Reform Alert - News from the Blues' Office of National Health Reform

BCBSM and BCN working with stakeholders to ensure compliance with near-term health care reform requirements

June 14, 2010

The Patient Protection and Affordable Care Act (PPACA) requires that insurers and employers offering health care coverage comply with several reform provisions within six months of the March 23, 2010 enactment date. In most cases, compliance is required with plan years starting on or after Sept. 23, 2010, which for most BCBSM and BCN groups is Jan. 1, 2011. However, some details and clarifications are still needed from the Department of Health and Human Services (HHS) in order to fully understand and implement reform requirements. While further clarification is still needed, the law provides some exemptions for union-negotiated benefit plans and grandfathered plans (those in existence prior to enactment).

Below is a chart identifying and describing each near-term reform requirement along with open issues:

Below is a chart identifying and describing each near-term reform requirement along with open issues:

Reform description Reform requirement Open issues

Annual dollar limits

Effective: New plan years beginning on or after Sept. 23, 2010
  • Prior to 2014, only "restricted" annual dollar limits (as defined by HHS) on "essential benefits" will be permissible.
  • Beginning in 2014, all annual dollar limits must be removed.
  • Does not apply to grandfathered individual plans (those in existence prior to enactment).
  • Final HHS regulations have not been issued.
  • What is the definition of "essential benefits?"

Lifetime dollar limits

Effective: New plan years beginning on or after Sept. 23, 2010

 Lifetime dollar limits will not be permissible on "essential benefits" for all plans in all market segments.
  • Final HHS regulations have not been issued.
  • What is the definition of "essential benefits?"

Children’s pre-ex

Effective: New plan years beginning on or after Sept. 23, 2010
  • Pre-existing condition exclusions for children under the age of 19 are prohibited.
  • Exclusions do include waiting periods. Plans cannot delay coverage for selected conditions for a certain period of time for new enrollees.
  • Does not apply to grandfathered individual plans (those in existence prior to enactment).
 HHS has stated this will be regulated to be guaranteed issue for children under age 19, but final HHS regulations have not been released.

Dependent Coverage

Effective: New plan years beginning on or after Sept. 23, 2010*. For insured business, BCBSM previously agreed to maintain coverage for existing members until the end of 2010, who may have otherwise been removed for age restrictions.
  • Coverage must be extended up to age 26.
  • Dependents can be married and do not require student or tax-dependent status.
  • No requirement to cover spouses or children of dependents
  • Rates cannot be different based on dependent’s age.
  • New dependents must be offered same policy options as other dependents.
  • A 30-day special enrollment period must be offered for dropped or previously un-enrolled dependents under 26 years old.
  • Will this change BCBSM/BCN’s policy on sponsored dependents? Some BCBSM groups opt to offer coverage for other sponsored dependents, such as elderly parents or other relatives who live with and are financially dependent on the subscriber. BCN currently limits sponsored dependent coverage to individuals 25 years of age and older.
  • How will BCBSM and BCN rating systems need to change to accommodate this? Currently, many of our groups pay different rates for dependents based on age, and this will have to be modified. Our National (NASCO) systems will also be affected.

Preventive coverage

Effective: New plan years beginning on or after Sept. 23, 2010

 Requires specified preventive care services set by the U.S. Preventive Services Task Force, immunizations set by the Centers for Disease Control and other preventive services set by the Health Resources and Services Administration with no cost sharing.
  • No regulations have been issued.
  • Is cost sharing allowed if the provider is out of network?
  • What procedure codes are included in each of the required benefit topics?

Rescissions

Effective: New plan years beginning on or after Sept. 23, 2010
  • No rescissions can be done except in the case of fraud or intentional misrepresentation.
  • Though additional HHS guidance is expected, we currently believe cancellations due to non-payment or other reasonable causes are permitted and that "rescission" refers to retroactive termination.
 None. BCBSM does not practice rescissions that are outside the scope of the law. Therefore, we believe we are already in compliance. However, final HHS regulations have not been issued. The statute does not define "rescission" and what cancellations will be permitted.

Emergency services

Effective: New plan years beginning on or after Sept. 23, 2010
  • Prohibits preauthorization requirement for emergency services.
  • Prohibits more restrictions on non-contracted providers for emergency services.
  • Must cover emergency services without any limitations other than cost sharing, coordination of benefits, waiting periods, etc.
  • No final HHS regulations have been issued.
  • Are limited approved amounts included in restrictions?

Key Points:

  • We have only received HHS regulations on dependent coverage. 
  • We are currently working on system modifications to allow enrollment of dependents up to age 26. We will notify customers and members as soon as we are able to do so and provide information about the special enrollment period. 
  • If a group is considering making benefit changes now, this may impact their grandfathered status. Grandfathered plans are in some cases exempt from certain reform provisions. Furthermore, final HHS regulations are still to come on many reform provisions, which will likely require further changes. 
  • We will provide more updates as regulations are released and decisions are made. 
  • To comply with new requirements in PPACA many groups will have to change their health insurance coverage. As a result, their rates may also change, and rate adjustments may not be reflected in upcoming renewal packages. Once all the required changes are identified we will notify groups of the impact on their rates. To learn more about PPACA, groups should consult with legal counsel.

The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.