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Immediate insurance reforms questions and answers
Questions
- What immediate insurance reforms must be made to health plans that are effective on or after March 24, 2010 (Non-grandfathered)?
- Is the prohibition against pre-x restrictions for individuals under 19 applicable to only dependent children or to all individuals under age 19?
- What immediate insurance reforms must be made to “grandfathered” health plans?
- Does the provision for coverage of dependent children up to age 26 apply if the child is married?
- Can we begin administering the provision for dependent children up to age 26 prior to 9/23/10 without endorsing our health plans?
12/10/2010 - May carriers continue to impose benefit-specific annual dollar limits on essential benefits? (08/05/1- 09/10/2010 - Does the restriction on lifetime limits apply to transplant benefits?
- How might a transplant waiting period be applied under the Pre-existing condition (PEC) waiting period for children?
- 06/11/2010 - What changes, if any, are required for conversion plans?
- When must these immediate reforms be implemented?
- What’s the definition of plan year?
- What are “essential benefits?”
- 12/10/2010 - Is the Washington chemical dependency benefit minimum considered a permissible restricted annual limit on essential benefits?
- What specific preventive benefits must be included without cost-sharing?
- Must we include a comprehensive list of the specific preventive benefits in our health plans?
- If a plan has multiple tiers of coverage (in-network, PPO, out-of-network/nonpar) may the $0 cost-share for preventive be limited to the in-network tier with cost shares for the PPO and non-par tiers in alignment with other covered benefits?
- Do preventative services have to be covered at all for out-of-network providers?
- 12/10/2010 - The law refers to annual dollar limits. Can the dollar amount be converted to visit limits? As an example, $2,000 rehab to 20 visits.
- Given that the Every Category of Provider (ECP) is “condition” driven, (i.e. treatment of migraines by ECP covered which could include acupuncturists), what will the interplay between Washington ECP requirements and “essential benefits” restriction of annual limits?(05/14/10)
- Will the OIC accept an endorsement for the changes to both “grandfathered” plans and for plans in effect on or after March 24, 2010?
- 06/11/2010 - Can we file a single endorsement for all plans?
- The OIC recently published new SERFF General Filing Instructions, effective 7/1/10. Will these be changed to reflect requirements of Health Care Refrom?
- Can we file other changes that are required by state law at the same time we file our health care reform endorsements?
- How does Health Care Reform affect Washington laws that are more generous than HCR guidelines? An example would be mammography.0)
- How will carriers be expected to handle provisions that require federal rulemaking? As an example, HHS needs to define the term dependent.
- Will our HCR endorsement need to address the requirement for annual rebates starting on January 1, 2011?
- The requirements of health care reform will be developing on an ongoing basis for a significant period of time. To avoid the need for new endorsements with ongoing developments and interpretations, may carriers include language in the HCR endorsement that requires the coverage to change as required to comply with new regulations or guidance and other state or federal regulatory interpretations of health care reform requirements?
- Can “grandfathered” plans be discontinued and replaced with new products that comply with all the new requirements for plans issued on or after March 24, 2010?
- If we discontinue and replace the whole portfolio of business each year, how does this annual process affect the “grandfathered” status of a plan? Does the “grandfathered” status go away when the 2010 contracts are refiled for the 2011 contract year?
- Can we discontinue offering all health plans in the group and individual market?
- Can we still use the short form filing for large group form filing (for HCSCs and HMOs)?
- After the initial HCR filing, can short form negotiated filings utilize as a deviation "Incorporated HCR endorsement?
- Can we still negotiate the large group contract benefits (for HCSCs and HMOs)?
- Does the reference to "master" policy in the presentation refer to the annual standard master contract or does it refer to the contract issued to the group?
- Are there changes to the Medicare Supplement Plan design?
