The Obama administration has unveiled interim final regulations it will use to implement the rescission, preexisting condition exclusion, benefits maximum and patient protection provisions in the new federal health laws.
The Internal Revenue Service, an arm of the U.S. Treasury Department, and the Employee Benefits Security Administration, an arm of the U.S. Labor Department, worked to put out the 196-page batch of interim final rules and guidance together with the new Office of Consumer Information and Insurance Oversight (OCIIO), an arm of the U.S. Department of Health and Human Services.
The Affordable Care Act (ACA) – the legislative package that includes the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act – created the OCIIO, and it also created the rescission provisions and other provisions that led to the development of the interim final rules.
The IRS also is proposing to adopt the same batch of rules as permanent regulations.
Final drafts of the interim final rules and the IRS notice of proposed rulemaking are now available on the Office of the Federal Register website.
The rules are due to appear in the Federal Register June 28. Agencies sometimes change documents between the time they appear on the Federal Register office website and the time they officially appear in the Federal Register.
Comments on the interim final rules will be due 60 days after the day of official publication in the Federal Register, and comments on the IRS proposed rules will be due 90 days after the publication date.
Many of the group plan and group insurance rules will apply for plan years beginning on or after Sept. 23, and others will apply for plan years beginning on or after Jan. 1, 2014.
Similarly, many of the rules that affect individual health insurance will apply for policy years beginning on or after Sept. 23, and some will apply for policy years beginning on or after Jan. 1, 2014.
Some ACA opponents hope to keep many of its provisions from taking effect by fighting the new requirements in court. The American Center for Law and Justice, Atlanta, has filed a suit against implementation in the U.S. District Court in the District of Columbia.
The ACA provisions banning lifetime benefits caps will take effect Sept. 23, and provisions restricting use of annual caps will take effect that same date. A ban on annual benefits caps is set to take effect Jan. 1, 2014.
Grandfathered individual policies are exempted from this provision, officials note.
“The statute provides that, with respect to benefits that are not essential health benefits, a plan or issuer may impose annual or lifetime per-individual dollar limits on specific covered benefits,” officials say.
The regulations describing “essential health benefits” have not been issued, officials say.
“For plan years (in the individual market, policy years) beginning before the issuance of regulations defining ‘essential health benefits,’ for purposes of enforcement, the Departments will take into account good faith efforts to comply with a reasonable interpretation of the term ‘essential health benefits,’” officials say. “For this purpose, a plan or issuer must apply the definition of essential health benefits consistently. For example, a plan could not both apply a lifetime limit to a particular benefit – thus taking the position that it was not an essential health benefit – and at the same time treat that particular benefit as an essential health benefit for purposes of applying the restricted annual limit.”
Between Sept. 23 and Jan. 2014, group plans and individual health insurers can “establish a restricted annual limit on the dollar value of essential health benefits,” officials say.
To avoid the possibility of big premium increases, federal agencies will phase the annual limits in over 3 years.
Starting Sept. 23, the annual limits must be at least $750,000. The minimum annual limit will increase to $1.25 million Sept. 23, 2011, and to $2 million Sept. 23, 2012.
The new ACA annual maximum rules do not apply to health savings accounts or to health reimbursement arrangements, officials say.
MINI MED PLANS
The federal agencies are making special allowances for limited benefit “mini med plans.”
To keep members of those plans from suffering a severe impact, “these interim final regulations provide for the secretary of Health and Human Services to establish a program under which the requirements relating to restricted annual limits may be waived if compliance with these interim final regulations would result in a significant decrease in access to benefits or a significant increase in premiums,” officials say.
HHS officials will put out limited-benefit plan guidance “in the near future,” officials say.