Wednesday, May 27, 2020

Proposed Rule on Expatriate Health Plans, Excepted Benefits, and Essential Health Benefits

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In a tri-agency proposed rule, the Department of Labor (DOL), Department of Health and Human Services (HHS), and Department of Treasury (Treasury) have published guidance discussing expatriate health plans (expat plans), excepted benefits, and essential health benefits (EHBs).

Expatriate Health Plans

The proposed rule would allow expatriate health plans, employers as sponsors of expatriate health plans, and expatriate health plan insurers to be exempt from certain Patient Protection and Affordable Care Act (ACA) requirements such as medical loss ratio, and, for employer plans that cover expatriates assigned to work in the United States, the Cadillac tax.

Expatriate plans are group health plans or individual coverage for which substantially all primary enrollees (95 percent) are qualified expatriates. Primary enrollees are all individuals other than a dependent, spouse, or beneficiary. Qualified expatriates must meet one of the following three definitions:

  • Individuals who, because of their skills, qualifications, job duties, or experience are transferred or assigned to the United States for a specific and temporary employment purpose and who are reasonably determined to require health insurance and other related services in multiple countries (that is, are expected to travel out of the United States at least once per year) and who are offered multinational benefits beyond one-time, de minimis benefits;
  • Individuals who work outside the United States for at least 180 days in a consecutive 12-month period that overlaps with a plan year; or,
  • Individuals who are members of a group:
    1. formed for traveling or relocating outside the United States for an educational or service purpose (such as students or missionaries), and
    2. not formed primarily for the sale of health insurance, and who are determined by the departments to require access to health insurance in multiple countries.

An individual must travel or reside outside the United States for at least 180 days during a 12-month period (or, if the coverage is for less than a year, for at least half the period), but may not be expected to travel or reside outside the United States for more than 12 months, and may not be traveling or residing outside the United States for employment purposes.

Expatriate plans have a multitude of items they must cover. They must:

  • not consist substantially of all excepted benefits;
  • cover inpatient hospital services, outpatient facility services, physician services, and emergency services in the United States and in the country from which the qualified expatriate was assigned or in which he or she is employed, and in countries designated by the departments;
  • provide at least minimum (60 percent actuarial) value;
  • if the plan provides dependent coverage, cover adult children up to age 26;
  • be issued by an insurer or administered by a plan administrator that is licensed to operate in more than two countries, has provider networks in eight or more countries, maintains call centers in three or more countries and in eight or more languages, processes at least $1 million in claims a year, makes available global evacuation/repatriation agreements, maintains legal and compliance resources in three or more countries, and offers reimbursement for items and services in the local currency of eight or more countries;
  • satisfy health reform requirements of federal law that applied before the ACA, including the pre-existing condition exclusion limitations imposed by HIPAA;
  • if an insured plan, be offered by a U.S.-licensed health insurer. United States, in this instance, includes all 50 states, the District of Columbia, and Puerto Rico. It does not include other territories.

Excepted Benefits

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