Conditions for self-insured dental, vision, or long-term care (LTC), and employee assistance programs (EAPs) to be treated as excepted benefits on or after January 1, 2015 have been set out in final regulations issued by the IRS, DOL, and HHS.
Under the 2004 regulations, self-insured dental, vision, or LTC coverage is an excepted benefit if employees can elect not to receive the coverage and those electing coverage must pay an additional contribution.
The final regulations eliminate the additional contribution requirement and clarify that dental, vision, or LTC benefits can be provided through the same plan as other group health benefits, a separate plan, or as the only plan offered to participants, as long as:
- Participants may decline the coverage
- Benefits claims are administered under a contract separate from claims administration for any other benefits under the plan.
An EAP is an excepted benefit if four conditions are met:
- The EAP does not provide significant benefits in the nature of medical care
- EAP benefits are not coordinated with benefits under another group health plan
- No employee contributions are required as a condition of participation in the EAP
- There is no cost-sharing under the EAP
Failure to meet the excepted benefit requirements will trigger additional requirements under HIPAA, health care reform, and other laws, and could result in noncompliance penalties.
Please note that the information contained in this document is designed to provide authoritative and accurate information, in regard to the subject matter covered. However, it is not provided as legal or tax advice and no representation is made as to the sufficiency for your specific company’s needs. This document should be reviewed by your legal counsel or tax consultant before use.
Additionally, the messages and content within the Pittsburgh Health Care Reform group do not reflect the advisory services of Henderson Brothers, Inc.