When it comes to healthcare under the Affordable Care Act, many points of coverage can often be an afterthought. QHPs, or “qualified health plans,” are required to fulfill ten “essential benefits” under the ACA’s mandate. Among those ten is pediatric dental care. However, the QHP need not itself provide pediatric dental care. Instead, a plan does not lose “QHP” status if a stand-alone dental plan offering pediatric dental care is also offered.
Notably,while applicable large employers must offer at least 95% of their full-time employees minimum essential coverage through their employer sponsored plans, dental plans for the employees or their children are not required. As a result, employees will often purchase supplemental dental plans in addition to the employer sponsored minimum essential coverage.
In a release from Washington, it was announced that this past Summer that the IRS and Department of Treasury proposed regulations regarding the determination of a taxpayer’s premium tax credit, including a change to address the absence of consideration of a stand-alone dental plan allocable to pediatric dental benefits. See IRS Bulletin 2016-30.
The proposed regulations explain:
Because qualified health plans that do not offer pediatric dental benefits tend to be cheaper than qualified health plans that cover all ten essential health benefits, the second lowest-cost silver plan (and therefore the premium tax credit) for taxpayers purchasing coverage through a Marketplace in which stand-alone dental plans are offered is likely to not account for the cost of obtaining pediatric dental coverage.
Should the proposed regulations be adopted, the effective date would be in 2019. Further, the proposed regulations explain:
Consistent with this interpretation, the proposed regulations provide that for taxable years beginning after December 31, 2018, if an Exchange offers one or more silver-level qualified health plans that do not cover pediatric dental benefits, the applicable benchmark plan is determined by ranking
(1) the premiums for the silver-level qualified health plans that include pediatric dental benefits offered by the Exchange and
(2) the aggregate of the premiums for the silver-level qualified health plans offered by the Exchange that do not include pediatric dental benefits plus the portion of the premium allocable to pediatric dental benefits for stand-alone dental plans offered by the Exchange.
In constructing this ranking, the premium for the lowest-cost silver plan that does not include pediatric dental benefits is added to the lowest-cost portion of the premium for a stand-alone dental plan that is allocable to pediatric dental benefits, and similarly, the premium for the second lowest-cost silver plan that does not include pediatric dental benefits is added to the second-lowest-cost portion of the premium for a stand-alone dental plan that is allocable to pediatric dental benefits. The second lowest-cost amount from this combined ranking is the taxpayer’s applicable benchmark plan premium.
In other words, under the proposed regulations, the premium tax credit will take into account a stand-alone dental plan allocable to pediatric dental benefits, bringing the ACA one step forward in providing well rounded health care for adults and children.
