- What is the effective date of the lifetime dollar limit mandate?
This provision is effective for plan years beginning on or after Sept. 23, 2010. For calendar year plans, the provision is effective Jan. 1, 2011.
- Does the restriction apply to all benefits?
No. The restriction on lifetime dollar limits only applies to essential health benefits as defined under the new law. Plans may enforce lifetime limits on specific covered benefits that are non-essential health benefits.
- While the provisions prohibit lifetime dollar limits, are plans still allowed to have frequency limits - such as annual visit or other treatment limits?
The statute and its interim final rule prohibit the use of lifetime limits on the dollar amount of benefits for group plans and individual policies. Nothing in the rule would appear to prohibit the use of lifetime visit limits or other treatment limits.
- Does the law apply to both fully insured and self-funded group plans?
Yes. This provision applies to group health plans, both self-funded and fully insured, as well as group or individual insurance coverage.
- Will grandfathered plans be able to continue enforcing lifetime limits?
No. The prohibition on lifetime dollar limits applies equally to grandfathered and non-grandfathered plans effective for plan years beginning on or after Sept. 23, 2010. For calendar year customers, the provision is effective Jan. 1, 2011.
- Are collectively bargained plans bound by contracts able to continue enforcing a lifetime limit?
No. The new prohibition on lifetime dollar limits applies to collectively bargained plans the same as any other plan.
- Does the reform law allow for any annual limits?
The interim regulations state that with respect to "essential health benefits", any restricted annual limit for all "essential health benefits" can be no less than $750,000, $1,250,000 and $2,000,000 per individual for plan years beginning Sept. 23, 2010, 2011 and 2012, respectively. On Jan. 1, 2014, restricted annual limits are prohibited entirely for "essential health benefits". Lifetime and annual limits may be used for non-essential health benefits, so long as they meet all other existing federal and state laws.
- The health reform provisions allow members who previously exceeded a lifetime, or annual maximum, or aged out as a dependent to re-obtain coverage. Do any of the provisions require any retroactivity considerations for claims payment when they take effect?
The Patient Protection and Affordable Care Act (the Act) is not a retroactive piece of legislation. Group health plans and health insurance issuers (group and individual) would have no obligation to reconsider claims for benefits that were properly denied in a prior plan year consistent with the then-applicable law. As long as a claim was denied appropriately, and in compliance with the applicable law (and plan provisions), there is no requirement in the Act that the group health plan re-consider its decisions to deny claims for exceeding lifetime limits, annual limits and dependent coverage provisions.
Note, however, that once the lifetime limits provision becomes applicable to a group health plan or health insurance coverage (group or individual), the plan must give the individual a written notice that the lifetime limit no longer applies and that the individual, if covered, is eligible for benefits. If the individual is not enrolled in the plan or health insurance coverage at that time, then the individual must be offered a 30-day enrollment opportunity similar to the existing Health Insurance Portability and Accountability Act (HIPAA) special enrollment provision.
- Would the lifetime limit provision prohibit "reference-based pricing plans" (i.e., limited amount paid per procedure, not an annual limit)?
Nothing in the interim final regulations addresses this type of plan design. We expect to seek additional guidance from the agencies on a range of health reform questions and will consider reference-based pricing plans as part of this review.
- Do these limits apply to pharmacy benefits or just medical benefits?
These limits apply equally to pharmacy and medical benefits since both are group health plans and prescription drugs are included in the categories of "essential health benefits". Lifetime limits provisions apply to group health plans and group and individual health insurance coverage. The restriction on lifetime limits would not apply to limited scope vision and dental plans, health savings accounts (HSAs)/medical savings accounts (MSAs), and retiree health plans that have fewer than two active employees. Nor would the lifetime limits provision apply to a health reimbursement account (HRA) that is integrated with a group health plan that does comply with the lifetime limits provision.
- Are members who have already reached their lifetime benefit limit under the plan before the effective date of the provision eligible for additional benefits?
Once the lifetime limits provision becomes applicable to a group health plan or health insurance coverage (group or individual), the plan must give the individual a written notice that the lifetime limit no longer applies and that the individual, if covered, is eligible for benefits.
If the individual is not enrolled in the plan or health insurance coverage at that time due to having reached a lifetime limit, then the individual must be offered a 30-day enrollment opportunity similar to the existing HIPAA special enrollment provision. The notice and enrollment opportunity must be provided beginning no later than the first day of the first plan year (in the individual market, policy year) beginning on or after Sept. 23, 2010.
- Are replacement limits prohibited for such things as wheelchairs or hospital beds?
The statute and its interim final rule prohibit the use of lifetime limits on the dollar amount of benefits for an individual. Nothing in the rule would appear to prohibit the use of replacement limits for durable medical equipment (DME) benefits. We expect to seek additional guidance from the agencies on a range of health reform questions and will consider replacement limits as part of this review.
- Does the dollar limit restriction impact the ability to include a maximum dollar limit in a stop loss policy?
Stop loss policies are not governed by the Act as these are not medical benefit plans. Dollar limits may be set on stop loss policies and pricing changed on the stop loss policy, if an employer now needs to drop the lifetime limits contained in the self-funded plan.
- Is there a plan to promote stop loss insurance for administrative services only (ASO) clients that will need to remove limits?
UnitedHealthcare continues to work with stop loss providers, both internal and external, to develop and distribute coverage that is responsive to the needs to self-funded group health plans in light of the Act, including the restriction on lifetime limits.
- Can employers appeal or apply for a waiver of the lifetime limit provision?
No. While the interim regulations grant waiver authority to the Secretary of Health and Human Services regarding annual limits, nothing in the new law confers similar waiver authority to the Secretary in the case of lifetime limits.