§9831 General Exceptions

Summary

The chapter’s rules do not apply to some plans. Government-run plans are exempt. So are group health plans that begin a plan year with fewer than 2 current employee participants. The rules also don’t apply to certain “excepted” benefits (in four categories) when those benefits are sold or kept separate from the main plan. For one category there are extra limits: the benefits must be under a separate insurance policy, not coordinated with the employer’s other plan, and must pay for an event whether or not the employer’s other plan does. A qualified small employer health reimbursement arrangement (QSEHRA) is not treated as a group health plan if it meets rules. It must be paid only by the employer, not by employee salary reductions, and it pays or reimburses medical care costs after the employee shows proof of coverage. The yearly limits are $4,950 for an individual and $10,000 if family members are covered. The employer must offer the arrangement on the same basic terms to all eligible employees, though permitted benefits can vary by age or by how many family members are covered. Limits are prorated for part-year coverage and are adjusted for inflation for years after 2016. An eligible employer is a small employer that is not a large employer and does not offer any group health plan. Employers must give each eligible employee a written notice at least 90 days before the plan year (or when the employee becomes eligible) stating the employee’s benefit amount, telling the employee to give that number to an exchange when applying for premium help, and warning about possible tax penalties and taxable reimbursements if the employee lacks minimum coverage. Employers may exclude employees who are in short waiting periods (up to 90 days).