Insurance Coverage & Health Plan Design
The ACA creates many new federal regulatory requirements for health insurance plans. Plans sold on the health insurance Exchanges will be subject to additional requirements. Plans in effect at the time the ACA was passed are exempt from many, but not all, of these requirements as long as they meet the HHS definition of a grandfathered plan. For a summary and analysis of grandfathered plan requirements, please see here and here.
Some plan design and benefit requirements took effect soon after the passage of the ACA. They include:
- Prohibition on lifetime limits for essential benefits coverage for all plans and prohibition on annual limits on essential benefits for all plans except grandfathered individual market plans.
- Rescissions only in cases of fraud or intentional misrepresentation. Policyholders must receive notification prior to cancellation.
- Coverage of preventive services without cost-sharing for all non-grandfathered plans.
- Extension of dependent coverage to adult children up to age 26.
- Enrollees must be allowed to designate their choice of an available in-network primary care provider, including a pediatrician.
- Out-of-network emergency services available without prior authorization. Cost sharing for out-of-network emergency services on the same basis as in-network services.
- OB/GYN services from a participating provider must be available without a referral.
- Pre-existing condition exclusions for enrollees under 19 years old are prohibited for all plans except grandfathered individual market plans.
- Plans must incorporate the Department of Labor’s claims and appeals procedures for internal appeals and comply with applicable state external review processes for all non-grandfathered plans.
The ACA also created new reporting requirements, for most plans, that went into effect immediately after passage:
- Plans must provide uniform explanations of coverage and standardized definitions to policyholders.
- All non-grandfathered plans must submit claims payment policies, enrollment and disenrollment data, and financial disclosures to the Secretary of HHS and relevant state insurance commissioner(s).
- All non-grandfathered plans must report to the Secretary of HHS on plan activities regarding case management, reduction of readmissions and medical errors, and wellness and health promotion activities.
- All fully insured group plans must report medical loss ratios to the Secretary of HHS, and provide rebates to consumers if the percentage of premiums for clinical services and activities is less than 85% of incurred losses plus loss adjustment expense for large group plans or 80% for small group plans.
- Annual review by the Secretary of HHS and the states of unreasonable premium increases for health insurance coverage.
Additional insurance regulations that will go into effect in 2014 include the following:
- Pre-existing condition exclusions for all enrollees in non-grandfathered plans will be prohibited.
- Rating will be based only on age, tobacco use, geographic area and individual vs. family coverage for all non-grandfathered fully-insured small group and individual plans.
- Eligibility based on health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, disability, or any other health status-related factor will be prohibited for non-grandfathered individual market plans.
- Waiting periods in excess of 90 days will be prohibited for group health plans.
- Guaranteed issue and guaranteed renewal for all non-grandfathered, fully insured plans.
- Discrimination against providers operating within their scope of practice will be prohibited for non-grandfathered plans.
- Enrollee participation in clinical trials for cancer or other life-threatening diseases may not be limited by non-grandfathered plans.
A discussion of the additional requirements for plan participation in health insurance Exchanges as well as the ACA’s reinsurance and risk rating requirements intended to stabilize the functioning of the Exchanges can be found here.