428 / What kinds of health plans are governed by the ACA, and what plans are not covered?
Health care reform covers insured and self-funded comprehensive medical health plans. In effect, the ACA governs major medical insurance and self-insured major medical plans.
Health care reform does not regulate excepted benefits, which include standalone vision, standalone dental, cancer, long-term care insurance, Medigap insurance, certain flexible spending accounts (“FSAs”), and accident and disability insurance that make payments directly to individuals. However, it did impose an annual contribution limit of $2,500 per year on health FSAs ($3,400 in 2026, $3,300 in 2025, $3,200 in 2024, $3,050 in 2023, $2,850 in 2022, $2,750 in 2020-2021 and $2,700 in 2019 - the amount is indexed annually for inflation).
The ACA also does not affect retiree-only plans. Although it removed the exemption for retiree-only plans and excepted benefit plans from the PHS Act, it left those exemptions in the IRC and ERISA. The preamble and footnote two of interim final grandfathered plan regulations explain that the exemption for retiree-only plans and excepted benefit plans still applies for those plans subject to the IRC and ERISA.
With respect to retiree-only and other excepted benefit plans, federal regulators have decided that even though those provisions were removed by the ACA, they will interpret the PHS Act as if an exemption for retiree-only and excepted benefit plans was still in effect. Federal regulators have encouraged state insurance regulators to do the same, although in any given state, it is possible, although extremely unlikely, that regulators will decide to enforce the ACA mandates on all fully insured plans, including those that are excepted benefit plans.