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Update: Health Insurance Reforms and “Grandfathered Plans”

Posted on November 17, 2010 | Comments (2)

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By Sara Rosenbaum

Background

The Patient Protection and Affordable Care Act establishes new standards governing health insurance sold in the individual and group health plan markets as well as (in some cases) self-insured group health benefit plans. Some of the new standards begin prior to 2014 and some take effect when mandatory coverage begins in January 2014. Collectively, these reforms are aimed at making private health insurance more accessible, better, and fairer.

Changes Made by the Health Reform Law
P.L. 111- 148, §1251, as modified by P.L. 111-152

New Plans

The health reform law establishes minimum federal standards, preserving states’ ability to require more stringent standards for insured plans. The following changes apply to new plans (i.e., for plans beginning after date of enactment):

  • Lifetime limits: prohibits lifetime coverage limits;[1]
  • Annual limits: restricts the use of annual coverage limits;[2]
  • Rescissions: prohibits rescissions (cancellation) of coverage except in the case of intentional misrepresentation or fraud;[3]
  • Preventive benefits with no cost-sharing: requires coverage of preventive benefits with a rating of “A or B in the current recommendations of the U.S. Preventive Services Task Force” with no cost-sharing;[4]
    • requires coverage of immunizations recommended by the Advisory Committee on Immunization Practices; and
    • requires coverage of “evidence informed” screenings and preventive care” provided for in “comprehensive guidelines supported by the Health Resources and Services Administration (HRSA) and, in the case of women, “additional” preventive care and screenings” identified by HRSA and not described by the U.S. Preventive Services Task Force.[5]
  • Young adults: requires dependent coverage for young adults up to age 26 who lack access to employer-sponsored coverage;[6]
  • Uniform explanations of coverage: requires health plans and insurance issuers to use standard and uniform explanation of coverage requirements and definitions;
    • directs the Secretary of the Department of Health and Human Services (HHS) to develop such standards and definitions for use by group health benefit plans and health insurance issuers in the individual and group markets in their summaries of benefits and coverage explanations;
    • requires that standards and definitions assure that plans and issuers “accurately describe” benefits and coverage under the group health plan or individual insurance coverage;[7] and
    • addresses what is required in standards and definitions in terms of length, font, linguistics and terminology, the accurate description of contents, disclosures of limitations, exclusions, cost-sharing, and other provisions, and plan and issuer contact information. The law also specifies that the information be periodically updated.[8]
  • Plain-language plan information: requires that health insurance issuers and group health plans use plain language in describing insurance and plan information, including claims payment policies and practices, financial disclosures, enrollment and disenrollment data, claims denials and rating practices, cost sharing and payments to out-of-network providers, and other information designated by the Secretary of HHS;[9]
  • Quality reporting: requires group health plans and health insurance issuers to report on the quality of health care in accordance with standards developed by the HHS Secretary in the areas of case management, care coordination, chronic disease management, medication and care compliance, medical homes, hospital readmission reduction, patient safety and medical errors reduction, and wellness and health promotion activities in areas such as smoking cessation, weight management, stress management, physical fitness, nutrition, heart disease prevention, healthy lifestyle support and diabetes prevention;[10]
  • Cost and value accountability: establishes accountability for the cost and value of health insurance through medical loss ratio reporting and rebate requirements; [11]
    • the law requires health insurance issuers offering individual or group health plans to provide an annual report on their expenditures for clinical services and quality improvement costs in relation to their total premium revenues and to pay rebates if their “medical loss ratios” (MLRs) fall below 85% in the large group market and below 80% in the small group and individual markets.[12] MLR reporting also takes into account federal and state taxes and licensing or regulatory fees as well as payments or receipts for risk adjustment, risk corridors and reinsurance.
  • Internal and external appeals: establishes an appeals process that includes both internal and external review procedures that meet uniform criteria;[13]
  • Patient protections: establishes patient protections for plan enrollees such as choice of primary care provider including pediatric providers and direct access without referral to ob-gyn services;[14]
  • Access to emergency care: establishes a prohibition of prior approval or the imposition of higher cost-sharing for out-of-network emergency care;[15]
  • Waiting periods: specifies a 90-day limit on waiting periods before health insurance coverage begins;[16]
  • Pre-existing condition exclusions: prohibits pre-existing condition denials for children under 19[17] and bars the use of pre-existing condition exclusions for all persons after 2014;
  • Discrimination on the basis of salary: prohibits discrimination in coverage based on salary in insured group plans;[18]
  • Premium increase reviews: provides for an annual review of premium increases to identify unjustified rate increases;[19]
  • Transitional reinsurance: provides transitional reinsurance for qualified health plans offered by issuers in the individual and small group markets during the 2014-2016 time period;[20]
