Monday, November 10, 2014

Insurance Plans That Fail to Cover In-Patient Hospitalizations Not ACA Compliant

Toni Fatone


The Department of Health and Human Services (HHS) and the Department of the Treasury (IRS) have announced Notice 2014-69 that group health insurance plans that do not cover in-patient hospitalization services and or substantial physician services will not be found to be compliant with the Affordable Care Act (ACA). HHS and the IRS will promptly propose regulations to provide that such plans currently being promoted to employers and that currently achieve compliance on the HHS Minimum Value (MV) Calculator do not provide minimum value under the intent of the law. Employers will not be permitted to use the calculator or any actuarial certification or valuation to defend use of such plans to cover employees under the requirements of the ACA.


These proposed changes will be finalized early in 2015 and will apply to all plans other than those that are dated pre-November 4, 2014. If an employer has entered into a binding agreement to adopt, or has been enrolling employees in a plan without In-Patient hospitalization/Non Physician Services plan prior to November 4, 2014 and the employer relied on the MV Calculator the proposed regulation will not apply before the end of the plan year IF that plan year begins no later than March 1, 2015. An employee offered a Non In-Patient Hospitalization Plan/Non-Physician Services Plan will still be eligible for a premium tax credit regardless of whether that Plan is offered pre-November 4th or not. Additionally, an employer that offers an In-patient/Non-Physician Plan must not state or imply in any disclosures to employees that the offer of coverage for such a plan will preclude the employee from obtaining a premium tax credit. The employer must also “timely correct” any prior disclosures that such Non-In-Patient/Non-Physicians Plan would bar an otherwise tax credit eligible employee from obtaining a premium tax credit. If an employer also offers to its employees a plan that includes hospitalization and physician services and it is “affordable” and provides “minimum value” that employer is permitted to advise employees that the offer of this other plan will or may preclude the employee from obtaining a premium tax credit.


Any questions regarding this may be directed to HHS at 301-492-5153 or IRS at 202-317-7006. Additional information for employers can be found at www.healthcare.gov, www.irs.gov/ACA, and www.business.usa.gov. Also, be sure to check out AHCA/NCAL’s ACA website for important information and updates on the ACA.

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