On Aug. 19, 2011, the Center for Consumer Information and Insurance Oversight (CCIIO) introduced supplemental regulatory guidance regarding the annual limit waiver application process. Specifically, the guidance clarifies that sponsors of stand-alone HRAs will not be required to seek waivers from PPACA rules that restrict annual dollar limits on the coverage of essential benefits.
As background, PPACA Section 2711 generally prohibits group health plans and issuers from offering coverage that imposes lifetime or annual limits on the dollar value of “essential health benefits,” but PPACA allows restricted annual limits with respect to essential health benefits for plan years beginning before Jan. 1, 2014. The waiver program is an application process permitted under PPACA whereby the secretary of HHS is permitted to temporarily waive the restricted annual limits for limited benefit or mini-med plans if compliance would result in a significant decrease in access to benefits or a significant increase in premiums. For plan years beginning on or after Jan. 1, 2014, all group health plans may not impose annual dollar limits on essential health benefits.
Prior regulations provided that HRAs that were integrated with group health coverage were exempt as long as the other group health coverage complied with the restricted annual limit requirements, meaning a waiver would not be needed. In those prior regulations, the CCIIO also requested comments on the process that should be imposed with respect to stand-alone HRAs.
The new guidance recognizes that “all HRAs set limits on the amount that can be spent” and that the limits would always be less than the applicable restricted annual limit amounts, which would ultimately result in a “significant decrease in access to HRA benefits.” Therefore, the guidance “exempts as a class all HRAs that are subject to the requirements of Section 2711 and that were in effect prior to Sept. 23, 2010, from having to apply individually for an annual limit waiver for plan years beginning on or after Sept. 23, 2010, but before Jan. 1, 2014.” This means that HRAs established prior to Sept. 23, 2010, which were otherwise subject to the restricted annual limit requirements, such as stand-alone HRAs, have been granted a waiver from the requirements without the need to actually request a waiver.
Significantly, while stand-alone HRAs are now exempt from the restricted annual limit waiver process, they still must comply with the record retention and annual notice requirements contained in the “Technical Instructions for the Waiver Extension and Waiver Application Process,” available below.
Finally, if an employer that maintains an HRA also maintains other coverage, whether or not that coverage is integrated with the HRA, that other coverage must meet the annual limit requirements or obtain a waiver. All waiver and waiver extension applications must be received by Sept. 22, 2011, as set forth in the previous guidance issued on June 17, 2011.
Technical Instructions for the Waiver Extension and Waiver Application Process
CCIIO Supplemental Guidance
Additional Information