LegiStorm

Summary:

Federal health insurance requirements generally apply to health plans sold in the private health insurance market in the United States (i.e., individual coverage, small- and large-group coverage, and self-insured plans). However, not all private health coverage arrangements comply with these requirements. This includes exempted health coverage arrangements and noncompliant health coverage arrangements, as termed for purposes of this report. This report identifies and describes arrangements in these two categories. It is intended to help congressional policymakers better understand the scope of such arrangements available to individuals in the United States and to provide information about the limits of the application of federal health insurance requirements. The arrangements described in this report can be divided into two categories: Exempted Health Coverage Arrangements: Those that meet a federal definition of health insurance but are exempt from compliance with some or all applicable federal health insurance requirements. Such arrangements include the following: Group health plans covering fewer than two current employees, including retiree-only plans, are exempt from all federal health insurance requirements. Health plans in their provision of excepted benefits (e.g., auto liability insurance, limited-scope dental and vision benefits, and specific disease coverage) are exempt from all federal health insurance requirements. Short-term, limited-duration insurance (i.e., coverage generally sold in the individual market that must have a specified expiration date that is less than 12 months after the original effective date of the contract and that cannot be renewed or extended for longer than 36 months) is exempt from complying with all federal health insurance requirements. Student health insurance coverage (i.e., individual health insurance coverage that meets specified conditions and that may be provided only to students enrolled in an institution of higher education and their dependents) is exempt from complying with some federal health insurance requirements if such coverage is fully insured and is exempt from all federal health insurance requirements if the student health plan is self-insured. Self-insured, nonfederal governmental plans (e.g., group health plans sponsored by states, counties, school districts, and municipalities) may elect to exempt the plan from some federal requirements. Grandfathered plans (i.e., group health plans or health insurance coverage in which at least one individual was enrolled as of enactment of the Patient Protection and Affordable Care Act [ACA; P.L. 111-148, as amended] and which have continued to meet specified conditions) are exempt from some federal requirements. Transitional plans (i.e., individual and small-group market plans that meet certain requirements and are in states that have continuously opted to exempt them, per federal guidance) are exempt from some federal requirements. Noncompliant Health Coverage Arrangements: Those that the federal government has not explicitly exempted from compliance with federal health insurance requirements and that do not necessarily comply with those requirements. Such arrangements include the following: Health care sharing ministries (i.e., faith-based organizations that share resources for medical needs among their members) do not currently and have not historically complied with federal health insurance requirements. Certain types of farm bureau coverage (i.e., health coverage offered by a farm bureau in the three states with a law that specifies that such coverage is not considered insurance and is not subject to the state's insurance laws) do not comply with federal health insurance requirements. The report includes a brief description of each arrangement, its status with respect to complying with federal health insurance requirements, and the history of its status. The report also includes information about whether and how the arrangements are subject to state regulatory authority. Where available, estimates of enrollment in an arrangement are provided.