Wait...more types of benefits would have to comply with the ACA?

Understanding the Impact of Proposed Rules on Fixed Indemnity Plans in Employee Benefits

In a recent update from the Departments, proposed rules were issued that specifically target fixed Indemnity plans in the realm of employee benefits. These rules have significant implications for the types of arrangements commonly seen in the industry, particularly those involving fixed payments upon the occurrence of medical treatments or services.

Fixed Indemnity Plans and Other Benefit Arrangements

Within the employee benefits industry, many types of arrangements exist, including fixed indemnity plans that pay a set amount per occurrence, such as worksite products covering cancer, critical illness, and accident expenses. While these plans are rare, we do see them occasionally. Additionally, there are gap insurance plans designed to cover what major medical plans may not. Under the newly proposed regulations, a distinction is made between fixed Indemnity plans and other types of benefits.

Implications for Acceptability under ACA Rules

The proposed rules specify that benefits not falling under the category of fixed Indemnity plans may not be considered accepted benefits, thus subjecting them to the rules of the Affordable Care Act (ACA) and healthcare reform. This could lead to significant changes in how certain plans are regulated.

Deadline for Comments and Implementation Timeline

Stakeholders have until September 11, 2023, to provide comments on the proposed rules and potentially influence their outcome. If the rules are finalized as proposed, policies issued before the effective date would need to be reevaluated for compliance with the new regulations, particularly for policy years starting on or after January 1, 2027.

Stay Informed and Engage in the Discussion

The landscape of employee benefits is evolving, and it is essential to stay informed about changes that may impact many types of benefit arrangements. By tracking proposed rules and actively participating in the commenting process, stakeholders can better anticipate and prepare for potential shifts in compliance requirements.