Descriptions of New Health Reform Rules

May 17, 2010

Extension of Dependent Coverage
The new health reform law requires health plans that offer dependent coverage to children to allow young adults up to age 26 to remain on their parent's insurance plan.

No Lifetime or Annual Limits
Group health plans, as well as individual and group health insurers, are subject to limits on imposing benefits caps. Specifically, lifetime limits on the dollar value of benefits for any participant or beneficiary are prohibited. Also barred are annual limits on the dollar value of benefits for any participant or beneficiary

Elimination of pre-existing conditions for children under 19
Pre-existing condition exclusions eliminated for enrolled children under age 19.

W-2 Reporting
Employers required to report aggregate value of health care coverage of employee health plan coverage. Excludes FSA and HSA.

Non-discrimination Rules
Non-discrimination rules of Section 105(h) not allowing discrimination in favor of highly compensated employees that applied to self-funded plans now applies to all plans.

Appeals of Denied Medical Claims
Personal testimony must be allowed as part of appeal process for denied claims. All self-insured plans must offer opportunity for external third party review of denied claims.

Group Health Plan Rescind
Group health plans may not rescind an individual’s coverage except in cases of intentional fraud.

Preventive Care
Plans must cover preventive care (such as immunizations, well-baby care, breast cancer screenings, etc.) without co-pays or deductibles.

New Reporting Requirements
Group Health Plans will be required to report to Secretary of HHS, the applicable State Insurance Commissioner, and the public the following information: claims payment policies and practices, financial disclosures, enrollment (and disenrollment) data, data on denied claims and rating policies, information on cost-sharing and payments with respect to out-of-network coverage, information on participant rights under the Act, and other information as determined by the HHS Secretary.

Retiree Reinsurance Program
Employers who are accepted into the program will receive reinsurance reimbursement for medical claims for retirees age 55 and older who are not eligible for Medicare, and their spouses, surviving spouses, and dependents. The amount of this reimbursement to the employer plan is up to 80% of claims costs for health benefits between $15,000 and $90,000. Claims incurred between the start of the plan year (often January 1) and June 1st are credited towards toward the $15,000 threshold for reimbursement. However, only medical expenses incurred after June 1, 2010 are eligible for reimbursement under this program.