Friday, November 13, 2009

What Are Immediate Reforms?

At first glance, employers appear to be off the hook from the changes in the House-passed Affordable Health Care for America Act until 2018.

Employer-based health plans that are in effect at the end of 2012 have an additional five years to meet the requirements for a qualified health benefits plan, including the essential benefit package requirement, as noted in an earlier post.

However, beginning as soon as 2010, all employer plans would have to adopt the immediate reforms of the House Health Care Act, including these:

Dependent Coverage. Group health plans would be required to provides coverage to dependents up to the age of 27, even if they are not students.

Preexisting condition exclusions. Preexisting condition exclusions in group health plans would be limited as follows:
  • Right now, employers can “look back” six months to identify medical services or diagnoses that would trigger a preexisting condition.  Under the House legislation, this period would be reduced to 30 days.

  • Right now, employers can impose preexisting condition exclusions in certain circumstances for up to 12 months.  The House legislation cuts this to three months.

Domestic violence. Existing law prohibits preexisting condition exclusions from being imposed on newborns, newly adopted children, or pregnancies.  The House bill also would prohibit acts of domestic violence from being treated as preexisting conditions (Wow—injuries incurred from beatings by your spouse should be covered by a health care plan—how progressive).

Minor child's congenital disease. Group health plans would be required provide coverage for outpatient and inpatient diagnosis and treatment of a minor child's congenital or developmental deformity, disease, or injury (and why would plans exclude this coverage?)

Lifetime limits. A group health plan would no longer be able impose an aggregate dollar lifetime limit with respect to benefits payable under the plan or coverage. This could be a big change. Approximately 55% of individuals with employer provided health insurance are subject to lifetime limits; the most common of which are $1 million and $2 million, according to a 2009 study by PriceWaterhouseCoopers.

Retiree Health Benefits. Employer group health plans that offer retire health benefits are prohibited from reducing retiree health benefits below what was offered to retirees at the time of their retirement, unless those reductions also made to active workers’ health benefits. Fewer than one-third of employers now offer retiree health care benefits, according to Mercer‑this provision could cause a quick rush by those employers to eliminate retiree coverage.

COBRA. Any individual covered by COBRA continuation of coverage could continue the coverage until a national insurance exchange took effect in 2013.


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