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PPACA: CCIIO to Wind Down Limit Waiver Program

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Employers and plans that want new relief from the federal annual benefits limit rules will have to submit their applications by Sept. 22, 2011, officials say.

The Center for Consumer Information and Insurance Oversight (CCIIO), the agency within the U.S. Department of Health and Human Services (HHS) that handles the annual benefit limit waiver applications, wants to wind down the program, CCIIO Director Steve Larsen said today during a press conference.

Employers or plans that already have waivers can apply to extend the waivers to 2013, Larsen said.

The CCIIO is also adding new disclosure rules for waiver users. Waiver users must, for example, show enrollees how the amount of any hospitalization benefit the plan provides compares the actual cost of a typical hospitalization, Larsen said.

The CCIIO created the program using bulletins, and it also will implement the new rules by issuing bulletins, Larsen said.

“Often the Only Option”

The annual benefits limit requirements are part of the Patient Protection and Affordable Care Act of 2010 (PPACA).

Starting with policy years beginning between Sept. 23, 2010, and Sept. 22, 2011, non-grandfathered health plans are supposed to have annual benefit caps of at least $750,000.

The minimum annual benefits levels are set to increase twice before 2014, and all annual benefits are supposed to go away in 2014.

Traditionally, many limited-benefit plans have had limits as low as $2,500.

HHS created a benefits limit waiver program for the limited benefit plans, to keep PPACA from wiping out coverage for the temporary workers, part-time workers and low-wage workers who tend to have the plans.

The waivers affect plans that cover only about 2% of the 160 million U.S. residents who have private, employer-sponsored health coverage. For the workers who have that kind of coverage, “they are often the only option,” Larsen said.

In 2014, PPACA is supposed to expand access to free Medicaid coverage and subsidies for the purchase of private coverage.

HHS hopes to see the need for the limited-benefit plans go away once the coverage expansion provisions take effect, Larsen said.

Some Republicans in Congress have accused the Obama administration of using the waiver program to reward unions that have been using limited-benefit plans, and some liberal Democrats have complained that the waivers protect plans that may mislead workers into believing that they have far more coverage than they really have. Officials at the U.S. Government Accountability Office concluded earlier this month that the CCIIO appears to be using objective criteria when deciding whether to approve waiver applications

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