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Expatriate Plans Receive Extra Time for ACA Compliance
Practical Law Legal Update 1-525-1101 (Approx. 4 pages)
Expatriate Plans Receive Extra Time for ACA Compliance
by PLC Employee Benefits & Executive Compensation
| Published on 12 Mar 2013 • USA (National/Federal) |
The Department of Labor (DOL) issued a frequently asked question (FAQ) that offers transitional relief to expatriate health plans under the Affordable Care Act (ACA). The FAQ was jointly prepared by DOL, the Department of Health and Human Services (HHS) and the Treasury Department.
On March 8, 2013, the DOL issued FAQ guidance that grants transitional relief to expatriate group health insurance plans to comply with the Affordable Care Act (ACA). The FAQ was jointly prepared by DOL, HHS and the Treasury (the Departments). For purposes of the transitional relief, an expatriate health plan is:
- An insured group health plan under which enrollment is limited to:
- primary insureds who reside outside their home country for at least six months of the plan year; and
- any covered dependents.
- The plan's associated health insurance coverage.
The Departments acknowledge in the FAQ that expatriate health plans may face special challenges in complying with the Patient Protection and Affordable Care Act (PPACA) as amended by the Health Care and Education Reconciliation Act of 2010 (HCERA) (collectively, the Affordable Care Act (ACA)). For example, the Departments note that:
- Independent review organizations may not exist abroad (see Practice Note, External Review Under the ACA).
- It may be difficult for certain preventive services to be provided, or identified as preventive, when those services are provided outside the US by clinical providers using different code sets and medical terminology to identify services (see Practice Note, Coverage of Preventive Health Services Under the ACA).
- Expatriate insurers may face difficulties in:
- communicating with enrollees living abroad; and
- producing standardized benefits disclosures, given the complexity of expatriate plans (see Practice Note, Summaries of Benefits and Coverage Under the ACA).
- Expatriate plans may need additional regulatory approval from foreign governments, and may face conflicting US and foreign law requirements.
For these reasons, the FAQ provides that for expatriate health plans with plan years ending on or before December 31, 2015, the Departments will consider the requirements of subtitles A and C of Title I of the ACA (including the corresponding rules as imported into ERISA and the Internal Revenue Code (Code)) satisfied if the plan and insurer comply with:
- The pre-ACA version of Title XXVII of the Public Health Service Act (PHSA).
- Other applicable law under ERISA and the Code, including:
- the mental health parity rules (see generally, Legal Update, DOL FAQs Address MHPAEA Compliance);
- HIPAA's nondiscrimination requirements;
- the DOL's claims procedures (see Practice Note, Internal Claims and Appeals Under the ACA); and
- reporting and disclosure obligations under Part I of ERISA (see Practice Note, Title I of the Employee Retirement Income Security Act (ERISA)).
This FAQ is part of a series of FAQs on the ACA, which are available on the DOL's website. The Departments are requesting comments, due by May 8, 2013, on the specific challenges expatriate health plans may face in complying with the ACA.
Practical Impact
Insured expatriate health plans that fall within the scope of the transition relief will welcome the additional compliance time offered in this FAQ. Regarding summaries of benefits and coverage (SBCs), this transition relief is in addition to an earlier DOL nonenforcement policy for the first year that the SBC requirement applied (see Legal Update, DOL FAQs on SBCs Address Electronic Distribution and Coverage Example Calculator).
For additional resources on ACA compliance, see Practice Note, Affordable Care Act (ACA) Overview.