Source: hr3590.com
Health reform’s final essential health benefits rule makes it clear that self-insured and large group health plans do not need to comply with limits on growth in employee cost-sharing, offer all 10 categories of essential health benefits, or meet actuarial minimums like small-group and individual policies.
However, the regime explained in the rule is still important self-insured and large group plans because they are still subject to many of their requirements; they may want to voluntarily apply elements to their own plans even though they’re not required, and some EHB rules may bear on other reform mandates.
The final health reform rule, which will be published Feb. 25, further defines the core package of benefits that health plans must offer while also: (1) limiting out-of-pocket expenses for covered lives; (2) limiting the growth of those expenses; (3) ensuring that consumers get a minimum value for the premiums they pay.
After receiving thousands of public comments, the U.S. Department of Health and Human Services issued a rule that largely conformed to the proposed rules (77 Fed. Reg. 70644) issued in November 2012.
The 10 categories of EHB are:
- Ambulatory patient services
- Emergency services
- Hospitalization
- Maternity and newborn care
- Mental health and substance abuse
- Prescription drugs
- Rehabilitative and devices
- Laboratory services
- Preventive and wellness services
- Pediatric services, including oral and vision care
Plans also have to meet the AV levels required by the law, namely 60 percent for a bronze plan, 70 percent for a silver plan, 80 percent for a gold plan and 90 percent for a platinum plan. AV is the percentage of incurred costs the plan expects to cover.
Actuarial Value
The rule includes an AV calculator for health plans. The proposed tool allows users to measure the actuarial value of health plans and compliance with actuarial value standards required by health reform.
AVs will help consumers compare and select health plans by allowing them to compare the relative payment generosity of available plans, HHS stated.
AV Will Include HSAs and HRAs
The proposed rules had established a standard under which for the treatment of small group market high-deductible health plans offered with a health savings account or health reimbursement arrangement, so that HDHP and HSAs or HRAs are integrated. Calculating the AV based on the insurance plan alone would have understated the value of coverage if the value of the HSAs or HRAs were not included, HHS said. This provision was finalized; however, HHS clarified that in order to count toward the AV calculation, employer contributions to HSAs and amounts made newly available under integrated HRAs that may only be used for cost sharing must be known to the issuer when the plan is purchased. The agency noted that whether other types of integrated HRAs might count toward AV is being given further consideration, so more federal guidance on this issue will be issued.
In-network Services Only Will Be Counted
HHS finalized proposed language noting that when considering actuarial value, in-network services only will be considered, because out-of network utilization is considered to be a minor portion of total health plan spending.
Most key, HHS posted an AV calculator at http://cciio.cms.gov/resources/files/av-calculator-final-2-20-2013.xlsm.
It also posted a similar “Minimum Value Calculator,” in order to assess an employee’s eligibility for a premium tax credit, at http://cciio.cms.gov/resources/regulations/index.html#pm.
Large and Self-funded Plans Still Must Limit Growth of Out-of-Pocket Expenses
The rule implements provisions that regulate the rate of growth in cost sharing for all plans to the premium adjustment percentage – this applies to both large and self-insured group health plans. Self-insured plans had argued they should get an exception because when they carve out coverage (for example for drug benefits), controlling out-of-pocket growth becomes difficult. HHS, DOL and Treasury issued “sub-regulatory guidance” identifying enforcement safe harbor to address those operational concerns; however, the rule will remain essentially intact.
Self-funded Plans Do Escape Prescriptive Deductible Limits
Under health reform, limits for deductibles for exchange, small group and individual coverage are $2,000 for self-only coverage; $4,000 for self-plus coverage. The growth rate can be no more than premium adjustment percentages. Self-funded and large group plans will not be subject to these exact amounts, HHS clarified in the final rules. However, further rulemaking is expected to further flesh out the agency’s reasoning.
Similarly, the annual limitation on cost sharing would be applicable to in-network services only. Although some commenters had questioned the exclusion of out-of-network services for this purpose, “[W]e have decided to apply cost-sharing limits to in-network visits only to promote health plan affordability,” HHS stated.
FSA Contributions Not Considered in Deductible Limits
The health reform law permits, but does not require, contributions to flexible spending accounts to be taken into account when determining the deductible maximum for small group plans. HHS finalized its proposal not to increase the deductible levels by the amount available under an FSA. Some commenters had sought such increases; however, the agency prohibited them, calling them operationally infeasible. HHS did add that “we will revisit this policy in later years.”
Drug Coverage Questioned
Commenters challenged the proposal that a certain number of drugs in a class be covered without regard to the specific drug brands. Some didn’t like U.S. Pharmacopeia being the sole source of coverage class determinations; and others questioned whether new drugs would be efficaciously added to plan formularies. In the final rules, HHS noted that states and exchanges would monitor drug coverage, and no alternative to USP had been suggested.