Employee Benefits-EBSA Issues FAQs IV On The Affordable Care Act

The Employee Benefits Security Administration (the “EBSA”) continues to issue FAQs on the Affordable Care Act. These FAQs were dubbed “FAQs IV“. FAQs IV consist of 3 questions and answers. Here is what they say on employer-provided benefits :

The EBSA notes that the interim final grandfather regulations-previously issued by the Departments of Health and Human Services, Labor and the Treasury (the “Departments”) – provide that, to maintain status as a grandfathered health plan (and not have to meet some new Affordable Care Act requirements), the plan must include, in any materials provided to participants and beneficiaries that describes the plan’s benefits, a statement that the plan believes it is grandfathered. To meet this requirement, the plan may include the model disclosure language provided in the interim final grandfather regulations (or a similar statement) in any summary of the plan benefits provided to participants and beneficiaries, such as the summary plan description. It is not necessary to include the required statement with each communication from the plan to participants and beneficiaries (such as an explanation of benefits or “EOB”), although inclusion is permitted and encouraged.

The EBSA presents the situation of an employer, who had maintained a plan, prior to the enactment of the Affordable Care Act, which reimburses expenses for special treatment and therapy of eligible employees’ children with physical, mental, or developmental disabilities (the “Children’s Plan”). The treatment or therapy is not covered by the employer’s primary medical plan. Reimbursable expenses may include the costs of:
— special treatment or therapy from licensed clinics or practitioners;
— day or residential special care facilities;
— special education facilities for learning-disabled children;
–camps offering medically oriented programs that are part of a child’s continued treatment; or
–special devices.

The Children’s Plan is operated separately from the employer’s primary medical plan. Employees may participate in the Children’s Plan, without participating in the primary medical plan. The Children’s Plan limits the total benefits for any eligible child to a specified lifetime dollar amount. The EBSA indicates that it would be a reasonable good faith interpretation of the Affordable Care Act and the underlying regulations for the plan sponsor to take the position that the per-child lifetime limit under the Children’s Plan does not violate the prohibition, under section 2711 of the Public Health Service Act (PHS Act) and the underlying regulations, on imposing a lifetime dollar limit on “essential health benefits”. The imposition by the Children’s Plan of the per-child lifetime limit will not result in an enforcement action by the Departments under PHS Act section 2711.