Glossary Term

Excepted Benefits

Excepted benefits are a class of employer-provided benefits that fall outside primary medical coverage offered in a group health insurance plan and are provided through a separate insurance policy than the group medical plan. Common examples of excepted benefits include dental coverage, accident coverage, vision coverage, disability income plans, travel insurance, hospital indemnity plans, long-term care insurance, and workers compensation insurance.

There are four categories of excepted benefits (as defined by HIPAA) The categories pertain to benefits that are:

  • Not subject to HIPAA requirements for group health insurance given that health benefits are absent or provided as a secondary or supplemental feature (e.g. mortgage insurance, disability income insurance, or workers’ compensation insurance)
  • Limited scope health benefits that are offered independently from group health insurance (e.g. dental insurance, vision insurance, hearing insurance, or long-term care insurance)
  • Medical benefits (e.g. specific disease coverage such as cancer insurance or a hospital indemnity plan) that are not coordinated with a group health insurance plan
  • A supplement to group health insurance (e.g. Medicare supplement insurance)

Excepted benefits that are health-related are exempted from requirements applied to primary medical coverage by HIPAA and the Affordable Care Act because excepted benefits are not comprehensive major medical coverage. However, if a health-related benefit such as dental care is offered within a primary medical insurance plan, it is not an exempt because it is coordinated by the group health insurance plan.

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