FAQs Address Cost-sharing Limits and Coverage of Preventive Services under the ACA

Practical Law Legal Update 4-524-4010 (Approx. 4 pages)

FAQs Address Cost-sharing Limits and Coverage of Preventive Services under the ACA

by PLC Employee Benefits & Executive Compensation

Cost-sharing Rules

Under the preventive services rules, group health plans must ensure that any annual cost-sharing imposed under the plan does not exceed specified limits, including limits on out-of-pocket maximums and deductibles for employer-sponsored plans. The FAQs confirm that:

Only non-grandfathered health insurance coverage and qualified health plans offered in the small group market must comply with the annual deductible limit (see Practice Note, Grandfathered Health Plans under the ACA). However, plans and insurers in the small group market may exceed the limit if they cannot reasonably reach a given level of coverage without exceeding the limit. According to the Departments, self-insured and large group plans:
- are not required to comply with the deductible limits; and
- can rely on the Departments' position on this issue, though additional guidance on cost-sharing will likely be provided.
All non-grandfathered group health plans must comply with the annual out-of-pocket maximum limits under the ACA.

The FAQs provide transitional relief regarding the annual limit on out-of-pocket maximums for plans that administer benefits using more than one service provider, which may:

Impose different levels of out-of-pocket limits.
Use different methods for crediting participants' expenses against any out-of-pocket maximums.

Under the transitional relief, effective only for the first plan year beginning on or after January 1, 2014, the Departments will consider a plan with multiple service providers to have satisfied the annual limit on out-of-pocket maximums if:

The plan complies with the annual limit with respect to its major medical coverage.
Any out-of-pocket maximums on coverage not consisting solely of major medical coverage (for example, separate maximums for prescription drug coverage) do not exceed the limits on out-of-pocket maximums for high-deductible health plans.

The FAQs note, however, that the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) prohibits plans and insurers from imposing an annual out-of-pocket maximum on all medical/surgical benefits and a separate annual out-of-pocket maximum on all mental health and substance use disorder benefits (see Legal Update, DOL FAQs Address MHPAEA Compliance).

Coverage of Preventive Services Generally

Non-grandfathered group health plans and health insurance coverage offered in the individual or group market must cover, and may not impose cost-sharing for, certain preventive services, including:

Evidence-based services recommended by the US Preventive Services Task Force (USPSTF) with a rating of "A" or "B," such as genetic counseling and breast cancer susceptibility gene testing, if appropriate as determined by a health care provider. Where USPSTF recommendations apply to populations identified as high-risk, it is up to the attending provider to determine whether an individual patient belongs to a high-risk population.
Routine immunizations recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention.
Care and screening for infants, children, adolescents and women provided for in guidelines supported by the Health Resources and Services Administration (HRSA).

If a plan or insurer does not have an in-network provider that can provide the specified service, it:

Must cover the service when performed by an out-of-network provider.
May not impose cost-sharing for the service.

Women's Preventive Services

Although non-grandfathered group health plans and health insurance coverage in the individual or group markets must cover certain care and screening for women, the HRSA Guidelines do not require or promote multiple visits for separate services. For example, a single well-woman preventive care visit, which the HRSA Guidelines recommend occur at least annually, could include several listed preventive services. Services related to follow-up and management of side effects, counseling for continued adherence and device removal are also covered under the HRSA Guidelines.

In addition, plans or insurers must cover the full range of FDA-approved contraceptive methods; they may not limit coverage of contraceptives to one kind (such as oral contraceptives as opposed to implanted devices). However, plan or insurers may use reasonable medical management techniques to control costs and promote efficient delivery of care. For example, plans may cover a generic oral contraceptive or other drug without cost-sharing and impose cost-sharing for equivalent branded drugs, but must accommodate any individual for whom either drug would be medically inappropriate, as determined by that individual's health care provider, by waiving any applicable cost-sharing for the branded drug.

For more information on coverage of preventive services, see Practice Note, Coverage of Preventive Health Services under the ACA.

Practical Impact

Plans with multiple service providers may welcome the 2014 plan year transitional relief regarding the annual limit on out-of-pocket maximums. The Departments acknowledge, however, that the providers' various processes will ultimately need to be coordinated in order to satisfy the single limit, which may require communications between the service providers that do not currently take place.

FAQs Address Cost-sharing Limits and Coverage of Preventive Services under the ACA | Practical Law