As a refresher, "point solution" programs are specific services that add value to an employer's major medical plan or benefits program. Point solution programs are generally provided through third-party vendors. They often target benefit plan enhancements that range from specific condition management to digital solutions and apps to overall benefit program simplification. Some common examples of services provided through point solution programs include fertility, musculoskeletal, developmental disability, and mental and behavioral health.
Whether ERISA (which governs the Form 5500 requirement) or the ACA (which includes the PCOR fee requirement) applies to any particular point solution program depends on whether the program provides medical care. "Medical care" is broadly defined to include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease or for the purpose of affecting any structure or function of the body. Although each point solution program should be analyzed on a case-by-case basis, it essentially boils down to whether the program provides individualized diagnosis, treatment, or prescription services for an employee (or an employee's family member, if applicable). If it does, then the program is typically a group health plan and is therefore subject to ERISA, the ACA, and other laws. For further information, please ask your broker or consultant for a copy of the NFP publication Point Solution Programs: A Guide for Employers, and review the NFP Observations article, Point Well Taken: Determining Whether Your Point Solution Program Is a Group Health Plan, in this edition of Compliance Corner.
Point solution programs that provide medical care are subject to ERISA, including the Form 5500 and Summary Annual Report (SAR) reporting requirements. Point solution programs that are integrated or wrapped together with the major medical plan can comply with the Form 5500 and SAR requirements by adding the program benefits to the medical plan Form 5500. Non-integrated and/or non-wrapped plans must file a separate Form 5500 (and they may have to do so without a Schedule A since many vendors take the position that their products are not "insurance products" subject to Schedule A reporting; see the Form 5500 Instructions for more information about filing Form 5500 without Schedule A). For further information about Form 5500 and SAR requirements, please ask your broker or consultant for a copy of the NFP publications Form 5500: A Guide for Employers and Summary Annual Report: A Guide for Employers.
The PCOR fee is levied on health plans, so point solution programs that provide significant benefits in the nature of medical care or treatment are subject to these requirements. Employers with fully insured plans have the fee paid by the carrier, but self-insured plans must file and pay their own PCOR fee. Point solutions are typically considered self-insured plans and are subject to the PCOR fee. This is especially relevant for point solution programs that are structured as a reimbursement that is outside of a self-insured medical plan or one that pairs with a fully insured medical plan. The PCOR fee count for point solution programs follows the same rule as for HRAs: the employer counts one covered life per participant, exclusive of spouses, domestic partners, or dependents. Employers should carefully review their point solution program to determine if a PCOR filing is due and, if so, follow the HRA filing rules to ensure the proper headcount is reported. For further information regarding the PCOR fee and filing, please ask your broker or consultant for a copy of the NFP publication ACA: A Quick Reference Guide to the PCOR Fee.