No Lifetime or Annual Coverage Limits

(Note : For the next few weeks, Health Reform Talk will focus on detailed explanations for specific provisions in the new health reform law.)

So what’s included in the Sec. 1001(5) of the Affordable Care Act, concerning lifetime and annual coverage 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, annual limits on the dollar value of benefits for any participant or beneficiary are also barred, subject to an exception for pre-2014 annual limits.

Pre-2014 annual limits. For plan years beginning before January 1, 2014, group health plans and health insurers offering group or individual health insurance coverage may impose a restricted annual limit on the dollar value of benefits per participant or per beneficiary only for “essential health benefits” under the Patient Protection and Affordable Care Act.

The Secretary of Health and Human Services (HHS) is to determine what benefits are considered “essential health benefits.” However, these items must be included:

• 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.


• Pediatric services, including oral and vision care.

In defining “restricted annual limits,”  the HHS Secretary must ensure that access to necessary services is made available with only a minimal impact on premiums.

Per beneficiary limits. The new rules on lifetime and annual coverage limits do not prevent group health plans or health insurance coverage from imposing an annual or a lifetime per beneficiary cap on specific covered benefits that are not considered “essential health benefits.”

Effective date. This provision is effective for plan years beginning on or after the date that is six months after the date of enactment of the Patient Protection and Affordable Care (Sept. 23, 2010).

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