Excepted Benefits - Final Regulations Released

Final regulations by the Departments (Treasury, DOL, HHS) released on September 26 eliminate the requirement that participants pay an additional premium or contribution for limited-scope vision or dental benefits to qualify as "excepted benefits".

Excepted benefits are generally exempt from health reform requirements under the Health Insurance Portability and Accountability Act and the Patient Protection and Affordable Care Act.  Eligibility for excepted benefits does not preclude an individual from eligibility for a premium tax credit if an individual chooses to enroll in Marketplace coverage.

The final regulations clarify that limited-scope vision or dental benefits do not have to be offered in connection with a separate offer of major medical or "primary" group health coverage under the plan, in order to meet the statutory criterion that such benefits are "otherwise not an integral part of the plan".  To meet this criterion, limited-scope vision and dental benefits can be provided without connection to a primary plan, or the benefits can be offered separately from the major medical or "primary" coverage under the plan.  The final rules provide that this criterion is satisfied if participants may decline coverage or the claims for the benefits are administered under a contract separate from claims administration for any other benefits under the plan.

Employee Assistance Programs (EAPs) - The final regulations provide that, for an EAP to constitute excepted benefits, the EAP must satisfy four requirements. 1) The EAP does not provide significant benefits in the nature of medical care.  2) The EAP's benefits cannot be coordinated with the benefits under another group health plan.  3) No employee premiums or contributions may be required as a condition of participation in the EAP.  4) An EAP that constitutes excepted benefits may not impose any cost-sharing requirements.

Click here to view the final regulations.  These final regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015.