Expat Plans and PPACA: An Exception to the Rule

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March 19th, 2013
Categories: Healthcare Reform

expat plans ppacaThe Federal Government has granted expatriate health plans temporary relief from complying with several PPACA provisions. Group expat plans must end on or before December 31, 2015 in order to be eligible for temporary relief.

The newly released guidance by the departments of Labor, Health and Human Services and the Treasury define an expat plan as one in which enrollment is limited to primary insureds and any covered dependents who reside outside of their home country for at least six months of the plan year.  Regulators recognize expatriate health plans may face several special challenges in attempting to comply with PPACA’s Subtitle A and Subtitle C PPACA Title I provisions. For example, it may be difficult for expat plans to meet both domestic and foreign health plan requirements. In some cases, the foreign and domestic requirements may be in conflict with one another.  Even in cases where they do not conflict, meeting several sets of requirements from domestic and foreign governments takes time and careful coordination. Other challenges include the fact that some countries may not have independent review organizations at all, or other countries may classify preventative services with completely different codes. Expat insurers also experience issues communicating with enrollees living abroad on a timely basis; and due to the complexity of expat plans producing a standardized summary of benefits may be almost be impossible.

In order to be eligible for this relief, expat plans must comply with HHS, Labor Department and Internal Revenue Code rules that were in place before PPACA. Importantly, the IRS will treat expat coverage as “minimum essential coverage” to satisfy the individual mandate requirements of PPACA.

The PPACA provisions expat plans are exempt from are as follows:

  • Prohibition on annual and lifetime dollar limits on essential health benefits, and limits on pre-existing condition restrictions
  • Coverage of adult children to age 26
  • Coverage of preventative care recommended by a variety of federal or quasi-federal agencies
  • Obligation to furnish summaries of benefits and coverage
  • Limitation on waiting periods (maximum 90 days)
  • Healthcare claims and appeals (including independent review of final appeals)
  • Nondiscrimination
  • Prohibition on retroactive coverage rescissions