12/10/2010 - The OIC suspended the 18 month filing requirement until January 1, 2011. Will this suspension end as of 1/1/11 or will the OIC consider a further suspension for an additional period of time?- What’s the OIC’s plan for handling existing and future filings for the remainder of the year, that are unrelated to health care reform?
Answers
Q: What immediate insurance reforms must be made to health plans that are effective on or after March 24, 2010 (Non-grandfathered)? 5/
A: No lifetime limits on overall plan benefits, and no lifetime limit on the dollar value of specific "essential benefits."
Annual limits on essential benefits, only until 1/1/14.
Rescission only for fraud or intentional misrepresentation of material facts.
Coverage of preventive health services and immunizations without cost sharing.
Dependent coverage extended to adult children to age 26.
Prohibition of pre-existing exclusions for individuals under 19.
Compliance with specific internal claims appeals processes and external review requirements.
(Note that components of Washington’s internal appeals process and external review requirements differ from that directed in the PPACA. We are still in the process of analyzing these differences to determine the impact on existing contract language and administration. We will be seeking confirmation from HHS that our external process is compliant.)
Q: Is the prohibition against pre-x restrictions for individuals under 19 applicable to only dependent children or to all individuals under age 19?
A: This prohibition does not appear to be restricted to dependent children only. As written, the provision applies to enrollees who are under age 19.
Q: What immediate insurance reforms must be made to “grandfathered” health plans?
A: These plans must comply with all the above noted components, with the exception of preventive health services. Additionally, annual limits on essential benefits and the prohibition of pre-existing exclusions for individuals under 19 do not apply to individual “grandfathered” plans. The requirement to offer coverage to dependents up to age 26 in group grandfathered plans is limited to dependents that are not eligible for their employer’s health plan.
Q: Does the provision for coverage of dependent children up to age 26 apply if the child is married?
A: Yes, but you do not have to provide coverage for the spouse of the dependent. You are also not required to cover children of the covered dependent.
Q: Can we begin administering the provision for dependent children up to age 26 prior to 9/23/10 without endorsing our health plans?
A: Yes and No. If you elect to do this, you must do so on a non-discriminatory basis. We do not expect you to file an endorsement to implement this early change. However, if you want to charge additional premium to implement this change prior to 9/23/2010, we expect you to submit an endorsement and rate filing with the proposed early implementation date.
If you choose not to charge additional premium and implement this change early, you still need to file the endorsement to reflect the extension of coverage to these children with an effective date on or after 9/23/10.
For further information, refer to recently released rules at http://www.hhs.gov/ociio/regulations/index.html
Q: May carriers continue to impose benefit-specific annual dollar limits on essential benefits?
A: The imposition of benefit-specific annual limits for essential benefits is contrary to the intent of PPACA and the expectations of HHS, with respect to the administration of these benefits. As such, the maximum annual limit on essential benefits must be an aggregate amount that is applied across all essential benefits provided under the plan.
Q: Does the restriction on lifetime limits apply to transplant benefits?
A: Although PPACA leaves it to HHS to define essential benefits, transplants are not currently identified in the general list of these benefits contained in Section 1302. We continue to maintain that a lifetime limit for transplants is acceptable, provided that limit is exhausted only by transplant related services that are not considered essential benefits. Transplant related services that fall within the scope of essential benefits should be covered up to the annual and lifetime maximum benefits under PPACA.
Q: How might a transplant waiting period be applied under the Pre-existing condition (PEC) waiting period for children?
A: A benefit specific waiting period that must be satisfied prior to receiving the specific benefit differs from a PEC waiting period. We do not believe that prohibition on PECs for enrollees under the age of 19 would preclude a carrier from imposing benefit specific waiting periods such as that for a transplant.
Q: What changes, if any are required for conversion plans?
A:Conversion plans must comply with PPACA's requirements for the individual market, according to the time frames imposed by PPACA.
Q: When must these immediate reforms be implemented?
