Under the Affordable Care Act (ACA), group health plans are prohibited from establishing any annual dollar limit on the amount of benefits for any individual. Group health plans must also provide certain preventive care services without imposing any cost sharing requirements for those services. These requirements apply to all employee welfare benefit plans that provide medical care to employees and their dependents directly or through insurance, reimbursement or otherwise, unless they are “excepted benefits.”
Limited-scope dental and vision benefits are group health plans. However, under the old rules, they could qualify as excepted benefits if they were provided under a policy, certificate, or contract of insurance that was separate from and not otherwise an integral part of an employer’s group health plan, provided participants were required to pay an additional premium or contribution for their limited-scope vision or dental benefits.
In September 2014, final regulations were issued that changed the way that limited-scope vision or dental benefits could qualify as excepted benefits. Under the new rules, the requirement that participants pay an additional premium or contribution for limited-scope vision or dental benefits was eliminated. In addition, limited-scope vision or dental benefits do not have to be offered in connection with a separate offer of major medical or “primary” group health coverage. Finally, limited-scope vision or dental benefits will qualify as excepted benefit if participants can decline this limited benefit coverage or if the claims for these benefits are administered under a contract separate from claims administration for any other benefit plans.
Since these rules relax the requirements for establishing that limited-scope vision and dental benefits are excepted benefits, employers will be able to offer these benefits without the administrative costs and burdens associated with the prior rules.