On June 28, 2010, the Departments of Health and Human Services, Labor and Treasury released an interim final rule (IFR) implementing provisions of the Affordable Care Act (ACA) that address application of lifetime and annual limits on benefits.
What are the basic rules concerning lifetime and annual limits on benefits?
The interim final rule prohibits group health plans and group and individual insurers from establishing any lifetime limit on the dollar amount of benefits for any individual.
In addition, they may establish only “restricted” annual limits on “essential health benefits” (EHB) For years prior to 2014, and no annual limits on benefits for plan years beginning after January 1, 2014.
How do these provisions apply to HSAs, MSAs, HRAs and other arrangements or accounts?
The IFR exempts flexible spending arrangements from the restrictions on annual limits. In addition, the preamble clarifies that health savings accounts (HSAs) and medical savings accounts (MSAs) are not subject to the requirements. (The rule does apply, however, to any high-deductible health plans offered in conjunction with an HSA, MSA or HRA).
In January 2013, the departments issued guidance that makes a distinction between HRAs that are “integrated” with other group coverage and “standalone” HRAs. HRAs that are integrated with other coverage are considered in compliance with the rules, even though the HRA itself has a limit on the amount of reimbursement it provides, as long as the other coverage complies with the rules. To be considered “integrated” with other coverage, the HRA must be available only to employees who are covered by that coverage. The departments have indicated that more guidance on this issue will be forthcoming.
The preamble to the IFR also clarifies that a standalone HRA provided under a retiree-only health plan is not subject to the requirements.
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