Smart Benefits: When Dental and Vision Don’t Count…Under PPAC, That Is

Monday, October 20, 2014

Amy Gallagher, GoLocalWorcester Business/Health Expert

The IRS, DOL and HHS recently issued final regulations that clarify when vision and dental benefits are “excepted benefits,” meaning they are exempt from many health care reform requirements, such as W-2 reporting and annual dollar limits.

Previously, under HIPPP regulations, vision and dental benefits were excepted if they were limited in scope (i.e. for treatment of the eyes or mouth, respectively) and either 1. Provided under a separate policy, certification or insurance contract or 2. Not otherwise an integral part of a group health plan.

In 2013, the IRS, DOL and HHS issued draft regulations that proposed to eliminate the requirement that participants pay an additional premium or contribution for limited-scope vision or dental benefits to qualify as benefits that are not an integral part of the plan.

Under the final rules, which apply to group health plans and group health insurance issuers for plan years beginning January 1, 2015, these benefits are not considered an integral part of a plan if participants have the right to opt out of coverage or if claims are administered under a separate contract for other benefits administration. To qualify as “non-integral,” employees don’t have to pay a separate premium or contribution for the excepted coverage.

These final rules will make it easier now – especially for self-funded plans – for a stand-alone dental or vision plan to qualify as an excepted benefit.

Amy Gallagher has over 21 years of healthcare industry experience guiding employers and employees. As Vice President at Cornerstone Group, she advises large employers on all aspects of healthcare reform, benefit solutions, cost-containment strategies and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, and is often quoted by national publications on the subject matter. Locally, Amy is a member of SHRM-RI, the Rhode Island Business Group on Health, and the Rhode Island Business Healthcare Advisory Council.