Will lifetime or annual limits on coverage be eliminated?
General Reference (not clearly pro or con)
HR Policy Association, wrote in its June 30, 2010 policy story “Health Reform Regulations on Annual and Lifetime Limits Released” on www.hrpolicy.org:
“Some ambiguity remains with respect to the benefits to which annual and lifetime limits apply. Employers may impose annual or lifetime per-individual dollar limits on specific covered benefits that are not essential health benefits. The regulations define ‘essential health benefits’ by reference to the applicable section of the health reform statute, but because regulations have not yet been issued defining the benefits, the rules advise employers to make a good faith effort to comply with a reasonable definition of ‘essential health benefits’ until regulations defining this term are issued. Further, the regulations clarify the application of the annual and lifetime limit rules to certain health account plans:
June 30, 2010
- The rules do not apply to health flexible spending arrangements, medical savings accounts, or health savings accounts.
- If a health reimbursement arrangement (HRA) is integrated with other coverage as part of a group health plan, and the other coverage standing alone would comply with this rule, then the HRA will not be subject to the rule.
- The limits generally do not apply to retiree-only stand-alone HRAs.”
Associated Press (AP), wrote in its June 22, 2010 article “White House Releases Health Law Details” published on www.npr.org:
“President Barack Obama is marking the first 90 days since he signed the landmark health care overhaul by packaging a series of consumer safeguards…
…[T]he safeguards include:
— A ban on lifetime coverage limits. More than 100 million people are enrolled in plans that currently impose such limits, the White House said.
— Phasing out annual coverage limits. Starting this year, plans can set annual limits no lower than $750,000. Such limits rise to $2 million in 2012, and will be completely prohibited in 2014.”June 22, 2010
The US Department of Health and Human Services (HHS) provided in its June 22, 2010 fact sheet “The Affordable Care Act’s New Patient’s Bill of Rights” on www.healthcare.gov:
“The regulation released today prohibits the use of lifetime limits in all health plans and insurance policies issued or renewed on or after September 23, 2010…
The rules will phase out the use of annual dollar limits over the next three years until 2014 when the Affordable Care Act bans them for most plans. Plans issued or renewed beginning September 23, 2010, will be allowed to set annual limits no lower than $750,000. This minimum limit will be raised to $1.25 million beginning September 23, 2011, and to $2 million beginning on September 23, 2012. These limits apply to all employer plans and all new individual market plans. For plans issued or renewed beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited.
Employers and insurers that want to delay complying with these rules will have to win permission from the Federal government by demonstrating that their current annual limits are necessary to prevent a significant loss of coverage or increase in premiums. Limited benefit insurance plans – which are often used by employers to provide benefits to part-time workers — are examples of insurers that might seek this kind of delay. These restricted annual dollar limits apply to all insurance plans except for individual market plans that are grandfathered.”June 22, 2010
[Editor’s Note: We have been unable to find any cons to this question, and if you know of any, please let us know. Aug. 23, 2010]