The Department of Labor recently issued new guidance (jointly prepared by the Departments of Labor, Health and Human Services, and Treasury) addressing frequently asked questions on the Affordable Care Act (Part V of the series), as well as additional assistance on the Mental Health Parity (MHP) regulations and wellness programs under HIPAA.
Below are some highlights from this document.
Affordable Care Act:
- DOL will issue guidelines to permit group health plans to utilize value-based insurance designs.
- The preventive services regulation under the Affordable Care Act (ACA) permits plans to use reasonable medical management techniques to control costs. Thus, for instance, a plan could use these techniques to steer patients towards having certain procedures done in an ambulatory surgery center rather than in an outpatient hospital setting. (The plan, however, would need to accommodate patients for whom it would be medically inappropriate to use the ambulatory setting rather than the hospital.)
- Employers will not need to comply with the automatic enrollment provisions of the ACA until regulations are issued. DOL intends to complete this rulemaking by 2014.
- The ACA provides that the DOL will develop standards for plans and insurers to use in providing a summary of benefits and coverage explanation to enrollees. The ACA also provides that if a group health plan or insurer makes a material modification of a plan or coverage that is not reflected in the most recently provided summary of benefits and coverage, the plan or issuer must provide notice of the modification to enrollees not later than 60 days prior to the effective date of the modification. Plans and insurers will not be required to comply with this notice requirement until DOL issues standards regarding the summary of benefits and a coverage explanation.
- The ACA does not prohibit distinctions based upon age that apply to all coverage under the plan; thus, a plan could charge a copayment for physician visits to individuals age 19 and over but waive it for those under 19.
- A plan will not lose its grandfathered status merely because it has a fixed-amount cost-sharing requirement (other than a copayment) that is based on a percentage-of-compensation formula, provided the formula is the same as that in effect on March 23, 2010.
Mental Health Parity:
- In claiming an increased cost exemption from MHP, increased costs would include increases in a plan's share of cost sharing. Non-recurring administrative costs attributable to complying with MHP must be amortized. Plans must demonstrate that increases in costs are directly attributable to implementation of MHP.
Nondiscrimination Based on a Health Factor and Wellness Programs:
- DOL intends before the year 2014 to propose regulations using existing HIPAA regulatory authority to raise the maximum reward for a health-contingent wellness program from 20% to 30% of the cost of coverage under the plan.
- If an employer operates a wellness program as an employment policy separate from its group health plan(s), the program is not subject to the HIPAA nondiscrimination regulations.
- In general, a wellness program subject to the HIPAA nondiscrimination regulations must be available to all similarly situated individuals, provide a reasonable alternative standard, and limit the reward to no more than 20% of the total cost of coverage. A program providing an annual premium discount for achieving a targeted cholesterol count could satisfy this requirement, provided the plan made available a reasonable alternative standard that took the relevant medical condition into account.
Questions or comments on these issues should be addressed to Gretchen Young ( email@example.com ).