The Departments of Labor, Treasury, and Health and Human Services have released additional guidance material on the implementation of the market reform provisions of the Affordable Care Act. Prior sets of frequently asked questions (FAQs) were issued on October 8 and September 20, 2010. The latest guidance answers questions about exemptions for group health plans with less than two current employees.

The guidance explains that HIPAA’s statutory exemptions for group health plans with “less than two participants who are current employees” also apply to the Affordable Care Act’s group market reform requirements. Therefore, group health plans that do not cover at least two current employees (such as plans in which only retirees participate) are exempt from the Affordable Care Act's market reform requirements.

The agencies have not yet issued guidance on whether an employer that sponsors health plans for retirees and individuals on long-term disability can continue to treat those plans as exempt under HIPAA, but plan to do so in 2011. Until then, the guidance explains that the agencies will consider these types of plans as qualifying for HIPAA’s and the Affordable Care Act’s exemptions from group market reforms for plans with less than two participants who are current employees. Additionally, a plan may adopt any or all of the HIPAA and Affordable Care Act market reform requirements without prejudice to its exemption. Any future guidance that is more restrictive will be applied prospectively to plan years that begin after the date of issuance.

This entry was written by Ilyse Schuman.

Photo credit: porcorex