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On Tuesday, March 23, President Obama signed the Patient Protection and Affordable Care Act into law, bringing wide-spread reform to the U.S. health system and some significant changes to the health insurance industry.
With the passing of this law comes many questions and uncertainties regarding the reform components and the implementation timeline. As a valued broker, Guardian is committed to ensuring that you and your clients are kept up-to-date with reform developments and aware of any potential impact that reform may bring.
The health reform law is certainly a complex and large piece of legislation to fully digest and understand. Furthermore, not all of the details of the reform provisions have been clearly defined yet by the federal government.
Additional legislative activity, as well as extensive rulemaking will most likely occur over the next 12 months and beyond, providing some additional guidance to both carriers and brokers.
To assist you in addressing some of the common immediate questions that you may be getting from your clients, here are three aspects of the reform law that we have found to be of particular interest right now to planholders and members
BEGINNING WITH PLAN YEARS ON OR AFTER SEPTEMBER 23, 2010
Employees covered under a medical plan will be able to extend coverage to eligible dependents up until age 26 under the new reform law. This can be done upon the renewal of the group medical plan on or after September 23, 2010. The definition of an “eligible” dependent has yet to be fully defined within the legislation. It is also unknown at this point if a dependent who “aged-off” of a current medical plan would be eligible to re-enroll once this provision goes into effect. In addition, some states may have their own laws that extend dependent coverage to an even older age. The dependent coverage age extension applies only to medical plans.
BEGINNING WITH PLAN YEARS ON OR AFTER SEPTEMBER 23, 2010
The health reform law eliminates Lifetime dollar limits on all medical plans, as of September 23, 2010. For existing medical plans, the reform law states that Lifetime Limit benefit changes can be made during the group’s renewal, so while this provision goes into effect on September 23, 2010, in-force groups may not receive this benefit change until their next scheduled renewal date. The No Lifetime Limits provision applies only to medical plans.
BEGINNING WITH PLAN YEARS ON OR AFTER SEPTEMBER 23, 2010 FOR DEPENDENT
CHILDREN AND IN 2014 FOR ADULTS.
Starting on September 23, 2010, medical plans can no longer impose pre-existing conditions for dependent children under the age of 19. In 2014, the same pre-ex prohibition on medical plans takes effect for adults. With the introduction of HIPAA in 1996, the usage of pre-ex to determine eligibility for a group medical plan was significantly reduced, so this reform provision will only have a slight impact to most carrier’s current pre-ex practices for group coverage. Pre-ex is primarily used as a determining factor when selling individual medical plans, so this provision will have a bigger impact to those plans. The No Pre-Ex provision applies only to medical plans.
Please note that these components of the Patient Protection and Affordable Care Act pertain to all Individual medical plans and both fully and self-funded group medical plans.
While working with your clients, it’s important to reiterate that while reform was signed into law, the implementation of reform components is not immediate. Aspects of reform will be phased in over time, so carriers will be making necessary benefit changes and provisions in accordance with the timelines outlined in the reform law. Furthermore, not every detail of the reform law has been fully developed by Congress, so there are some nuances of reform that have yet to be defined. Over the next 12 months, the detailed rules writing of the reform law will take place and as that happens, carriers will be in a better position to respond and react to the key components of reform.
America’s Health Insurance Plans (AHIP) has developed two great reform resources that we encourage you to review: The Reform Law Summary and Reform Implementation Timeline. Please visit the AHIP website for the most up-to-date information on reform at www.ahip.org or the National Association of Health Underwriters (NAHU) . |
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