  • Risk corridors: establishes a program of risk corridors during the 2014-2016 time period for qualified health plans offered by issuers in the individual and small group markets;
  • Risk adjustment: establishes a state-administered program of risk adjustment for participating health plans with enrollees who “for a year” have “greater than the average actuarial risk” among all group health plans and individual coverage offered in the state;[21]
    • Participation in approved clinical trials: prohibits plans and issuers from denying participation by “qualified individuals” (defined as individuals with cancer or other life-threatening conditions) in approved clinical trials, and from denying or limiting coverage of “routine patient costs” for covered items and services furnished in connection with a trial.[22] Plans may exclude coverage of investigational items, devices or services, may require use of in-network providers when available, and may deny coverage for items and services not used in direct clinical management or that are “clearly inconsistent with “widely accepted and established standards of care for a particular diagnosis.” Referrals to trials must come from a “participating” health care professional who has “concluded that the individual’s participation would be appropriate as a result of the presence of cancer or a life-threatening condition. Individuals must submit medical and scientific evidence of appropriateness. Specifies that an approved clinical trial means a phase I, II, III, or IV trial “that is conducted in relation to the prevention, detection, or treatment of cancer or other life-threatening disease or condition” and that either receives federal funding from the NIH, other agencies within HHS, the Departments of Veterans Affairs, Defense or Energy or is a study conducted under an FDA-approved investigational new drug application. The trial must be subject to the “highest scientific standards” of peer review.
  • Non-discrimination based on health status and wellness programs: bars the use of eligibility criteria by health insurance issuers and group health plans based on health status-related factors including health status, medical condition (including both physical and mental illness), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence), disability, or any other health status related factor determined appropriate by the Secretary; [23]
    • permits wellness programs to tie eligibility for premium discounts, rebates, and rewards to health outcome status, framed as an individual’s ability to satisfy a standard “related to a health status factor.” Health outcomes-linked wellness programs are permissible as long as the total wellness program award does not exceed 30% of the cost of employee-only coverage under the plan or, in the case of participating dependents and spouses, 30% of the cost of such coverage. The Secretaries of Labor, HHS and Treasury may increase the reward up to 50%. Deems permissible certain programs that do not tie incentives to health status as long as they are available to all similarly situated individuals: programs offering fitness center membership discounts; programs that waive cost sharing related to preventive care for health conditions; programs that reward participation without conditioning the reward on health outcomes; smoking cessation programs that do not depend on results; and programs that reward participation in health education seminars; and
    • wellness programs tied to health outcomes must be “reasonably designed to promote health or prevent disease,” meaning that the program “has a reasonable chance of improving the health of, or preventing disease in, participating individuals and it is not overly burdensome, is not a subterfuge for discriminating based on a health status factor, and is not highly suspect in the method chosen to promote health and prevent disease.” Outcomes based programs must give eligible individuals the opportunity to qualify for a reward at least once a year, and the full reward must be made available to all “similarly situated” individuals.
  • Essential benefits: requires coverage of an “essential benefits package” in the case of health insurers offering coverage in the individual or small group market (100 employees or fewer, with a state option (which sunsets in 2016) to define small group as 50 employees or fewer);[24]
  • Cost-sharing: places limits on cost-sharing obligations in the case of individual health insurance coverage and small group plans;[25]
  • Community rating: requires the use of modified community rating by prohibiting discriminatory premium rates, by limiting rate variability factors to individual versus family coverage, rating areas, age (no more than a 3:1 ratio), and tobacco use (no more than a 1.5:1 variation);[26]
  • Guaranteed issue: requires “guaranteed issue” of coverage in both the individual and group plan markets (insurance issuers may continue to use special enrollment periods but must continue to offer coverage for qualifying events as required under current COBRA standards);[27]
  • Guaranteed renewability: requires the “guaranteed renewability” of coverage;[28] and
  • Non-discrimination against providers: prohibits group health plans and health insurance issuers from discriminating with respect to participation against providers acting within the scope of their licensure.
    • specifies that the provision is not intended to require contracts with “any health provider willing to abide by the terms and condition for participation established by the plan or issuer” and by further specifying that plans and issuers may vary “reimbursement rates based on quality and performance measures.”[29]

Grandfathered Plans

The law provides for “grandfathering” certain plans. Specifically, the law contains a section titled “Preservation of the Right to Maintain Existing Coverage” that:

