Wednesday, June 30, 2010

Agencies issue guidance on several reform provisions, including annual and lifetime limits

On June 28th, the Departments of Health and Human Services (HHS), Labor and Treasury released an Interim Final Rule (or Regulation) addressing several of the initial reform provisions applicable to plan years beginning on or after September 23, 2010, including pre-existing conditions, annual and lifetime limits, rescission, choice of providers and emergency services.

The most noteworthy clarification was the Regulation’s explanation of the provision that prohibits annual and lifetime limits on essential health benefits.

The Regulation clarifies that:
• Annual and lifetime limits refer to total dollar limit and do not extend to specific treatment limits (such as day or visit limits).
• Prior to 2014, a plan may establish annual limits on essential benefits as follows: $750,000 for the 2011 plan year, $1.25 million for the 2012 plan year and $2 million for the 2013 plan year.
• Prior to 2014, limited medical plans or so-called “mini-med” plans could apply for a waiver if compliance with the new annual limits “would result in a significant decrease in access to benefits or would significantly increase premiums for the plan or health insurance coverage.”

For more information on the Regulation, click to access the Groom Law Group Memorandum or the Interim Final Rule.

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