Lifetime Dollar Limits
Annual Dollar Limits
When does the prohibition on annual dollar limits go into effect?
|Plan Year Begins||Minimum Annual Limit|
No. The regulation states that a plan may only take essential health benefits into account when determining whether an individual has received benefits that meet or exceed the restricted annual dollar limit.
No. The regulations do not exempt out-of-network benefits from the restriction on lifetime and annual limits. The DOL has confirmed verbally that the annual dollar limit restriction and the annual/lifetime limit prohibition apply to out-of-network benefits.
Waiver from Restricted Annual Limit Requirements
The regulations authorized the Secretary to establish a program for plans to obtain waivers from the restricted annual limits if compliance with the limits would result in a significant decrease in access to benefits or increase in premiums.
The application must include:
1. The terms of the plan or policy form(s) for which a waiver is sought;
2. The number of individuals covered by the plan or policy form(s) submitted;
3. The annual limit(s) and rates applicable to the plan or policy form(s) submitted;
4. A brief description of why compliance with the interim final regulations would result in a significant decrease in access, to benefits for those currently covered by such plans or policies, or significant increase in premiums paid by those covered by such plans or policies, along with any supporting documentation; and
5. An attestation, signed by the plan administrator or Chief Executive Officer of the issuer of the coverage, certifying a) that the plan was in force prior to September 23, 2010; and b) significant decrease in access to benefits for those currently covered by such plans or policies, or a significant increase in premiums paid by those covered by such plans or policies.
In 2011, CCIIO allowed carriers and employers to extend their waivers for the remainder of the waiver period (2011 through 2013) rather than having to reapply for a new waiver each year.
All waiver extension forms and applications for waivers from the annual dollar limits requirements had to be filed with CCIIO between June 24, 2011 and September 22, 2011. CCIIO will not entertain any waiver applications or extensions after that date.
Waiver recipients are required to provide an annual Notice of a waiver from the Annual Limit Requirement. This Notice must be updated and sent to eligible participants and subscribers annually. The guidance provides for Model Notice language around this requirement and can be found at: http://cciio.cms.gov/resources/files/06162011_annual_limit_guidance_2011-2012_final.pdf
More details about the waiver process, record retention and notice requirements can be found in the HHS bulletins available at: http://cciio.cms.gov/resources/regulations/index.html#alw
Who is responsible for applying for the waiver, Aetna or the plan sponsor?
Aetna has received a waiver for its fully insured Strategic Resource Company (SRC) plans. Self-funded plan sponsors must apply for the waiver for their self-funded plans. HHS has accepted some applications directly from plan sponsors for insured plans as well.
How are Health Reimbursement Accounts (HRAs) impacted by the annual dollar limit requirements and the waiver process?
HRAs that are integrated with other health coverage are not impacted by the annual dollar limit requirements so long as the other coverage meets the requirements.
Interim guidance was also issued with regard to HRAs, with respect to the waiver process. HRAs that were in effect prior to Sept. 23, 2011, are exempt from the waiver requirement and are permitted to continue annual dollar limits provided that the plan comply with any record retention and the annual notice requirements, described above.
Subsequent guidance released by the Departments has clarified that in order to comply with the annual dollar limit requirements the HRA must be "integrated" with other coverage as part of a group health plan.
Essential Health Benefits
Do large group health plans or grandfathered plans have to include essential health benefits?
No. Large group health plans, self-funded plans, and grandfathered plans are not required to include essential health benefits as coverage requirements. However, to the extent such plans cover any essential health benefits, any annual dollar lmits or lifetime dollar limits must be removed.
Which benchmark plan should be used for a large group health plan, self-funded plan or a grandfathered plan to determine compliance with annual and lifetime dollar limit requirements?
According to guidance issued, the Departments of Labor, Treasury and HHS will allow such plans to use a permissible definition of essential health benefits, as authorized by HHS, including any available benchmark option, supplemented as needed to ensure all ten categories are reflected.
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