Employee Benefits-Government Issues Guidance On New Protections Under The Affordable Care Act

According to a new government Fact Sheet, the Departments of Health and Human Services (“HHS”), Labor, and Treasury have now issued regulations to implement a new Patient’s Bill of Rights under the recently enacted Affordable Care Act. These rights will help children (and eventually all Americans) with pre-existing conditions gain coverage and keep it, protect all Americans’ choice of doctors and end lifetime limits on the health care an individual may receive. These new protections apply to nearly all health insurance plans.

The Fact Sheet says that the new regulations for the Patient’s Bill of Rights detail a set of protections that apply to health coverage starting on or after September 23, 2010, six months after the enactment of the Affordable Care Act. These protections are:

–No Pre-Existing Condition Exclusions for Children Under Age 19. The new regulations will prohibit health care and insurance plans from denying coverage to children based on a pre-existing condition. This ban includes both benefit limitations (e.g., an insurer or employer health plan refusing to pay for chemotherapy for a child with cancer because the child had the cancer before getting insurance) and outright coverage denials (e.g., when the insurer refuses to offer a policy to the family for the child because of the child’s pre-existing medical condition). These protections will apply to all types of insurance except for individual policies that are “grandfathered,” and will be extended to Americans of all ages starting in 2014.

–No Arbitrary Rescissions of Insurance Coverage. Under the new regulations, insurers and plans will be prohibited from rescinding coverage – for individuals or groups of people – except in cases involving fraud or an intentional misrepresentation of material facts. Insurers and plans seeking to rescind coverage must provide at least 30 days advance notice to give people time to appeal. There are no exceptions to this policy.

–No Lifetime Limits on Coverage. The new regulations prohibit the use of lifetime limits in all health plans and insurance policies issued or renewed on or after September 23, 2010.

–Restricted Annual Dollar Limits on Coverage. The new regulations will phase out the use of annual dollar limits over the next three years until 2014 when the Affordable Care Act bans them for most plans. Plans issued or renewed beginning September 23, 2010, will be allowed to set annual limits no lower than $750,000. This minimum limit will be raised to $1.25 million beginning September 23, 2011, and to $2 million beginning on September 23, 2012. These limits apply to all employer plans and all new individual market plans. For plans issued or renewed beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited. Employers and insurers that want to delay complying with these rules will have to win permission from the Federal government by demonstrating that their current annual limits are necessary to prevent a significant loss of coverage or increase in premiums. Limited benefit insurance plans – which are often used by employers to provide benefits to part-time workers — are examples of insurers that might seek this kind of delay. These restricted annual dollar limits apply to all insurance plans except for individual market plans that are grandfathered.

–Protecting Your Choice of Doctors. Under the new regulations, it is clear that health plan members are free to designate any available participating primary care provider as their provider. Parents may choose any available participating pediatrician to be their children’s primary care provider. And, the new regulations prohibit insurers and employer plans from requiring a referral for obstetrical or gynecological (OB-GYN) care. The new rules apply to all individual market and group health insurance plans except those that are grandfathered.

–Removing Insurance Company Barriers to Emergency Department Services. Health plans and insurers will not be able to charge higher cost-sharing (copayments or coinsurance) for emergency services that are obtained out of a plan’s network. The new regulations also set requirements on how health plans should reimburse out-of-network providers. These rules apply to all individual market and group health plans except those that are grandfathered.