Do HIPAA Portability and ACA Rules Apply to Our Dental Benefits?
Question: Do the portability rules of the Health Insurance Portability and Accountability Act (HIPAA), and the various requirements of the Affordable Care Act (ACA), apply to our company’s dental benefits?
Answer: If your dental plan qualifies as a HIPAA “excepted benefit,” it’s exempt from that law’s portability requirements (such as the need to provide special enrollment periods). And, as we’ll explain, it should be exempt from many of the ACA’s mandates.
Whether your company’s dental benefits are an excepted benefit depends on how those benefits are set up. First, they must be “limited in scope.” Second, the benefits need to either:
- Be provided under a separate policy, certificate or contract of insurance, or
- Otherwise not be an “integral part” of a group health plan.
“Limited in scope” means that substantially all of the benefits must be for treatment of the mouth (including any organ or structure within the mouth). This definition describes benefits that are typically included in most independent dental coverage. In addition to applying to routine care of the teeth, this definition generally includes procedures associated with oral cancer and injuries that result in broken, displaced or lost teeth.
With respect to the first prong, the “separate policy, certificate, or contract of insurance” test is satisfied if you offer limited-scope dental benefits under a separate insurance policy that covers only dental benefits. The dental benefits may be offered as a separate plan or as part of your insured or self-insured major medical plan — so long as they’re provided under a separate insurance policy. By its terms, this prong of the test can be satisfied only if your dental benefits are fully insured.
Alternatively, under the second prong, limited-scope dental benefits that aren’t offered under a separate insurance policy may still qualify for the exception — whether they’re insured or self-insured — as long as they’re “not an integral part” of a nonexcepted group health plan (for example, your major medical plan).
Limited-scope dental benefits will be considered to be “not an integral part” of a group health plan (whether the benefits are provided through the same plan, a separate plan, or as the only plan offered to participants) if:
- Participants may decline the dental coverage, or
- Claims for dental benefits are administered under a contract separate from claims administration for any other benefits.
These requirements apply to plan years beginning on or after January 1, 2015 (and, under a transition rule, could have been applied in 2014). Previously, the “not an integral part” test required both an opportunity for participants to opt out of the dental coverage and an additional employee contribution for those who opted in.
HIPAA excepted-benefit status is important for purposes of the ACA because excepted benefits generally are exempt from the ACA’s mandates, such as waiting-period limits, required first-dollar coverage of preventive services, dependent coverage for children through age 26, and prohibitions on pre-existing condition exclusions and annual and lifetime dollar limits.
Do you have questions regarding HIPAA rules?