Gray, Gray & Gray
More Coverage: IRS Adds Hospital and Physician Services to Health Plan Requirements
 
Companies that offer employer-sponsored health care benefits must now be sure the plan includes substantial coverage of inpatient hospital care and physician services in order to meet "minimum value" requirements.
 
Under the Affordable Care Act, employer health plans must provide a minimum of 60 percent coverage of the total allowed cost of benefits. But the IRS is concerned that some plans may not include coverage for services used by employees with significant health problems, including hospitalization and certain physician care services. This lack of coverage may discourage some employees from enrolling in the employer-sponsored plan, instead pushing them toward an individual health insurance exchange plan.
 
However, individuals who choose a health exchange plan while still eligible for an employer-sponsored plan will not be able to claim a premium tax credit. The IRS's new requirement that employer health plans include coverage for hospitalization and physician services is aimed at correcting this situation.
 
The new rule would apply to plan years beginning after Nov. 3, 2014. Under a transition rule, the new definition of minimum value will not apply before the end of a plan year beginning no later than March 1, 2015. Employers are urged to review their sponsored health plans to make sure coverage levels are adequate to meet the new requirements.
 
Compliance with the multiple aspects of the Affordable Care Act can be complex. For additional information, please contact Gray, Gray & Gray at (781) 407-0300.

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