By Phil Larson

An interesting point for some plans and their compliance is that the plan may need to follow certain limits on the health plan coverage under the plan.  This is sometimes referred to as the out-of-pocket maximum.  The federal government generally defines an out-of-pocket maximum in their uniform glossary that accompanies the Summary of Benefits and Coverage (SBC) as the following: 

The most you pay during a policy period before your health insurance or plan begins to pay 100% of the allowed amount. This limit never includes your premium, balance-billed charges or health care your health insurance or plan doesn’t cover.  

A confusing point on this however is that there will be two different limits to consider for some plan compliance starting in 2015.  One rule deals with Health Savings Accounts (HSA) and one rule deals with the Affordable Care Act (ACA).   

• HSA LIMIT:  First, HSAs have has a maximum out-of-pocket for the corresponding High Deductible Health Plan (HDHP).  This is one of the required elements of meeting eligibility to contribute to an HSA, namely that the HDHP plan enrollment meets certain threshold amounts including a maximum out-of-pocket.  This only applies to HDHP requirements related to HSA eligibility.  It also covers all in-network benefits under the plan.    
  

• ACA LIMIT:  Second, the ACA currently has a maximum out-of-pocket for plan qualification status under federal law.  This section cited the HSA rules in the Code, but used a different methodology to adjust those numbers in the future.  In addition, this limit only applies to the Essential Health Benefits under the plan which may not include all in-network coverage.  Last but not least, this rule is subject to Grandfather status, meaning that if the plan is Grandfathered in accordance with the ACA, it is exempt from the maximum out-of-pocket amounts.    
  

Technically speaking, it appears an HSA plan must follow both, while a non-HSA plan will only follow the ACA limit.  Both sets of rules also define the limit in terms of single coverage (meaning coverage for one person) or family coverage (meaning any coverage above one person).  Please see the following chart attempting to highlight some of these differences including the limits for 2014 and 2015.  

If you have questions on the ACA or HSAs, please contact Kinney & Larson.      

By Phil Larson

Recent guidance from Health and Human Services (HHS), Treasury and the Department of Labor (DOL) sheds light on some Affordable Care Act (ACA) and Consolidated Omnibus Budget Reconciliation Act (COBRA) issues important for future compliance. 

The FAQs Part XIX, published in May 2014 discuss the following ACA related issues:

COBRA
These rules govern the extension of coverage when certain events trigger a loss of coverage for participants of most health plans.  The guidance clarifies that the forms used to explain these rights to individuals should be updated to reflect new ACA issues.  The impact of the Exchanges/Marketplace, premium subsidies and cost sharing reductions may be important in deciding COBRA coverage so new model notices from the DOL include this information.  The DOL is also issuing a notice of proposed rules to update its regulations with respect to the COBRA model notices. Until the rules are finalized and effective, the DOL will consider use of the model notices as compliance with the notice content requirements of COBRA.

CHIPRA
Employers that maintain health coverage are also required to tell individuals of their opportunity to elect premium assistance for medical coverage in their state.  This is under the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA).  Similar to above, model notices for CHIPRA are also updated to reflect changes with the ACA.    

Cost Sharing
Non-grandfathered health plans must ensure that their coverage meets certain limits for participants including out-of-pocket limits for use of coverage.  For plan or policy years beginning in 2014, the annual limitation on out-of-pocket costs in effect is $6,350 for self-only coverage and $12,700 for coverage other than self-only coverage.  In 2015, the annual limitation on out-of-pocket costs will be $6,600 for self-only coverage and $13,200 for coverage other than self-only coverage.  

The new guidance clarifies these limits generally apply to essential health benefits and do not have to apply to charges for out-of-network coverage, pharmacy reference pricing for non-generics when a generic was available and medically appropriate, charges above reference based pricing (e.g. fixed amount payments for care), and charges above the usual and customary amounts determined by the plan.  Any such rules on what is not included or excluded in the cost-sharing should be included in the summary plan description (or SPD) for ERISA plans.  

Non-grandfatehred health plans in the individual and small group markets must also meet requirements of essential health benefits related to prescription drug coverage and essential health benefits found in 1302(a) of the ACA.    

Preventive Services 
Non-grandfathered group health plans and health insurance coverage offered in the individual or group market must also provide coverage for preventive services without any cost-sharing requirements for participants generally from four government lists of what constitutes preventive care.  

The Q&As clarify that reasonable medical management techniques may be used for the frequency, method, treatment or setting of these services when the lists do not specify it.  As part of that analysis, the DOL believes that evidence based clinical practice guidelines can provide useful guidance on this point.  

The guidance provides an example of tobacco counseling that includes (1) screenings for tobacco use, (2) four cessation counseling sessions at least 10 minutes each, and (3) all FDA approved tobacco cessation medications (including prescriptions for over the counter drugs or pharmacy).  The rules hint that items #2 and #3 above should be offered at least two times per year.  They refer to the Public Health Service-sponsored Clinical Practice Guideline, Treating Tobacco Use and Dependence: 2008 Update, available at: http://www.ahrq.gov/professionals/clinicians-providers/guidelines-recommendations/tobacco/index.html#Clinic. 

Health FSA Carryovers
The guidance clarifies that if an Health FSA uses the recently adopted carryover feature that allows coverage to carry over up to $500 of unused amounts each year into the next year, that the plan may still qualify as an "excepted benefit" for many compliance rules tied to HIPAA portability and ACA market reform.  As an excepted benefit, many of these compliance rules still will not apply to these programs (e.g. preventive care mandates shown above).  
 
Summary of Benefits and Coverage (SBCs)
Group Health Plans and health insurance issuers are also required to provide a summary of benefits and coverage and uniform glossary during various required timeframes.  These summaries are meant as a common tool to advise potential participants on the plan offering and allow for an easy way to compare plans.  Until further guidance is issued, entities should continue to use the government provided 2013 forms for compliance.  In addition, the DOL extends many of the compliance transition rules for entities that are working diligently and in good faith to come into compliance for these rules.  These transition rules may be found in prior Q&As from Part VIII, IX, X, and XIV.  

If you need assistance with any of these rules, please contact Kinney & Larson.