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HHS Guidance Clarifies that Insurance Companies Must Make Available Health Insurance Coverage for Same-Sex Spouses

by Brian Tiemann, Jacob Mattinson and Todd Solomon | Apr 1, 2014 | Health and Welfare Plans

On March 14, 2014, the Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) released guidance clarifying the final regulations implementing Section 2702 of the Public Health Service Act (PHSA). PHSA Section 2702 addresses guaranteed availability of coverage. Pursuant to that section, health insurance issuers offering non-grandfathered health insurance coverage in the group or individual market, including coverage under a state or federal Marketplace Exchange, must accept every employer and individual in the state that applies for the coverage, subject to limited exceptions. PHSA Section 2702 and the related regulations prohibit discriminatory marketing practices, including discrimination based on sexual orientation.

The new CMS guidance clarifies that health insurance issuers offering non-grandfathered group or individual health insurance coverage must offer coverage on the same terms and conditions to same-sex spouses that is offered to opposite-sex spouses. Prior to this guidance, this requirement to extend coverage to same-sex spouses already applied in states that perform and recognize same-sex marriage. The new CMS guidance clarifies, however, that all insurance companies in all states are required to make such coverage available.

Importantly, the CMS guidance does not require private sector employers to offer coverage to same-sex spouses. Instead, the guidance requires an insurance company offering non-grandfathered health insurance coverage to offer private employers the option to cover same-sex spouses.

Employers will continue to have discretion—subject to other non-discrimination laws—regarding whether or not to offer coverage to same-sex spouses. For example, employers with self-insured plans are not subject to the new CMS guidance. Likewise, employers sponsoring fully-insured plans that are funded by insurance contracts issued in states that do not currently recognize same-sex marriage also are not necessarily required to offer coverage to same-sex spouses; they must simply be offered the opportunity by the insurance company.

Thus, while the CMS guidance ensures that health insurance coverage will always be available to employers that wish to offer coverage to same-sex spouses, it does not ensure that all same-sex spouses will receive coverage under employer plans. The CMS guidance clarifies that while health insurance issuers are encouraged to offer coverage to same-sex spouses in 2014, all issuers must fully comply for plan or policy years beginning on or after January 1, 2015.

Next Steps for Employers

Employers with insured group health plans should review their policies to determine whether existing spousal coverage is required to be extended to same-sex spouses. Plans insured under a contract issued in a state where same-sex marriage is legal already must extend existing spousal coverage to same-sex spouses. Employers with insured plans issued in states where same-sex marriage is not legal must have the option of extending coverage to same-sex spouses beginning on or after January 1, 2015.

Employers offering either insurer or self-insured plans may also wish to consider whether other nondiscrimination laws implicate the decision whether to offer same-sex coverage.

Additional Guidance Issued on Summary of Benefits and Coverage Disclosure Requirements

by McDermott Will & Emery | May 16, 2013 | Health and Welfare Plans

by Amy M. Gordon and Joanna C. Kerpen

The U.S. Departments of Labor, Health and Human Services, and the Treasury recently issued new guidance and templates regarding the summary of benefits and coverage requirement under the Patient Protection and Affordable Care Act.

To read the full article, click here.

Finalized ACA Regulations on Transitional Reinsurance Program Premiums and Potential Effects for Employer-Sponsored Group Health Plans

by McDermott Will & Emery | Mar 12, 2013 | Health and Welfare Plans

by Amy M. Gordon, Susan M. Nash and Jacob Mattinson

As part of the Patient Protection and Affordable Care Act, the U.S. Department of Health and Human Services (HHS) recently released final regulations regarding the transitional reinsurance program fee effective in CY 2014. Effective May 10, 2013, the regulations address the estimated amount of annual contributions that will be paid to HHS from employer-sponsored group health plans, the types of welfare plans that are subject to the fee, the applicability of the fee to COBRA coverage and the treatment of certain retiree benefits.

To read the full article, click here.

New ACA Regulations Address Minimum Essential Coverage and Exemptions

by McDermott Will & Emery | Jan 31, 2013 | Health and Welfare Plans

by Anne W. Hance and Amy M. Gordon

The U.S. Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS) released on January 30, 2013, two proposed rules and a final rule relating to the Affordable Care Act’s (ACA) requirement that individuals maintain “minimum essential coverage” (MEC) or be subject to a “shared responsibility” payment.

