30. Section 147.170 is added to read as follows:
(a) In general. With respect to coverage under an expatriate health plan, the requirements of (including any amendment made by) the Patient Protection and Affordable Care Act and of title I and subtitle B of title II of the Health Care and Education and Reconciliation Act of 2010, and implementing rules and regulations do not apply to—
(1) An expatriate health plan (as defined in paragraph (c) of this section),
(2) An employer, solely in its capacity as plan sponsor of an expatriate health plan, and
(3) An expatriate health insurance issuer (as defined in paragraph (b) of this section) with respect to coverage under an expatriate health plan.
(b) Definition of expatriate health insurance issuer —(1) In general. Expatriate health insurance issuer means a health insurance issuer, within the meaning of § 144.103 of this subchapter, that issues expatriate health plans and that in the course of its normal business operations—
(i) Maintains network provider agreements that provide for direct claims payments, with health care providers in eight or more countries;
(ii) Maintains call centers in three or more countries, and accepts calls from customers in eight or more languages;
(iii) Processed at least $1 million in claims in foreign currency equivalents during the preceding calendar year, determined using the Treasury Department's currency exchange rate in effect on the last day of the preceding calendar year;
(iv) Makes global evacuation/repatriation coverage available;
(v) Maintains legal and compliance resources in three or more countries; and
(vi) Has licenses or other authority to sell insurance in more than two countries, including in the United States.
(2) Additional rules. For purposes of meeting the requirements of this paragraph (b), two or more entities, including one entity that is the expatriate health insurance issuer, that are members of the expatriate health insurance issuer's controlled group (as determined under 26 CFR 57.2(c)) are treated as one expatriate health insurance issuer. Alternatively, the requirements of this paragraph (b) may be satisfied through contracts between an expatriate health insurance issuer and third parties.
(c) Definition of expatriate health plan. Expatriate health plan means a plan that satisfies the requirements of paragraphs (c)(1) through (3) of this section.
(1) Substantially all qualified expatriates requirement. Substantially all primary enrollees in the expatriate health plan must be qualified expatriates. For purposes of this paragraph (c)(1), the primary enrollee is the individual covered by the plan or policy whose eligibility for coverage is not due to that individual's status as the spouse, dependent, or other beneficiary of another covered individual. Notwithstanding the foregoing, an individual is not a primary enrollee if the individual is not a national of the United States and the individual resides in his or her country of citizenship. A plan satisfies the requirement of this paragraph (c)(1) for a plan or policy year only if, on the first day of the plan or policy year, less than 5 percent of the primary enrollees (or less than 5 primary enrollees if greater) are not qualified expatriates.
(2) Substantially all benefits not excepted benefits requirement. Substantially all of the benefits provided under the plan or coverage must be benefits that are not excepted benefits described in § 146.145(b) and § 148.220 of this subchapter.
(3) Additional requirements. To qualify as an expatriate health plan, the plan or coverage must also meet the following requirements:
(i) The plan or coverage provides coverage for inpatient hospital services, outpatient facility services, physician services, and emergency services (comparable to emergency services coverage that was described in and offered under section 8903(1) of title 5, United States Code for plan year 2009) in the following locations—
(A) In the case of individuals described in paragraph (f)(1) of this section, in the United States and in the country or countries from which the individual was transferred or assigned, and such other country or countries the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and Secretary of Labor, may designate;
(B) In the case of individuals described in paragraph (f)(2) of this section, in the country or countries in which the individual is present in connection with his employment, and such other country or countries the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and Secretary of Labor, may designate; or
(C) In the case of individuals described in paragraph (f)(3) of this section, in the country or countries the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and Secretary of Labor, may designate.
(ii) The plan sponsor reasonably believes that benefits provided by the plan or coverage satisfy the minimum value requirements of section 36B(c)(2)(C)(ii) of the Internal Revenue Code. For this purpose, a plan sponsor is permitted to rely on the reasonable representations of the issuer or administrator regarding whether benefits offered by the issuer or group health plan satisfy the minimum value requirements unless the plan sponsor knows or has reason to know that the benefits fail to satisfy the minimum value requirements.
(iii) In the case of a plan or coverage that provides dependent coverage of children, such coverage must be available until an individual attains age 26, unless an individual is the child of a child receiving dependent coverage.
(iv) The plan or coverage is:
(A) In the case of individuals described in paragraphs (f)(1) or (f)(2) of this section, a group health plan (including health insurance coverage offered in connection with a group health plan), issued by an expatriate health insurance issuer or administered by an expatriate health plan administrator. A group health plan will not fail to be an expatriate health plan merely because any portion of the coverage is provided through a self-insured arrangement.
(B) In the case of individuals described in paragraph (f)(3) of this section, health insurance coverage issued by an expatriate health insurance issuer.
(v) The plan or coverage offers reimbursements for items or services in local currency in eight or more countries.
(vi) The plan or coverage satisfies the provisions of title XXVII of the Public Health Service Act (42 U.S.C. 300gg et seq. ) and regulations thereunder as in effect on March 22, 2010. For this purpose, the plan or coverage is not required to comply with section 2701(e) (relating to certification of creditable coverage) and underlying regulations. However, to the extent the plan or coverage imposes a preexisting condition exclusion, the plan or coverage must ensure that individuals with prior creditable coverage who enroll in the plan or coverage have an opportunity to demonstrate that they have creditable coverage offsetting the preexisting condition exclusion.
