Implementing Healthcare Reform

The Patient Protection and Affordable Care Act

Provisions Impacting Self-Funded Employers and their Employees
 

PLAN COVERAGE PROVISIONS

Prohibition on Maintaining Lifetime Limits

All self-insured health plans (and all other group health plans) are prohibited from establishing lifetime limits on the dollar value of benefits for any participant or beneficiary.

Exclusion – Self-insured health plans (and all other group health plans) and health insurance providers are not restricted from placing lifetime per-beneficiary limits on non-essential health benefits to the extent that such limits are otherwise permitted under Federal or State law.

Effective date – Plan years beginning after 9/23/10

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Restrictions on Maintaining Annual Limits

Prior to 2014, all self-insured health plans (and all other group health plans) may only establish a restricted annual limit on the dollar value of the benefits for any participant or beneficiary with respect to the scope of benefits that are essential health benefits. Starting in 2014, plans are prohibited from establishing any limits on the dollar value of benefits.

Exclusion – All self-insured health plans (and all other group health plans) and health insurance providers are not restricted from placing annual per-beneficiary limits on non-essential health benefits to the extent that such limits are otherwise permitted under Federal or State law.

Effective date – Plan years beginning after 9/23/10

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Prohibition on Rescissions

All self-insured health plans (and all other group health plans) are prohibited from rescinding coverage from any beneficiary unless that beneficiary has committed an act of fraud against the plan or a misrepresentation of material fact.

Effective date – Plan years beginning after 9/23/10

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Coverage of Preventative Health Services

All non-grandfathered self-insured health plans (and all other non-grandfathered group health plans) must provide first-dollar coverage for the following preventative services:

  • Items or services with a rating of A or B in the current recommendations of the U.S. Preventative Services Task Force
  • Immunizations recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention
  • Preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration for infants and children
  • Preventative care and screenings for women as provided for by the Health Resources and Services Administration

Plans may cover additional services and/or deny coverage for services not required to be covered.

A minimum time interval of at least one year will be established for plans to begin covering any newly mandated preventative services.

Effective date – Plan years beginning after 9/23/10

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Extension of Dependent Coverage

All self-insured health plans (and all other group health plans) that cover dependent children, will have to extend that coverage to dependents up to their 26th birthday. Prior to 2014, grandfathered self-insured plans (and all other grandfathered group health plans) are only required to offer coverage to dependent children without access to a plan through their own employer.

  • Marriage or student status is not a factor in dependent eligibility.
  • A dependent’s coverage is not taxable as income.
  • Plans are not required to cover a child of a child dependent.

Effective date – Plan years beginning after 9/23/10

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Prohibition of Discrimination Based on Salary

All non-grandfathered group health plans (as already applied to self-insured health plans) are prohibited from discrimination as to eligibility or benefits in favor of highly compensated individuals.

Effective date – Plan years beginning after 9/23/10 for non- grandfathered plans

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Prohibition of Preexisting Conditions Exclusions

Prior to 2014, all self-insured health plans (and all other group health plans) are prohibited from imposing any preexisting condition exclusions on enrollees under the age of 19. For plan years beginning after 1/1/14, all group plans (including self-insured) are prohibited from imposing any preexisting condition exclusions on any enrollee.

Effective date – Plan years beginning after 9/23/10 from excluding children, plan years beginning after 1/1/14 for all enrollees

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Prohibition of Discrimination Against Beneficiaries Based on Health Status

All non-grandfathered self-insured health plans (and all other health plans) are prohibited from establishing rules for eligibility (including continued eligibility) based on the following factors:

  • Health status
  • Claims experience
  • Receipt of health care
  • Medical history
  • Genetic information
  • Evidence of insurability
  • Disability

Effective date – Plan years beginning after 1/1/14

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Prevention and Wellness Program Rules and Restrictions

All non-grandfathered self-insured health plans (and all other non-grandfathered group health plans) must comply with provisions relating to prevention and wellness programs.

Plans may offer wellness programs that do not require an individual to satisfy a standard related to a health factor as a condition for obtaining a premium discount, rebate or other reward, if it does so to all similarly situated beneficiaries. Such programs include:

  • A partial or full subsidy for membership in a fitness center
  • A diagnostic testing program
  • Programs that encourage preventive care through the waiving of a copayment or deductable
  • Smoking cessation programs
  • Health education seminars

Plans may offer discounts, rebates or rewards for participants of a wellness program based on achieving a change in health status, but only under certain conditions:

  • If the premium discount is less than 30%
  • The program has a reasonable chance of improving health or preventing disease
  • The program is offered at least once a year

Effective date – Plan years beginning after 1/1/14 for non-grandfathered plans

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Waiting Periods Restrictions

All self-insured health plans (and all other health plans) are prohibited from maintaining waiting periods longer than 90 days.

