The Obama administration has finally posted an early version of final regulations for some of which, in 2009 and 2010, were the most popular provisions in the proposals that became the Patient Protection and Affordable Care Act of 2010 (PPACA) and its sister, the Health Care and Education Reconciliation Act of 2010 (HCERA).
The “tri agencies” — the Internal Revenue Service (IRS), the Employee Benefits Security Administration (EBSA) and the U.S. Department of Health and Human Services (HHS) — are preparing to publish the regulatory packet, which addresses PPACA provisions such as the grandfathered plan rules, the essential health benefits (EHB) package requirements, the mandate requiring group plans to offer coverage to dependent children up to age 26, and internal appeal and external review process standards, on Wednesday.
The regulations will apply to major medical plans, and, possibly, in some cases, to some arrangements marketed as alternatives to PPACA-compliant major medical plans.
The tri agencies have been implementing the affected PPACA provisions using interim final regulations since July 2010.
See also: PPACA: Feds Unveil Appeal Rule Draft
Federal agencies tend to take a looser approach to enforcing laws implemented with final regulations, which have gone through a full public comment period and full paperwork review and economic impact analysis processes, than those implemented with interim final regulations. The release of the final regulations could pave the way for the start of more compliance audits.
The final regulations are set to take effect on the first day of the first individual policy year, or group plan year, starting on or after Jan. 1, 2017.
For a look at 10 interesting provisions we found in the official preamble to the regulations, with page numbers based on the page numbers in the preview PDF file, read on.
1. A grandfathered group plan that makes significant changes in cost-sharing requirements or design changes will lose its “grandfather” status, but a plan can add a new tier, with new employee contribution levels or other features, without losing grandfathered status.
“For example, if a plan with ‘self-only’ as the sole coverage tier added a ‘family’ coverage tier, the level of employer contributions toward the ‘family’ coverage could not cause the plan to lose grandfather status.” (Page 18)
2. The tri agencies have no plans to be merciful to grandfathered plans that goof.
A grandfathered plan loses grandfathered status whenever a change that triggers the loss of grandfathered status becomes effective, even if that’s in the middle of a plan year. “Once ‘grandfather’ status is lost, there is no opportunity to cure the loss of ‘grandfather’ status.” (Page 23)
See also: NAIC Opposes Grandfather Swapping
3. The tri agencies have cut down on the number of EHB benchmarks that non-EHB coverage issuers can use for PPACA compliance purposes.
A grandfathered individual policy does not have to offer the standard EHB benefits package, and a large group health plan does not have to offer the EHB benefits. But PPACA forbids even those types of plans from imposing annual or lifetime limits on coverage for the services in the EHB package.
The interim regulations let those non-EHB EHB users choose from what amounted to a list of more than 500 possible EHB benchmarks. The tri agencies say they will reduce the possible benchmarks the non-EHB EHB users can choose to the 51 EHB benchmark plans used by a state or the District of Columbia, plus three EHB benchmarks that serve as base benchmark plan options under the Federal Employees Health Benefit Program. (Page 31)
Health reimbursement arrangements (HRAs)
4. The tri agencies will let the HRAs in group health-HRA packages escape from the PPACA ban on annual lifetime and benefits limits, but they are, effectively, banning individual health-HRA packages by requiring the HRAs in those packages to provide unlimited benefits for EHB services.
“It has come to the departments’ attention that there are a wide variety of account-based products being marketed, often with subtle but insubstantial differences, in an attempt to circumvent the guidance set forth by the departments on the application of the annual dollar limit prohibition and the preventive services requirements to account-based plans,” officials say in the preamble. “The departments intend to continue to address these specific instances of noncompliance.” (Pages 40-41)
5. The tri agencies will let consumers, affected by any rescissions of health coverage that do continue to take place, use internal appeal and external review programs.
The agencies say other regulations already define a rescission as an “adverse benefit determination,” whether or not the rescission affects any particular benefit. (Pages 44-45)
See also: NAIC Eyes Rescissions
Coverage for dependent children up to age 26
6. Plans with locally based provider networks will have to open up to out-of-area dependent children.
Eligibility restrictions that require the insureds’ dependent children, including college students, to live, work or reside in a particular area violate the young adult coverage access law, the agencies said. But the agencies say this provision does not directly affect whether or how the plans must pay for out-of-area care for the out-of-area dependent children. (Page 49)
Internal appeals and external review
7. For individual policies, insurers have to allow for appeals of coverage eligibility decisions within the internal appeal process, and they can impose only one level of internal appeal for individual coverage holders.
The agencies say they put these requirements in the interim final regulations and are keeping them as is. (Page 56)
8. The maximum external review filing fee in a state that allows filing fees will be $25 per filing and $75 per claimant per plan year.
In states without filing fee rules, insurers and states cannot impose any filing fees on enrollees who ask for external reviews. (Pages 69-70)
General patient protection provisions
9. The tri agencies are still thinking about how to handle balance billing.
PPACA itself “does not require plans or issuers to cover balance billed amounts, nor does it prohibit balance billing,” the agencies say. (Page 77)
10. The tri agencies are still working on regulations implementing the Expatriate Health Coverage Clarification Act of 2014 (EHCCA), which is part of the Consolidated and Further Continuing Appropriations Act of 2015.
Employers and issuers should keep using the interim guidance they’ve been using, the agencies say. (Pages 83-84)