A: All new group plans issued on or after 09/23/10 must include these reforms. Existing group plans that renew on or after 09/23/10 must include these reforms on the first renewal after that date. Carriers will need to review their individual contracts to determine if they contain a designation of a “policy year.” (See the explanation under “What’s the definition of plan year?”) If not, then the policy year will default to the calendar year and all necessary changes will be required to be implemented January 1, 2011.
Q: What’s the definition of plan year?
A: For group plans, we interpret this to be the first renewal date on or after 09/23/10. Rules published by HHS on 5/10/10 clarify the use of the term “plan year” and how it applies to individual coverage. PPACA uses the term “plan year” in referring to the period of coverage in both the individual and group health insurance markets. The interim final regulations substitute the term “policy year” for “plan year” in defining the period of coverage in the individual health insurance market. These regulations define “policy year” as the 12 month period that is designated in the policy documents of individual health insurance coverage. If the policy document does not designate a policy year (or no such document is available), then the policy year is the deductible or limit year used under the coverage. If deductibles or other limits are not imposed on a yearly basis, the policy year is the calendar year.
Q: What are “essential benefits?”
A: The HHS will be providing further guidance. The following general categories and items and services covered within the categories are contained within PPACA:
Ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services including oral and vision care.
Q: Is the Washington chemical dependency benefit minimum considered a permissible restricted annual limit on essential benefits?
A: No. Chemical dependency is an essential benefit under PPACA. As such, we believe it inappropriate to consider the benefit minimum a permissible restricted annual limit.
Q: What specific preventive benefits must be included without cost-sharing?
A: Services recommended by the US Preventive Services Task Force
Immunizations recommended by the Advisory Committee on Immunization Practices of the CDC
Preventive care and screenings for infants, children and adolescents supported by the Health Resources and Services Administration
Preventive care and screenings for women supported by the Health Resources and Services Administration
Note that current recommendations from the US Preventive Services Task force for breast cancer screenings will not be considered.
Q: Must we include a comprehensive list of the specific preventive benefits in our health plans?
A: No. This would not be realistic for a number of reasons. At a minimum, however, we will expect plans to include a representative listing of the services contemplated by the PPACA that would provide the average layperson with an adequate understanding of those services. We will also expect that the preventive benefits section will refer the enrollee to a web page or to a customer service contact for a more comprehensive listing as it becomes available from HHS.
Q: If a plan has multiple tiers of coverage (in-network, PPO, out-of-network/nonpar) may the $0 cost-share for preventive be limited to the in-network tier with cost shares for the PPO and non-par tiers in alignment with other covered benefits?
A: Preventive services for all contracted providers must be provided without cost-sharing. We do not believe, however, that PPACA requires that preventive services by out-of-network providers be provided without cost-sharing. We will be requesting guidance from HHS concerning our interpretations of this provision of the law. Refer back to this FAQ for updates.
Q: Do preventive services have to be covered at all for out-of-network providers?
A: This is a difficult question, and carriers are cautioned to proceed carefully if they choose to exclude out-of-network preventive services from a plan that otherwise does contain benefits for non-network providers. However, because there is no state law that requires carriers to provide out-of-network preventive services, we believe at this time it is not necessary to provide an out-of-network benefit for preventive services, even though other health care services may be covered. We would caution that HHS may come out with a rule that does require out-of-network coverage for preventive services, and may even preclude any cost sharing for these services.
Q: The law refers to annual dollar limits. Can the dollar amount be converted to visit limits? As anexample, $2,000 rehab to 20 visits.
A: Even though the position of HHS is to permit conversion of essential benefits from dollar limits to a per day limit, at this time we feel this position is problematic and may likely be revisited by HHS at a later date. Based upon verbal instruction from HHS, we will not disapprove per day or per visit limit conversions unless they violate a specific state benefit requirement. If future instructions from HHS change, we will expect any carrier who has filed these conversions to modify their contracts to conform to the HHS instructions. We would urge carriers to exercise caution in considering this type of conversion since the plan’s grandfathered status may change if changes are extreme.
