would have made it impossible for employers with health care
reimbursement accounts (HRAs) to offer those benefits, since these HRAs
must be funded exclusively by the employer.

4. Defining "Limited"
"Limited" dental and vision plans provide substantially all their benefits
towards the treatment of the mouth and eyes, respectively, and are a benefit
distinct from the main health plan. One stipulation under the new regulations
is that employees must have the right to choose not to have those benefits.
The new rules are in effect at least for 2014 and probably beyond, once the
final regulations are published.
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The regulations also added a new category of excepted benefit: Employee
assistance plans (EAPs) typically provide resources to help employees with
emotional and substance abuse problems, as well as dire personal financial
circumstances.
To have excepted status, EAPs must not "provide significant benefits in the
nature of medical care," according to the proposed regulations. Whether
they do or not is subject to the employer's "good faith" determination,
because "significant" is too general to define.
In addition, EAP benefits cannot be coordinated with their other benefits. For
example, employees cannot be required to exhaust their benefits through
EAPs before seeking benefits in their health care plan. Similarly, employees
cannot be required to participate in a group health plan to be eligible for
health benefits.
Also, to maintain excepted status, EAP benefits must be made available
without charge, including co-payments.

6. Wraparound Coverage
The proposed regulations also created an entirely new excepted benefit
category: "limited wraparound coverage." This category becomes effective in
2015. In a nutshell, such coverage helps employees who are enrolled in "non-
grandfathered" (that is, pre-ACA) plans, which meet ACA's minimum
standards, yet is unaffordable to the employees. Minimum plan standards
include covering at least 60 percent of health benefits provided through the
plan, and being affordable to the majority of employees.
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Affordability is defined as single coverage under an employer plan that will
cost the employee not more than of 9.5 percent of household income.
Needless to say, if single coverage is unaffordable, family coverage would be
way above that affordability threshold.
What does wraparound coverage pay for? It pays for health benefits which
are not "essential health benefits" as defined by ACA, care provided out of
the main health plan's provider network, and co-pays and coinsurance under
the employee's individual policy.

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Strict nondiscrimination rules apply to wraparound coverage:
•Health must not be used as a consideration in determining employee
eligibility for the coverage,
•No preexisting condition exclusions are permitted, and
•The main health plan which wraparound coverage supplements also cannot
discriminate as described under ACA section 105(h).
It will take some careful analysis to determine whether it will make sense for
you to offer a wraparound plan next year. The good news is you have ample
time to make that decision. Meanwhile, you can immediately find out
whether your company's EAP plan, if you have one, as well as any dental or
vision plans offered, qualify as "excepted." You can also learn whether you
can benefit from coming out from under the ACA rules which previously
applied to those plans.

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Toll Free
Phone
Fax
:
:
:
877.880.4477
281.880.6525
281.866.9426

10. 14550 Torrey Chase Blvd., Ste. 360 Houston, TX 77014 USA
www.hrp.net
E-mail : info@hrp.net
Toll Free
Phone
Fax
:
:
:
877.880.4477
281.880.6525
281.866.9426