  • specifies that “nothing in this Act (or an amendment made by this Act) shall be construed to require that an individual terminate coverage under a group health plan or health insurance coverage in which such individual was enrolled on the date of enactment”;[30]
  • provides that the reforms in the health insurance and group health plan markets “shall not apply to such plan or coverage, regardless of whether the individual renews the coverage after such date of enactment”;[31]
  • makes an exception from the general exemption for certain insurance reforms that will be applied to “grandfathered health plans”; [32]
    • the prohibition on lifetime dollar limits in both the individual health insurance and group health plan markets;
    • the prohibition against rescissions in both the individual and group health plan markets;
    • the requirement of coverage of dependent children up to age 26 for young adults (for plan years beginning before 2014 adult child coverage under grandfathered group health plans is required only if the child does not have access to an employer plan);
    • the uniform explanation of coverage requirements in both the individual health insurance and group health plan markets;
    • the medical loss ratio reporting and rebate requirements in both the individual insurance coverage and group health plan markets;
    • the prohibition against waiting periods longer than 90 days in both the individual insurance coverage and group health plan markets;
    • the prohibition against coverage denials because of a pre-existing condition (beginning in 2010 for children under 19 in both the group and individual markets, and in 2014 for persons of all ages but applicable only in the group health plan market); and
    • the restrictions on annual limits (in the group health plan market only).
  • a provision allowing family members of individuals enrolled in health insurance coverage or a group health plan to join a plan in which the individual was enrolled on the date of enactment and which is renewed after such date;[33]
  • a provision that allows new employees and their families to join a group health plan that is operating on the date of enactment, without having to apply the group health plan reforms made applicable by the law;[34]
  • a provision protecting collective bargaining agreements from the applicability of the provisions of the Act “until the date on which the last of the collective bargaining agreements relating to the coverage terminates”;[35] and
  • a provision defining the term “grandfathered health plan” as “any group health plan or health insurance coverage to which this section applies.”[36]

In addition, grandfathered plans must comply with applicable requirements under federal law prior to passage of the Affordable Care Act (mental health parity, the Newborns and Mothers’ Health Protection Act, the Women’s Health and Cancer Rights Act, and Michelle’s Law).

At the same time, the exemption from the law for “grandfathered” insurance coverage and group health plans means that a number of reforms made in both the individual health insurance coverage and group health plan markets will not apply to grandfathered plans. Specifically exempted are:

  • coverage of an “essential benefits package” and limits on cost-sharing exposure;
  • coverage of preventive benefits with no cost-sharing;
  • restrictions on annual coverage limits in the individual market;
  • reforms in the internal and external appeals process;
  • protections against health status discrimination including the exemption for wellness programs;
  • coverage of clinical trials;
  • transitional reinsurance and risk corridors;
  • modified community rating;
  • guaranteed issue and renewability;
  • prohibition against discrimination based on salary;
  • the use of plain language in disclosing health plan data;
  • provider non-discrimination rules;
  • patient protections and protections against coverage and cost-sharing restrictions for out-of-network emergency care; and
  • quality of care reporting.

Implementation

Agency

Three federal agencies – the Departments of Health and Human Services, Labor, and Treasury – will be involved in defining grandfathering because the term affects the state-regulated individual and group health plan health insurance markets as well as employers that offer group health plans under ERISA on either a fully-insured or self-insured basis.

Key Dates

The health insurance reforms outlined in the health reform law begin to take effect upon enactment and continue over the 2010-2014 time period, and thus the grandfathering issue will arise at repeated points, as new requirements phase in.

Process

The federal agencies are required to issue regulations for certain reforms, such as coverage of young adults, and can be expected to use a rulemaking approach in defining the scope and extent of the reforms and the meaning of grandfathering.

Agency Actions

On June 14, 2010 the three relevant agencies released an interim final rule, which takes effect on July 12, 2010 (their scheduled Federal Register publication date). The interim final rules provide extensive interpretation of the Act and considerably expand upon the Act’s grandfathering terms. The regulations set a series of standards that affected plans must satisfy if they are to retain their grandfathered status; collectively these standards are aimed at assuring that plans that make what the regulations deem to be significant changes in coverage do not retain their grandfathered status but must come into compliance with all applicable coverage and performance standards applicable to new plans.

The impact of the regulation on grandfathered plans is expected to be significant. The agencies’ estimates suggest that, mid-range, the interim final rule is expected to result in the loss of grandfathering status by 51% of all employer-sponsored group health plans by 2013.[37] The regulations apply to state-regulated health insurance products sold to individual and group health plans and ERISA-governed group health benefit plans and provide numerous illustrative examples to demonstrate when grandfathered status would or would not continue to apply under the terms of the rules.

