Common Questions under the Health Care Reform Laws – Part 4
December 10, 2010
If an employer maintains a grandfathered health plan, can it maintain a $500 annual limit on preventive and/or wellness benefits for plan years beginning after September 23, 2010?
No. Lifetime dollar limits are prohibited and annual dollar limits are first restricted (then, later prohibited)-but only on the value of “essential health benefits.”
The IRS, DOL, and HHS have jointly issued interim final regulations (effective August 27, 2010) to implement the rules regarding lifetime and annual dollar limits. These regulations clarify that an exclusion of all benefits for a condition is not considered to be a lifetime or annual dollar limit. However, if any benefits are provided for a condition, then the annual and lifetime prohibitions apply.
“Essential health benefits” include minimum benefits in general categories and the items and services within those categories (to be determined by HHS), such as-
- Ambulatory patient services,
- Emergency services,
- Maternity and newborn care,
- Mental health and substance use disorder services, including behavioral health treatment,
- Prescription ,
- Rehabilitative and habilitative services and devices,
- Laboratory services,
- Preventive and wellness services and chronic disease management , and
- Pediatric services, including oral and vision care.
Until HHS issues regulations, there is no way to precisely determine which benefits will be considered “essential” within the categories listed above. Many plans have lifetime and annual limits on certain benefits such as infertility coverage and chiropractic services. For purposes of enforcement, until such regulations are issued, the agencies will take into account “good faith” efforts to comply with a reasonable interpretation of “essential health benefits,” but a plan must apply this definition consistently.