Critical first implementation steps in the healthcare reform law went into effect last week, and a flurry of new proposals, guidance and directives regarding the law were issued by federal agencies.
At the same time, the Department of Health and Human Services has issued guidance that provides the industry with great flexibility when selling limited-benefit medical plans.
The new rules, effective for plans that go into effect Jan. 1, 2011, bar lifetime limits on essential benefits. This provision applies to all plans.
Annual limits will be phased out through 2014 for all plans, except grandfathered individual plans, according to officials at the National Association of insurance and Financial Advisors, and the National Association of Insurance Commissioners.
Also going into effect is a ban on rescissions, that is, retroactive cancellation of policies. The law bans rescissions except in cases of fraud or intentional misrepresentation of material fact.
Under the new rules, a wide range of preventive care provisions including immunizations, well baby and child screenings, and well women exams must be covered without cost-sharing under all non-grandfathered plans.
Moreover, plans that cover dependent children must extend coverage until the child’s 26th birthday. This applies to all types of plans, however before 2014, group health plans will be required to cover adult children only if the adult child is not eligible for employer-sponsored coverage. Adult children cannot be charged more than any other dependent.
Also, effective as of the 23rd, children under 19 years of age cannot be denied coverage or benefits based on medical status or past illnesses. This applies to all plans except grandfathered individual plans.