Earlier this month, the Departments of Labor, Health and Human Services and Treasury (collectively, the "Departments") issued a new Frequently Asked Question ("FAQ") providing transitional relief from the Affordable Care Act's ("ACA") group health mandates for certain insured expatriate group health plans. The Departments' rationale for this transitional relief is expatriate health plans and their issuers may face special challenges in complying with some of the ACA's requirements including, but not limited to, difficulty in providing or identifying certain preventive services, standardizing benefit disclosures and reconciling conflicts between American and a host location's laws.
As such, certain insured expatriate health plans will, for plan
years ending on or before December 31, 2015, be considered to be in
compliance with the ACA's group health mandates (e.g.
dependent coverage to age 26, preventive services without
cost-sharing, summary of benefits and coverage and uniform glossary
disclosure, etc.) if the expatriate health plan and issuer
currently comply with the pre-ACA version of the Public Health
Service Act and other applicable laws under ERISA and the Internal
Revenue Code. These current requirements include, for example, the
mental health parity provisions, the HIPAA nondiscrimination
provisions, the ERISA claims and appeals provisions, and any ERISA
reporting and disclosure obligations (e.g. Form 5500).
The FAQ also notes that expatriate health plans are a form of
minimum essential health coverage under the ACA. This means that an
individual covered by an expatriate health plan will not be subject
to the individual mandate. In addition, employers will not be
subject to the employer mandate penalty if they offer coverage
under an expatriate health plan, provided the coverage is
"affordable" and meets the minimum value requirement
under the ACA.
For purposes of this transitional relief, an expatriate health plan
is an insured group health plan with respect to which
enrollment is limited to employees who reside outside of
their home country for at least six months of the plan
year and any covered dependents. Therefore, no transitional relief
is available for self-funded health plans providing expatriate
coverage and these plans must operate in compliance with the
ACA's requirements.
As a practical matter, employers should review their health plans
to identify those that provide coverage to their expatriate
population and should consider if such plans are eligible for this
transitional relief, or otherwise comply with the ACA.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
