New PPACA Provisions I

Part I of a Two-Post Series – What Just Changed on September 23rd?


September 23, 2010 is exactly six months after President Barack Obama signed PPACA into law, and it marks the day that many important provisions take effect impacting both group and individual health insurance coverage. In Part I of this series, we’ll discuss the impact of these reform provisions on employer-based group coverage; and in Part II we’ll take a look at the individual health insurance marketplace, including an unintended consequence of PPACA.

First, now that we’re into October does this mean your group health insurance just changed? Not necessarily, as the new requirements actually are effective on the renewal date of your group plan. If your plan year starts January 1st, as many do, that’s when the changes start.

“Grandfathered” plans, which are health plans that existed before the law was enacted on March 23rd and remain essentially unchanged, must meet only some of the requirements. New health plans and those with significant changes in benefits or out-of-pocket costs must comply with further changes as mandated by PPACA. If you get your coverage through work, ask your employer whether or not your health plan renewal is a Grandfathered plan.

Here are provisions affecting all group plans issued or renewed after September 23rd:

•  No lifetime dollar limits may be imposed on essential benefits. Those who have maxed out because of prior caps but remain eligible for coverage must be reinstated on the first day of the group health plan renewal.
•  Plans can’t impose annual limits that are less than $750,000 (annual limits will be eliminated entirely by 2014).
• No rescissions are permitted, except in case of fraud or intentional misrepresentation.
• Pre-existing condition exclusions may not be imposed on children under the age of 19.
• Children may stay on their parents’ policies until age 26 if coverage isn’t available through their work, regardless of marital status.

Non-grandfathered health insurance plans also must comply with the following:

• The full cost of preventive care, as recommended by the U.S. Preventive Services Task Force, must be provided without copays, coinsurance or plan deductibles (preventive benefits under grandfathered plans may maintain cost sharing).
• Plans must not discriminate in favor of highly compensated individuals.
• Plans must report on their quality of care improvement activities.
• New requirements apply for internal and external appeal procedures against claims denials (although group plans already must provide internal appeals under ERISA and most states require that plans provide both internal and external appeal procedures).
• Plans that require or provide for a Primary Care Physician (PCP) designation must allow each member to designate any in-network PCP, or pediatrician for children, accepting new patients. Plans may no longer require an authorization or referral to an Ob-Gyn. Prior authorization for emergency services also is prohibited – and no additional cost sharing is allowed for out-of-network emergency services.

Click here for more details on the September 23^rd health care reform changes as they relate to employer-based group health coverage (document provided courtesy of Humana).