The regulations:[38]

  • specify that grandfathered status applies to “coverage provided by a group health plan or a group or individual health insurance issuers in which an individual was enrolled as of March 23, 2010, for “as long as it maintains that status under” the rules. Coverage that does not meet the requirements of the rules therefore would cease to be grandfathered and would have to come into compliance with all applicable individual and group standards;[39]
  • specify that a group health plan or group health insurance coverage does not cease to be a grandfathered health plan “merely because” the fact that one or more or even all individuals enrolled on March 23, 2010 cease to be covered, providing that “the plan or group health insurance coverage has continuously covered someone” since that date;[40]
  • specify that the grandfathered status rules apply to “each benefit package made available” under a group health plan or health insurance coverage;[41]
  • specify that (with exceptions for collectively bargained plans) if an employer or employee organization “enters into a new policy, certificate, or contract of insurance after March 23, 2010 [i.e., an existing policy is not renewed] then that policy, certificate, or contract of insurance is not a grandfathered plan with respect to the individuals in the group health plan”;[42]
  • requires that in order to maintain status as a grandfathered health plan, a plan or health insurance coverage must disclose its status by including a statement “in any plan materials provided to a participant or beneficiary (in the individual market, primary subscriber) describing the benefits provided under the plan or health insurance coverage, that the plan or coverage believes it is a grandfathered health plan . . . and must provide contact information for questions or complaints.”[43] (The regulations set out model language that plans can use to meet their disclosure obligations).
  • require that in order to maintain status as a grandfathered plan, a group health plan or group or individual health insurance coverage, “for as long as the plan or . . . coverage takes the position that it is a grandfathered plan” must (i) maintain records documenting the terms of coverage in effect on March 23 2010; and (ii) make such records available for public inspection;[44]
  • specify that with respect to individuals enrolled in a group health plan or health insurance coverage as of March 23, 2010, grandfathered coverage applies to family members who enroll after the date;
  • specify that grandfathered group health plans as well as health insurance issued in connection with a group plan retain their status as grandfathered plans for new employees “whether newly hired or newly enrolled” and their families enrolling in the plan after March 23;[45]
    • creates two exceptions to this rule: first, grandfathered status for the plan will cease in the event of a merger, acquisition, or other business restructuring whose “principal purpose” is “to cover new individuals under a grandfathered plan; and
    • second, grandfathered status will cease if employees are transferred into a group plan or health insurance coverage offered in connection with a group health plan without a “bona fide reason”, and “comparing the terms of the transferee plan with those of the transferor plan in effect on March 23, the transferee plan would result in a loss of grandfathering status were it considered to be an amendment to the transferor plan.[46]
  • specifies the provisions of the law that apply to grandfathered plans;[47]
  • specifies that grandfathered plan must comply with all provisions of the PHS Act, ERISA, and the Internal Revenue Code in effect before passage of the ACA;[48]
  • specifies that in the case of collectively bargained health plans ratified before March 23, 2010, the grandfathered coverage continues “at least until the date on which the last of the collectively bargained agreements relating to the coverage in effect on March 23 terminates”;
  • specifies that in order to maintain grandfathered status, group health plans and health insurance, as well as, in certain cases, individual insurance plans, must avoid certain “situations” that would, if present, trigger a cessation of grandfathered status. Any of the situations described below would “result in the loss of grandfathered status”:[49]
    • (i) the elimination of “all or substantially all benefits to diagnose or treat a particular condition” by a group health plan or health insurance. Specifies that the “elimination of benefits for any necessary element to diagnose or treat a condition is considered the elimination of all or substantially all benefits to diagnose or treat a particular condition”;
    • (ii) as measured by provisions in effect on March 23 2010, “any” increase by a group health plan or health insurance in a “percentage cost sharing” requirement [i.e., coinsurance, which is measured as a percentage of the allowed payment];
    • (iii) “any” increase after March 23, 2010 in “a fixed amount cost sharing requirement other than a copayment” by a group health plan or health insurance [e.g., increasing a deductible] that exceeds the regulations’ permissible threshold of medical inflation plus 15 percentage points;
