What is a “point solution” and why is compliance challenging?

What is a point solution?

“Point Solutions” are offered by third-party vendors in the employee benefits marketplace and include a range of benefit enhancements and care-focused interventions focused on specific diseases, illnesses, or conditions.

Examples of Point solutions

• Virtual physical therapy
• reproduction & Fertility
• Nutrition Support
• Virtual mental helath
• Enhanced EAP
• Pharmacy supplement
• Complex care navigation

Point Solutions have become increasingly popular among the traditional benefit options offered by employer plan sponsors because they are intentionally designed to fill gaps in the employee benefits landscape. Look for targeted interventions and treatments for conditions such as reproduction, fertility and family planning, virtual care and navigation of care, chronic disease management, and more.

Point Solution related compliance assuredness is a demanding endeavor, requiring expert level analysis and evaluation aptitude, oftentimes challenging even the most experienced HR professional. Namely, this is because employer plan sponsors must navigate the scope-intensive and complex (and oftentimes overlapping) requirements of laws such as the ACA, ERISA, HIPAA, MHPAEA, COBRA, and the like.

Assessing Compliance for Point Solution Benefits

Question 1: Does the Point Solution Provide Medical Care?

• Licensed Medical Professional providing a diagnosis, treatment, or prescriptions see here.
• If the solution provides medical care → Legal Mandates are Applicable.

Question 2: Is the Point Solution an Integrated Benefit?

• An Integrated Benefit must satisfy either the “Minimum Value Not Required” or the “Minimum Value Required” test (see here).
• An Integrated Benefit Plan satisfies the legal mandates by virtue of the underlying GHP’s compliance.

Question 3: Is the Point Solution an Excepted Benefit?

• An Excepted Benefit must satisfy four requirements:
  • No Significant Medical Benefits
  • No Coordination with GHP
  • No Participant Premium Required
  • No Participant Cost Sharing (see here).
• An Excepted Benefit Plan is exempt from the legal mandates (note that HIPAA Privacy & Security requirements still apply).

Question 4: Is the Point Solution Available to HDHP Enrollees?

• If Point Solution enrollment is available to HDHP/HSA enrollees, the Point Solution may not offer medical care unless the solution is integrated or excepted.
• If a Point Solution offers medical care and is not integrated or excepted, the solution must comply with the legal mandates.

Question 5: Is Point Solution Participation Available on a Tax-Qualified Basis?

• If the Point Solution provides medical care, or if the solution is an excepted or integrated benefit, tax-qualification principles likely apply to the solution (see here).
• Point Solution benefits are generally tax-qualified if the solution provides medical care, or if the solution is excepted or integrated. In this case, the plan might be tax-qualified.

Legislative & Regulatory Applicability Outcomes for Point Solution Benefits

1. Medical Care Offered but Not an Integrated or Excepted Benefit

• Outcome: The Point Solution is required to comply with the legal mandates.

2. Medical Care Offered and an Excepted Benefit

• Outcome: The Point Solution is not required to comply with the legal mandates.

3. Medical Care Offered and an Integrated Benefit

• Outcome: The Point Solution is not required to comply with the legal mandates.

4. Medical Care is Not Offered

• Outcome: The Point Solution is not required to comply with the legal mandates.