Obama administration publishes final rule on excepted benefits
The U.S. Departments of Labor, Health and Human Services, and Treasury have published final rules to amend the definition of excepted benefits to include certain limited coverage that wraps around individual health insurance.
The final rules permit group health plan sponsors, in limited circumstances, to offer wraparound coverage to employees who are purchasing individual health insurance in the private market, including in the Health Insurance Marketplace. The rule sets forth two pilot programs for limited wraparound coverage. One pilot allows wraparound benefits only for multi-state plans in the Health Insurance Marketplace. The other allows wraparound benefits for part-time workers who enroll in an individual health insurance policy or in Basic Health Plan coverage for low-income individuals established under the Affordable Care Act. These workers could, under existing excepted benefit rules, qualify for a flexible spending arrangement alternative to this wraparound coverage.
The final rules take into account the feedback received on both proposed rules and give businesses — including small businesses — new flexibility to meet the unique needs of their employees.
The final rules were published in the March 18 edition of the Federal Register and can also be viewed online.