    • (iv) “any” increase after March 23, 2010 by a group health plan or group health insurance in a fixed amount copayment, determined as of the effective date of the increase, if the “total increase in the copayment measured from March 23, 2010 exceeds the greater of (A) $5.00, increased by medical inflation or (B) medical inflation plus 15 percentage points;
    • (v)(A) a decrease in the employer’s or employee organization’s “contribution rate based on cost of coverage” toward the cost of “any tier of coverage for any class of similarly situated individuals by more than 5 percentage points below [the March 23, 2010] contribution rate.” Defines contribution rate based on cost of coverage as contributions that are expressed as a percentage of the total cost of coverage;[50]
    • (v)(B) a decrease by a group health plan or group health insurance in the “contribution rate based on a formula” toward the cost of any tier of coverage for any class of similarly situated individuals by more than 5 percent below the March 23, 2010 contribution rate. Defines contribution rate based on a formula as contributions made on a formula (such as hours worked or work output);[51]
    • (vi)(A) the addition of an annual limit by a plan or group or individual health insurance coverage that as of March 23 did not impose an overall annual or lifetime limit on the dollar value of benefits;
    • (vi)(B) a decrease by a group health plan or health insurance in coverage by adopting “an overall annual limit at a dollar value that is lower than the dollar value of the [March 23] lifetime limit;”
    • (vi)(C) in the case of a group health plan or group health insurance or an individual insurance policy, a decrease in “the dollar value of any applicable annual limit on coverage that was in effect as of March 23, 2010, regardless of whether the plan or health insurance coverage also imposed an overall lifetime limit on the dollar value of all benefits; and
    • specifies transitional rules for plans and issuers that made changes that were to take effect as of March 23 2010, even though they might not have been in effect as of the date.
  • On September 20th, October 8th, October 12th, and October 29thof 2010, the Department of Labor issued Frequently Asked Questions (FAQs) regarding grandfathered plans. The FAQs, developed by the Departments of Labor, Treasury, and HHS, address questions that arise in interpreting and applying the regulations. They do not resolve the question of how many plans will be grandfathered, but instead assist plan administrators in understanding the impact of the rules:
    • The FAQs address the fact that insurers have pointed out that they do not always know when an employer changes its contribution rates, an event that may determine whether a plan remains grandfathered. The FAQ indicates that the agencies will not treat a change in contribution rate for an insured plan as automatically affecting grandfathering status, as long as (i) the issuer tells employers in advance that changes in contribution rates are to be reported “in a prominent and effective manner” that changes are to be reported; and (ii) requires employers to make a representation regarding their contribution rate on March 23, 2010 (the date of enactment) as well as their contribution as of the renewal date (September 20th);
    • Questions also have arisen as to whether the external review process already in place as of the date of enactment continue to be permitted. The FAQ (September 20th) responds that grandfathered plans can continue to use the external review procedures already in place. The FAQ also points out that insured plans that are not grandfathered can use existing state appeals procedures and further, that self-insured plans that are not grandfathered may qualify for a safe harbor for their existing appeals procedures (September 20th);
    • The FAQs also point out that the grandfathering question goes to each separate benefit package. Thus, even if one benefit package is not grandfathered, other packages sponsored by an employer offering a choice of plans could still qualify for grandfathering status if the regulation’s criteria are satisfied (October 8th);
    • The FAQs point out that the cost sharing test for grandfathering applies to each separate category of services, so that if cost-sharing is raised for primary care but not for other services, grandfathering could be lost (October 8th);
    • The FAQs also state that insurers and plans may rescind coverage for a wide range of fraudulent activities or misrepresentations, not just fraud or misrepresentation related to prior medical history (October 8th);
    • In addition, the FAQs state that where detail is lacking in a preventive service guideline issued by the US Preventive Services Task Force, the Advisory Committee on Immunization Practice, or HRSA, an insurer or plan “can use reasonable medical management techniques (which generally limit or exclude benefits based on medical necessity or medical appropriateness using prior authorization requirements, concurrent review, or similar practices) to determine any coverage limitations under the plan” (October 8th); and
    • The FAQs also state that insurers and health plans will be in compliance with the grandfathering disclosure requirement if a disclosure is made in each summary benefit description regarding the fact that the plan is a grandfathered plan (October 29th).

