New Requirements for Fixed Indemnity and Short-Term Limited Duration Plans 

The Departments of Labor, Treasury, and Health and Human Services (the Departments) have issued final rules related to Fixed Indemnity and Short-Term Limited Duration Plans. These final rules amend the definition of short-term, limited-duration insurance, which is excluded from the definition of individual health insurance coverage under the Public Health Service Act. The rules also set forth final rules for the requirements for hospital indemnity or other fixed indemnity insurance to be considered an excepted benefit in the group and individual health insurance markets. 

To ensure that consumers purchasing fixed indemnity excepted benefits coverage are aware of the type of coverage they are purchasing, including the limitations of the coverage, and that it is not mistakenly purchased as an alternative or replacement for comprehensive coverage, the Departments now also require that a consumer notice be displayed when offering fixed indemnity excepted benefits coverage in the group market.  

The final notice includes model notice language for Fixed Indemnity and Short-Term Limited Duration Plans. Employers and plan sponsors will want to review their plan offerings to determine if this requirement impacts them and to ensure they are providing the appropriate notices as part of the enrollment process. 

Review the guidance in the Federal Register for more information.

Are you ready for the Medicare Part D Notice changes? 

Significant changes are coming to Medicare Part D, which may impact whether group health plans are determined to be Creditable Coverage.  As the Part D benefits become richer, employer benefits will need to be higher to remain creditable. While some plans will remain creditable based on their benefit offering, others may not meet the new requirement to be considered creditable.  

Employers should work with their plan consultants to determine if the plans will remain creditable under the new rules, such that the Part D Notices will not need to change or plan to shift to a notice of Non-Creditable Coverage if required. Additionally, employers with Employer Group Waiver Plan (EGWP) plans should evaluate any impact to their plan’s administration and Medicare reimbursement levels. 

Check out the Part D Redesign Program Instructions for a detailed review of the Part D changes, or review the summary fact sheet for an overview.