2 tweaks to health reform rules you may have missed
When the Department of Labor (DOL) provided firms with new model COBRA notices, it also tucked away other key health reform info in that document — info that you might have overlooked.
In addition to the COBRA notices, the DOL’s latest FAQ — FAQ XIX — delved into some of the finer points regarding the new Affordable Care Act rules that apply to out-of-pocket limits and the preventive services requirement.
So what do HR pros need to know about these reform requirements?
1. Out-of-pocket limits
Let’s start with the Obamacare out-of-pocket limits.
For 2014, the out-of-pocket limits under the Affordable Care Act are:
- $5,350 (individual), and
- $12,700 (for family coverage).
Then, starting in 2015, those limits jump to:
- $6,600 (individual), and
- $13,200 (for families).
In the FAQ, the DOL clarified how these out-of-pocket maximums will apply to different benefits — e.g., medical, pharmacy, etc.
According to the feds, plans are able to have separate out-of-pocket limits for different benefit categories as long as the combined amount of those limits does not exceed the out-of-pocket maximums outlined above.
And these limits only apply to in-network healthcare expenses. Plans don’t have to limit the amount of out-of-pocket costs spent on out-of-network care — but they do have the option to do so.
Another key clarification — a clarification that is good news for employer plans — centered around non-covered items.
The DOL says plans don’t have to include items or services in the out-of-pocket limit calculation if those things aren’t covered by the plan.
Plus, plans don’t have to count the amount paid by employees for brand-name drugs toward the annual limit, when there’s a generic (and medically appropriate) drug available.
2. Preventive services
The FAQ also touched on preventive services that must be covered without any cost-sharing requirements to employees.
According to the DOL guidance, group health plans beginning on or after September 24, 2014, must cover breast cancer risk-reducing medications — e.g., tamoxifen, raloxifene — at no cost to employees.
On top of breast-cancer medications, Obamacare requires plans or health insurance issuers to cover tobacco-use counseling and interventions. And the FAQ listed a “safe harbor” regarding these services — which must be provided to employees at no-cost as preventive services — that applies if a plan provides:
- a screening for tobacco use, and
- at least two tobacco cessation attempts per year for individuals who use tobacco products.
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