The Employee Benefits Security Administration (EBSA) has posted a collection of answers to group benefits questions related to the Affordable Care Act and the Mental Health Parity and Addiction Equity Act (MHPAEA).
Officials at EBSA, an arm of the U.S. Department of Labor, address topics such as automatic health plan enrollment, the young adult coverage mandate, the grandfathered plan rules, the MHPAEA small group exemption, and wellness incentives based on a worker’s health.
A section of the Affordable Care Act, the federal legislative package that includes the Patient Protection and Affordable Care Act (PPACA), has added Section 18A to the Fair Labor Standards Act (FLSA). The section requires employers with more than 200 full-time employees to enroll new full-time employees in the employer’s health plan automatically.
“What agency is responsible for guidance under this new FLSA provision?” a commenter asks EBSA.
The U.S. Labor secretary has delegated her responsibility for enforcing FLSA Section 18A to EBSA, EBSA officials say.
EBSA shares responsibility for developing the rules implementing the provision with the U.S. Treasury Department, officials say.
EBSA hopes to complete work on automatic enrollment rules by 2014. “It is the view of the Department of Labor that, until such regulations are issued, employers are not required to comply with section 18A,” officials say.
DEPENDENT COVERAGE OF CHILDREN TO AGE 26
The Affordable Care Act requires plans that provide dependent coverage to offer access to dependent coverage to dependents up to age 26.
EBSA officials have included an answer to a question about a group health plan that normally charges a co-payment for physician visits that do not involve preventive services. The plan charges a co-payment for individuals ages 19 and over, including employees, spouses, and dependent children, but the plan waives the co-payment for enrollees under age 19.
“Is this permissible?” a member of the public asks.
“Yes,” officials say.
The new mandate generally bans age-based distinctions in coverage of dependent children, but it does not ban age-based distinctions that apply to all coverage under the plan, officials say.
“In this case,” officials say, “the co-payments charged to dependent children are the same as those charged to employees and spouses.”
GRANDFATHERED HEALTH PLANS
The Affordable Care Act exempts “grandfathered health plans” — plans that existed when the act took effect — from some of the act requirements.
A member of the public asks about a plan that bases out-of-pocket spending limits on a fixed percentage of the employee’s prior-year compensation.
The commenter asks about whether a grandfathered plan can keep grandfathered status if an increase in earnings leads to a substantial increase in an employee’s out-of-pocket limit.
In that situation, officials say, the plan can keep grandfathered status, even though some employees might face an increase in cost-sharing amounts.
Federal regulators have decided that uses a percentage-of-compensation formula for determining cost-sharing amounts can keep grandfathered status, as long as the formula stays the same, officials say..
The Mental Health Parity and Addiction Equity Act of 2008, a health system change act that became law before the Affordable Care Act, sets standards for behavioral health benefits.
The MHPAEA does not require a plan to offer behavioral health benefits. But, if a plan over a certain minimum size does offer behavioral health benefits, it must make sure the benefits are “no more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits,” officials say.
Federal regulators issued interim final MHPAEA rules Feb. 2, and those rules apply for plan years beginning on or after July 1, 2010.
One issue EBSA officials consider is the effects of Affordable Care Act small group definitions on the MHPAEA small group exclusion.
Today, in the wake of the Affordable Care Act changes,
“how is ‘small employer’ defined?” a commenter asks.
When applying the MHPAEA to plans subject to the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code, federal regulators “will continue to treat group health plans of employers with 50 or fewer employees as exempt from the MHPAEA requirements under the small employer exemption, regardless of any State insurance law definition of small employer,” officials say.
For nonfederal governmental plans, federal regulators will define a “small employer” to be one that has100 or fewer employees, officials say.
THE AFFORDABLE CARE ACT AND WELLNESS PROGRAMS
The Affordable Care Act will help plans that offer participants “health-contingent” rewards bigger rewards, officials say.
The change is a result of an act provision that updates Health Insurance Portability and Accountability Act of 1996 wellness program provisions.
Regulations implementing the provisions let health plans offer incentives to plan members who participate in specified wellness activities, such as filling out a health screening questionnaire.
The regulations also let plans offer “health-contingent” incentives, or rewards given to plan members who meet standards related to a health factor. An employer can, for example, offer rewards to employees who actually give up smoking, or actually get control over their blood pressure.
To limit discrimination, the HIPAA regulations set limits on health-contingent incentive programs.
The regulations have required, for example, that the total reward for wellness programs be limited to 20% of the total cost of employee-only coverage under the plan.
Effective 2014, the Affordable Care Act will increase the size of the maximize health-contingent wellness reward to 30% of the cost of employee-only coverage, from 20%, officials say.
Federal regulators plan to use HIPAA regulatory authority to help plans increase the maximum health-contingent reward size to 30%, from 20%, before 2014, officials add.
But regulators “are also considering what accompanying consumer protections may be needed to prevent the program from being used as a subterfuge for discrimination based on health status,” officials say.
If all employees can get an incentive simply by participating in an activity, such as attending a monthly wellness meeting, without having to achieve a wellness goal, a plan can set the cost of the wellness reward at any level, without worrying about the old 20% difference limit or the new 30% difference limit.