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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 22 attorneys engaged exclusively in employee benefits, estate planning and employment law. Six of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.






Contact Info

The Wagner Law Group


  Integrity | Excellence


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

Suite 904

San Francisco, CA 94104







March 13, 2015


 Health and Welfare Law Alert




ACA FAQs Address Supplemental Health Coverage That Qualifies as Excepted Benefits




The DOL, HHS and IRS (the "Departments") have released FAQs About Affordable Care Act (ACA) Implementation Part XXIII ("FAQ XXIII"). FAQ XXIII addresses the circumstances under which supplemental group health coverage qualifies as excepted benefits which are exempt from ACA's market reform requirements.


Background. Benefits are excepted supplemental benefits only if they are provided under a separate policy, certificate, or contract of insurance. DOL has previously issued guidance which indicates that supplemental benefits are excepted if they meet the following criteria:


  • The policy, certificate, or contract of insurance must be issued by an entity that does not provide the primary coverage under the plan. The supplemental plan cannot be self-insured.
  • The supplemental policy, certificate, or contract of insurance must be specifically designed to fill gaps in primary coverage, such as coinsurance or deductibles.
  • The cost of the supplemental coverage may not exceed 15 percent of the cost of primary coverage; and
  • The coverage must be Medicare supplemental health insurance (e.g., Medigap), TRICARE supplemental programs or coverage that supplements a group health plan.
  • Supplemental coverage sold in the group insurance market must not differentiate among individuals as to eligibility, benefits, or premiums based upon any health factor of the individual (or any dependents of the individual).



FAQ XXIII. FAQ XXIII confirms that the Departments will continue to apply the same criteria to determine whether insurance coverage sold as supplemental to group health coverage is an excepted benefit. FAQ XXIII indicates that the Departments intend to propose regulations clarifying the circumstances under which supplemental insurance products that do not fill in cost-sharing under the primary plan are considered to be specifically designed to fill gaps in primary coverage. Specifically, they intend to propose that additional categories of coverage would be considered to be designed to "fill in the gaps" of the primary coverage only if the benefits provided by the supplemental insurance coverage are not an essential health benefit (EHB) in the state where it is being marketed. If any benefit is an EHB in its marketed state, the insurance coverage would not be an excepted benefit, and would have to comply with the applicable ACA provisions.


ACA Compliance. Until the proposed regulations are finalized, the Departments will not initiate enforcement if an issuer of group or individual health insurance coverage fails to comply with ACA's market reforms with respect to health insurance coverage that:


  • provides coverage of additional categories of benefits that are not EHB in the relevant state (rather than coverage intended to fill in cost-sharing gaps under the primary plan);
  • complies with the applicable regulatory requirements and meets all of the criteria in the existing guidance on "similar supplemental coverage;" and
  • has been filed and approved with the state (as may be required under state law).



FAQ XXIII may be accessed at: http://www.dol.gov/ebsa/pdf/faq-aca23.pdf





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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.