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Fully-Insured Expatriate Health Plans Get Extra Time to Comply with PPACA

Posted in Affordable Care Act, Health Care

Recognizing that expatriate group health plans may find it impossible, or nearly impossible, to comply with all of the relevant provisions of the Patient Protection and Affordable Care Act of 2010 (PPACA), the U.S. Labor Department, the U.S. Department of Health and Human Services (HHS) and the U.S. Treasury Department have recently released a joint response to a Frequently Asked Question (FAQ)providing temporary transitional relief to plan sponsors of certain insured expatriate health plans from complying with some of PPACA’s provisions. Last year, the Departments gave sponsors of expatriate group health plans a one-year enforcement reprieve from the summary of benefits and coverage requirement.  http://www.proskauer.com/news/detail.aspx?news=7776

What requirements must be met in order to qualify for the transitional relief?

To qualify for the transitional relief provided for in the FAQ, an expatriate group health plan must:

1. Be a fully-insured arrangement;

2. Limit coverage to primary insureds who reside outside of their home country for at least six months of the plan year and any covered dependents; and

3. Comply with pre-PPACA law under the Public Health Service Act (PHSA) Act, ERISA and the Internal Revenue Code, including, for example, mental health parity provisions, the HIPAA nondiscrimination provisions, ERISA claims procedures, and ERISA reporting and disclosure obligations.

Sponsors of fully-insured expatriate group health plans should confirm with their insurance carrier that all of these criteria are satisfied before relying on the transitional relief.

What transitional relief is provided under the FAQ?

If the criteria above are met, then the fully-insured expatriate group health plan (regardless of grandfathered status) is afforded temporary transitional relief from:

Prohibitions on annual and lifetime limits, rescissions, coverage of preventive services without participant cost-sharing, medical plan eligibility for children up to age 26, SBC and uniform glossary, and 60-day advance notice of material modifications, prohibition on discrimination in favor of highly-compensated employees (HCEs), quality of care reporting, medical loss ratio requirements, appeals and external review, and rate review requirements; and

Prohibitions on pre-existing condition exclusions and excessive waiting periods, and the insurance mandates relating to fair health insurance premiums (rating limitations), guaranteed availability and renewability, nondiscrimination based on health status, comprehensive health coverage, and uniform application of rating reforms.

How long is the transitional relief available under the FAQ?

The transitional relief applies to plan years ending on or before December 31, 2015 (i.e., 2014 and 2015 for calendar year plans).

On or before May 8, 2013, interested parties may submit to e.ohpsca-expat.ebsa@dol.gov comments for consideration by the Departments about the unique challenges that expatriate health plans may face in complying with provisions of PPACA, including information about which particular types of plans face these challenges and with respect to which particular provisions of PPACA.

Recently, HHS also issued final regulations and a fact sheet regarding its Transitional Reinsurance Program exempting “expatriate health coverage” (as defined by the Secretary) from the transitional reinsurance fee. In light of this guidance as well as the FAQ, employers sponsoring self-insured expatriate group health plans may want to consider fully-insuring expatriate group health plan coverage.