Employer sponsored health plans that set low annual limits on “essential” benefits have been able to apply to HHS for a waiver if they can demonstrate that compliance with June 28, 2010 interim final rules phasing out such caps would cause a “significant decrease in access to benefits or a significant increase in premiums.” Waivers gained in the first round of applications will expire on Sept. 23, 2011, but HHS is accepting applications for a second year. This application will extend waivers until Jan. 1, 2014.
To apply for a waiver extension or a new waiver, complete and submit this form.
Plans that fail to apply for or extend their waiver, along with plans whose application for a waiver is rejected, will have to comply with the annual limit rule starting Sept. 23.
If a plan does get a waiver, it must inform plan participants of that fact, noting that the plan has restricted benefits below the law, and telling them the maximum number of hospital days covered due to the limits in their plan benefits.
The health reform law prohibits plans from applying dollar limits on “essential health benefits” below: $750,000 for plan years starting before Sept. 23, 2011; $1.25 million for plan years that start between Sept. 23, 2011 and Sept. 23, 2012; and $2 million for plan years beginning after Sept. 23, 2012 but before Jan. 1, 2014.
Plans that are complying with the limits phase-out say there’s been an absence of cost impact so far.
Until the government decides the kinds of benefits employer plans must offer to be deemed minimum essential benefit plans in 2014, plans may still restrict benefits for certain goods, services or conditions outside the scope of “essential health benefits.”
Under a generous reading, permitted benefits might allow caps for benefits such as bariatric surgery, chiropractic and maybe infertility services.
Maybe plans can try out non-dollar limits and see how they work. While dollar limits are strictly confined, plans can include other kinds of limits, such as on the number of inpatient mental health days or home health visits. But for self-funded plans, aggressive limits might just protect stop-loss insurers at the expense of employees, says Ron Walter, CEO of Professional Benefit Administrators in Oak Brook, Ill.