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CCH® BENEFITS — 06/28/10

New Health Reform Rules Specify Minimum Annual Limits, Provide Model Language For Patient Protections

from Spencer’s Benefits Reports: Minimum annual dollar limits for health plans in 2010 through 2013 were established in interim final regulations announced on June 23 by the Internal Revenue Service, the Employee Benefits Security Administration (EBSA), and the Office of Consumer Information and Insurance Oversight in the Department of Health and Human Services.

The interim final regulations, scheduled to be published in the June 28, 2010, Federal Register, provide detailed guidance on four separate health insurance provisions in the Patient Protection and Affordable Care Act (P.L. 111-148), as follows:

The interim final rules are effective 60 days after publication in the Federal Register, or Aug. 27, 2010. The rules are applicable to plan years beginning on or after Sept. 23, 2010.

Comments on the interim rules, which also must be received within 60 days after publication, may be submitted through the federal eRulemaking Portal at http://www.regulations.gov.

Comments to EBSA should be identified by RIN 1210- AB43; comments to HHS should refer to file code OCIIO-9994-IFC; and comments to the IRS should be identified by REG-120399-10.

Preexisting Condition Exclusions

The interim final rule defines preexisting conditionexclusions, which are banned under the Affordable Care Act, as follows:

Annual And Lifetime Benefits

The Affordable Care Act prohibits lifetime benefit limits and bans annual limits with exceptions until 2014.

The interim rules clarify that restriction on annual limits does not apply to health flexible spending arrangements (FSAs), medical savings accounts (MSAs), or health savings accounts (HSAs).

In regard to the annual limit exceptions before 2014, a group health plan may establish an annual limit on the dollar amount of benefits that are essential health benefits. The interim rules establish the following minimum limits:

Rescissions

The Affordable Care Act, prohibits coverage rescissions are prohibited, defined in the interim final rules as a cancellation or discontinuance of coverage that has a retroactive effect. For example, a cancellation that treats a policy as void from the time of the individual’s or group’s enrollment is a rescission. In another example, a cancellation that voids benefits paid up to a year before the cancellation also is a rescission for this purpose.

A cancellation of coverage is not a rescission if the cancellation has only a prospective effect; or the cancellation of coverage is effective retroactively because of a failure to timely pay required premiums or contributions.

Insurers and plans are required to provide at least 30 days advance notice of a rescission with time to appeal.

Patient Protections

The Affordable Care Act also requires that plans allow enrollees to select, when the plan requires it, any primary care provider that participates in the plan’s network.

The interim final rules note that plans must notify enrollees of this provision, and the rules provide the following model language that plans may use to comply with this requirement:

“(A) For plans and issuers that require or allow for the designation of primary care providers by participants or beneficiaries, insert:

“[Name of group health plan or health insurance issuer] generally [requires/allows] the designation of a primary care provider. You have the right to designate any primary care provider who participates in our network and who is available to accept you or your family members. [If the plan or health insurance coverage designates a primary care provider automatically, insert: Until you make this designation, [name of group health plan or health insurance issuer] designates one for you.] For information on how to select a primary care provider, and for a list of the participating primary care providers, contact the [plan administrator or issuer] at [insert contact information].

“(B) For plans and issuers that require or allow for the designation of a primary care provider for a child, add:

“For children, you may designate a pediatrician as the primary care provider.

“(C) For plans and issuers that provide coverage for obstetric or gynecological care and require the designation by a participant or beneficiary of a primary care provider, add:

“You do not need prior authorization from [name of group health plan or issuer] or from any other person (including a primary care provider) in order to obtain access to obstetrical or gynecological care from a health care professional in our network who specializes in obstetrics or gynecology. The health care professional, however, may be required to comply with certain procedures, including obtaining prior authorization for certain services, following a preapproved treatment plan, or procedures for making referrals. For a list of participating health care professionals who specialize in obstetrics or gynecology, contact the [plan administrator or issuer] at [insert contact information].”

For more information on these rules, contact the following: Amy Turner or Beth Baum, EBSA, (202) 693-8335; Karen Levin, IRS, (202) 622-6080; or Jim Mayhew, OCIIO, (410) 786-1565.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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