Protections and Standards for Qualified Health Benefits Plans

Thursday, December 10, 2009

A core provision of the Act is to provide protection and certain standard plan provisions that almost every health care plan must meet. Similar to ERISA protections for retirementment plans, the Act extends these provisions with the thought of achieving affordable access and providing essential benefits to the covered members. (In reading the Act you may note that the various provisions of the Act are not always in a sequential order that make sense to the reader.)

To be a “qualified health benefits plan”, a plan must meet the provisions relating to: affordable coverage, essential benefits, and consumer protection. These three provisions apply to persons enrolled in an employer-based and individual plan. An individual is considered enrolled if the individual is a participant or beneficiary as defined by ERISA.

The Act does provide for a grace period allowing current employment-based health plans to meet the requirements of qualified health benefits plan. An exception is made for certain plans including those that cover a “specified disease or illness policy”, i.e., cancer, heart attack, accident, … etc. Would this also exempt all indemnity type limited medical plans? However, the Act makes it clear that specific disease or illness policies are “In no case shall an employment-based health plan … be treated as acceptable coverage under this division.” Lastly, the Act does permit high deductible health care plans with no apparent sunset provisions noted.

Individuals currently enrolled in an individual health care plan are ‘‘grandfathered” into their current health care plan. However, carriers may not allow new enrollees to enter the grandfathered plans except under certain conditions, i.e., new dependents. Does this mean that I can add a newborn but can I add a dependent that has lost coverage under another plan? What happens to the mother or father of that newborn who decides to become a stay-at-home parent? Any individual health care plan that is not grandfathered must be offered through a Health Insurance Exchange plan. The Act restricts premium increases by allowing a carrier to increase premiums only if it increases premium percentages for “all enrollees in the same risk group at the same rate”.

How will affordable coverage be maintained? Qualified health benefits plans will not be allowed to impose preexisting condition exclusions. Policies will be guaranteed issue, renewable, and cancellations will be prohibited, except in cases of non-payment and fraud. Policy pricing rules will allow for use of: age, geographical area, tier size (single, single + 1, … family), and actuarial value of optional services, i.e., dental, vision, … etc.

The Act prohibits discrimination in benefits; for mental health and substance abuse treatments. It attempts to ensure that provider networks are adequate, that members have internet access to plan information, and provides for an option of extended coverage for uninsured dependent children under the age of 27 and who are not otherwise enrolled in a health benefits plan. If the coverage offered under a qualified health care plan, decreases or the cost-sharing increases during the plan year, the carrier (and plan sponsor, i.e., employer) must inform members of the change within 90 days of the change or sooner to protect the health/ of the members.