A Health Care Reform Update from Delta Dental of Iowa

The content provided is for informational purposes only, and is not intended as legal or tax advice or opinion relative to any specific issue. Additional changes may be made to the Federal or State regulations described in this message. You should consider consulting with your lawyer or tax advisor before acting based on this information. This newsletter is up-to-date as of April 8, 2013.

In this issue:
Did You Know… »
Pediatric Dental Essential Health Benefit »
ACA Impact on Stand-Alone Dental »
ACA Summary of Benefit Coverage (SBC) »
Quick Question: What does "medically necessary" orthodontia mean? »

Did You Know…

Ninety-seven percent of all dental benefits are offered and priced under a separate policy from medical insurance.1

Starting with the Health Insurance Portability and Accountability Act (HIPAA) in 1996 and continuing with the Affordable Care Act (ACA), Congress has specifically enacted health care laws that avoid imposing unnecessary requirements on excepted benefits. Stand-alone dental plans, like Delta Dental of Iowa, are considered an excepted benefit under the ACA. Excepted benefits are typically limited in their scope of coverage and/or designed to supplement comprehensive medical coverage, such as dental, vision, disability and other miscellaneous health benefits.

As an excepted benefit, if stand-alone dental coverage is purchased on the insurance exchange, it is exempt from many provisions within the ACA. However, if dental coverage is purchased as an integral part of a comprehensive medical plan, it is not considered an excepted benefit and would be subject to insurance market reforms under the ACA.

Dental plans sold by Delta Dental generally meet the excepted benefits exemption. If you have questions regarding whether your dental plan is considered an excepted benefit, please consult with your broker or attorney. Read the "ACA Impact on Stand-Alone Dental" to see how certain ACA requirements will affect Delta Dental.

1 NADP/DDPA Joint Dental Benefits Report: Enrollment, June 2009

Pediatric Dental Essential Health Benefit

As part of the Essential Health Benefit (EHB) package in the ACA, there is a requirement for a pediatric dental benefit in individual and small group plans. The State of Iowa has determined that the pediatric dental EHB will be based on the Federal Employee Dental and Vision Insurance Plan (FEDVIP).

Below are the provisions of the pediatric dental EHB that will be offered in Iowa:

  • Children up to the age of 19 will have access to oral health services under the ACA.
  • There will be an orthodontia benefit, but the State of Iowa will define the scope of medically necessary orthodontia in the pediatric dental EHB. The final definition of medically necessary orthodontia will have an impact to the costs of pediatric dental EHB plans. Read more about medically necessary orthodontia here.
  • No annual or lifetime benefit maximums will be applied to the pediatric dental EHB.
  • The pediatric dental EHB is only required of individual and small group plans. Effective January 1, 2014, the State of Iowa will define small group plans as 1 to 50 employees. In 2016, the ACA will define small group plans as 1 to 100 employees.

ACA Impact on Stand-Alone Dental

Not all of the provisions under the ACA are required of stand-alone dental plans like Delta Dental. The table below outlines ACA requirements and the impact to stand-alone dental.

ACA Requirement Impact To Stand-Alone Dental
Individual coverage Requires pediatric dental EHB services be covered up to age 19.
Public exchange offering The pediatric dental EHB may be offered on and off the state exchange.
Premium subsidies Subsidies will be applied to Qualified Health Plans (QHP) for medical first and if any amount is "leftover," this amount would be applied to pediatric dental services.
Cost sharing limits
(or out of pocket maximums)
For the pediatric dental EHB, a cost sharing limit or out-of-pocket maximum of $700 for a plan with one child or $1,400 for a plan with two or more children will be considered reasonable.1 If services are performed by an out-of-network provider, the out-of-pocket expense will not be applied to the out-of-pocket maximum.
Age 26 adult child coverage The extension of coverage to age 26 is not required of stand-alone dental but some carriers (including Delta Dental) have implemented or allowed plan administrators to include adult child coverage.
No annual limits of coverage The pediatric dental EHB services cannot have annual or lifetime maximums. This will not apply to adult dental.
Essential Health Benefits (EHB) Pediatric dental coverage is included in the 10 categories in the EHB package. For a full list of the EHBs, go to http://www.healthcare.gov/glossary/e/essential.html.
Small business premium tax credit Dental insurance expenses qualify for the tax credit. For more details, please see the IRS website: http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions.
High/low plans Stand-alone pediatric dental plans will provide high/low plans with an actuarial value requirement of 85 (High)/ 70 (Low) +/-2%. Metal levels will continue to be utilized for medical plans that embed the pediatric dental EHB.
1 Center for Consumer Information and Insurance Oversight (CCIIO), Centers for Medicare and Medicaid Services, Affordable Exchanges Guidance — Letter to Issuers on Federally-Facilitated and State Partnership Exchanges, April 5, 2013.

ACA Summary of Benefit Coverage (SBC)

One of the requirements of the Affordable Care Act (ACA) is that medical carriers change their Summary of Benefit Coverage (SBC) document to a common format. The ACA SBC document was designed and is intended for major medical plans and does not include comprehensive dental and vision information.

Because Delta Dental is a stand-alone dental plan and offers an excepted benefit, the law provides an exemption to the ACA SBC requirement. At this time, Delta Dental will continue to provide plan administrators with a Summary of Covered Benefits document in the current format at renewal if there are plan changes or in welcome packets for new groups.

Quick Question: What does "medically necessary" orthodontia mean?

Answer: Medically necessary orthodontia will be part of the pediatric dental EHB. Recent rules from the U.S. Department of Health and Human Services1 clarify that the orthodontia benefit must be medically necessary.

Medically necessary orthodontia can have a limited definition meaning the patient's oral health interferes with speech or eating to very narrow scope such as severe handicapping malocclusions, craniofacial anomalies, or cleft lip or palate.

This definition of medically necessary orthodontia will have an impact to the cost of the pediatric dental EHB. The State of Iowa will define the medically necessary orthodontia benefit.

1 HHS, Patient Protection and Affordable Care Act; Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation, February 20, 2013.

Do you have an ACA dental question? Send your question to your Delta Dental representative or email hcricomed@deltadentalia.com and we may use it in a future Dental Perspective newsletter.

All content is Copyright © 2013 Delta Dental of Iowa.
9000 Northpark Drive, Johnston, IA 50131

Visit us online at www.deltadentalia.com.