Benefits Insights, Winter 2016
The departments of Treasury, Labor and Health and Human Services issued final rules on November 13 for grandfathered health plans, preexisting condition exclusions, lifetime and annual dollar limits on benefits, rescissions, coverage of dependent children to age 26, internal claims and appeal and external review processes, and patient protections under the Affordable Care Act (ACA). The majority of changes were expected and consistent with previous guidance and should not generate significant compliance changes.
- Grandfathered plans. The final rule states that to maintain status as a grandfathered health plan, each group health plan, or health insurance coverage, must include a statement in its summary of benefits that the plan or health insurance coverage is considered a grandfathered plan.
- Preexisting condition exclusions. The rule clarifies that a carrier can bar coverage for a specific condition if it does so regardless of when the condition arose.
- Lifetime and annual dollar limits on benefits. Limits on essential health benefits cannot be imposed on in-network or out-of-network benefits.
- Rescissions. Failure to pay the required premiums can retroactively terminate COBRA coverage without violating the prohibition on rescissions.
- Coverage of adult children. All children up to the age of 26 must be covered by a group health plan or carrier regardless of dependency, residence, or status.
- Internal claims and appeal. Claimants must be provided, free of charge, any new or additional evidence relied on or generated in connection with a claim or internal appeal, and they must be given the chance to respond before making a decision.
Although the rule takes effect on January 19, 2016, it will apply to group health plans and health insurance issuers beginning on the first day of the first plan year (or, in the individual market, the first day of the first policy year) beginning on or after January 1, 2017, at which time all prior interim rules will be superseded.