IRS Final Rule: The IRS issued final regulations in May 2012 addressing eligibility for the health insurance premium tax credit, which is available to certain low-income individuals purchasing a qualified health plan on a health insurance exchange. The January 30, 2013 final rule supplements these regulations by finalizing the requirement that “affordability” of coverage available for the employee under an employer-sponsored group health plan is determined based on self-only coverage (and not family coverage).
IRS Proposed Rule: The proposed rule addresses (1) the obligation each taxpayer has to make a “shared responsibility payment” for himself, herself and any dependents who, for a calendar month, do not have MEC, and (2) exemptions to this payment obligation. The limited exceptions for this payment obligation include individuals who lack access to affordable MEC. The proposed rule addresses the difference in determining affordable MEC for an employee eligible for coverage under a group health plan (as described above) versus affordability for a “related individual.” A “related individual” is one for whom an Internal Revenue Code Section 151 deduction can be claimed.
HHS Proposed Rule: The HHS proposed rule sets forth standards and processes by which a health insurance exchange will make eligibility determinations and grant exemptions from the shared responsibility payment. This proposed rule also (1) identifies certain types of coverage deemed to be MEC , and (2) sets forth standards by which HHS may designate certain health benefits coverage as MEC.For example, self-funded student health insurance coverage and Medicare Advantage Plans are proposed to be designated as MEC. Additionally, sponsors of other types of coverage that meet designated criteria, such as providing consumer protections required by the Affordable Care Act, may apply to HHS for recognition as MEC.

Next Steps

Health insurance issuers will want to consider whether the various products they offer or administer will meet the MEC requirements set forth in HHS’s proposed rule, in order to respond to inquiries from customers, to meet notice requirements (including inserting model statements into existing plan documents, as applicable), and potentially to respond to exchanges making eligibility determinations. If a product does not constitute MEC, issuers may want to consider whether to continue to offer the product in its current form or revise the coverage to meet the MEC requirements.

Sponsors of group health plans will need to consider the separate affordability standards for employees and for related individuals and the implications for group health plan participants, and either modify coverage to meet the MEC standards, or consider the consequences of the shared responsibility payment.

DOL Extends Notification Deadline for Purchase of Medical Benefits on Health Insurance Exchanges

by McDermott Will & Emery | Jan 28, 2013 | Health and Welfare Plans

by Amy M. Gordon and Susan M. Nash

The U.S. Department of Labor (DOL) pushed back the deadline for employers to notify their workers that they can purchase medical benefits on health insurance exchanges. The original deadline was March 1, 2013, and has now been moved to late summer or early fall 2013. The DOL said it was aiming for a “smooth implementation process” that would balance the need to give employers sufficient time to comply with the desire that notices be distributed closer to the October 1, 2013 start of exchange enrollment.

In its announcement, the DOL said it might provide “generic language” that employers could distribute to satisfy the notice requirement. Alternatively, the DOL said it might allow use of a template that was discussed in the proposed rules published in the Federal Register (See Volume 78, Number 14, Tuesday, January 22, 2013).

The notices are required to have three components:

The first will inform workers that exchanges exist, what benefits they offer and how they can get in touch with an exchange.
The second must tell individuals they might qualify for tax credits to subsidize purchase of insurance on exchanges if their company health plan covers less than 60 percent of costs. However, a minimum value calculator hasn’t yet been released by the U.S. Department of Health and Human Services and the Internal Revenue Service.
The third will let individuals know that if they buy medical coverage through an exchange, they could lose the employer’s contribution to the employer’s group medical plan.

We will keep you updated as further guidance is released.

New Proposed Wellness Guidance under PPACA

by McDermott Will & Emery | Dec 11, 2012 | Health and Welfare Plans

by Amy M. Gordon and Susan M. Nash

New proposed employer wellness program regulations have been released under the Patient Protection and Affordable Care Act.

To read the full article, click here.

HHS Proposes to Allow States to Define “Essential Health Benefits”

by McDermott Will & Emery | Jan 19, 2012 | Health and Welfare Plans

by Amy M. Gordon, Todd A. Solomon and Brian J. Tiemann

The U.S. Department of Health and Human Services (HHS) issued a bulletin on December 16, 2011, outlining and requesting comments on its proposed regulatory approach to allow states to define what is an “essential health benefit.”

To read the full article, please click here.