Administration expands health law exemptions

The Obama Administration on Tuesday proposed new regulations that add to the list of benefits not subject to reforms under the president’s healthcare law.

A draft rule issued jointly by the departments of Health and Human Services, Labor and Treasury is the latest in a series of tweaks to the Affordable Care Act announced just days before major parts of the law are to take effect.

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The regulations, published in Tuesday's Federal Register, amend the 1996 Health Insurance Portability and Accountability Act (HIPAA), which laid out a category of “excepted benefits.” These include workers compensation or disability coverage, accidental death insurance, auto insurance and other benefits that are related to health but don’t amount to comprehensive health coverage.

Excepted benefits are exempt from the market reforms imposed by ObamaCare, though they don’t satisfy the law’s requirement that individuals obtain coverage, also known as the individual mandate.

"This proposal would give employers and workers more options for their healthcare coverage while staying true to the consumer protections put in place by the Affordable Care Act," said Phyllis C. Borzi, Labor Department's assistant secretary of Labor for employee benefits security.

The administration is expanding the list of excepted benefits to include employee assistance programs (EAP) that are typically free to workers and include short-term substance abuse or mental health counseling, referral services, as well as financial counseling and legal services.

EAPs would be considered excepted if they are free to employees and don’t “provide significant benefits in the nature of medical care or treatment,” the agencies said.

Self-insured vision and dental policies and certain supplemental “wraparound” coverage would also be considered excepted.

The rule is designed to allow individuals to take advantage of the benefits without risking their eligibility for a premium tax credit for enrolling in qualified health plans through the law’s insurance exchanges.

The action responds to concerns raised by both employers and employees during the administration’s development of the law.

"This is another example of federal agencies listening to public concerns and responding with solutions," Borzi said.