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Delay on ACA Compliance for Expatriate Insured Health Plans
Apr 15, 2013
On March 8th, 2013, the Departments of Labor, Health and Human Services, and Treasury issued a Frequently Asked Questions (FAQs)
indicating a temporary delay for fully insured expatriate health plans to comply with most Affordable Care Act (ACA) provisions. Self-funded plans must comply with all applicable ACA provisions.
The FAQ guidance for fully-insured expatriate health plans, communicates the following key pieces of information:
- The definition of an expatriate plan as, “an insured group health plan with respect to which enrollment is limited to primary insureds 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 ACA provided the plan and issuer continue to comply with the federal requirements in place before the ACA 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.
- Subtitles A and C broadly mention ACA provisions delayed as a result of the FAQ. Amongst others, these 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 ACA. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage.
The FAQ was notably silent on the issue of compliance with the insurer tax provisions. However, a final ruling clarifies that expatriate plans are excluded for purposes of determining a contributing entities annual reinsurance contribution. The FAQ did not address how the Health Insurer Fee (HIF) will be applied to expatriate plans. Until we hear guidance to the contrary, we will continue to be impacted by this tax.
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