The departments of Labor, Health and Human Services, and Treasury (the departments) have issued 20 frequently asked questions (FAQs) clarifying some compliance issues under health care reform. Non-grandfathered employer group health plans — whether insured or self-insured — must conform to a new limit on total out-of-pocket (OOP) expenses beginning with the 2014 plan year, although a transition rule will relax the standard for some plans for 2014. Separately, employer group health plans that have lost grandfathered status must comply with the mandate to cover certain preventive services with no participant cost sharing, and most of the new FAQs address these issues, including contraceptive and other preventive services for women.

Most of these FAQs are effective immediately for non-grandfathered insured and self-insured group health plans. The FAQs clarifying the new OOP maximum take effect with the 2014 plan year.

Compliance with deductible limitations in 2014

Large insured and self-insured employer group health plans (generally more than 100 employees) need not comply with the $2,000 limit on annual deductibles for single coverage ($4,000 for family coverage). Only plans and insurers in the small group market must comply with the deductible limit beginning in 2014. The departments plan to develop formal regulations reflecting this view and welcome public comments by April 22, 2013.

Non-grandfathered plans must meet the annual limitation on OOP expense

Beginning with their 2014 plan year, non-grandfathered employer group health plans generally must comply with a single OOP maximum for all plan coverage, including medical, prescription drug, and mental health and substance use disorder benefits. Under a special transition rule, however, plans currently using multiple claim payers, such as medical third-party administrators (TPAs) and separate pharmacy benefit management, have until the 2015 plan year to design a single OOP maximum and coordinate vendor arrangements.

The OOP maximums will be the same as those for health savings account-qualifying high-deductible health plans in 2014, which will be identified later this year (2013 maximums are $6,250 for single coverage and $12,500 for family). Thus, a group health plan using a single vendor to administer claims must implement a unified OOP maximum beginning with the 2014 plan year for all in-network copays, coinsurance and deductibles across all categories of covered expenses under the plan.

Multiple-vendor plans will be considered to have satisfied the annual OOP limit for the 2014 plan year if:

  1. The plan's major medical coverage complies with the maximum OOP requirements (excluding, for example, prescription drug coverage and pediatric dental coverage).
  2. The plan includes a separate OOP maximum for nonmedical benefits, such as prescription drug coverage, that does not exceed $6,250 (single) or $12,500 (family), indexed for 2014.

Group health plans and insurers may not impose an annual OOP maximum on all medical/surgical benefits and a separate annual OOP maximum on all mental health and substance use disorder benefits.

This OOP maximum requirement is part of the group health plan mandates and insurance market reforms in the Patient Protection and Affordable Care Act (PPACA); group health plan sponsors that fail to comply may be subject to excise taxes.

Preventive services

If a group health plan's network of providers cannot provide a mandated preventive service, then the self-insured plan (or the insurer) must cover the item or service from an out-of-network provider without cost sharing. If such services are available from in-network providers, however, plans need not offer free preventive services by out-of-network providers.

The FAQs also clarify the following:

  • Aspirin and other over-the-counter (OTC) recommended items and services must be covered without cost sharing only when prescribed by a health care provider.
  • If a colonoscopy is scheduled and performed as a screening procedure, a plan or insurer may not impose cost sharing for the cost of polyp removal during the colonoscopy.
  • The preventive services recommendation for genetic counseling and evaluation for routine breast cancer susceptibility gene (BRCA) testing includes the BRCA test itself.

Identifying high-risk populations

Clinical health care providers (not group health plans or insurers) will identify patients in a high-risk population for purposes of U.S. Preventive Services Task Force recommendations for certain high-risk populations. They will also decide whether a patient so identified should receive a preventive item or service recommended for those at high risk.

Covering immunizations

Coverage is required for immunizations recommended by the Advisory Committee on Immunization Practices (ACIP) for routine use. Vaccines administered by an in-network provider must be covered without cost sharing. The ACIP makes routine immunization recommendations for children, adolescents and adults that are population-based (e.g., age-based), risk-based (e.g., underlying medical conditions, work-related or other special circumstances that increase risk of illness), or based on catch-up recommendations. In some circumstances, the ACIP makes a recommendation that applies for certain individuals rather than an entire population. In these cases, health care providers should determine whether to administer the vaccine, and if the vaccine is prescribed by a health care provider consistent with the ACIP recommendations, the plan or issuer must cover it without cost sharing.

