The Affordable Care Act includes a prohibition on group health plans setting lifetime dollar limits on essential health benefits. ERISA contains some exceptions for certain plans with fewer than two active employees. The Ninth Circuit Court of Appeals recently affirmed that the ACA did not supersede ERISA’s rule exempting retiree-only plans from some group health plan requirements, including the prohibition against lifetime dollar limits. Therefore, the retiree-only plan was permitted to have a lifetime cap on benefits. Plan sponsors of retiree-only health plans should carefully review their plan structure to confirm that the plans are indeed retiree-only plans and therefore permitted to use ERISA’s exceptions.
King v. Blue Cross and Blue Shield of Ill., 2017 WL 3928339 (9th Cir. 2017)