Last month, the Departments of the Treasury, Labor and Health and Human Services issued final regulations governing several market reforms implemented under the Affordable Care Act. These regulations finalize the 2010 interim final regulations and amendments without substantial change and incorporate the guidance and clarifications issued by the departments since 2010.
The final regulations are effective January 19, 2016 and apply to group health plans and health insurance issuers for plan years beginning on or after January 1, 2017.
Here are a couple of important takeaways for each market reform:
Grandfathered Health Plans
- Determine grandfather status separately with respect to each benefit package.
- A plan must disclose that it believes it is a grandfathered health plan and provide contact information for questions and complaints in any summary of benefits provided under the plan. Model disclosure language is available.
Prohibition of Preexisting Condition Exclusions
- Excluding benefits for a condition regardless of when the condition arose relative to the effective date of coverage is not a preexisting condition exclusion.
- These final regulations do not impose enrollment period requirements and do not address commenters’ concerns about increasing premium rates related to the prohibition on preexisting condition.
Prohibition on Lifetime and Annual Dollar Limits
- To define essential health benefits (EHB), self-insured, large group market, and grandfathered health plans may select among 51 EHB base-benchmark plans and the Federal Employees Health Benefit Program (FEHBP) base-benchmark plans. A final list of the 51 EHB base-benchmark plans for 2017 is available on the CMS website.
- HRAs and other “account-based plans” (e.g., a health FSA) may be integrated with another group health plan coverage to satisfy the annual dollar limit prohibition.
Prohibition on Rescissions
- For non-grandfathered plans, rescissions of coverage are eligible for internal claims and appeals and external review regardless of whether the rescission has an adverse effect on any particular benefit at the time of appeal.
- A group health plan may retroactively terminate coverage due to a failure to elect and pay for COBRA continuation coverage.
Coverage of Dependent Children to Age 26
- A plan using an HMO design cannot require individuals to work, live, or reside in the HMO service area to the extent such eligibility restrictions are applicable to dependent children under age 26.
- The applicable plan terms and coverage provided to dependent children under age 26 cannot vary based on the age of the child. Yet, a plan may provide distinctions based upon age that apply to all coverage under the plan, including coverage for employees, spouses, and dependent children.
Internal Claims and Appeals and External Review
- A plan or issuer that relies on any new or additional evidence or grounds to make a benefit determination must send such evidence or information to the participant free of charge as soon as it becomes available.
- Internal review procedure notices must be provided under culturally and linguistically appropriate standards. These standards require, in part, that a plan or issuer provide the notice in a non-English language upon request if the notice is sent to a county in which 10 percent or more of the population is literate only in that non-English language.
Patient Protections
- A plan or issuer that requires designation of a primary care provider by a participant or beneficiary must provide notice of the participant’s rights (1) to select any participating primary care provider or pediatrician available to accept the participant and (2) to obtain obstetrical or gynecological care provided by an OB/GYN without prior authorization.
- Whether a participating primary care provider is “available” may be subject to reasonable and appropriate geographic limitations.
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