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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 23 attorneys engaged exclusively in employee benefits, estate planning and employment law. Seven 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

 

www.wagnerlawgroup.com

 

 

 

 

January 2, 2014

 

 State and Federal Law Alert

 

 

 

Agencies Expand Definition of "Excepted Benefits"

 

 

 

IRS, the Department of Health and Human Services and the Department of Labor have issued proposed regulations that would expand the definition of "Excepted Benefits" which are not subject to certain requirements under the Patient Protection and Affordable Care Act. These requirements include the nondiscrimination rules, the requirement to provide essential health benefits, the prohibition against annual benefit limits, and the 90-day waiting period limitation.

 

Excepted Benefits currently include most health FSAs, limited scope dental and vision benefits, long term care, coverage limited to a specific disease, and hospital indemnity and fixed indemnity coverage.

 

Limited Dental and Vision Coverage. Under current rules, dental and vision benefits are excepted if they are limited in scope, and are either provided under policies separate from the employer's group health plan or are not otherwise an integral part of the group health plan. Coverage is not an integral part of the group health plan if employees have a separate election for these benefits and must pay a separate contribution to receive the benefit. Sponsors of self-funded plans complained that it is impossible for their coverage to be under separate policies and that the requirement of imposing a separate contribution is administratively impractical and prevents the employer from paying the full cost of these relatively minor benefits.

 

The proposed regulation would amend the contribution rule so the employer would not be required to impose a separate employee contribution on the dental or vision benefit.

 

Limited "Wraparound" Coverage. Because group health plan coverage is often more comprehensive than the individual coverage that can be purchased through an Insurance Exchange, some group health plan sponsors want to create a "wraparound" benefit plan for employees who select individual coverage because the group health plan's premium is unaffordable. These plans would help fill in the gaps between the group health plan and the individual coverage.

 

The Agencies proposed that these wraparound coverage plans would be excepted benefits if:

  • the individual coverage is non-grandfathered and does not consist solely of excepted benefits;
  • the wraparound benefit plan provides coverage that is in addition to essential health benefits (it can also cover the cost sharing expenses under the individual policy);
  • the employer sponsoring the wraparound coverage plan sponsors its own group health plan;
  • the total cost of coverage under the wraparound plan does not exceed 15% of the cost of coverage under the employer's primary group health plan; and
  • the wraparound coverage does not differentiate as to eligibility, benefits, or preexisting conditions. 

Employee Assistance Plans. Employee Assistance Plans (EAPs) will be considered excepted benefits if:

  • The EAP does not provide "significant" benefits in the nature of medical care. While the proposed regulations give a few examples, the Agencies state that they expect employers to use a reasonable, good faith interpretation when determining if the medical benefits provided are "significant."
  • The benefits in the EAP cannot be coordinated with benefits under the group health plan.
  • Employees do not have to make contributions to participate in the EAP.
  • There is no cost sharing under the EAP.

 

 

 

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

  

Pursuant to Internal Revenue Service Circular 230, we hereby inform you that any advice set forth herein with respect to US federal tax issues is not intended or written by The Wagner Law Group to be used and cannot be used, by you or any taxpayer, for the purpose of avoiding penalties that may be imposed on you or any other person under the Internal Revenue Code.

 

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.