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December 22, 2010 at 07:00 PM
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.
AUTO ENROLLMENT
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..
