Recent Health Care Reform Law and Self Insured Plans

I wanted to share the most current assessment of how the legislation passed by the House and signed by the President might impact our self funded accounts. Essentially, through the efforts of  the SIIA (Self Insured Association of America),  two weeks ago, we were able to secure a “Grandfather” waiver for existing Self Funded programs relative to the new criteria of the legislation.

The following are the provisions of the soon to be enacted healthcare reform bill that will affect self-insured health plans. Note – changes to these provisions could still be made through the healthcare Reconciliation process. )

Enacted Consumer Protections Affecting Employer-Sponsored Health Plans

• Prohibition of lifetime limits – Prohibits all plans from establishing lifetime limits. Only applicable to self-insured plans established after 6 months from date of enactment
• Prohibition of annual limits – Prohibits all plans from establishing annual limits on the dollar value of benefits starting in 2014. Prohibits plans from setting limits that would “impair essential health benefits” in subsequent years. Only applicable to self-insured plans established after 6 months from date of enactment
• Prohibition on rescissions – Prohibits all plans from rescinding coverage except in instances of fraud or misrepresentation. Only applicable to self-insured plans established after 6 months from date of enactment
• Coverage of preventive health services – Requires all plans to cover preventive services and immunizations, recommended by various Federal agencies, also specifically includes certain child preventive services and women’s preventive care. Plans are prohibited from imposing any cost-sharing requirements. Only applicable to self-insured plans established after 6 months from date of enactment
• Dependent coverage – Requires all plans offering dependent coverage to make coverage available to dependents that are under the age of 26 and unmarried. Plans are not required to cover dependents of dependents. Only applicable to self-insured plans established after 6 months from date of enactment
• Prohibition of preexisting conditions – No group health plan or insurer offering group or individual coverage may impose any pre-existing condition exclusion or discriminate against those who have been sick in the past. Only applicable to self-insured plans established after 6 months from date of enactment
• Prohibiting discrimination based on health status – No group health plan may set eligibility rules based on health status, medical condition, claims-experience, receipt of healthcare, medical history, genetic information or evidence of insurability – including acts of domestic violence or disability. Permits employers to vary insurance premiums by as much as 30 % for employee participation in certain health promotion and disease prevention programs. Only applicable to self-insured plans established after 6 months from date of enactment
• Prohibition on waiting periods – Prohibits any waiting periods for group or individual coverage that exceed 60 days. Employers are penalized $600 per full-time employee for each employee required to wait beyond 60 days. Only applicable to self-insured plans established after 6 months from date of enactment

Required Plan Information Disclosure:

• Requires plans to issue a summary of benefits and explanation of coverage to beneficiaries with the following criteria:
  • In uniform format
  • In “easily understood” language
  • Inclusion of uniform definitions of standard insurance and medical terms
  • Explanation of cost-sharing exceptions, reductions and limitations on coverage
  • Provide common benefits scenarios

Expanded Beneficiary Appeals Availability:

• Requires plans to implement a process for external appeals of coverage determinations and claims
• Requires self-insured plans to comply with minimum standards to be established by the Secretary of DOL
• Only applicable to self-insured plans established after 6 months from date of enactment

Health Information Technology Standards and Plan Requirements:

• Adoption of uniform standards and operating rules for the electronic transactions that occur between providers and health plans that are governed under HIPAA (such as benefit eligibility verification, prior authorization and electronic funds transfer payments)
• Establishes