Expatriate health plans temporarily excused from PPACA requirements
On March 8th, 2013, the Departments of Labor, Health and Human Services, and the U.S. Treasury issued a Frequently Asked Questions (FAQs) indicating a temporary delay for fully insured expatriate health plans to comply with most Patient Protections and Affordable Care Act (PPACA) provisions. Self-funded plans must comply with all applicable PPACA provisions.
The guidance specifically notes the challenges Expat plans may have in complying with the need for independent review organizations (that may not exist abroad), as well as the difficulty of providing for certain required preventive services – or even identifying certain services as preventive – given the varied medical terminology and code sets used around the world. Additionally, in some countries Expat plans require in-country governmental regulatory approvals that may conflict with aspects of the rules and requirements within PPACA.
The FAQ guidance for fully-insured expatriate health plans, communicates the following:
- Definition of an expatriate plan: an insured group health plan with respect to which enrollment is limited to those who reside outside their home country for at least six months of the plan year and any covered dependents, and its associated group health insurance coverage.
- Expatriate plans with plan years ending on or before December 31, 2015 will be deemed to have satisfied the provisions in subtitles A and C of Title I of the PPACA, provided the plan and issuer continue to comply with the federal requirements in place before the PPACA became law. These requirements include without limitation: Mental Health Parity, the Health Insurance Portability and Accountability Act (HIPAA), the Employee Retirement and Income Security Act (ERISA), and other provisions within Title XXVII of the Public Health Service Act.
- PPACA provisions delayed include: insurance market reforms, prohibition on discrimination in favor of highly compensated individuals, the Summary of Benefits and Coverage, aspects of MLR, rating rules requirements, and guaranteed renewal of expatriate coverage.
- Coverage provided under an expatriate plan will qualify as minimum essential coverage for purposes of satisfying the individual and employer mandates. Minimum essential coverage is defined as the type of coverage an individual needs to have to meet the individual responsibility requirement under the PPACA.
While not addressed in the FAQ, a final ruling has determined that Expat plans will not be subject to the Reinsurance fee assessment, but no ruling has been provided for the Health Insurer Tax (HIT). Therefore – absent any further clarification – employers with fully-insured expat plans can expect to be hit with this fee that will add in the range of two to two-and-a-half percent to every plan renewal.
We will keep you updated as further guidance and clarification becomes available.
About the Author
Jeff Ursprung is a Senior Vice President at William Gallagher Associates in the Employee Benefits Group. He works closely with large clients in all areas of health and welfare employee benefits to effectively manage the negotiation of benefit pricing and renewals, and evaluates managed care network access, cost effectiveness and consults on appropriate plan funding and risk tolerance.