Key Issues

  • Gauging the impact of the regulations. Given growing evidence of a significant rise in the cost of group health plans and health insurance coverage offered in connection with such plans for the coming calendar year, whether employers and issuers will elect to make the types of changes in their plans and coverage offerings that will trigger the loss of grandfathered status. That is, will plans and issuers raise the employee premium share, cut benefits, and increase cost-sharing sufficiently to trigger the loss of grandfathered status? If so, then reforms that are applicable to new plans prior to 2014 (e.g., preventive benefits without cost sharing) could be available in the short-term, with longer term reforms applicable to group health plans and health insurers on an accelerated basis.
  • Which “situation” might be considered to have the greatest impact? The regulations set forth a series of “situations” any one of which, if applicable, could trigger the loss of grandfathered status. Which situation may have the greatest impact overall? The raise in employees’ premium share? The raise in cost-sharing? The imposition of new annual or lifetime coverage limits? The reduction in condition-related coverage?
  • On November 17, 2010, the three agencies published revisions to their interim final rule that modify the June 10 rule so as to allow a group health plan that changes insurance carriers after March 23, 2010 to enter into a new insurance coverage arrangement without losing its grandfathered status. This change means that group health plans that buy health insurance will be able to retain their grandfathered status to the same extent permitted in the case of self-insured plans that purchase administrative services only and that change third-party administrators after March 23, 2010. At the same time, the rule clarifies that if the new policy includes changes to coverage of the type outlined in the interim final rule, grandfathered status will be lost. As such, the revised ruled clarifies that a mere change in policies is not enough in and of itself to cost a plan grandfathered status.
  • Gauging reaction to the interim final rule. The rule invites comments, and although it is in effect, the rule ultimately could change. What “situations” will stakeholders focus on particularly in their comments?

Recent Agency Action

On June 14, 2010 the three relevant agencies released an interim final rule (described above), which takes effect on July 12, 2010 (their scheduled Federal Register publication date). FAQs were then issued in September and October, 2010.

Authorized Funding Levels

As a regulatory matter, none described.


[1] PPACA §1001 adding PHSA §2711(a)(1)(A).
[2] PPACA §1001 adding PHSA §2711(a)(1)(B); in interpreting the phrase “restricted annual limit” the Secretary of HHS must ensure that “access to needed services is made available with a minimal impact on premiums.” Id.
[3] PPACA §1001 adding PHSA §2712.
[4] PPACA 1001 adding PHSA §2713.
[5] Id. The Secretary must recommend a “minimum interval” [not less than one year] between “the date on which a recommendation” by the USPSTF or ACIP or HRSA guideline is issued and the “plan year” that such recommendation becomes effective. The Secretary may also “develop guidelines to permit a group health plan and a health insurance issuer offering group or individual health insurance coverage to utilize value-based insurance designs.” Id.
[6] PPACA §1001 adding PHSA §2714. The HHS Secretary is required to promulgate regulations to define the dependents covered by this provision.
[7] PPACA 1001 adding PHSA §2715.
[8] PPACA 1001 adding PHSA §2715.
[9] PPACA §1001 adding PHSA §2715 and PHSA §1311(e)(3).
[10] PPACA §1001 adding PHSA §2717.
[11] PPACA §1001 adding PHSA §2718.
[12] PPACA §1001 adding PHSA §2718.
[13] PPACA §1001 adding PHSA §2719.
[14] PPACA §1001 adding PHSA §2719A.
[15] PPACA §1001 adding PHSA §2719A.
[16] PPACA §1201 adding PHSA §2708.
[17] PPACA §1201 adding PHSA §2704.
[18] PPACA §1001 adding PHSA §2716.
[19] PPACA §1003 adding PHSA §2794.
[20] PPACA §1341.
[21] PPACA §1343.
[22] PPACA §1201 adding PHSA §2709.
[23] PPACA §1201 re-codifying previous PHSA provision as PHSA §2705 and revising to include a wellness program exemption.
[24] PPACA §1201 adding PHSA §2707; PPACA §1302.
[25] PPACA §1201 adding PHSA §2707 and PPACA §1302.
[26] PPACA §1201 adding PHSA §2701.
[27] PPACA §1201 adding PHSA §2702.
[28] PPACA §1201 adding PHSA §2703.
[29] PPACA §1201 adding PHSA §2706.
[30] PPACA §1251(a)(1).
[31] PPACA §1251(a)(2).
[32] PPACA §1251(a)(3) and (4).
[33] PPACA §1251(b).
[34] PPACA §1251(c).
[35] PPACA §1251(d).
[36] PPACA §1251(e).
[37] Federal Register Public Display copy of the Interim Final Rule (a link can be found at http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html) p. 54.
[38] All citations here are to the Public Health Service Act rules governing state-regulated individual and group health plans. The interim final rules also contain revisions to the ERISA regulations and regulations governing ERISA plans under the Internal Revenue Code.
[39] 45 C.F. R. §147.140(a)(1)(i).
[40] 45 C.F. R. §147.140(a)(1)(i).
[41] 45 C.F. R. §147.140(a)(1)(i).
[42] 45 C.F.R. §147.140(a)(ii).
[43] 45 C.F.R. §147.140(a)(2).
[44] 45 C.F.R. §147.140(a)(3).
[45] 45 C.F.R. §147.140(b)(1) and (2).
[46] 45 C.F.R. §140.147(b)(2)(i) and (ii).
[47] 45 C.F.R. §140.147(c) – (e).
[48] 45 C.F.R. §140.147(c)(2).
[49] 45 C.F.R. §140.147(g)(i)-(v).
[50] 45 C.F.R. §140.147((g)(3)(iii)(A).
[51] 45 C.F.R. §140.147((g)(3)(iii)(B).

