Wagner Header

The Wagner Law Group

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 26 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



Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Palm Beach Gardens 

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



Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 


San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

300 Montgomery Street

Suite 600

San Francisco, CA 94104


St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
100 South 4th Street, Suite 550
St. Louis, MO  63102 







November 3, 2016


 Health and Welfare Law Alert




Final Regulations Address Various

ACA Topics 




IRS, DOL, and HHS have issued final regulations providing guidance on short-term, limited-duration insurance; travel insurance; supplemental health insurance coverage; and essential health benefits ("EHBs") for purposes of the ACA's annual and lifetime limits.



The following provides a summary of the regulations:



Short-term, limited-duration insurance.  Short-term, limited duration insurance is designed to bridge gaps in coverage when an individual transitions from one form of coverage to another.  This insurance is considered excepted benefit coverage under the ACA and does not qualify as minimum essential coverage for purposes of satisfying the ACA's individual mandate requirement.  Therefore, as a form of excepted benefit coverage, it is exempt from certain ACA requirements, including the prohibition on pre-existing condition exclusions and annual and lifetime dollar limits on EHBs. 



The final regulations confirm that in order for limited-duration insurance coverage to qualify as an excepted benefit, it must last no more than three months , including renewals.  In addition, the underlying insurance policies must include a disclaimer explaining that the coverage does not qualify as minimum essential coverage and, therefore, the insured may be subject to  the ACA's individual mandate penalty.



Supplemental health insurance coverage.  Supplemental health insurance coverage, which is designed to fill gaps in primary health coverage through either payments of coinsurance or deductibles, or by providing benefits for items and services not covered under the primary coverage, is also excepted benefit coverage and exempt from the ACA's market reforms.



The final regulations confirm that in order for supplemental health insurance coverage to qualify as an excepted benefit, it must either:


  • cover benefits that are not covered by primary coverage and are not EHBs;
  • cover cost-sharing for primary benefits; or
  • both provide supplemental benefits and cover cost-sharing.


The final regulations do not change prior guidance that limited the cost for supplemental coverage to no more than 15 percent of the cost for the primary coverage.




Travel Insurance.  Travel insurance is designed to provide insurance coverage for personal risks of planned travel, including trip cancellation, lost baggage, damages to accommodations or rental vehicles, and sickness, accident, disability or death during transit, provided that health benefits are not offered on a stand-alone basis and are incidental to other coverage.  The final regulations formally recognize travel insurance as excepted benefit coverage for ACA purposes.




Essential Health Benefits and the ACA's prohibition on annual and lifetime dollar limits.  The ACA requires small group health plans to offer EHB coverage without annual or lifetime dollar limits.  However, this requirement does not apply to large group plans.  Nevertheless, the final regulations provide that large group health plans (which are not required to provide EHBs) must define EHBs as either:


  • any EHBs covered by an EHB-benchmark plan in any state, including state-mandated benefits that qualify as EHBs; or
  • benefits under one of the three largest Federal Employees Health Benefit Program plans, including any benefits added to meet ACA requirements.


Takeaway for Employers.  The final regulations apply as of the first day of the first plan year commencing on or after January 1, 2017.




The final regulations are available at: https://www.gpo.gov/fdsys/pkg/FR-2016-10-31/pdf/2016-26162.pdf




This Newsletter is protected by copyright. Material appearing herein may be reproduced with appropriate credit.


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.