Texas Insider Report
The Patient Protection & Affordable Care Act (PPACA) is the new set of federal rules signed into law by President Barack Obama on March 23 2010. Despite the claim that current health care plans are grandfathered" in under PPACA the U.S. Departments of HHS Labor & Treasury just issued new regulations on grandfathered" health plans and some trigger the mandate to have a government approved plan.
Under PPACA grandfathered" plans would still be required to comply with certain reforms and individuals who choose to enroll in these plans would not be able to use tax credits essentially allowing these plans to wither on the vine.
Along with the Health Care & Education Reconciliation Act of 2010 (signed into law on March 30 2010) the PPACA Act is a product of the health care reform agenda of the Democratic 111th Congress and the Obama administration.
Six months after passage the reconciliation bill would require grandfathered" individual and small group plans to do the following:
- Prohibit practices such as the rescission of insurance excessive waiting periods and lifetime limits.
- Requires young adults" be allowed to stay on their parents insurance plan until age 26.
The U.S. Departments of HHS Labor & Treasury have just recently now issued a
new regulation on grandfathered" health plans under PPACA. Similar to the
draft that was leaked on Friday the final regulation shows the following:
- Any policies sold in the group and individual health insurance markets to new entities or individuals after March 23 2010 will not be grandfathered health plans even if the health insurance products sold to those subscribers were offered in the group or individual market before March 23 2010." (Page 14)
- Mid-range estimates show that 51 of all employees in 2013 will be in plans without grandfathered" status as employers will be forced to change their plans. (Page 54)
- This means that nearly 87 million Americans will not be able to keep their coverage.
- High-end estimates show that 69 of all employees in 2013 will be in plans without grandfathered" status. (Page 54)
- This means that nearly 117 million Americans will not be able to keep their coverage.
- High-end estimates show that 80 of employees in small employer plans in 2013 will be in plans without grandfathered" status. (Page 54)
- Unions are exempt. Collectively bargained plans can change issuers during the period of the collective bargaining agreement without a loss of grandfather status" at least until the last agreement in effect as of March 23 2010 terminates. (Page 81)
Group health plans or health insurance coverage no longer will be considered grandfathered" if a plan sponsor or insurer:
Eliminates all or substantially all benefits to diagnose or treat a particular condition."
- In other words if a plan cuts benefits in order to offset rising costs they are no longer grandfathered. (Page 35)
- Increases a percentage cost-sharing requirement (such as coinsurance)." (Page 36)
- Increases fixed-amount cost-sharing requirements other than copayments…by a total percentage measured from March 23 2010 that is more than the sum of medical inflation and 15 percentage points." (Page 36)
- For co-payments plans cease to be grandfathered if there is an increase since March 23 2010 in the copayment that exceeds the greater of (A) the maximum percentage increase or (B) five dollars increased by medical inflation." (Page 21)
- For a group health plan or group health insurance coverage an employer or employee organization decreases its contribution rate by more than five percentage points below the contribution rate on March 23 2010." (Page 36)
- A group health plan or group or individual health insurance coverage with respect to annual limits as of March 23 2010:
- If previously did not impose an overall annual or lifetime limit - imposes an overall annual limit on the dollar value of benefits.
- If previously imposed a lifetime limit but no overall annual limit - adopts an overall annual limit at a dollar value that is lower than the dollar value of the lifetime limit that was previously imposed.
- If previously imposed an overall annual limit on the dollar value of all benefits - decreases the dollar value of the annual limit (regardless of whether the plan or health insurance coverage also imposes an overall lifetime limit on the dollar value of all benefits). (page 36)
Additional Information:
Click
here for Administrations fact sheet on the new regulation and
here for their questions and answers.
The new regulation is available on the Federal Registers website at the following link:
http://www.federalregister.gov/OFRUpload/OFRData/2010-14488_PI.pdf
