Self-funded employer health plans should continue to be popular during the age of the Affordable Care Act, according to an Independence Holding Company executive.
The new ACA – a package that includes the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act – does nothing to restrict use of self-funding.
“By 2014, we anticipate that there will be a growing demand for self-funding solutions among employers that believe in promoting a health work environment through wellness and disease management initiatives,” David Kettig, the chief operating officer of IHC, Stamford, N.Y. (NYSE:IHC), writes in a memo to business partners.
ACA prohibits self-funded plans from imposing lifetime limits on most benefits starting Sept. 23, Kettig writes.
“The new law does allow the U.S. Department of Health and Human Services to definite a set of benefits for which certain ‘restricted annual limits’ would be allowed for plan years beginning before Jan. 1, 2014,” Kettig writes.
So far, HHS has not started implementing that provision, Kettig writes.
“It is uncertain whether annual maximums will be permitted, and, if they are, to what benefits they will apply,” Kettig writes.
IHC will cope by offering a medical stop-loss policy with an unlimited lifetime maximum, he says.
Offering the unlimited lifetime maximum could increase costs.
But Kettig says IHC will be able to make some other ACA-related changes without increasing costs.
Those changes include:
- Elimination of any pre-existing condition exclusions for dependent children under the age of 19/
- Elimination of any cost-sharing for preventive services.
- Elimination of pre-authorization requirements for access to emergency services.
- Elimination of any authorization or referral requirements for access to ob/gyn services.
- Extension of coverage to child up to age 26.