H&W: Expatriate Plan Exemptions from the ACA

President Obama has signed legislation intended to clarify the application of the ACA to “expatriate health plans”.

The legislation – which applies to both insured and self-insured plans – exempts expatriate plans from most of the health care market reform requirements of the ACA.  While employer shared responsibility requirements continue to apply, such plans will be deemed to be minimum essential coverage for purposes of the individual mandate and employer shared responsibility although the reporting requirements related those requirements (Section 6055 and 6056) continue to apply.

In addition, the various fees applicable to insurers and health plans under the ACA do not apply; the only exception is for the so-called Cadillac tax which continues to apply.

The legislation applies to plans:

• where substantially all the covered employees are “qualified expatriates”;
• which do not consist primarily of excepted benefits;
• which cover inpatient hospital services, outpatient facility services, physician services and emergency services;
• which the plan sponsor reasonably believes meets the 60% minimum value requirements of the ACA;
• which provide coverage for depends to age 26 (if it offers dependent coverage); and
• which meet certain requirements of HIPAA including preexisting conditions, special enrollment, nondiscrimination Michelle’s law, mental health parity, newborn coverage, women’s health and cancer rights, and GINA.

Qualified expatriates are employees:

• whose skills and expertise caused the employer to temporarily transfer or assign them to the U.S., who are reasonably determined to require access to health insurance in multiple countries, and to whom the employer periodically offers other multinational benefits (such as tax equalization, compensation for cross-border moving expenses or compensation to permit the expatriate to return to their home country; or
• working outside the U.S. for at least 180 days in a consecutive 12-month period that overlaps with the plan year.

It also includes members of groups formed to travel internationally to do nonprofit work.