When the Department of Labor (DOL) provided firms with new model COBRA notices, it also tucked away other key health reform info in that document — info that you might have overlooked.
In addition to the COBRA notices, the DOL’s latest FAQ — FAQ XIX — delved into some of the finer points regarding the new Affordable Care Act rules that apply to out-of-pocket limits and the preventive services requirement.
So what do HR pros need to know about these reform requirements?
1. Out-of-pocket limits
Let’s start with the Obamacare out-of-pocket limits.
For 2014, the out-of-pocket limits under the Affordable Care Act are:
- $5,350 (individual), and
- $12,700 (for family coverage).
Then, starting in 2015, those limits jump to:
- $6,600 (individual), and
- $13,200 (for families).
In the FAQ, the DOL clarified how these out-of-pocket maximums will apply to different benefits — e.g., medical, pharmacy, etc.
According to the feds, plans are able to have separate out-of-pocket limits for different benefit categories as long as the combined amount of those limits does not exceed the out-of-pocket maximums outlined above.
And these limits only apply to in-network healthcare expenses. Plans don’t have to limit the amount of out-of-pocket costs spent on out-of-network care — but they do have the option to do so.
Another key clarification — a clarification that is good news for employer plans — centered around non-covered items.
The DOL says plans don’t have to include items or services in the out-of-pocket limit calculation if those things aren’t covered by the plan.
Plus, plans don’t have to count the amount paid by employees for brand-name drugs toward the annual limit, when there’s a generic (and medically appropriate) drug available.
2. Preventive services
The FAQ also touched on preventive services that must be covered without any cost-sharing requirements to employees.
According to the DOL guidance, group health plans beginning on or after September 24, 2014, must cover breast cancer risk-reducing medications — e.g., tamoxifen, raloxifene — at no cost to employees.
On top of breast-cancer medications, Obamacare requires plans or health insurance issuers to cover tobacco-use counseling and interventions. And the FAQ listed a “safe harbor” regarding these services — which must be provided to employees at no-cost as preventive services — that applies if a plan provides:
- a screening for tobacco use, and
- at least two tobacco cessation attempts per year for individuals who use tobacco products.
