Proposed Safe Harbor Designs
Under proposed IRS regulations, the following are possible safe harbors for plan designs which may be made available:
Safe Harbor Design 1
$3,500 integrated medical and drug deductible
80% plan cost sharing
$6,000 maximum out-of-pocket limit for employee cost sharing
Safe Harbor Design 2
$4,500 integrated medical and drug deductible
70% plan cost sharing
$6,400 maximum out-of-pocket limit
$500 employer contribution to a Health Savings Account (HSA)
Safe Harbor Design 3
$3,500 medical deductible
$0 drug deductible
60% plan medical expense cost sharing
75% plan drug cost sharing
$6,400 maximum out-of- pocket limit drug copays of $10/$20/$50 for the first, second, and third prescription drug tiers, with 75% coinsurance for specialty drugs.
Note: These safe harbor designs have not yet been finalized, as they have only been suggested in proposed IRS regulations. The final regulations could impose additional requirements.
The proposed regulations require plans with nonstandard features that cannot determine MV using the MV Calculator or a safe harbor to use the actuarial certification method. The actuary must be a member of the American Academy of Actuaries and must perform the analysis in accordance with generally accepted actuarial principles and methodologies and any additional standards which subsequent guidance requires.
Key Mandates Applicable to All Group Health Plans
Preventive Care Coverage Requirements
Both self-funded health plans and insured group health plans are required to cover certain types of preventive care without any cost sharing such as immunizations, child preventive services, and women’s preventive services. Cost sharing includes copayments, coinsurance charges, and deductibles which are required to provide first-dollar coverage. The interim final regulations on these preventive care requirements establish four categories of preventive care to which these rules apply:
Evidence-based services or items which have an effect rating of A or B in the current recommendations of the United States Preventive Services Task Force (Task Force) with respect to involved individuals
Routine immunizations in children, adolescents, and adults recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention (Advisory Committee) with respect to involved individuals
Infant, child, and adolescent evidence-informed preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration (HRSA)
Women’s preventive care and screenings provided for in comprehensive guidelines supported by HRSA:
Well-woman visits: annually, with additional visits as necessary
Screening for gestational diabetes: between weeks 24-28 of gestation, and at the first prenatal visit for high-risk women
Testing for HPV: every three years beginning at age 30
Counseling for sexually transmitted infections: annually
Counseling and screening for HIV: annually
FDA-approved contraceptive methods, sterilization procedures, and counseling*: annually, subject to certain religious-employer exemptions
Breastfeeding support, supplies and counseling*: with each birth
Screening and counseling for interpersonal and domestic violence*: annually
Cost Sharing Limits
Self-funded and fully-insured health plans must limit out-of-pocket expenses incurred by participants to the limits applicable to high-deductible health plans, which are $6,350 for single coverage, and $12,700 for family coverage (indexed for inflation and subject to change). In addition, fully-insured small group health plans (including such plans offered on the federal/state exchanges) will not be permitted to have annual deductibles exceeding $2,000 for single coverage and $4,000 for any other coverage tier (also indexed).
Prohibition of Lifetime and Annual Limits
The ACA prohibits all self-funded and fully-insured health plans from imposing any lifetime or annual dollar limits on the value of any essential health benefits offered by a plan. The interim final regulations do not specifically address whether non-monetary limits, such as day or visit limits (e.g., annual limits on physical or speech therapy visits) are permissible. Until further guidance is issued, it appears that a non-monetary limit paid at a uniform, customary, and reasonable rate might be acceptable (but not if it is combined with a specific dollar limit).