QUESTION: We recall that the Affordable Care Act (ACA) requires insured group health plans to satisfy nondiscrimination rules similar to those that apply to self-insured plans under Code § 105(h) (the eligibility and benefit tests). What is the status of those rules? Are employers that sponsor insured plans required to comply with them, and if so, when?

ANSWER: Under the ACA, insured group health plans generally must satisfy the nondiscrimination rules of Code § 105(h)(2), including “rules similar to” those in Code § 105(h) regarding nondiscriminatory eligibility, nondiscriminatory benefits, and controlled groups. The Code § 105(h) rules pre-date the ACA, prohibit certain discrimination in favor of highly compensated individuals, and apply only to self-insured health plans. The ACA applied similar requirements to insured plans, other than those that provide only excepted benefits or qualify for grandfathered status.

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