Comprehensive Relief for Global Plans Signed Into Law
December 17, 2014
On December 16, the President signed into law the Expatriate Health Coverage Clarification Act (the “Act”), which was passed by Congress late last week. The legislation helps preserve U.S.-based employer-sponsored expatriate insurance options and ensures that U.S. carriers remain competitive against non-U.S. carriers who are not subject to the requirements, fees, and taxes of the Patient Protection and Affordable Care Act (PPACA).
The legislation also provides relief from portions of PPACA that were unworkable for plans providing worldwide coverage. It allows expatriate plans to be considered minimum essential coverage for expatriates and clarifies that these plans are considered eligible employer-sponsored plans for purposes of the employer mandate. It does so while also continuing to allow eligible individuals access to certain PPACA protections and benefits within the U.S.
Highlights of the Act include:
- Provides permanent, comprehensive relief for U.S.-issued expatriate plans, both fully insured and self-funded, from most of the PPACA’s market reforms – i.e., the benefit requirements, except that these plans will continue to provide dependent coverage to age 26. The exemption applies only to PPACA market reforms and does not extend to other pre-PPACA benefit requirements such as mental health parity.
- Deems U.S.-issued expatriate plans to be minimum essential coverage for expatriate employees and their dependents regardless of where they are located in the world.
- Deems U.S.-issued expatriate plans to be eligible employer-sponsored plans for purposes of the employer mandate but does not exempt employers from the employer mandate or reporting requirements.
- Exempts U.S.-issued expatriate plans from the health insurance fee after 2015, the reinsurance fee, and the Comparative Effectiveness Research Fee (CERF), also known as the Patient-Centered Outcomes Research Institute (PCORI) Fee.
- Exempts U.S.-issued expatriate plans from the excise tax on high-cost employer-sponsored health coverage for most categories of expatriates.
- Protects U.S.-issued expatriate plans from the small group definition change which could have prevented the sale of expatriate coverage to employers with 50 to 99 lives, thereby preserving expatriate coverage options for this employer segment.
- Exempts U.S.-based insurers from the administrative simplification requirements such as the Summary of Benefits and Coverage (SBC).
Much like under the transitional relief, U.S.-issued expatriate plans will be required to meet certain conditions to qualify for the benefits and relief provided under the Act. Similarly, insurance carriers must also meet certain conditions to qualify as providers of expatriate plans. The Act creates categories of qualified expatriates with different requirements by category.
The federal agencies responsible for implementing the provisions of the Act may provide additional regulatory guidance. As this guidance is issued, you have our continued commitment to keep you informed of the details.
We encourage you to bookmark Cigna's health care reform website, www.InformedonReform.com, where we will update information as more guidance becomes available.
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