5.66 Years Later – We Have Final Regs for PPACA’s 2010 Features – Departments Finalize Healthcare Reform Guidance

5.66 Years Later – We Have Final Regs for PPACA’s 2010 Features – Departments Finalize Healthcare Reform Guidance

PPACA ComplianceThe Departments of Labor, Treasury and Health and Human Services (DOL, IRS, HHS) have jointly issued final regulations coverage a number of health care reform topic, many dating back to 2010’s initial implementation of the Affordable Care Act (PPACA). These include:

  • Appeals and Review of Claims
  • Dependent Coverage
  • Designating a Primary Care Physician
  • Emergency Care
  • Grandfathered Plans
  • Implications for Expatriate Plans
  • Lifetime and Annual Limits
  • Preexisting Condition Exclusions
  • Rescissions (Cancellation of Coverage)

Dates! Dates! Dates—I need to know the dates before I can go on.

  • Effective date: These final regulations are effective on January 19, 2016.
  • Applicability date: These final regulations apply to group health plans and health insurance issuers beginning on the first day of the first plan year (or, in the individual market, the first day of the first policy year) beginning on or after January 1, 2017.

So, that means you have some time to digest these and then makes plans to implement the changes.

Appeals and Review of Claims. The good news here – is that these were “finalized” without “substantial change.” They are much like the initial guidance, which you can review using the hyperlinks below.

Under this new, long-list of clarifying technical guidance, we see the Departments’ full and fair review rules. When a health plan relies on new or additional evidence (or even a new reason or rationale) when making a benefit determination, the plan must automatically provide the evidence or rationale to the plan-participant-claimant and give them a reasonable opportunity to respond.

The final regulations also extend the transitional period for using state “NAIC-similar” external review processes through 2017.   Plans and insurers in a state without a NAIC compliant external review process, and self-insured plans, must follow an HHS process established previously. In addition, the temporary rule applying the external review process to claims that involve medical judgment and rescissions has now been made permanent, and two new items are added to the list of what is considered a medical judgment.

Prior articles:

Dependent Coverage.  Natural, adopted and stephchildren (sometimes referred to as dependent children, even though they may not be “tax” dependents, can be married, don’t have to live with you, etc.) may enjoy coverage until age 26. Some plans end that coverage on the child’s birthday, others end the coverage on the last day of the month in which the birthday occurs, and still others terminate coverage as of the end of the calendar or plan year in which the birthday occurs.  One thing that is new, today, is that the final regulations clarify that you cannot require the “children” to live within a specific service area in order to be eligible for coverage. This regulation relates only to eligibility and does not require a plan such as an HMO to cover services provided outside the plan’s service area.

Also, the examples in the guidance illustrate the requirement that coverage (for children) cannot vary based on age, except for children that are over the age of 26 (if that is applicable).  One example cites that a plan may not charge more for a dependent child unless that child was age 26 or older.  (Confirming what most plans did, and consistent with some of the post-2010 guidance and FAQs, where plans were attempting to “upcharge” for dependents over age 18, over age 23, etc.).  In another example, a plan with a narrow-network PPO would be required to permit entry (eligibility) for my daughter attending an out-of-state college, but the plan would not be required to cover out-of-network care that she receives—except for emergencies.

Designating a Primary Care Physician – Patient Protections. New clarifications allow health plans to require participants and beneficiaries to select in-network providers within specified geographic limits when designating a primary care provider. They also clarify when and how balance billing (i.e., billing patients for the excess of the providers’ billed charges over benefits paid by the plan and other patient payments, such as copayments or coinsurance) is permitted for out-of-network emergency care, and provide that emergency care does not have to be sought within a specific timeframe (e.g., within 24 hours of onset).

Emergency Care.   Health plans cannot charge a plan participant more for emergency care, even if it is out-of-network. The final regulations permit balance billing for emergency care, although existing state laws prohibiting balance billing must still be followed. Plans and insurers must provide notice in the Summary Plan Description (SPD) about whether balance billing may result from using an out-of-network provider for emergency care.

Grandfathered Plans. The final regulations maintain the rule that grandfathered status is determined separately as to each “benefit package” under a group health plan. They also adopt existing “anti-abuse rules” that curtail attempts to retain grandfather status through indirect plan changes, and add new clarifying examples. Considerable effort is also devoted to describing changes that would cause a plan to lose grandfathered status— addressing, for instance, decreases in employer contribution rates and changes in copayments for limited categories of services. Highlighting the continuing relevance of these issues, the agencies estimate that more than 40 million participants and beneficiaries are covered by grandfathered group health plans.

Prior articles:

Lifetime and Annual Limits. Group health plans (including self-insured plans) that are not required to cover EHB are nonetheless barred from imposing annual or lifetime dollar limits on any EHB they do offer. Under the regulations, these plans may define EHB by reference to any of the 51-benchmark plans identified by the states, or the District of Columbia, or one of the three largest Federal Employees Health Benefit Program (FEHBP) plans.

Finalizing some, but not all, existing guidance for HRAs and other account-based plans that are permitted only if “integrated” with a group health plan that complies with health care reform requirements (including the prohibition on lifetime and annual dollar limits), the regulations attempt further clarifications and offer new guidance. For instance, they explain that employers with fewer than 20 employees may be unable to meet the integration test for Medicare Part B and Part D premium reimbursement arrangements (PRAs) provided in previous guidance because some insurers will not allow offers of coverage to employees who are eligible for Medicare (see our article). The final regulations allow such PRAs to be integrated with Medicare if employees not offered other group health plan coverage would be eligible for that coverage but for their eligibility for Medicare. They also clarify that a forfeiture of amounts or waiver of reimbursements under an HRA will comply with the integration requirements even if amounts may be reinstated on a future date, upon death, or the earlier of the two dates.

Preexisting Condition Exclusions. While adopting previous guidance on preexisting condition exclusions, the final regulations also clarify that these rules do not prohibit plans or insurers from excluding all benefits for a condition if they do so regardless of when the condition arose relative to the effective date of coverage. They note, nevertheless, that other rules and laws (such as the essential health benefit (EHB) requirements) may preclude such exclusions.

Rescissions. Although they don’t break new ground, the final regulations remind employers that a rescission (i.e., retroactive cancellation or discontinuation of coverage) is considered an adverse benefit determination subject to internal and external appeals procedures and that coverage must remain effective until an internal appeal is completed. They also finalize previous guidance providing that the prohibition on rescissions is not violated if a plan retroactively terminates coverage due to a failure to pay required contributions (including COBRA premiums).