Proposed Changes to "Excepted Benefits" Regulations

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Proposed regulations issued at the end of December by the U.S. Departments of Treasury, Labor, and Health and Human Services (the Departments) broaden the categories of health coverage that qualify as "excepted benefits." These regulations are significant because excepted benefits are exempt from many of health care reform's requirements, such as its prohibitions on waiting periods of more than 90 days and annual limits. Excepted benefits also do not disqualify an otherwise qualified individual from receiving a subsidy towards individual health coverage obtained on an Affordable Insurance Exchange (also called a Health Insurance Marketplace).

The proposed regulations are particularly important to employers who sponsor self-insured, limited-scope dental and vision plans and employee assistance programs (EAPs). Employers who make any required changes to these offerings can rely on these regulations now, even though they are in proposed form, and can treat these benefits as excepted. The proposed regulations also create a new type of excepted benefit as of January 2015.

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