(v) Example. The rule of paragraph (c)(1) of this section is illustrated by the following example:
Example.
(i) Facts. Business has health plan X for 250 U.S. citizens working outside of the United States in Country Y. All of the U.S. citizens working in Country Y satisfy the requirements to be qualified expatriates under § 147.170(f)(2). In addition to the 250 U.S. citizens, Business employs 100 citizens of Country Y who reside in Country Y and do not satisfy the requirements to be qualified expatriates under § 147.170(f). Health plan X covers both the U.S. citizens and citizens of Country Y.
(ii) Conclusion. Health plan X satisfies the requirement of § 147.170(c)(1) that substantially all primary enrollees of an expatriate health plan be qualified expatriates because 100 percent of the primary enrollees are qualified expatriates. The 100 citizens of Country Y who reside in Country Y are not treated as primary enrollees for purposes of the substantially all requirement of § 147.170(c)(1) because they are not nationals of the United States and they reside in the country of their citizenship.
(d) Definition of expatriate health plan administrator —(1) In general. Expatriate health plan administrator means an administrator that in the course of its regular business operations—
(i) Maintains network provider agreements that provide for direct claims payments, with health care providers in eight or more countries,
(ii) Maintains call centers, in three or more countries, and accepts calls from customers in eight or more languages,
(iii) Processed at least $1 million in claims in foreign currency equivalents during the preceding calendar year, determined using the Treasury Department's currency exchange rate in effect on the last day of the preceding calendar year,
(iv) Makes global evacuation/repatriation coverage available,
(v) Maintains legal and compliance resources in three or more countries, and
(vi) Has licenses or other authority to sell insurance in more than two countries, including in the United States.
(2) Additional rules. For purposes of meeting the requirements of this paragraph (d), two or more entities, including one entity that is the expatriate health plan administrator, that are members of the expatriate health plan administrator's controlled group (as determined under 26 CFR 57.2(c)) are treated as one expatriate health plan administrator. Alternatively, the requirements of this paragraph (d) may be satisfied through contracts between an expatriate health plan administrator and third parties.
(e) Definition of group health plan. Group health plan, for purposes of this section, means a group health plan as defined in § 146.145(a) of this subchapter.
(f) Definition of qualified expatriate. Qualified expatriate, for purposes of this section, means an individual who is described in paragraph (f)(1), (2), or (3) of this section.
(1) Individuals transferred or assigned by their employer to work in the United States. An individual is described in this paragraph (f)(1) only if such individual has the skills, qualifications, job duties, or expertise that has caused the individual's employer to transfer or assign the individual to the United States for a specific and temporary purpose or assignment that is tied to the individual's employment with such employer. This paragraph (f)(1) applies only to an individual who the plan sponsor has reasonably determined requires access to health coverage and other related services and support in multiple countries, and is offered other multinational benefits on a periodic basis (such as tax equalization, compensation for cross-border moving expenses, or compensation to enable the individual to return to the individual's home country), and does not apply to any individual who is a national of the United States. For purposes of this paragraph (f)(1), an individual who is not expected to travel outside the United States at least one time per year during the coverage period would not reasonably require access to health coverage and other related services and support in multiple countries. Furthermore, the offer of a one-time de minimis benefit would not meet the standard for the offer of other multinational benefits on a periodic basis.
(2) Individuals working outside the United States. An individual is described in this paragraph (f)(2) only if the individual is a national of the United States who is working outside the United States for at least 180 days in a consecutive 12-month period that overlaps with a single plan year, or across two consecutive plan years.
(3) Individuals within a group of similarly situated individuals. (i) An individual is described in this paragraph (f)(3) only if:
(A) The individual is a member of a group of similarly situated individuals that is formed for the purpose of traveling or relocating internationally in service of one or more of the purposes listed in section 501(c)(3) or (4) of the Internal Revenue Code, or similarly situated organizations or groups. For example, a group of students that is formed for purposes of traveling and studying abroad for a 6-month period is described in this paragraph (f)(3);
(B) In the case of a group organized to travel or relocate outside the United States, the individual is expected to travel or reside outside the United States for at least 180 days in a consecutive 12-month period that overlaps with the policy year (or in the case of a policy year that is less than 12 months, at least half the policy year);
(C) In the case of a group organized to travel or relocate within the United States, the individual is expected to travel or reside in the United States for not more than 12 months;
(D) The individual is not traveling or relocating internationally in connection with an employment-related purpose; and
(E) The group meets the test for having associational ties under section 2791(d)(3)(B) through (F) of the Public Health Service Act (42 U.S.C. 300gg-91(d)(3)(B) through (F)).
(ii) This paragraph (f)(3) does not apply to a group that is formed primarily for the sale or purchase of health insurance coverage.
(iii) If a group of similarly situated individuals satisfies the requirements of this paragraph (f)(3), the Secretary, in consultation with the Secretary of the Treasury and the Secretary of Labor, has determined that the group requires access to health coverage and other related services and support in multiple countries.
(g) Definition of United States. Solely for purposes of this section, United States means the 50 States, the District of Columbia, and Puerto Rico.
(h) National of the United States. For purposes of this section, national of the United States, when referring to an individual, has the meaning used in the Immigration and Nationality Act (8 U.S.C. 1101 et seq. ) and includes U.S. citizens and non-citizen nationals. Thus, for example, an individual born in American Samoa is a national of the United States at birth.
(i) Applicability date. The provisions of this section apply for plan years (in the individual market, policy years) beginning on or after January 1, 2017.