The U.S. Department of Health and Human Services has issued final regulations and a set of frequently asked questions and answers establishing standards for the provision of essential health benefits in the individual and small group insurance markets, both inside and outside of an Exchange. In large part, the final rules adopt standards set forth in the proposed regulations issued late last year, with some clarifications and additions. The final rules provide guidance on a number of important topics, including:

  • Standards for determining the actuarial value of coverage for plans seeking to qualify as Exchange plans
  • Other Exchange accreditation requirements
  • The availability of the minimum value calculator and safe harbor checklists for public use (as well as comment)

The calculator and checklists are designed to allow plan sponsors to determine whether their plans provide adequate coverage under the pay-or-play rules. The final rules provide that these calculations may, with certain adjustments, take into account an employer’s contributions to a Health Savings Account or Health Reimbursement Account that are limited to the payment of cost-sharing obligations.

The explanation accompanying the final rules previews certain distinctions that more formal guidance will likely address regarding cost-sharing limits. These comments clarify that the deductible limits of $2,000 (single) and $4,000 (family) apply only to small group market plans and not plans in the large insurance market or self-funded plans. By contrast, the annual out-of-pocket maximum (set at the applicable high deductible plan limit) applies to all group health plans, other than grandfathered plans. To ease implementation, the FAQs provide a transitional rule for the out-of-pocket requirement that will apply only to the first plan year beginning on or after January 1, 2014.

As the federal health care reform effort gained steam, Ballard Spahr attorneys established the Health Care Reform Initiative to monitor and analyze legislative developments. With federal health care reform now a reality, our attorneys are assisting health care entities and employers in understanding the relevant changes and planning for the future. They also have launched the Health Care Reform Dashboard, an online resource center for news and analysis on developments under the Affordable Care Act.

If you have questions about the Affordable Care Act’s impact on individual and small group markets or any other implications of the law, contact Jean C. Hemphill at 215.864.8539 or