On December 16, 2014, President Obama signed into law a $1.1 trillion omnibus spending bill (H.R. 83, the Consolidated and Further Continuing Appropriations Act; Pub. Law No. 113-235) that includes important relief from the Affordable Care Act for certain health plans provided to expatriate employees.
The spending bill incorporates the Expatriate Health Coverage Clarification Act (the “Act”), which broadly exempts “expatriate health plans or expatriate health coverage,” employers that sponsor such plans, and “expatriate health insurance issuers” with respect to coverage under such plans from most otherwise applicable provisions of the Patient Protection and Affordable Care Act (“PPACA”) and the Health Care and Education Reconciliation Act of 2010 (“HCERA”) (together, the “ACA”).
Some important highlights of the Act are:
- Expatriate health plans are exempt from most of the ACA insurance market reforms.
- Expatriate health plans are exempt from the transitional reinsurance fee and the Patient Centered Outcomes Research Institute (“PCORI”) fee.
- After 2015, expatriate health plans are exempt from the health insurer fee (“HIF”)– (with special transition rules applying in 2014 and 2015).
- Employer-sponsored coverage for expatriates generally is exempt from the 40% high-cost plan excise tax in Code section 4980I, except for coverage provided to certain expatriates who are “assigned” to work in the U.S.
- The employer “shared responsibility” mandate rules continue to apply, but expatriate health plans with respect to certain foreign employees working in the U.S. and certain U.S. expatriates working abroad are treated as “minimum essential coverage” under an “eligible employer-sponsored plan” for purposes of the employer and individual mandates.
- The Code sections 6055 and 6056 reporting requirements continue to apply (with certain relief from the electronic delivery consent rules for individual statements).
Unless otherwise specified in the Act, the Act is effective on the date of enactment and applies only to expatriate health plans issued or renewed on or after July 1, 2015.
Read the full report here.
Please contact Steven G. Cosby, MHSA, Group Health Insurance Broker and Agent with Cosby Insurance Group, with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.
