Health plans: Regs, regs and more regs
Three federal agencies—the IRS, the Department of Labor (DOL) and the Department of Health and Human Services (HHS)—hold sway over group health plans. Each agency has issued regulations that will affect your group plan. Note: The status of regulations related to the Affordable Care Act is unresolved for now. Here’s the scoop.
1. Meaningful opportunity to enroll. Under the ACA, employees must have a meaningful opportunity to enroll in your group plan. Final tax regulations, which adopt proposed regs without change, clarify that employees who opt out of coverage one year must be allowed to opt back in for the next year. Under the regs, employees who aren’t allowed at least an annual opportunity to enroll in group coverage, and who buy individual policies on the exchange, may be eligible for a premium tax credit, if they’re otherwise qualified for the credit. This provision is effective for tax years beginning after Dec. 31, 2016. (81 F.R. 91755, 12-19-16)
SAVED FOR LATER: The proposed regs also covered payments made to employees who opt out of the group plan. The regs split these payments into unconditional opt-out payments, which would be added into employees’ monthly premium costs, regardless of whether they took the payment or the benefit, and conditional opt-out payments, which wouldn’t necessarily need to be added into employees’ premiums. The final regs have reserved this item for the future.
2. 2018 maximum out-of-pocket limits. Under the ACA, the HHS sets the maximum limit on out-of-pocket expenses (i.e., deductibles and in-network cost sharing) for non-grandfathered, non-high-deductible health plans. For the 2018 plan year, the limits are $7,350 for self-only coverage ($7,150 for the 2017 plan year) and $14,700 for other than self-only coverage ($14,300 for the 2017 plan year). Reminder: All plans must include a provision that requires that the self-only annual limit on out-of-pocket expenses applies separately to each family member who’s enrolled in a family plan. (81 F.R. 94058, 12-22-16)
3. Consumer protections for disability benefits. Final regs issued by the DOL cover ERISA regulation of disability benefit plans. The final regs impose requirements similar to the ACA’s consumer protections. For example, benefit denial notices must contain a more complete discussion of the reason an employee’s claim was denied and the standards for making that decision. In addition, plans must ensure that benefit claims and appeals are handled by individuals who are independent and impartial. And finally, notices must be written in a culturally and linguistically appropriate manner. The final regs apply to disability benefit claims submitted on or after Jan. 1, 2018. (81 F.R. 92316, 12-19-16)