PPACA §1001 adding PHSA §2711(a)(1)(A).
PPACA §1001 adding PHSA §2711(a)(1)(B); in interpreting the phrase “restricted annual limit” the Secretary of HHS must ensure that “access to needed services is made available with a minimal impact on premiums.” Id.
PPACA §1001 adding PHSA §2712.
PPACA 1001 adding PHSA §2713.
Id. The Secretary must recommend a “minimum interval” [not less than one year] between “the date on which a recommendation” by the USPSTF or ACIP or HRSA guideline is issued and the “plan year” that such recommendation becomes effective. The Secretary may also “develop guidelines to permit a group health plan and a health insurance issuer offering group or individual health insurance coverage to utilize value-based insurance designs.” Id.
PPACA §1001 adding PHSA §2714. The HHS Secretary is required to promulgate regulations to define the dependents covered by this provision.
PPACA 1001 adding PHSA §2715.
PPACA 1001 adding PHSA §2715.
PPACA §1001 adding PHSA §2715 and PHSA §1311(e)(3).
PPACA §1001 adding PHSA §2717.
PPACA §1001 adding PHSA §2718.
PPACA §1001 adding PHSA §2718.
PPACA §1001 adding PHSA §2719.
PPACA §1001 adding PHSA §2719A.
PPACA §1001 adding PHSA §2719A.
PPACA §1201 adding PHSA §2708.
PPACA §1201 adding PHSA §2704.
PPACA §1001 adding PHSA §2716.
PPACA §1003 adding PHSA §2794.
PPACA §1201 adding PHSA §2709.
PPACA §1201 re-codifying previous PHSA provision as PHSA §2705 and revising to include a wellness program exemption.
PPACA §1201 adding PHSA §2707; PPACA §1302.
PPACA §1201 adding PHSA §2707 and PPACA §1302.
PPACA §1201 adding PHSA §2701.
PPACA §1201 adding PHSA §2702.
PPACA §1201 adding PHSA §2703.
PPACA §1201 adding PHSA §2706.
Federal Register Public Display copy of the Interim Final Rule (a link can be found at http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html) p. 54.
All citations here are to the Public Health Service Act rules governing state-regulated individual and group health plans. The interim final rules also contain revisions to the ERISA regulations and regulations governing ERISA plans under the Internal Revenue Code.
45 C.F. R. §147.140(a)(1)(i).
45 C.F. R. §147.140(a)(1)(i).
45 C.F. R. §147.140(a)(1)(i).
45 C.F.R. §147.140(a)(ii).
45 C.F.R. §147.140(a)(2).
45 C.F.R. §147.140(a)(3).
45 C.F.R. §147.140(b)(1) and (2).
45 C.F.R. §140.147(b)(2)(i) and (ii).
45 C.F.R. §140.147(c) - (e).
45 C.F.R. §140.147(c)(2).
45 C.F.R. §140.147(g)(i)-(v).
45 C.F.R. §140.147((g)(3)(iii)(A).
45 C.F.R. §140.147((g)(3)(iii)(B).

Comments (2)

