Earlier this year, the Department of Labor, the Department of Health and Human Services and the IRS jointly issued a set of FAQs regarding the Affordable Care Act (ACA). The guidance addresses a variety of important requirements under the law. Here are some highlights:
Preventive services. The FAQs confirm that the required preparation for a preventive screening colonoscopy is an integral part of the procedure and must be covered without cost-sharing, subject to reasonable medical judgment. This includes preparatory medications when medically appropriate and prescribed by a provider.
Furthermore, the guidance allows plans, as part of using reasonable medical management techniques, to develop a standard exception form that providers may use to prescribe particular services or FDA-approved items based on a medical necessity determination for an individual. The “Medicare Part D Coverage Determination Request Form” may be used as a model for this purpose.
Rescissions. Under the ACA, rescission is the retroactive cancellation of a policy. This action is generally illegal except in cases of fraud or intentional misrepresentation of material fact.
The FAQs describe a fact pattern involving a teacher who was employed under a 10-month contract from August 1 to May 31, but had health coverage for the entire August 1 to July 31 plan year. (The teacher had fully paid premiums during this period and hadn’t committed fraud or intentional misrepresentation.)
According to the guidance, if the teacher resigned on July 31, termination of coverage retroactive to May 31 would constitute a prohibited rescission. The plan could, however, terminate coverage prospectively, subject to other applicable laws.
Out-of-network emergency services. The FAQs confirm that plans are generally required to disclose on request how they calculate payments for out-of-network emergency services — for example, the usual, customary and reasonable amount — to comply with disclosure requirements under the Employee Retirement Income Security Act, as well as the ACA’s appeals process and external review requirements.
Clinical trials. If a plan generally covers chemotherapy to treat cancer, it may not limit that coverage for chemotherapy provided in connection with an individual’s participation in an approved clinical trial for a new antinausea medication. Similarly, if a plan typically covers items or services to diagnose or treat certain complications or side effects, the plan may not deny coverage of these items or services to diagnose or treat complications or side effects in connection with an approved clinical trial.
The guidance also confirms that the nondiscrimination requirement relating to participation in clinical trials is self-implementing. Until further guidance is issued, plans are expected to follow a good-faith, reasonable interpretation of the law.
Cost-sharing limits. Previously issued FAQs address how the overall cost-sharing limit applies to plan designs that use reference-based pricing. This involves the plan paying a fixed amount for a particular procedure and providers accepting it as payment in full.
Consistent with that guidance, if a plan merely states a reference price without using a proper method to ensure reasonable access to quality providers, the plan won’t be considered to have established an adequate network. Such a plan would be required to count an individual’s out-of-pocket expenses for providers who don’t accept the reference price toward the maximum annual out-of-pocket limit.
Mental health parity. The Mental Health Parity and Addiction Equity Act requires group plans to ensure that financial obligations (such as co-pays and deductibles) and treatment limitations (such as limits on visits) for mental health and substance abuse issues aren’t more restrictive than those applied to other medical/surgical benefits.
The FAQs clarify how to perform the “substantially all” and “predominant” tests for financial requirements and quantitative limitations under the mental health parity requirements. The agencies note that these requirements apply to any benefits a plan may offer for medication-assisted treatment for opioid use disorder. The guidance also addresses disclosure requirements relating to providers and the individual insurance market.
Sidebar: Final SBC template and related materials now available
This past April, the Department of Labor and the Department of Health and Human Services released the final revised template and related materials for the summary of benefits and coverage (SBC). The final versions, which will replace materials in use since 2012, largely reflect the revisions proposed recently. Important aspects include the:
SBC template and instructions. The template itself is substantially similar to the most recent proposal. In the “Why This Matters” column relating to the “Important Questions” chart, the prescribed language for describing certain coverage components — including services covered before the deductible is met, embedded deductibles for family coverage and out-of-pocket limits — has been made clearer and more straightforward.
For the coverage examples, the instructions explain that the generic “[cost sharing]” notations in the template should be replaced with the appropriate cost-sharing category (for example, co-payment, co-insurance) to accurately reflect the plan. Overall, the instructions provide more details than the currently applicable instructions — for instance, specifying where in the SBC the plan should add premium information, if it voluntarily chooses to do so.
Glossary definitions. A few glossary definitions have been somewhat revised, but no new terms have been added to those in the proposed versions. For plans using an electronic SBC, the agencies have provided the capability (via a list of “anchors”) to hyperlink defined terms directly to the definition on the dedicated healthcare.gov glossary website. Also included are updated coverage example calculators and information for simulating coverage examples.
Required usage deadline. Use of the new SBC template and related materials is required starting with the first day of the first open enrollment period that begins on or after April 1, 2017, with respect to coverage for plan years beginning on or after that date. (So, for calendar-year plans, the new materials will be used for the 2017 open enrollment period relating to coverage beginning on or after January 1, 2018.) For plans that don’t use an annual open enrollment period, these materials must be used beginning on the first day of the first plan year that begins on or after April 1, 2017.