New Rules for Insurers’ Annual Limits
July 6, 2011 – On June 17, 2011, CMS issued guidance to allow limited benefit, or mini-med plans, to apply for or renew a temporary waiver from annual limit restrictions through 2013. In 2014, annual limits for new health plans will be banned as “high-quality, affordable, and comprehensive health insurance plans are made available through Health Insurance Exchanges.” Until then, annual limits are phased out in order to preserve access to needed benefits and the affordability of coverage. CMS has granted temporary waivers from the annual limits provision of the law for plans that demonstrate that compliance with the phase-out of limits would result in a significant decrease in access to benefits or a significant increase in premiums.
CMS also announced that after September 22, 2011, no new applications or requests for extensions will be considered.
The rule also includes the following provisions:
- Imposes new, more stringent disclosure requirements and requires health plans with waivers to tell consumers that their health care coverage is subject to an annual dollar limit lower than what is allowed by law.
- Insurers must include the dollar amount of the annual limit along with a description of the plan benefits to which the limit applies
- Plans must show how the annual limit would affect a consumer who was hospitalized to help people understand how far their coverage will reach if they become seriously ill.
- Plans with waivers must attest annually to their compliance with the consumer disclosure requirement.
Today, most plans can not impose an annual limit that is lower than $750,000 and beginning in September 2012, the allowable limit will increase to $1.25 million and to $2 million for plan years beginning in September 2012.
For more information about this ruling, click below.
Annual Limits
Tags: Healthcare Reform
