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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 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

  

Boston 

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

   

Tampa

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 

 

www.wagnerlawgroup.com

 

 

 

 

June 17, 2016

 

 Health and Welfare Law Alert

 

 

 

  Agencies Release Guidance on Application of ACA Rules to Expatriate Health Plans

 

 

 

 

IRS, DOL, and HHS have issued proposed regulations on expatriate health plans, expatriate health issuers and qualified expatriates under the Expatriate Health Coverage Clarification Act of 2014 ("EHCCA").

 

Background. The ACA made various changes to federal health care laws, including implementing certain market reforms and information reporting requirements. Prior to the enactment of EHCCA, there were many questions about how ACA's rules applied to expatriate health plans, U.S. assignees working abroad, and foreign nationals working in the U.S.

 

Under the EHCCA, the ACA generally does not apply to: (i) expatriate health plans; (ii) employers, as plan sponsors of expatriate health plans; and (iii) expatriate health insurance issuers. Despite this general exception, EHCCA does subject expatriate health plans to certain ACA requirements, including the employer mandate and information reporting requirements.

 

Proposed Regulations.  Highlights from the proposed regulations are as follows:

 

ACA market reforms. The proposed regulations confirm that the ACA's market reforms generally do not apply to expatriate health plans.

  

Coverage requirements. Expatriate health plans must provide coverage for inpatient hospital services, outpatient facility services, physician services and emergency services.

 

Excepted Benefits. Substantially all of the benefits provided under an expatriate health plan must be benefits that are not excepted benefits. The proposed regulations consider group or individual supplemental health insurance benefits and travel insurance to be excepted benefits.

 

Expatriate health plan defined. An expatriate health plan is a plan where "substantially all" (i.e., at least 95%) of the primary enrollees are qualified expatriates.

 

Minimum value. An expatriate health plan sponsor must reasonably believe that benefits provided under the plan satisfy the ACA's minimum value requirements.

 

Dependent coverage. Where an expatriate health plan provides coverage for dependent children, such coverage must be available until the dependent attains age 26, unless the dependent is a dependent of a dependent who is receiving coverage.

 

Preexisting condition exclusion. Expatriate plan sponsors are significantly restricted from imposing preexisting condition exclusions. In fact, the proposed regulations require that the period of any preexisting condition exclusion be reduced by the length of any period of creditable coverage the individual had without a 63-day break in coverage.

 

ACA Information Reporting. Information reporting provisions under Code sections 6056 and 6055 continue to apply to expatriate plans under the proposed regulations.

 

Non-US insurers. The proposed regulations specify that a non-U.S. insurer does not qualify as an expatriate health insurer under EHCCA.

 

Hospital Indemnity Insurance. The proposed regulations add new requirements for hospital and other indemnity insurance to comply with in order to be considered an excepted benefit. For instance, enrollment materials provided to enrollees must indicate that the coverage is a supplement to major medical coverage and that a failure to have MEC may result in additional taxes.

 

Short-Term Limited Duration Insurance. The proposed regulations change the definition of short-term, limited-duration insurance requiring that coverage must be less than three months in duration with or without an insurer's consent. A notice of the three-month term would also be required in application materials.

 

Individual Mandate. The ACA's individual mandate requires most individuals to either obtain minimum essential coverage or pay a penalty. The proposed regulations clarify that expatriate coverage will qualify as minimum essential coverage.

 

Takeaway for Employers. The proposed regulations clarify the application of many ACA and EHCCA rules and alter definitions applicable to expatriate health plans and insurance issuers. Employers should review their expatriate plans, work with their insurance issuers, and speak with legal counsel to confirm that expatriate health plan requirements are still being met under the proposed regulations.

 

    

 

 

 

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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.