Benefits and Compensation

Reform FAQs Solidify Rules on OOP Maximums, Provider Nondiscrimination

Non-grandfathered employer-sponsored group health plans must abide by out-of-pocket maximums for every individual covered, whether they are enrolled in “self-only” or in “other than self-only” (family) coverage. And the government stayed enforcement of the Affordable Care Act’s provider nondiscrimination rules, according to a new set of frequently asked questions from the departments that administer health care reform.

Out-of-pocket Limits

An FAQ on administration of ACA rules on OOP limits reiterated that plans and insurers must start paying OOPs: (1) when a family exceeds the plan’s “other than self-only” aggregate limit; but they also must do so: (2) whenever a single member of a family exceeds the “self-only” OOP limit, the U.S. Departments of Labor, Health and Human Services and Treasury said.

This interpretation of the rule on annual cost sharing limits takes effect for plan years that begin in or after 2016, but not 2015, the departments said. For 2016, the amount will increase to $6,850 for self-only coverage and $13,700 for “other than self-only” coverage. In 2015, the maximum annual limitation on cost sharing is $6,600 for “self-only” coverage and $13,200 for coverage other than self-only coverage.

If a non-grandfathered health plan has a compliant “other than self-only” OOP limit, it also must apply a separate embedded OOP for each individual covered under that coverage tier.

Example: If a plan has a $13,000 OOP limit on family coverage, and one member of a family of four incurs $10,000 in covered expenses, the plan must pay $3,150 for that individual; if the other members of the family each incurred $3,000, the family has exceeded the family OOP limit ($6,850 + $3,000 + $3,000 + $3,000 = $15,850). As a result, the plan must also pay the $2,850 by which the family’s aggregate cost-sharing exceeded the plan’s $13,000 annual limit, for a total of $6,000.

Provider Nondiscrimination

In another answer, the departments said they will not take any enforcement action against health plans and insurers for violating the ACA’s provider nondiscrimination rules, as long as the plan or insurer uses a “good faith, reasonable interpretation.” This comes in response to unresolved questions about how to interpret the rules. A request for information generated 1,500 comments, and a congressional committee requested further clarification.

The ACA’s provider nondiscrimination rules prohibit all non-grandfathered group health plans and insurers from discriminating against health care providers who are acting within the scope of their license or certification. This means that plans cannot exclude broad categories of providers from offering services otherwise covered or reimbursable under a plan.

The provision was intended to prevent plans and insurers from denying services solely because a physician did not provide it. It prohibits plans and insurers from denying claims only because a service was performed by a nurse practitioner, physician’s assistant, osteopath, podiatrist or chiropractor (provided they were licensed to perform the service under state law).

On the other hand, the nondiscrimination rule is not an “any willing provider” requirement. The rules at PHS Act section 2706(a) state:

This section shall not require that a group health plan or health insurance issuer contract with any health care provider willing to abide by the terms and conditions for participation established by the plan or issuer.

Nor is it meant to interfere with health plans trying to establish varying pay rates based on quality and performance.

Nothing in this section shall be construed as preventing a group health plan, a health insurance issuer, or the Secretary from establishing varying reimbursement rates based on quality or performance measures.

The directive overturns Question 2 of Series XV of ACA implementation questions and answers (from April 2013), which stated that there would be no more regulations to further explain the rule. Instead, the old FAQ advised employers and insurers to take their questions to their state insurance departments, HHS’ Center for Consumer Information and Insurance Oversight or DOL.

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