New Healthcare reform 2010 - Released June 22, 2010

HHS Releases Final Interim Guidance on Several PPACA Provisions

Would you like more information on Grandfathering? This informational flyer summarizes the interim final regulations published by the government on June 17, 2010. Click here. Don’t forget to visit our Health Care Reform site at www.informedonreform.com

On June 22, 2010, the Departments of Health & Human Services, Labor, and Treasury issued new regulations that better define the following PPACA provisions:

• No Pre-Existing Condition Exclusions for Anyone Under Age 19
• No Arbitrary Rescissions of Insurance Coverage
• No Lifetime Dollar Limits on Coverage
• Restricted Annual Dollar Limits on Coverage
• Broader Doctor Choice
• No Higher Out-of-Network Cost-Share for Emergency Department Services

These are labeled as interim final rules (IFRs), which means final rules may differ. As clarification continues to be provided through the federal government’s rule-making process, we’ll share that information with you. Please continue to look out for e-mail Alerts and information on our Health Care Reform website on these important subjects.

All provisions are effective on the first plan anniversary on or after 9/23/2010

No Pre-Existing Condition Exclusions for Anyone Under Age 19
Plans are prohibited from denying coverage to anyone under the age of 19 based on a pre-existing condition. This ban includes both benefit limitations and coverage denials. These policies apply to all individual market and group health insurance plans. The requirement will be extended to all ages starting in 2014. Grandfathered individual plans are exempt from this requirement.
No Arbitrary Rescissions of Insurance Coverage
Insurers and plans will be prohibited from rescinding coverage – for individuals or groups of people – except in cases involving fraud or an intentional misrepresentation of material facts.
No Lifetime Dollar Limits on Coverage
Insurers and employers are prohibited from imposing lifetime dollar limits in all health plans and insurance policies issued or renewed on or after September 23, 2010.
Restricted Annual Dollar Limits on Coverage
The rules will phase out the use of annual dollar limits on “essential health benefits” over the next three years until 2014 when the Affordable Care Act bans them for most plans. The limits can only apply to essential health benefits; however, the rule does not provide any further detail on the definition of “essential health benefits” beyond that provided in the law.

• Plans issued or renewed beginning September 23, 2010, will be allowed to set annual limits no lower than $750,000
• Beginning September 23, 2011, minimum limit will be raised to $1.25 million
• Beginning September 23, 2012, minimum limit will be raised to $2 million
• Beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited

These limits apply to all employer plans and all new individual market plans. It does not apply to grandfathered individual plans.
Waiver Process/Special Consideration:
The IFRs indicate that the Health & Human Services Secretary will design a process by which employers and insurers may apply for a waiver to delay complying with the restricted annual dollar limit rules if compliance would cause a significant loss of coverage or increase in premiums. The IFRs indicate that limited medical plans (such as CIGNA Voluntary) are one example of the type of plan that may apply for a waiver. We await details from the Secretary about the waiver application process.
The waiver for special circumstances reflects the Administration’s desire to work with the industry to minimize disruption during the transition period from now to 2014, and is a direct result of CIGNA's efforts to work with the Administration on the implementation of the Patient Protection and Affordable Care Act, and of the letters that many Limited Medical clients wrote to Congress and HHS.
Broader Doctor Choice
Health plan members are free to designate any available participating primary care physician (PCP) as their provider (e.g., pediatricians for children). Also, plans cannot require a referral for OB-GYN care.
These policies apply to all individual market and group health insurance plans except those that are grandfathered.
No Higher Out-of-Network Cost-Share for Emergency Department Services
Health plans and insurers will not be able to charge higher cost-sharing (copays or coinsurance) or require prior authorization for emergency services that are obtained out of a plan’s network. This policy applies to all individual market and group health plans except those that are grandfathered.

Mental Health Parity has an immediate impact

The Mental Health Parity and Addiction Equity Act (MHP) is creating a significant and immediate impact on employer groups with more than 50 total employees. With this legislation, group health plans that provide mental health and/or substance use disorder benefits cannot apply "financial requirements" or "treatment limits" that are more restrictive than the "predominant" financial requirement or treatment limit that applies to "substantially all" medical/surgical benefits. We are working to ensure the health plans we offer fully comply with the provisions contained in MHP.

The Early Retiree Reinsurance Program helps employers provide coverage to retirees

The recently passed Patient Protection and Affordable Care Act includes an early retiree reinsurance program available to groups that provide medical coverage to early retirees and their spouses, surviving spouses and dependents. This temporary program will provide $5 billion to help employers to continue to provide coverage to retirees ages 55 to 64.
The program provides for reimbursement of an early retiree's (and covered dependents') health care claims in an amount equal to 80% of the costs between $15,000 and $90,000. The employer is then expected to use the reimbursement to help lower health care costs (such as premium contributions, copays and deductibles) for participating enrollees.
This program is expected to be effective from June 1, 2010, to January 1, 2014. After January 1, 2014, retirees will have additional coverage options through the health insurance exchanges and federal subsidies for coverage.
Both self-insured and fully insured employer groups that offer early retiree coverage can apply, including plans sponsored by private entities, state and local governments, nonprofits, religious entities, unions, and other employers. To participate in the program, employers must first submit applications to the Department of Health and Human Services, which is expected to make the application available in the coming weeks. We'll share a link to the application when it becomes available.