The Departments of Labor, Health and Human Services and the Treasury (collectively, the “Departments”) recently issued guidance in the form of a Frequently Asked Question (“FAQ”) that relates to the applicability of the market reform provisions of the Affordable Care Act (the “ACA”) to certain expatriate health care plans. The issuance of this new FAQ indicates that the Departments recognize that expatriate health care plans face special challenges in complying with certain provisions of the ACA, such as the need to reconcile multiple regulatory regimes that may apply to such plans. In addition, the Departments recognize that in some situations it is possible that the ACA actually may conflict with foreign law requirements.
The new guidance provides that expatriate plans that are fully-insured will not have to comply with certain provisions of the ACA for a limited transition period extending through plan years ending on or before December 31, 2015. For purposes of this transitional relief, an expatriate health plan is defined as an insured group health plan in which enrollment is limited to primary insureds who reside outside of their home country and its associated group health insurance coverage for at least six months of the plan year and any of their covered dependents. No relief is extended to plans that are not insured.
As a result of the guidance, insured expatriate health care plans are not subject to a number of ACA requirements during the transition period, including but not limited to: (a) the extension of coverage for children until age 26; (b) the prohibition of all pre-existing condition limitations; (c) the coverage of preventive health care services on a first-dollar basis; (d) the prohibition against annual and lifetime dollar limits on essential health benefits; (e) the prohibition against waiting periods in excess of 90 days; and (f) the new internal and external claims appeals procedures.
As noted above, this transitional relief is available for plan years ending on or before December 31, 2015. In order to take advantage of the transitional exemption, plans must be in compliance with the applicable requirements of the Public Health Service Act, the Employee Retirement Income Security Act and the Internal Revenue Code in effect before the enactment of the ACA.
The FAQ also provides that the Departments will treat coverage provided under an expatriate group health plan to be a form of minimum essential coverage under the ACA. Therefore, individuals enrolled in such coverage should satisfy the individual health care coverage mandate and thus avoid potential tax penalties.
The Departments have requested comments by May 8, 2013 on the challenges that expatriate health care plans face in complying with provisions of the ACA.
Any such comments can be sent to the Departments at firstname.lastname@example.org.