In the 15th set of Affordable Care Act (ACA) FAQs, the Internal Revenue Service (IRS) and the Employee Benefit Security Administration (EBSA) answer questions posed by the public and stakeholders to demystify the implementation of various components of the ACA. This particular set discusses annual limit waivers, stating that an alteration to a health plan or policy year will not impact the expiration of an annual limit waiver. The FAQs also indicate that IRS, EBSA and the US Department of Health and Human Services (HHS) will not issue guidance on provider nondiscrimination prior to January 1st, 2014, because the statutory language on the topic is "self-implementing." In regards to transparency reporting, the FAQs clarify that plans are not beholden to the transparency provisions of the ACA until the plans have been certified as a qualified health plan (QHP) for one benefit year.
The Center for Consumer Information and Insurance Oversight (CCIIO) released a set of eight questions on implementation of the Affordable Care Act (ACA). Specifically, this guidance clarifies the limitation provided in the Market Rule final rule stating that a plan issuer may have one geographic rating factor for each approved geographic rating area per single risk pool in a given state. The following topics are addressed in the FAQ to expand upon the meaning of this limitation:
  • Withdrawal of non-grandfathered business
  • Maintenance of alternative mechanisms
  • Geographic rating areas
  • Definition of association coverage
  • Premium adjustment when coverage becomes secondary to Medicare
Issuers submitting plans to the federally-facilitated Exchanges may make necessary changes to their plans in order to comply with this new guidance.
On February 24, The Department of Health and Human Services (HHS) outlined the proposal it plans to use to define actuarial value for individual and small group health plans. The bulletin also outlines the plans for cost-sharing requirements for benefits that insurers must cover for moderate-income people purchasing policies through insurance exchanges. Actuarial value (AV), a measure of the percentage of expected health care costs a health plan will cover...
The Internal Revenue Service answered frequently asked questions related to automatic enrollment, employer shared responsibility payments, and waiting periods under the Affordable Care Act (ACA). The notice addressed employers' questions and invited comments on proposals that the Treasury, Labor, and Health and Human Services departments expect to include in future guidance or rulemaking under the ACA. The notice included the following information...
According to a set of frequently asked questions (FAQs) recently released by the Departments of Health and Human Services (HHS), Treasury (DOT), and Labor (DOL), the final rule under an Affordable Care Act (ACA) provision, which requires health care insurers and group health plans to make available to consumers a standardized summary of the benefits and coverage for each plan they offer, will be released "as soon as possible." The FAQs pertain to implementation of ACA market reform provisions and mental health parity requirements. Until this final rule is released, plans are not required to comply with the proposed rule's provisions. The ACA requires plans to provide consumers with a standardized form containing definitions of benefits and information on coverage. Along with the benefits and coverage summary, the departments also included several FAQs addressing the implementation of the Mental Health Parity and Addiction Equity Act of 2008, which mandates equal treatment for medical and surgical care and mental health and substance use disorder care in areas such as out-of-pocket costs and benefit limits and practices.
The American Medical Association recently issued the 2011 edition of "Competition in Health Insurance: A Comprehensive Study of U.S. Markets." The survey reports that four out of five metropolitan areas in the United States lack a competitive health insurance market. Those markets are rate "highly concentrated" based on Department of Justice and Federal Trade Commission findings. In approximately half of such markets, at least one commercial health insurer had a market share of at least 50 percent. In 24 out of the 48 states covered, the two largest commercial insurers controlled a market share of 70 percent or more.
Under the Affordable Care Act (ACA) beginning January 1, 2014, state insurance Exchanges become operational and comprehensive insurance market reforms take effect. One of the most significant market reforms is the requirement that all health insurance plans sold in the individual and small group (100 employees or fewer) markets – whether sold outside or inside state insurance Exchanges – cover “essential health benefits” (EHBs). The definition of EHBs also will apply to Medicaid “benchmark” plans, the specified coverage standard for individuals made newly eligible by the ACA’s Medicaid expansions.
More than 40% of the U.S. population has one or more chronic condition. Although the likelihood of having a chronic disease increases with age, approximately half of working-age Americans has at least one chronic condition. The prevalence of chronic diseases is increasing in both the elderly and non-elderly populations, with a significant increase in the number of people with multiple chronic diseases. Increased spending on chronic diseases in Medicare is a significant driver of the overall increase in Medicare spending over the last twenty years. Nevertheless, given the high cost of treating chronic diseases, the Affordable Care Act (ACA) includes many provisions to encourage chronic disease management as part of the overall emphasis on improving the efficiency of health care.
Prior to the enactment of the Affordable Care Act (ACA), federal law did not specify a standard minimum benefit package that must be covered by private health insurance and group health plans. The ACA not only bars discrimination in enrollment or the availability of coverage based on health status, but also establishes a minimum standard of coverage that must be satisfied by individual and small group health plans sold in both exchange and non-exchange markets, as well as by any qualified health plan sold in the state exchange market, regardless of group size.
One important question that has arisen in the course of implementation of the Affordable Care Act (ACA) is the extent to which the states can impose obligations on grandfathered health plans that are not imposed on those plans by the ACA itself. Section 1251 of the ACA defines grandfathered plans as those in which an enrollee was enrolled as of the effective date of the ACA. It imposes on grandfathered plans some of the new ACA requirements (such as coverage of adult children to age 26) or prohibitions (such as the ban on rescissions or lifetime limits), but not others (such as the prohibition on cost-sharing for preventive care or the requirement that plans offer internal and external appeals). Section 1251 does not, however, expressly address the question of whether states can independently impose requirements or prohibitions on grandfathered plans. This entry discusses this issue.