The federal government has announced that beginning in 2015, health plans and issuers are required to apply all out-of-pocket maximums across all essential benefits.
In a new set of frequently asked questions (FAQ) on the implementation of the Affordable Care Act (Obamacare), the departments of Labor, Treasury and Health and Human Services explained that because the cost-sharing limits included in the ACA only apply to essential health benefits, “plans are not required to apply the annual limitation on out-of-pocket maximums to benefits that are not” essential health benefits.
Further, the FAQ stated that “plans and issuers are permitted to structure a benefit design using separate out-of-pocket limits, provided that the combined amount of any separate out-of-pocket limits applicable to all [essential health benefits] under the plan does not exceed the annual limitation on out-of-pocket maximums for that year.” In addition, a plan with a provider network isn’t required to count a participant’s out-of-pocket expenses for items and services obtained outside of the plan’s network toward the annual out-of-pocket limits for the plan and aren’t required to count costs for services that aren’t covered by the plan toward the out-of-pocket maximum for the year.
The revised guidance, which marks the 18th time the FAQ has been updated, also addressed the following issues:
•If participants in a group health plan decline the chance to avoid a “tobacco premium surcharge” by enrolling in a smoking cessation program at the beginning of a plan year, the plan isn’t obligated to offer the participants the discount if they decide to join the program in the middle of the year. Specifically, the agencies noted that “the plan is not required (but is permitted) to provide another opportunity to avoid the tobacco premium surcharge until renewal or reenrollment for coverage for the next plan year.”
•Provides clarification on the reasonable alternative standard that plans must provide for participants in health-contingent wellness programs, with the agencies noting that “If an individual’s personal physician states that the outcome-based wellness program is not medically appropriate for that individual and recommends a weight reduction program (an activity-only program) instead, the plan must provide a reasonable alternative standard that accommodates the recommendations of the individual’s personal physician with regard to medical appropriateness.”
•Explains how the new act impacts the Mental Health Parity and Addiction Equity Act (MHPAEA), noting that the ACA “builds on MHPAEA and provides that mental health and substance use disorder services are one of ten [essential health benefits] categories.”