Rulemaking would allow employers to offer part timers ancillary benefits to supplement individual plans

The federal government has issued proposed rules apparently intended to help put health benefits offered to low wage, part time employees more on a par with those offered full time employees in terms of coverage and affordability. The proposed rulemaking recognizes that part time employees may find their premium share for group coverage offered full time workers unaffordable and will thus turn to subsidized individual coverage sold in the state health benefit exchange marketplace in order to meet the Patient Protection and Affordable Care Act mandate to have health coverage.

The proposed rules would allow employers to offer ancillary, non-group health benefits to part time employees (those expected to work on average of 30 hours a week or less) and their dependents. The ancillary benefits would supplement or “wrap” individual health plans but could not cover out of pocket cost sharing or work in a coordinated manner with individual health plans. Examples include expanded in-network medical clinics or providers; benefits for long-term, nursing home, home and community-based care or any combination thereof; coverage for specific diseases or illnesses and hospital indemnity or other fixed indemnity plans. These are “excepted benefits” that don’t fall within the definition of group health plans under the Employee Retirement Income Security Act of 1974.

The proposed rules would limit the annual amount of the wraparound ancillary benefit coverage to the maximum for flexible spending accounts (FSAs) — $2,500 for 2014. In addition, the cost of the coverage cannot exceed 15 percent of the cost of coverage for an employer’s primary health plan offered to employees eligible for the ancillary benefit wrap coverage.

Comment on the proposed rules is due by January 22, 2015.


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email or call 530-295-1473. 

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1 Comment

  1. Elizabeth Ley

    This is great news. A welcomed and needed addition. However what about those who are hired as temporary workers(leased) less than a year in length. The ranks of these unspoken of group of employees is growing ever day. Not recognized by the ACA, this group is denied even a deduction on their individual return as the ability to itemized deduction for an “employee” for medical expenses is raised even hirer. What of them? Who speaks for them?

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