Health and Welfare Benefit Plan Regulation: ERISA, ACA, HIPAA, and COBRA
The Overlay Structure
Health and welfare plans sit under ERISA plus three statutory overlays: the Affordable Care Act (market reforms, mandates, reporting), HIPAA (portability, nondiscrimination on health status, privacy), and COBRA (continuation coverage). Candidates must be able to identify which overlay governs a given issue.
ACA Market Reforms
Key requirements include the prohibition on preexisting condition exclusions, the ban on annual and lifetime dollar limits on essential health benefits, preventive services without cost sharing, dependent coverage to age 26, the 90-day waiting period limit, and the employer shared responsibility rules under 4980H. Grandfathered status preserves some flexibility but imposes strict anti-abuse rules.
HIPAA and COBRA Essentials
HIPAA portability covers creditable coverage, special enrollment rights, and the prohibition on discriminating based on health status or genetic information. COBRA requires continuation coverage for qualifying events, with notice obligations running both ways: the employer notifies the plan within 30 days, the plan notifies the qualified beneficiary within 14 days, and the beneficiary elects within 60 days.
Common Traps
- Mixing COBRA election (60 days) with premium payment grace periods (30 days for initial payment).
- Applying ACA reforms to excepted benefits such as stand-alone dental or vision.
- Forgetting that HIPAA privacy applies to the plan, while portability applies to group health coverage.
- Assuming small employers are subject to all ACA employer mandates; the 4980H rules generally apply at 50 full-time equivalents.
Rule of Thumb
For any welfare question, first name the statute, then the specific obligation, then the party responsible for the notice or action.