Smart Benefits: ACA Insurance Reforms Finalized
Monday, December 07, 2015
• grandfathered plans
• preexisting condition exclusions
• internal and external appeals
• rescissions, lifetime and annual limits, access to emergency care and providers
• dependent coverage
On November 13, 2015, the three departments finalized the interim rules. While the final rules make virtually no changes to the interim rules as interpreted by current guidance, they are significant because they incorporate existing guidance into regulations. And as the Obama administration nears its final year, that finalization of the rules makes it more difficult for a future administration to change them.
Highlights of the 2010 rules that were recently finalized include:
• Grandfathered Plans: Grandfathering refers to the preservation of the right to maintain existing coverage. The challenge presented by grandfathering was determining how much a plan could change and retain grandfathered status. The interim rules, which were in turn elaborated upon in guidance, adopted a series of rules defining how much a plan could change and still remain the same plan.
• Preexisting Conditions: The 2010 reforms prohibited the imposition of preexisting condition exclusions on enrollees under 19 years old, except in grandfathered individual plans, a prohibition extended to all enrollees in 2014. The final regulation clarifies that the prohibition doesn’t bar a plan or an insurer from excluding all benefits for a condition if it does so regardless of when the condition arose, although other ACA provisions such as the essential health benefits requirement may preclude such an exclusion.
• Lifetime and Annual Coverage Limits: The 2010 reforms prohibited plans and insurers from imposing lifetime limits on coverage and restricted them from imposing annual limits below certain escalating amounts on coverage for essential health benefits. In 2014, annual limits on essential health benefits coverage were completely prohibited. The lifetime limit prohibitions apply to all group health plans, including grandfathered plans, although the annual limit prohibition does not apply to individual grandfathered plans.
• Coverage of Adult Children: A provision of the 2010 reforms required group health plans and insurers, including grandfathered plans, to cover adult dependents up to age 26. The final rule clarifies that insurers and plans must cover all children under age 26 regardless of financial dependency or shared residence with the enrollee, student status, employment status, or marital status. The final rule also adds that adult children under age 26 must be covered even though they don’t live in a plan’s service area – although plans and insurers aren’t required to cover out-of-network coverage for adult children.
The final rule will go into effect on January 1, 2017, at which time the interim rules will no longer remain in effect.
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