Many Affordable Care Act Provisions Take Effect September 23

23 calendar2.JPGOn Thursday, a number of provisions of the Patient Protection and Affordable Care Act (“Affordable Care Act”) go into effect for benefit plan years beginning on or after September 23, 2010. The following is a summary of these new requirements:

  • Extension of Health Plan Dependent Coverage up to Age 26. Group health plans and insurers that provide dependent health coverage must extend that coverage to dependents up to age 26. Prior to 2014, a grandfathered group health plan must only extend dependent coverage to age 26 if the dependent is not eligible for other employer-sponsored coverage. Children of the adult dependents (grandchildren of the covered employee) do not have to be offered coverage under the plan. The coverage is not taxable to the employee or dependent
  • Prohibition on Rescissions. Group health plans and insurers are prohibited from rescinding, or canceling, health coverage of an enrollee except in the case of fraud or intentional misrepresentation of material fact.
  • Prohibition on Pre-existing Condition Exclusions. Group health plans and insurers are prohibited from imposing pre-existing condition exclusions for children under the age of 19. Beginning in 2014, plans are prohibited from including a pre-existing condition exclusion for any participant.
  • Prohibition on Lifetime Benefit Limits. Group health plans and insurers are prohibited from imposing a lifetime dollar limit on essential health benefits.
  • Restriction on Annual Benefit Limits. Prior to 2014, group health plans may impose annual limits on the dollar value of essential health benefits only as determined by the Secretary of Health and Human Services. Beginning in 2014, annual dollar limits are prohibited for all essential health benefits.
  • Maintenance of Minimum Loss Ratios. Insurers that offer group or individual plans must start reporting, on an annual basis, the percentage of health premiums used for claims reimbursement, and adhere to certain minimum medical loss ratios or provide participant rebates.

In addition to the above, the following are provisions that apply to new plans, but not to plans that qualify as “grandfathered” plans:

  • Preventative Care. Group health plans and insurers must cover certain preventative care services without cost-sharing, including preventative services rated A or B by the U.S. Preventative Task Force, recommended immunizations, preventative care and screenings for infants, children, and adolescents, and additional preventative care and screenings for women.
  • Appeals Process. A new appeals process that includes both internal and external reviews will be required to be provided by employers to employees for appeals of coverage determinations and claims.
  • Non-discrimination in Favor of Highly-Compensated Employees. The requirements of Section 105(h) of the Internal Revenue Code will be extended to fully-insured plans. The restriction currently only applies to self-insured plans.
  • Emergency Services. Group health plans and insurers must cover emergency services without prior authorization and in-network requirements.
  • Physician Selection. Group health plans and insurers that provide for or require the designation of a participating primary care provider must permit each participant to designate any participating primary care provider who is available to accept such individual. The plan must permit a participant to designate a pediatrician as the primary care provider for a child. Plans are prohibited from requiring authorization or referral for an OB-GYN.

For a more detailed timeline explaining when the Affordable Care Act’s provisions will take effect, including those that have already been implemented, see Littler’s Insight: Health Care Reform: Are You Prepared? A Timeline for Employers to Follow by Ilyse W. Schuman, Steven J. Friedman, and David M. Sawyer.

This entry was written by Ilyse Schuman.

Photo credit:  picha

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.