Q: Given that the Every Category of Provider (ECP) is “condition” driven, (i.e. treatment of migraines by ECP covered which could include acupuncturists), what will the interplay between Washington ECP requirements and “essential benefits” restriction of annual limits?
A: We do not believe that this will operate to change the current application of Washington’s ECP statute and would caution any specific “essential benefits” restrictions that might operate to impair the intent of this statute.
Q: Will the OIC accept an endorsement for the changes to both "grandfathered" plans and for plans in effect on or after March 24, 2010?
A: Yes.
Q: Must we include a comprehensive list of the specific preventive benefits in our health plans?
A: No. This would not be realistic for a number of reasons. At a minimum, however, we will expect plans to include a representative listing of the services contemplated by the PPACA that would provide the average layperson with an adequate understanding of those services. We will also expect that the preventive benefits section will refer the enrollee to a web page or to a customer service contact for a more comprehensive listing as it becomes available from HHS.
Q: Can we file a single endorsement for all plans?
A: No. You must file a separate endorsement for “grandfathered” plans and for plans in effect after March 24, 2010 for each line of business – Large group, small group, and individual. These filings must be identified using the appropriate TOI (Type of Insurance) for the specific line of business. Do not use the sub-TOI “Any size group” with these filings. To identify this as a filing specific to health care reform changes, the product name should be prefaced with HCR. As an example, consider using HCR END 2010 in the product name. Under the “supporting documentation” tab in SERFF, provide a list all the impacted forms.
Q: The OIC recently published new SERFF General Filing Instructions, effective 7/1/10. Will these be changed to reflect requirements of HCR?
A: Yes. We will be updating the General Filing Instructions to clarify how to submit HCR filings. These instructions will be posted as soon as possible. Additionally, a notification e-mail will be sent out to those individuals currently on our State Filers Distribution List. If you are not on this list or would like to include additional staff to the list, please e-mail Jennifer Kreitler.
Q: Can we file other changes that are required by state law at the same time we file our health care reform endorsements?
A: Yes, but we strongly urge that these changes not be within the health care reform submission package. Our immediate concern will be processing health care reform filings. We recognize, however, that changes, such as small employer application changes recognizing groups down to 1 will be effective October 1st and must be filed. Any changes unrelated to health reform should be included in a separate filing submission to expedite the processing of Health Care Reform filings. Making additional changes, while not strictly prohibited by the insurance code, will delay the overall review and processing of the HCR filings and is thus discouraged.
Q: How does HCR affect Washington laws that are more generous than HCR guidelines? An example would be mammography.
A: Title I of PPACA, which include most of the new federal standards that relate to health insurance coverage, contains the following provision:
" . . . No Interference With State Regulatory Authority – Nothing in this title shall be construed to preempt any State law that does not prevent the application of provisions of this title . . .." Therefore, more generous benefits mandated by state law will continue to be required.
Q: How will carriers be expected to handle provisions that require federal rulemaking? As an example, HHS needs to define the term dependent.
A: In this situation, we will permit a definition stating that “dependent means an individual who meets the dependent status criteria to be adopted by the Secretary of HHS.” Carriers will be expected to incorporate the new definition along with other endorsement changes into their health plans as they are later re-filed.
Q: Will our HCR endorsement need to address the requirement for annual rebates starting on January 1, 2011?
A: At this time, we do not believe that you have to describe the possibility of a rebate in your endorsement. We will anticipate that carriers will work closely with this office in developing communication materials relative to these rebates.
Q: The requirements of health care reform will be developing on an ongoing basis for a significant period of time. To avoid the need for new endorsements with ongoing developments and interpretations, may carriers include language in the HCR endorsement that requires the coverage to change as required to comply with new regulations or guidance and other state or federal regulatory interpretations of health care reform requirements?
A: We recognize that this is a work in progress and believe a generic statement of this nature to be acceptable as long as such changes are incorporated into the plan at renewal. We will expect any mid-year plan changes to be communicated to enrollees at the time the change occurs. Any changes that result in a reduction or restriction must be communicated immediately to enrollees and to the OIC. As more and more issues are resolved or answered, we will expect more and more specificity in the plans.
Q: Can “grandfathered” plans be discontinued and replaced with new products that comply with all the new requirements for plans issued on or after March 24, 2010?
A: Possibly. Both HIPAA and Washington laws permit carriers to discontinue offering a particular type of health plan coverage. For both group and individual products, the carrier must provide notice to each group or individual at least 90 days prior to the discontinuation and act uniformly without regard to any health status of enrolled individuals. Refer back to this FAQ for updates.
Q: If we discontinue and replace the whole portfolio of business each year, how does this annual process affect the “grandfathered” status of a plan? Does the “grandfathered” status go away when the 2010 contracts are refiled for the 2011 contract year?
A: We believe that the practice of discontinuing and replacing the entire portfolio of business would operate to extinguish the grandfathered status of these plans. We are waiting for further guidance on this issue from HHS. Refer back to this FAQ for updates.
Q: Can we discontinue offering all health plans in the group and individual market?
A: Yes. You must notify the OIC of the intent to discontinue the existing health coverage at least 180 days prior to the discontinuation. With such discontinuation, you may not provide either coverage in the group or individual market in the state for a five-year period beginning on the date of discontinuation of the last health plan not renewed.
Q: Can we still use the short form filing for large group form filing (for HCSCs and HMOs)?
A: At this point, we have not changed any practices related to short form filings. The OIC may need to modify the short-form filing content to satisfy the rating requirement.
Q: After the initial HCR filing, can short form negotiated filing utilize as a deviation “Incorporated HCR endorsement?”
A: In order to help facilitate the initial implementation of HCR, we will permit this practice. Changes will eventually have to be incorporated into the standard master contracts.
Q: Can we still negotiate the large group contract benefits (for HCSCs and HMOs)?
A: Yes, as long as the benefit plan complies with applicable laws. Caution – it is unclear at this time if these changes will jeopardize the “grandfathered” status. We are continuing to analyze this aspect of the law. Check back to this FAQ for updates.
Q: Does the reference to “master” policy in the presentation refer to the annual standard master contract or does it refer to the contract issued to the group?
A: This reference is to the contract between the carrier and employer or the carrier and the association and not the “standard master” contract filed with the OIC.
Q: Are there changes to the Medicare Supplement Plan design?
A: Per Section 3210 of the PPACA, there will be changes to Medicare Supplement Standardized Plans C and F. The implementation date of revised standards is likely to be January 1, 2015. The NAIC is in charge of developing the new standards for the Medicare Supplement Plans. More information to come.
Q: The OIC suspended the 18 month filing requirement until January 1, 2011. Will this suspension end as of 1/1/11 or will the OIC consider a further suspension for an additional period of time?
A: We are still waiting on answers from HHS on a few issues and in view of the anticipated upcoming legislative session and the OIC’s busy agenda, we feel it appropriate to continue the temporary suspension for another 6 months until July 1, 2011. You must contact the analyst assigned to review your contracts for directions if you intend to exercise this option.
Q: What’s the OIC’s plan for handling existing and future filings for the remainder of the year, that are unrelated to health care reform?
A: Health care reform is our #1 priority at this time. As such, we are looking at all ways to streamline the handling of all changes compelled by PPACA in an effort to make the process less burdensome for both carriers and OIC staff. Our current backlog of other filings is at a minimum at the present time. Once we begin reviewing health care reform filings, we will divert other appropriate resources within the agency in an attempt to provide prompt turn-around of these filings while also providing minimal disruption to the flow of non-health reform filings.
Questions
E-mail Janis LaFlash, and we'll get your answers posted as soon as possible!
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