By: Tommy Eden, Attorney
The Department of Health and Human Services (HHS) on Dec. 8, 2010 released instructions for obtaining waivers, and a day later released guidance with model language needed to satisfy the notice requirement. The Patient Protection and Affordable Care Act bans annual dollar limits beginning in 2014. Until then, annual limits are limited under HHS regulations published in June 2010. For plan years starting between September 23, 2010 and September 22, 2011, plans may not limit annual coverage of essential benefits such as hospital, physician and pharmacy benefits to less than $750,000. The restricted annual limit will be $1.25 million for plan years starting on or after September 23, 2011, and $2 million for plan years starting between September 23, 2012 and January 1, 2014. For plans issued or renewed beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited.
A class of group health plans and health insurance coverage, generally known as “limited benefit” plans or “mini med” plans, often has annual limits well below the restricted annual limits set out in the interim final regulations. Because this is often the only type of private insurance available to some workers, the Department of Health and Human Services (HHS) has issued temporary waivers to allow workers to keep their insurance. These “annual dollar limit” waivers only last for one year and are only available if the plan certifies that waiver is necessary to prevent either a significant increase in premiums or decrease in access to coverage. Additionally, health plans that receive waivers must tell consumers if their health care coverage is subject to an annual dollar limit lower than what is required under the law.
This article contains guidance related to the annual limit waiver process, including the waiver application form and instructions.
• OCIIO Supplemental Guidance on Consumer Notices on Waivers of the Annual Limits Requirements (12/9/2010)
• OCIIO Supplemental Guidance on Sale of New Business by Issuers Receiving Waivers (12/9/2010)
• Fact sheet on Supplemental Guidance on Consumer Notices and Sale of New Business (12/9/2010)
• News release on Supplemental Guidance on Consumer Notices and Sale of New Business (12/9/2010)
• Letter to Consumer Groups on Supplemental Guidance on Consumer Notices and Sale of New Business (12/9/2010)
• Annual Limit Waiver Application Form (XLS - 5.8MB) (12/8/2010)
• Annual Limit Waiver Application Instructions (PDF - 44KB) (12/8/2010)
• OCIIO Supplemental Guidance on Waivers of the Annual Limits Requirements
• OCIIO Sub-Regulatory Guidance: Process for Obtaining Waivers of the Annual Limits Requirements of PHS Act Section 2711
• Approved Applications for Waiver of the Annual Limits Requirements of the PHS Act Section 2711
Common Sense Counsel: these HHS waivers allow Health Plans to keep lower benefit limits. Employers with group health plans offering limited coverage can avoid this federal mandate prohibiting annual caps of less than $750,000 on essential health benefits if they obtain a temporary waiver and notify plan participants. If you wish to apply now is the time.
Tommy Eden is a Lee County native, an attorney with the local office of Constangy, Brooks & Smith, LLP and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at firstname.lastname@example.org or 334-246-2901. Blog at www.alabamaatwork.com