The United States Departments of Health and Human Services, Labor, and the Treasury issued a series of regulations related to the Patient Protection and Affordable Care Act, as amended (the “Health Care Reform Act”). The regulations provide guidance for group health plans, including new rules for preexisting conditions, annual/lifetime limits, and coverage rescissions.
Employers should be aware that the following rules for group health plans, both insured and self-insured, and including grandfathered plans, will go into effect for plan years beginning on or after September 23, 2010.
- Preexisting condition exclusions – The Health Care Reform Act generally prevents group health plans from imposing preexisting condition exclusions for participants who are under age 19. The prohibition will go into effect for all other participants in the 2014 plan year.
- Annual/Lifetime Benefit Limits – The Health Care Reform Act prohibits group health plans from using dollar amount lifetime limits for health benefits. In addition, the regulations gradually phase out the use of annual dollar limits for health insurance coverage (such limits will be prohibited for plan years beginning on or after January 1, 2014).
- Rescission – The Health Care Reform Act prohibits group health plans from rescinding coverage, except in cases involving fraud or an intentional misrepresentation of material facts (caused by either the individual involved or the person seeking coverage on his or her behalf). Plans seeking to rescind coverage must provide the affected individual with 30 days advance, written notice of the rescission.
The regulations also provide guidance on required plan participant protections for non-grandfathered plans. Specifically, group health plans must provide to plan participants, without any co-pays or other cost-sharing measures for in-network providers, preventative care options such as well-child care and certain immunizations/screenings. In addition, plan participants will be allowed to choose their own primary care provider (“PCP”) or pediatrician from the plan’s provider network, and will be able to see an OB-GYN without needing a referral or authorization from a PCP. Moreover, group health plans will be prohibited from requiring prior authorization for emergency care at a hospital outside the plan’s network. These protections also go into effect for plan years beginning on or after September 23, 2010.
Employers will have to review their existing group health plans to ensure that they incorporate the coverage mandated by the Health Care Reform Act. Most of the protections must be in place for plan years beginning on September 23, 2010, which means that time is of the essence in making any modifications to existing health plans.