Annual and Lifetime Limits

Explanation

Annual dollar limits are prohibited, except for “restricted” annual dollar limits for essential benefits for plan years beginning prior to January 1, 2014. The regulations allow gradually increasing annual limits ($750,000 for plan year 2011; $1.25 million for plan year 2012; and $2 million for plan year 2013) until the limits are eliminated completely in 2014. It also clarifies that nothing restricts the use of annual dollar limits for covered benefits that are not essential benefits.[Section 2711 of H.R. 3590/Section 2301 of H.R. 4872]

Lifetime limits on the dollar value of essential benefits are now prohibited. This provision clarifies that nothing restricts the use of lifetime dollar limits for covered benefits that are not essential benefits.[Section 2711 of H.R. 3590/Section 2301 of H.R. 4872]

Aetna’s take and action

• We will remove annual dollar limits for all plans at the plan level upon next effective date or renewal date, on or after September 23, 2010. We will also remove annual dollar limits from all essential benefits.
• We do not have system capability to support restricted annual limits for essential benefits.
• HHS has agreed to waive the restricted annual benefit limit provisions in ACA for qualified limited benefits plans until 2014. Aetna received a waiver for all SRC limited benefits products for one year.
• We will remove lifetime dollar limits from all plans, upon the next effective date or renewal date on or after September 23, 2010
• We have made a good faith effort in developing our reasonable interpretation of essential benefits, until additional information is provided
• We will provide plan sponsors with our interpretation of essential benefits. We recommend self-funded plan sponsors seek advice of their own counsel regarding compliance and will consider administration of customer variations that we determine are reasonable.
  

Questions and answers

• What happens to people who have reached a lifetime limit? 
• When does the prohibition on annual limits go into effect? 
• What is the process for applying for a waiver and what must be shown to qualify? 
• What is an essential versus a non-essential health benefit? Are chiropractic and mental health services considered essential health benefits? 

View all Lifetime and Annual Limits Q&As 

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