New ACIP recommendations must be covered without cost-sharing starting with the plan year (in the individual market, policy year) beginning on or after the one-year anniversary of the recommendation.

Women's preventive services and "well-woman" visits

The regulations allow plans and insurers to use reasonable medical management techniques to determine the frequency, method, treatment or setting for a recommended preventive item or service, to the extent they are not specified in a recommendation or guideline. Although the Health Resources and Services Administration (HRSA) Guidelines list services individually, neither the law nor the regulations require that each service be provided in a separate visit. Efficient care delivery and the delivery of multiple prevention and screening services at a single visit is a reasonable and permissible medical management technique. For example, HIV screening and counseling and sexually transmitted infections counseling could occur as part of a single well-woman visit.

The HRSA Guidelines recommend at least one annual well-woman preventive care visit for adult women to obtain age- and developmentally appropriate recommended preventive services, including preconception and prenatal care. The guidelines recommend that well-woman visits include listed preventive services as well as others referenced in the law. If the clinician determines that additional well-woman visits are necessary, the visits may be subject to reasonable medical management but must be provided without cost sharing.

Screening and counseling for interpersonal and domestic violence

Screening may consist of a few brief, open-ended questions or be facilitated by using brochures, forms or other assessment tools, including chart prompts. Counseling provides basic information, including how a patient's health concerns may relate to violence and referrals to local domestic violence support agencies when patients disclose abuse.

HPV DNA test and annual HIV counseling and screening

The HRSA Guidelines recommend high-risk HPV DNA testing for women with normal cytology results who are aged 30 or older no more frequently than every three years. The guidelines recommend annual HIV counseling and testing for all sexually active women.

Contraceptives under the mandate

The HRSA Guidelines call for access to the full range of contraceptive methods approved by the Food and Drug Administration (FDA), including barrier methods, hormonal methods, implanted devices and others, as well as patient education and counseling, as prescribed by a health care provider. Intrauterine devices and implants are contraceptive methods under the HRSA Guidelines and therefore must be covered without cost sharing if approved by the FDA and prescribed by a woman's health care provider. Plans and insurers may use reasonable medical management techniques to control costs and promote efficient delivery of care.

For example, plans may cover a generic drug without cost sharing and impose cost sharing for equivalent branded drugs. However, if a woman's health care provider determines that the generic or a brand-name drug would be medically inappropriate, the insurer must waive the otherwise applicable cost sharing for the branded or non-preferred brand version.

Contraceptive methods that are generally available OTC, such as contraceptive sponges and spermicides, fall under the preventive services mandate only if the method is both FDA approved and prescribed by a woman's health care provider. The HRSA Guidelines do not include contraception for men.

Services related to follow-up and management of side effects, counseling for continued adherence and device removal are included under the HRSA Guidelines and must be covered without cost sharing, subject to reasonable medical management.

Breastfeeding in the HRSA Guidelines

The HRSA Guidelines include comprehensive prenatal and postnatal lactation support, counseling and equipment rental. Accordingly, the included items and services must be covered without cost sharing, subject to reasonable medical management (which could include purchase instead of rental of equipment). Reimbursement policy for lactation consultants is outside the scope of the HRSA Guidelines and the regulations.

Coverage of comprehensive lactation support and counseling, and the costs of renting or purchasing breastfeeding equipment extends throughout the duration of breastfeeding. Nonetheless, group health plans and insurers may use reasonable medical management techniques to determine the frequency, method, treatment or setting to the extent not specified in the recommendation or guideline.

Going forward

Sponsors of non-grandfathered group health plans should review these new FAQs to identify whether and how the OOP limit will affect their current cost-sharing plan design as well as to coordinate the new OOP maximum among multiple claim payers serving the same plan. Plans must consider all non-premium cost sharing under the new OOP maximum — including deductibles, copays and coinsurance — which may require changes to the current plan. With the exception of high-deductible health plan options, almost all group health plans will require some design and administration changes for 2014 or 2015.

Separately, the new FAQs underscore the sophisticated claim administration competencies that will be necessary to administer the no-cost preventive services mandated by the PPACA. Employers should confirm that their TPAs or insurers are aware of and capable of administering the mandated preventive services benefits. The latest set of 20 FAQs are at www.dol.gov/ebsa/healthreform/.