The Obama Administration released two new key pieces of health reform regulatory guidance, including a series of FAQs that even further clarify the Administration’s preexisting position that if an employer creates some type of premium reimbursement arrangement to pay for health coverage, then that arrangement is subject to all federal health law market reform requirements, even if the reimbursement is for individual insurance coverage premiums.
The Administration’s prior guidance explains that employer healthcare arrangements, such as HRAs and employer payment plans, are group health plans that typically consist of a promise by an employer to reimburse medical expenses up to a certain amount. The guidance released on November 6th, clarifies that such arrangements are subject to the group market reform provisions of the Affordable Care Act, including the prohibition on annual limits under Public Health Service Act (PHS Act) section 2711 and the requirement to provide certain preventive services without cost sharing under PHS Act section 2713.
The Administration’s guidance further clarifies that such employer healthcare arrangements will not violate these market reform provisions when integrated with a group health plan that complies with such provisions. However, an employer healthcare arrangement cannot be integrated with individual market policies to satisfy the market reforms. Consequently, such an arrangement may be subject to penalties, including excise taxes under section 4980D of the Internal Revenue Code.
Read the full report here.
Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.
