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Departments Release Guidance on Dental and Vision Plans, EAPs, and "Wraparound" Coverage

March 2017

The Departments of Treasury, Labor and Health & Human Services (collectively, the Departments) jointly issued proposed rules (Proposed Regulations) on December 20, 2013. The proposed rules would amend the regulations regarding excepted benefits under various federal laws, including the Employee, Retirement Income Security Act of 1974 (ERIS) and the Internal Revenue Code (the Code). In general, excepted benefits are exempt from the market reform and other requirements that were added to ERISA and the Code by the Affordable Care Act (the ACA), including the rules prohibiting annual and lifetime dollar limits on essential benefits, the 90-day waiting period rule, and the requirement to cover certain preventive care with no cost sharing. Excepted benefits are also exempt from the ACA's transitional reinsurance program (TRP) and Patient-Centered Outcomes Research Institute (PCORI) fees.

The Proposed Regulations amend existing regulations applicable to "limited scope" dental and vision plans, and add two new classes of excepted benefits: employee assistance plans (EAPs) and "wraparound" coverage, which would be considered an excepted benefit if it is used to provide additional coverage to individuals and families enrolled in nongrandfathered individual health insurance and for whom minimum value coverage under the employer's group health plan is offered but unaffordable.

The Proposed Regulations attempt to level the playing field between  insured and self-insured dental and vision coverage by eliminating the requirement that participants pay an additional contribution for a self-insured dental or vision benefits to be considered excepted. They also provide much-needed guidance for employers that were struggling with how to administer their EAPs in light of the ACA's new market reforms.

To learn more about the impact of this and other health care reform decisions, please visit Peel & Holland University, where we have posted a document titled Departments Release Guidance on Dental and Vision Plans, EAPs, and "Wraparound" Coverage.

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