Filed Under:Health Insurance, Individual Health

Expat plans win PPACA reprieve

International employers will get several more years to comply with the new health rules. (AP photo/Lefteris Pitarakis)
International employers will get several more years to comply with the new health rules. (AP photo/Lefteris Pitarakis)

The U.S. Labor Department and other federal departments will be giving the sponsors of expatriate health plans extra time to comply with the Patient Protection and Affordable Care Act of 2010 (PPACA).

The Labor Department, the U.S. Department of Health and Human Services (HHS) and the U.S. Treasury Department have decided to free insured group expat plans from having to comply with major PPACA provisions during plan years that end on or before Dec. 31, 2015.

The Employee Benefits Security Administration (EBSA), an arm of the Labor Department, has described the temporary  transitional relief the departments are offering in a brief response to a frequently asked question (FAQ)

The relief applies to the provisions in Subtitle A and Subtitle C PPACA Title I.

Subtitle A deals with group market rules, such as annual benefits limits and the rules governing rescissions.

Subtitle C relates to underwriting restrictions, coverage mandates and rate review requirements.

The Labor Department and other departs recognize that expat plans may find it impossible, or nearly impossible, to comply with all relevant PPACA rules, at least in the near future, EBSA officials said in the FAQ answer.

Officials have noted, for example, that an expat plan may have no way to provide some of the preventive services now included in the PPACApreventive services coverage mandate.

"Further, expatriate issuers may face challenges and delays in communicating with enrollees living abroad, and, due to the complex nature of these plans, standardized benefits disclosures can be difficult for issuers to produce," EBSA officials said. "Expatriate health plans may require additional regulatory approvals from foreign governments, and, in some circumstances, it is possible that domestic and foreign law requirements conflict."

Federal regulators want to learn more about those challenges before requiring expat plans to comply with the PPACA market and product rules provisions, officials said.

For purposes of expat PPACA relief, an expat plan is "an insured group health plan with respect to which enrollment is limited to primary insureds who reside outside of their home country for at least six months of the plan year and any covered dependents, and its associated group health insurance coverage."

To be eligible for the transitional relief, an expat plan must comply with the HHS, Labor Department and Internal Revenue Code rules that were in effect before PPACA came along, officials said.

Although expat plans will not have to comply with the new PPACA market and coverage rules, the Internal Revenue Service (IRS) will treat expat coverage as "minimum essential coverage" when individuals are using it to avoid having to pay the new PPACA tax on the uninsured, officials said.

Comments on the challenges expat plans may face when trying to comply with PPACA are due May 8. 

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