United States: Final Regs On ACA Implementation

Last Updated: January 26 2016
Article by Ron M. Present, CALA, CNHA, LNHA, FACHCA

This past November, the IRS, Department of Labor and Department of Health and Human Services jointly issued final regulations covering a variety of topics related to the implementation of the Affordable Care Act (ACA). Effective for plan years beginning on or after January 1, 2017, these assorted nuggets incorporate agency guidance into a mixture of proposed and interim final regs dating back to 2010. Here are some highlights.

Grandfathered plans

The final regulations maintain the rule that grandfathered status is determined separately as to each "benefit package" under a group health plan. They also add new clarifying examples and adopt existing antiabuse rules that curtail attempts to retain grandfathered status through
indirect plan changes.

Considerable effort is also devoted to describing changes that would cause a plan to lose grandfathered status. The regs address, for instance, decreases in employer contribution rates and changes in co-payments for limited categories of services. Highlighting the continuing relevance of these issues, the agencies estimate that more than 40 million participants and beneficiaries are covered by grandfathered group health plans.

Pre-existing condition exclusions

The final regulations adopt previous guidance on pre-existing condition exclusions. Yet they also clarify that these rules don't prohibit plans or insurers from excluding all benefits for a condition if they do so regardless of when the condition arose relative to the effective coverage date. Nevertheless, the agencies note that other rules and laws — such as the essential health benefit (EHB) requirements — may preclude such exclusions.

Lifetime and annual limits

Group health plans (including self-insured plans) that aren't required to cover EHBs are nonetheless barred from imposing annual or lifetime dollar limits on the EHBs that they do offer. Under the regulations, these plans may define an EHB by reference to:

  • Any of the 51 benchmark plans identified by the states or the District of Columbia, or
  • One of the three largest Federal Employees Health Benefits Program plans.

The final regs address some, but not all, existing guidance for Health Reimbursement Arrangements and other account-based plans that are permitted only if "integrated" with a group health plan that complies with the ACA — including its prohibition on lifetime and annual dollar limits. Specifically, the regulations offer further clarifications and new guidance.

For instance, the regs explain that employers with fewer than 20 employees may be unable to meet the integration test for Medicare Part B and Part D premium reimbursement arrangements (PRAs) provided in previous guidance. The reason: Some insurers won't allow offers of coverage to employees who are eligible for Medicare.

The final regulations allow such PRAs to be integrated with Medicare if employees not offered other group health plan coverage would be eligible for that coverage except for their eligibility for Medicare. And the regs further clarify that a forfeiture of amounts or waiver of reimbursements under an HRA will comply with the integration requirements even if amounts may be reinstated on a future date or upon death (or the earlier of the two dates).

During periods when the HRA is considered forfeited or waived, the individual (for example, a retiree) is treated as not covered by the HRA. This may allow him or her to qualify for a premium tax credit for obtaining coverage from a Health Insurance Marketplace.


Although they don't break new ground, the final regulations remind employers that a rescission (that is, retroactive cancellation or discontinuation of coverage) is considered an adverse benefit determination subject to internal and external appeals procedures. Thus, coverage must remain effective until an internal appeal is completed.

In addition, the regs finalize previous guidance providing that the prohibition on rescissions isn't violated if a plan retroactively terminates coverage because of a failure to pay required contributions. This includes COBRA premiums.

Dependent coverage

Regarding the age 26 mandate, the final regulations clarify that adult children under age 26 must be offered coverage even if they don't live in a particular service area. This requirement, however, doesn't affect the extent to which plans and insurers are required to cover out-of-network services for adult children. Examples illustrate the requirement that coverage of children under age 26 can't vary based on age.

Claims and appeals

The regulations finalize "without substantial change" extensive rules on claims and appeal processes issued in interim and amended interim final regulations, incorporating a long list of clarifying technical guidance. Under the full and fair review rules, a plan that relies on new or additional evidence or a new rationale in making a benefit determination must automatically provide the evidence or rationale to the claimant and give the claimant a reasonable opportunity to respond.

Additionally, the final regulations extend the transitional period for using state "NAIC-similar" external review processes through 2017. (The NAIC acronym refers to the National Association of Insurance Commissioners.) Plans and insurers in a state without an NAIC-compliant external review process, as well as self-insured plans, must follow a process established through previous guidance and finalized in these regulations.

Also, the temporary rule applying the external review process to claims that involve medical judgment and rescissions has been made permanent. Two new items, however, have been added to the list of what's considered a medical judgment.

Patient protections

New clarifications allow health plans to require participants and beneficiaries to select in-network providers within specified geographic limits when designating a primary care provider. In addition, they clarify when and how "balance billing" is permitted for out-of-network emergency care. (Balance billing is billing patients for the excess of the providers' billed charges over benefits covered by the plan and other patient payments, such as co-payments or co-insurance.) Last, the final regs provide that emergency care doesn't have to be sought within a specific timeframe (for instance, within 24 hours of onset).

Breadth and depth

As you can see, these final regulations add both breadth and depth to the wealth of existing information on the ACA's compliance requirements. Fortunately, they largely incorporate previously issued guidance and, as mentioned, aren't effective until 2017.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions