Thanks to Health Affairs blog for bringing this three-part insight into implementing new health reform guidelines at your business.
Beginning on January 1, 2014, the ACA will revolutionize the way in which health insurance is sold to individuals and small groups in the United States. Insurers in the individual and small group markets will be required to sell insurance coverage to any applicant or enrollee and not be allowed to exclude coverage of preexisting conditions or discriminate on the basis of health status, gender, or occupation in setting premiums. Premiums in non-grandfathered plans will only be allowed to vary based on age (with a maximum 3 to 1 ratio), tobacco use (with a 1.5 to 1 maximum ratio), geographic location, and household composition and size. The proposed regulations implement these provisions as required by the terms of the ACA, although the introduction suggests disconcertingly that HHS may be open to “a phase in or transition period for certain policies” to avoid disruption.
There are few surprises in this proposed rule for those who have been following guidance issued to date on the issues it addresses. In general it reduces to rule form the literal requirements of the ACA. But it does give insurers additional flexibility on some issues, such as the coverage of habilitative services or setting deductibles for low actuarial value small-group plans. In other areas, the proposed rule gives consumers additional protections, such as access to a wider variety of prescription drugs.
The proposed rule frees states from the obligation to pay for state-mandated services not included in the essential health benefits by including all services mandated by a state on or before December 31, 2011 in the EHB (and listing them in an appendix). Finally, it leaves some issues, such as how HHS will identify plans that discriminate illegally or lack balance in their benefit coverage, maddeningly unclear.
The Departments published final HIPAA wellness program rules in 2006. These in turn formed the basis for a wellness program exception to the ACA prohibition on health status discrimination for group health plans, which will, effective January 1, 2014, allow rewards or surcharges of up to 30 percent of the total cost of plan coverage (or 50 percent with approval of the HHS Secretary) for approved wellness programs. The proposed rules implement this provision.
The ACA does not allow wellness programs in the individual market, but it does authorize a 10-state demonstration project for wellness programs in the individual market beginning no later than July of 2014. The proposed rule does not address this program. The ACA amendment does not apply to grandfathered plans, but since it merely extends the HIPAA program, the proposed rule will apply to ACA grandfathered plans as well, since they are subject to HIPAA.