Obama administration publishes proposed rule on excepted benefits

WASHINGTON — The U.S. Departments of Labor, Health and Human Services, and Treasury are seeking public comment on proposed rules that would amend the definition of excepted benefits to include certain limited wraparound coverage.

The proposed rules would allow group health plan sponsors, in limited circumstances, to offer wraparound coverage to employees who are purchasing individual health insurance in the private market, including through the Health Insurance Marketplace. The rule proposes two pilot programs for wraparound coverage. One pilot would allow wraparound benefits only for Multi-State Plans in the Health Insurance Marketplace and another would allow wraparound benefits for part-time workers who could otherwise qualify for a flexible savings arrangement who enroll in individual market plan.

The proposed rules would give employees who otherwise may not be able to get generous employer-based benefits access to high level benefits. It responds to suggestions made on a proposed rule last December from a wide range of stakeholders, including business groups supportive of the idea. The proposed rule would give businesses, including small businesses, new flexibility to meet the unique needs of their workforces.

A notice of proposed rulemaking will be published in the Dec. 23 edition of the Federal Register and can also be viewed online here.