Effective date – Plan years beginning after 1/1/14

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Development and Availability of Plan Explanations

All self-insured health plans (and all other health plans) will be required to provide to their enrollees and applicants a summary of benefits and coverage explanations that accurately describes the benefits and coverage under the plan.

HHS is required to develop standards for plans to follow in complying with this requirement. The Department will consult the NAIC, a group of representatives of health-related consumer advocacy groups, health insurance issuers, healthcare professionals and patient advocates.

The standards to be developed will include:

  • A summary of benefits and coverage presented in uniform format that does not exceed 4 pages and has a font of at least 12 point
  • A summary written in a culturally and linguistically appropriate manner using terminology understandable by the average plan enrollee
  • The summary of benefits will be required to include:
    • Uniform definitions of insurance terms
    • A description of the coverage including cost-sharing for each of the categories of the essential health benefits
    • Other benefits
    • The exceptions reductions and limitations on coverage
    • Cost-sharing provisions, including deductible, coinsurance and co-payment obligations
    • The renewability and continuation of coverage provisions
    • Examples of common benefits scenarios including; pregnancy and chronic medical conditions and cost-sharing scenarios for each
    • Whether the plan provides minimum essential coverage and provides a cost-share of at least 60%
    • A statement that the summary should be consulted to determine the governing contractual provisions
    • Contact information for the beneficiary to contact with questions and an Internet address for the beneficiary where a certificate of insurance can be reviewed

The summary will be presented to the enrollee at the time of their application for the plan and prior to their reenrollment. The summary is to be in paper or electronic form.

A health insurance issuer or the administrator of a self-insured plan is responsible for development of the summary.

If the plan makes any material modification not reflected in the most recent summary, it will provide notice to enrollees no later than 60 days prior to the effective date of such modification.

Effective date – Plan years beginning after 9/23/12

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Reporting Requirements

All non-grandfathered self-insured health plans (and all other non-grandfathered group health plans) are required to report to HHS and plan enrollees, information on initiatives and programs that improve health outcomes. Information required to be submitted will be decided on by the Department no later that 9/23/12.

The general information to be reported will be as follows:

  • Programs that improve health outcomes through the implementation of quality reporting, effective case management, care coordination, chronic disease management and medication
  • Activities implemented to prevent hospital readmissions
  • Activities implemented to improve patient safety and reduce medical errors through the use of clinical practices, evidence based medicine and Health Information Technology (HIT)
  • Wellness and prevention programs

A report is to be issued annually and is to outline how the benefits under the plan satisfy the required goals. The report is to be made available to enrollees and prospective enrollees during each open enrollment period.

Effective date – non-grandfathered plans will be required to begin issuing reports for plan years that begin after the Department formally releases the reporting requirements

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Appeals Process

All non-grandfathered self-insured plans (and all other non-grandfathered group health plans) are required to implement a process for the appeal of coverage determinations and claims. The process at a minimum should:

  • Have an internal claims appeal process (already current law for employer-sponsored plans)
  • Provide notice (culturally and linguistically appropriate) of the availability of an internal and external appeals process and the availability of the Office of Consumer Assistance
  • Allow employees to review their files, present evidence and testimony as part of the appeals process and continue to be covered until the appeal is closed
  • Have an external appeals (fully-insured – follow NAIC consumer protection standards; self-insured follow TBD DOL guidelines)

Plans must provide notice of their process and the availability of ombudsman’s office.

Effective date – Plan years beginning after 9/23/10 for non-grandfathered plans

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Choice of Primary Care Provider

All non-grandfathered self-insured health plans (and all other non-grandfathered group health plans) who require beneficiaries to designate a primary care physician, must permit each beneficiary to designate any available provider.

