In a wide-ranging set of frequently asked questions (FAQs) and other guidance, the U.S. Departments of Labor, Treasury, and Health and Human Services have addressed a number of issues pertaining to the Affordable Care Act (ACA). They include issues pertaining to COBRA and the Children’s Health Insurance Program Reauthorization Act (CHIPRA), annual cost-sharing limits, preventive care, health flexible spending arrangements (health FSAs), and summaries of benefits and coverage.


To better coordinate the coverage and subsidies available through the Health Insurance Marketplace (often referred to as the health insurance exchanges) with the continuation of health coverage available through COBRA and the premium assistance available under CHIPRA, the three agencies have issued an FAQ. In addition, the Department of Labor has issued proposed regulations and new model notices under COBRA (affecting the general COBRA notice as well as the election notice) and CHIPRA. This guidance aims to provide individuals with more information about their options for health coverage and the attendant costs. The government has also announced a special enrollment period, lasting until July 1, 2014, for current COBRA participants to sign up for Marketplace coverage.

Cost-Sharing Limits

The ACA limits the out-of-pocket expenses that a participant in a non-grandfathered health plan may incur in a year. The FAQs address how plans may, if they choose, count certain costs as an out-of-pocket expense for these purposes. These costs include balance billing (for amounts above the usual and customary charge) by an out-of-network provider and the cost of a brand-name prescription drug when a medically appropriate generic drug is available.

Preventive Care

The FAQs include a safe harbor for the coverage that a non-grandfathered plan must provide without cost-sharing for tobacco prevention products and services.

Health FSAs

The FAQs provide that health FSA carry-forwards will not affect a health FSA's exception from ACA requirements.

Summaries of Benefits and Coverage

The FAQs provide that certain basic forms and safe harbors applicable to the uniform summaries of benefits and coverage required under the ACA will continue in effect.

As the federal health care reform effort gained steam, Ballard Spahr attorneys established the Health Care Reform Initiative to monitor and analyze legislative developments. With federal health care reform now a reality, our attorneys are assisting health care entities and employers in understanding the relevant changes and planning for the future. They also have launched the Health Care Reform Dashboard, an online resource center for news and analysis on developments under the ACA.

If you have questions about this alert, please contact Jean C. Hemphill at 215.864.8539 or, Brian M. Pinheiro at 215.864.8511 or, Diane A. Thompson at 424.204.4334 or, or Edward I. Leeds at 215.864.8419 or

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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