Health Care Reform

Excepted Benefits

Excepted benefits are benefit products that are designed to supplement comprehensive medical coverage. Dental, vision and other miscellaneous health benefits are examples of excepted benefits. Starting with HIPAA in 1996 and continuing with the ACA, Congress has specifically enacted health care laws that avoid imposing unnecessary requirements on excepted benefits.

This means that if stand-alone dental coverage is purchased on the Exchange, it is exempt from many provisions in the ACA, but if the coverage is purchased as an integrated piece of a major medical plan, it is not exempt and would be subject to insurance market reforms.

For group health plans to be considered an excepted benefit, the stand-alone dental plan must be a separate policy, certificate, or contract of insurance from the medical plan, or not be an integral part of the medical plan, and employees must pay a minimal premium and have an opt-out for the dental benefit. Self-funded stand-alone dental plans were not widely used in 1996, and so the HIPAA law is unclear as to whether an Administrative Services Only (ASO) contract for a stand-alone dental plan also meets the "separate insurance" or "not an integral part" tests to be an excepted benefit.

Delta Dental has sought guidance from the HHS, the Department of Labor (DOL) and Internal Revenue Service (IRS) on the unclear portions of this policy and will provide updates as they become available.