Effective date – Plan years beginning after 9/23/10 for non-grandfathered plans

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Coverage of Emergency Services

All non-grandfathered self-insured health plans (and all other non-grandfathered group health plans) covering emergency department services, must cover emergency services:

  • Without the need for any prior-authorization determination
  • Whether the provider is a participating provider
  • If emergency services are provided:
    • Services will be provided without imposing any requirement for prior authorization of services or limitation on coverage where the provider does not have a contractual relationship with the plan for the providing of services that is more restrictive than the requirements or limitations that apply to providers who do have a contractual relationship with the plan; and
    • If services are provided out-of-network, the cost-sharing requirement is the same requirement that would apply if such services were provided in-network
  • Without regard to any other term or condition of coverage

Effective date – Plan years beginning after 9/23/10 for non-grandfathered plans only

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Access to Pediatric Care

All non-grandfathered self-insured health plans (and all other non-grandfathered group health plans) that require the designation of a participating primary care provider for a child, must allow beneficiaries to designate a participating physician (allopathic or osteopathic) who specializes in pediatrics as the child’s primary care provider.

Effective date – Plan years beginning after 9/23/10 for non-grandfathered plans only

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Access to Obstetrical and Gynecological Care

All non-grandfathered self-insured health plans (and all other non-grandfathered group health plans) providing coverage for obstetric or gynecologic care and require the designation by a beneficiary of a participating primary care provider, may not require authorization or referral from a beneficiary for obstetrical or gynecological care by participating providers.

Effective date – Plan years beginning after 9/23/10 for non-grandfathered plans only

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Access to Clinical Trials

All non-grandfathered self-insured health plans (and all other non-grandfathered group health plans) that provide coverage to an individual who meets the qualifications to participate in a clinical trial dealing with the treatment of a life-threatening disease, may not:

  • Deny the participation in the clinical trial
  • Deny, limit or impose additional conditions on the coverage of routine patient costs for items and services furnished in connection with participation in the trial
  • Discriminate against the individual on the basis of the individual’s participation in a clinical trial

Effective date – Plan years beginning after 1/1/14 for non-grandfathered plans only

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Transparency of Coverage

All non-grandfathered self-insured health plans (and all other non-grandfathered group health plans) are required to make details of their plan available. Plans are required to submit the following information to HHS, the applicable State insurance department and the general public:

  • Claims payment policies and practices
  • Periodic financial disclosures
  • Data on enrollment
  • Data on disenrollment
  • Data on the number of claims that are denied
  • Data on rating practices
  • Information on cost-sharing and payments with respect to any out-of-network coverage
  • Information on enrollee and participant rights

The information is required to be presented in plain language.

Plans must make available to individuals the amount of cost-sharing (including deductibles, copayments, and coinsurance) under the individual’s plan or coverage that the individual would be responsible for paying with respect to the furnishing of a specific item or service by a participating provider.

Effective date – Plan years beginning after 1/1/14 for non-grandfathered plans only

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Health Information Technology Standards

All self-insured health plans (and all other health plans) will have to adopt new HIT procedures based on Federally set standards. The procedures will be a set of uniform standards and operating rules for the electronic transactions that occur between providers and plans.

The Federally adopted standards and operating rules will:

  • Enable determination of an individual’s eligibility and financial responsibility for specific services prior to or at point of care
  • Require no or minimal augmentation by paper
  • Provide for timely acknowledgment, response and status reporting supporting a transparent claims and denial process
  • Describe all data elements

No later than 12/31/15, plans must file a statement certifying that their data and information system are in compliance with the adopted standards and rules. Plans will be required to comply immediately with any revised standards and/or rules.

Plans may be audited as to whether they are in compliance. Starting no later than 4/1/14, plans will be assessed a $1 per-life/per-day penalty if they are in non-compliance of any of the standards and/or rules.

Effective date – Plans required to comply once standards and rules are adopted by HHS

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Cost-Sharing Limitations

All self-insured health plans (and all other health plans) will be limited on the amount of cost-sharing they can require from their beneficiaries.

Starting in 2014, required cost-sharing will be limited to the maximum non-premium out-of-pocket expenses allowable for High-Deductable Health Plans.

In plan years beginning in 2015 and beyond, cost-sharing will be limited to twice the product of the maximum non-premium out-of-pocket expenses allowable under High Deductable Health Plans and the yearly Premium Adjustment Percentage.

For plans offered in the small group commercial market, the deductible under the plan may not exceed $2,000 for individual coverage and $4,000 for family coverage.

Effective date – Plan years beginning after 1/1/14 for non-grandfathered plans

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(Please note: This document was produced by the Self-Insurance Institute of America to provide an overview of the Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act. It does not cover every aspect of the legislation, and certain provisions of the law may change or be modified by additional rules and regulations. This document does not constitute legal or tax advice.)