Obama administration delays another healthcare reform provision

HR . BLR . com reports:

“The Obama administration has revealed the delay of another Affordable Care Act (ACA) provision. The administration has postponed a consumer protection provision that limits out-of-pocket costs until 2015. Under the provision, the limit on such out-of-pocket costs was not supposed to exceed $6,350 for an individual and $12,700 for a family.

According to the New York Times, the new one-year grace period was announced in February on the Department of Labor’s (DOL) website in guidance entitled “FAQs about Affordable Care Act Implementation Part XII.” However, the language outlining the grace period largely flew under the radar until DOL officials recently confirmed what the language meant.

The FAQs, which were prepared jointly by the DOL, the Department of Health and Human Services (HHS), and the Department of the Treasury (collectively, the Departments), note that the Departments recognize that plans may use multiple service providers to help administer benefits, and that such plan service providers may impose different levels of out-of-pocket limitations and may use different methods for crediting participants’ expenses against out-of-pocket maximums. According to the Departments, such processes will need to be coordinated under the ACA provision, and coordination may require new regular communications between service providers.

Therefore, the Departments have decided to implement a grace period. For only the first plan year beginning on or after January 1, 2014, if a group health plan or group health insurance issuer uses more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket maximums, the Departments will consider the annual limitation to be satisfied if two conditions are met. More specifically:

A plan must comply with the requirements with respect to its major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage); and

To the extent the plan or any health insurance coverage includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (for example, if a separate out-of-pocket maximum applies with respect to prescription drug coverage), such out-of-pocket maximum does not exceed the dollar amounts set forth in the ACA.

The Departments do address that under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), plans and issuers are barred from imposing an annual out-of-pocket maximum on all medical/surgical benefits and a separate annual out-of-pocket maximum on all mental health and substance use disorder benefits.

This new delay comes after the Obama administration announced in July the delay of implementation of the ACA’s employer responsibility provision, commonly known as the “play or pay” provision, until 2015.”