With the new Health Reform through the Patient Protection and Affordable Care Act (PPACA), there are many changes that will take place with your group health insurance plan, effective September 23rd. Most of you who have fully insured plans have not seen these changes unless your plan renews on or after October 1, 2010.
Are you ready for the changes?
Do you know what they are?
Do you know how to highlight the best of the new rules to your employees?
What about your new communication requirements?
As with any new legislation, there is a lot to digest, so here is a simple list of the first round of changes:
1. Grandfathered plans: Health plans in effect on March 23, 2010 are exempt from some health care reform provisions. For plans that choose to maintain grandfathered status, participants are entitled to a notice of grandfathered status. So if your current plan was in place before March 23, 2010, and is not going to renew until March 2011, you can remain exempt from some of the changes. But change carriers or deductibles, and you’ll need to bring the rest of the plan up to speed.
Communication requirements on Grandfathered plans: notice to employees of Grandfathered plan status
2. Appeals process: Health plans must install an internal and external appeals process, except for grandfathered plans. Plan participants should be given a notice explaining their right to appeal claims decisions.
So what if an employee wants to appeal a decision? Well, health plans will need to install both internal and external appeals processes.
Internal review process must follow Department of Labor claims procedure; self-funded plans already comply with this.
External review process for fully-insured plans must follow state law process, or if none, Department of Health and Human Services (HHS) guidance. If you are self funded, the external review process must follow HHS guidance.
Communication requirements: plan participants should be given a notice explaining their right to appeal claims decisions.
3. Annual limits: Only restricted annual limits may be placed on health plans except for per beneficiary annual limits on nonessential health benefits. Federal law and/or state law may prohibit specific benefit lifetime limits. Note that some lower lifetime limits on a per beneficiary basis may violate the ADA.
4. Dependent coverage extension: Health plans that offer dependent coverage are required to cover children up to age 26.
Communication Requirements: Plan participants should be notified of this new option on dependent coverage.
5. Lifetime limits: Lifetime limits are prohibited except for specific covered benefits that are not “essential health benefits.”
Communication requirements: Participants who have reached the plan’s lifetime limits are entitled to a special enrollment notice informing them that they are again eligible to have claims paid.
6. Pre-existing conditions: Pre-existing condition exclusions are prohibited for covered children under age 19.
7. Preventive care: Plan sponsors must provide coverage for select evidence-based preventive care, certain immunizations, and certain additional care and screenings for women. This coverage must be provided without any payment from the insured (no co-pays or percent payment). Services covered are determined by the Federal office assigned to Preventive Care (the U.S. Preventive Services Task Force). Does not apply to grandfathered plans.
8. Rescission: Health coverage cannot be cancelled except for fraud, etc. This provision generally applies to individual health insurance. It does not prevent the employer from terminating the plan.
What is a Grandfathered plan? A grandfathered plan is one that does not have the required benefit designs mentioned above. However, most insurance companies are complying with the dependent to age 26 requirement regardless of plan status. If you are fully insured and renewed prior to October 1, then you most likely are on a grandfathered plan. If you renew on or after October 1, your insurance company may or may not let you keep your old plan.