HHS Permits Insurers to Establish Open Enrollment Periods for Child Coverage

Responding to concerns that the new health care law’s prohibition on denying coverage to children with pre-existing conditions would significantly drive up costs, the U.S. Department of Health and Human Services (HHS) has clarified that plans may set up specific enrollment periods. Insurers had predicted that the non-discrimination coverage requirement that takes effect for most plans beginning on or after September 23 would result in parents enrolling their children only once they became sick. Amid reports that many insurance companies were considering dropping child coverage altogether, the HHS on July 27 issued a fact sheet explaining, in question and answer format, how the prohibition on pre-existing condition exclusions applies to insurers offering coverage to children under 19 years old in the individual market. Specifically, the HHS clarified that:

• Insurance issuers in the individual market may restrict enrollment of children under 19 to specific open enrollment periods – the number and length of such periods to be at the insurer’s discretion – if permitted under state law. Insurance issuers must abide by more stringent state laws, if applicable, that require issuers to maintain a continuous open enrollment period or regulate the number and/or frequency of these enrollment periods.
• Child-only individual market insurance plans that existed on or prior to March 23, 2010, and that do not significantly change their benefits, cost sharing, and other features, will be “grandfathered” and thus exempt from the regulations prohibiting pre-existing condition exclusions.
• The administration will issue new regulations if it determines that insurers are using their enrollment periods to limit coverage access, or if children with pre-existing conditions are being diverted inappropriately from Medicaid or the Children’s Health Insurance Programs (CHIP) to private insurance plans.

This entry was written by Ilyse Schuman.