Along with newly issued health reform rules finalizing essential health benefits provisions comes a new series of FAQs from the U.S. departments of Labor, Health and Human Services and Treasury. This guidance addresses specific questions raised about the scope of reform’s cost-sharing and preventive services provisions, and provides some transition relief for large group and self-insured plans concerned about the administrative impact of the cost-sharing provisions.
Limitations on Cost Sharing
Generally, the health reform law provides that a group health plan is to ensure that any annual cost-sharing does not exceed certain out-of-pocket and deductibles limitations. Questions have been raised on whether self-insured and large group health plans must comply with these requirements. An FAQ clarified that the agencies “continue to believe that only plans and issuers in the small group market” are required to comply with the deductible limit. Further rulemaking is expected specific to self-insured and large group health plans, according to the guidance.
Regarding the annual limitation on out-of-pocket maximums, the FAQ explained that all non-grandfathered group health plans must comply. However, the response went on to say that some plans use multiple service providers to help administer benefits (such as one third-party administrator for major medical coverage, a separate pharmacy benefit manager, and a separate managed behavioral health organization). These providers may impose different levels of out-of-pocket limitations and may use different methods for crediting participants’ expenses against any out-of-pocket maximums. These processes will need to be coordinated and may require new regular communications between the providers. In recognition of this issue, the agencies established a transition period for the first plan year beginning on or after Jan. 1, 2014, under which the annual limitation on out-of-pocket maximums is considered satisfied if both of the following conditions are met:
- the plan complies with the requirements for its major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage); and
- to the extent the plan or any health insurance coverage includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (for example, if a separate out-of-pocket maximum applies to prescription drug coverage), the out-of-pocket maximum does not exceed the dollar amounts under the reform law.
However, the agencies noted that separate mental health parity rules prohibit plans and issuers are prohibited from imposing an annual out-of-pocket maximum on all medical/surgical benefits and a separate annual out-of-pocket maximum on all mental health and substance use disorder benefits.
Among other things, the agencies also clarified that a plan without any in-network providers to offer a particular preventive service cannot impose cost-sharing if the service is done out-of-network, and addressed several questions on cost-sharing procedures related to women’s preventive services, colonoscopies, genetic counseling and other medical services.
More details on this issue can be found at http://hrcomplianceexpert.com.