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Deadline for 2011 Plan Amendments Fast Approaching
The Patient Protection and Affordable Care Act (PPACA) requires formal plan amendments be in place by June 30, 2011 for some of the group health plan changes that went into effect on January 1, 2011. The provisions noted below were effective for group health plan years beginning on or after September 23, 2010 (generally, effective Jan. 1, 2011, for calendar year plans). Formal plan amendments must be adopted to bring plans into compliance with these requirements:
1. OTC Reimbursement Restrictions
The PPACA revised the definition of " qualified medical expenses" for employer-provided accident and health plans, including account based health programs (health FSAs, HRAs, HSAs and Archer MSAs) This change limits an employer's ability to reimburse for certain over-the-counter (OTC) medications.
Account-based health program may not reimburse a participant for the purchase of over-the-counter medicines and drugs (other than insulin) unless the participant obtains a prescription. Often debit cards used for account-based health programs operate through systems not capable of differentiating between medications purchased with a prescription and those purchased without a prescription, so in some cases debit card transactions may not be allowed for OTC purchases. Medical supplies such as antiseptic creams, bandages and blood sugar test kits—are not affected by the new rules.
2. Update maximum dependent age to 26
Plans should remove any language that requires the dependent to be a student, residing with their parent or financial dependency.
3. Prohibition on pre-existing condition exclusions
Group health plans may not impose any pre-existing condition exclusions for any participant under the age of 19 (this applies to any covered employee under age 19 or covered dependent). If a plan has a pre-ex clause, they must modify the language to apply only to those 19 and over. In 2014, all pre-ex condition clauses will need to be removed.
4. Prohibition on lifetime benefit limits
5. Restriction on annual benefit limits
Group health plans may impose annual limits only on the dollar value of essential health benefits of $750,000 in 2011 and $1.25 million in 2012. Beginning in 2014, annual dollar limits are prohibited for all essential health benefits.
6. Preventative care
Non-grandfathered group health plans and insurers must cover specific preventive care services without cost sharing. The specific list can be obtained at: http://www.HealthCare.gov/center/regulations/prevention.html
7. Emergency Services
Non-grandfathered group health plans and insurers must cover emergency services without prior authorization or in-network requirements.
8. Physician Selection
Non-grandfathered group health plans that require the designation of a primary care provider must permit each participant to designate any participating primary care provider available, including a pediatrician if the patient is a child. There can be no required pre- authorizations or referrals for women seeking care from OB-GYNs.
What to Do Now
• Review all group health plan documents to make sure that all are in compliance with the Employee Retirement Income Security Act and PPACA requirements.
• Contact insurers to assure administrative and document compliance.