Division Of Insurance Comes to Agreement With Harvard Pilgrim Shortly after the DOI found that rate increases Harvard Pilgrim initially sought in April are “reasonable” given what it must pay to hospitals and doctors, a settlement was announced stating that Harvard Pilgrim is agreeing to limit increases for small employers to between 7 and 11 percent. “Harvard Pilgrim said it agreed to the settlement, which it said would result in a loss of millions of dollars in premium revenue, in order to end the collision with the state and get on with business...." Full link to article: http://www.boston.com/yourtown/wellesley/articles/2010/07/03/harvard_pilgrim_reaches_settlement_with_state_to_limit_rate_hikes/?page=1 Blue Cross has a received DOI approval for some of their PPO rates, more information is expected to be released as decisions are made between insurance carriers and the Division of Insurance.
Dependent Coverage To Age 26
For new plan years starting on or after September 23, 2010, the new health law requires group and individual health plans that cover dependents to continue to make dependent coverage available until age 26. Many private health insurance companies that cover the majority of Americans have volunteered to provide coverage earlier than the implementation deadline for young adults losing coverage as a result of graduating from college or aging out of dependent coverage on a family policy. If early coverage is not an option through your current insurance company, then young adults will qualify for an open enrollment period to join their parents' family plan or policy beginning on or after September 23, 2010. Insurers and employers are required to provide notice for this special open enrollment period.
If you are unsure if your carrier is currently providing this coverage please contact your Telamon representative.
Federal Mental Health Parity and Addiction Act of 2008
Generally, this rule prohibits group health plans from applying financial requirements or treatment limitations to mental health or substance use disorder benefits that are more restrictive than financial requirements or treatment limitations placed on medical or surgical benefits. The rule was scheduled to take effect July 1, 2010 for both insured and self insured accounts with more than 50 employees. However, on July 1, 2010, the Department of Labor issued a significant update to the Federal Mental Health Parity Interim Final Rule. This very important issuance, redefines the testing approach for determining whether a plan satisfies parity requirements. The new definition of "outpatient services" recognizes two distinct categories of outpatient services, causing office visits to be separated from all other outpatient medical services.
Insurance carriers are working through all their plans to ensure compliance. The carriers will be releasing updated information as soon as possible.
Grandfathered Plans
The Affordable Care Act specifically exempts “grandfathered plans”- those plans that were in effect on March 23, 2010 - from having to implement a number of the Act’s requirements. Thus, it is vital for employers and administrators of these grandfathered plans to understand what changes they must make in 2010 and in future years. The following is a timeline of required key changes to grandfathered health plans:
What Must Be Done in 2010
Extend Dependent Coverage Up to Age 26
For plan years starting on or after September 23, 2010, the new health law requires group and individual health plans that cover dependents to continue to make dependent coverage available until age 26. This requirement applies to grandfathered as well as non-grandfathered plans. However, for plan years beginning before Jan. 1, 2014, grandfathered group health plans offering dependent coverage will not need to make this coverage available if the adult child is eligible to enroll in another employer-sponsored health plan.
Prohibit Lifetime Limits
For plan years starting on or after September, 23, 2010, grandfathered health plans may not impose lifetime limits on coverage for “essential health benefits.” Essential health benefits will be further defined by the U.S. Department of Health and Human Services.
Restrict Annual Limits
For plan years starting on or after September 23, 2010, grandfathered group health plans are prohibited from imposing annual limits other than on "restricted" annual limits to be set by HHS. Effective Jan 1. 2014, grandfathered group health plans may not set any annual limits on essential benefits coverage.
Drop Pre-Existing Condition Exclusions for Children
For plan years starting on or after September 23, 2010, grandfathered group health plans must not exclude children on the basis of pre-existing conditions. Effective Jan. 1, 2014, group health plans may not impose pre-existing condition exclusions on adults or children.
No Rescission of Coverage
For plan years starting on or after September 23, 2010, grandfathered health plans are prohibited from rescinding a participant’s coverage, absent fraud or an intentional misrepresentation of material fact. Required Change in 2011
No Reimbursements for Over-the-Counter Drugs Not Prescribed
For expenses incurred after Dec. 31, 2010, distributions from HSAs or Archer MSAs, or reimbursements for FSAs or HRAs, qualify only if made for a medicine or drug that is a prescribed drug, or insulin. Over-the-counter medicine obtained with a prescription will continue to be a qualified medical expense.
What Grandfathered Plans Must Do in 2014
No Exclusions for Dependent Coverage
In 2014, grandfathered group health plans offering dependent coverage will need to continue to make this coverage available until age 26, even if the adult child is eligible to enroll in another employer-sponsored health plan.
No Annual Limits
In 2014, grandfathered group health plans may not set any annual limits on essential benefits coverage.
No Excessive Waiting Periods
For plan years starting on or after Jan. 1, 2014, grandfathered health plans may not apply waiting periods for coverage that exceed 90 days.
Maintaining Grandfather Status
The Departments of Health and Human Services, Labor, and Treasury have issued interim final rules on grandfathered plans- health coverage in place on March 23, 2010. The rules clarify what changes can occur to health plans without them losing their “grandfather” status. Grandfathered plans are exempt from certain requirements of the Affordable Care Act, such as coverage of recommended prevention services with no cost sharing, and guaranteed access to OB-GYNs and pediatricians.
The regulation allows employers and insurers to make “routine” changes to plans without them losing grandfather status. Routine changes include cost adjustments to keep pace with medical inflation, adding new benefits, making modest adjustments to existing benefits, voluntarily adopting new consumer protections under the new law, or making changes to comply with state or other federal laws.
Health Insurance Responsibility Disclosure (HIRD) Filings Due
Reminder that Fair Share reporting is now quarterly, with reports due to the Division of Unemployment Assistance on or before the 15th of February, May, August and November. If you need assistance submitting your filing for August 15th, 2010 please contact us.
We will continue to update you as new information becomes available an all of these changes, and additional updates as they are released. Please contact your Telamon representative with any additional questions, or call 617-964-5340.
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