Bills Would Amend Affordable Care Act Provisions Affecting Coverage Rescission and Reporting Requirements

United_States_Capitol_dome_daylight.jpgTwo bills recently introduced in Congress seek to amend the Patient Protection and Affordable Care Act (“Affordable Care Act”) by speeding up the application of the ban on coverage rescissions, and eliminating certain reporting requirements for businesses.

The first bill, H.R. 5761, would expedite the application of the Affordable Care Act’s prohibition on arbitrarily rescinding health care coverage. Section 2712 of the Affordable Care Act prohibits group health plans and insurance providers from rescinding coverage from group or individual plan enrollees unless they commit health insurance fraud or otherwise intentionally misrepresent material facts prohibited by the terms of the plan or coverage. Insurers and plans seeking to rescind coverage are required to provide at least 30 days’ notice. This health coverage rescission ban is effective for plan or policy years beginning after September 23, 2010. The new bill introduced by Rep. Charlie Melancon (D-LA) would make this provision effective immediately, and require plans or insurance issuers to reinstate coverage for any enrollee whose coverage was dropped between the time the Affordable Care Act was signed into law on March 23, 2010 and the new bill is enacted. During this interim period, any claims for services also may be submitted for reimbursement and treated as if the coverage rescission had never occurred.

This bill has been referred to the House Committee on Energy and Commerce.

Another recently-introduced measure would repeal the expansion of information requirements included in the Affordable Care Act. The Small Business Paperwork Mandate Elimination Act (H.R. 5141, S. 3578) sponsored by Rep. Daniel Lungren (R-CA) and Sen. Mike Johanns (R-NE) would retract the health care bill’s provision that requires all businesses, charities, and state and local governments to file 1099 forms if they purchase $600 or more in goods from another business after December 31, 2011. According to a press release issued by Sen. Johanns’s office, this reporting requirement could impact as many as 40 million businesses. According to Johanns, “[f]or businesses already struggling to emerge from a recession this would be particularly burdensome, requiring government paperwork for common, everyday purchases. It is nothing more than a government-imposed obstacle to economic growth and job creation.”

The legislation introduced in the House has been referred to the House Committee on Ways and Means. The Senate companion bill has been referred to the Senate Committee on Finance.

This entry was written by Ilyse Schuman.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.