Health Care Reform & Group Imposed Waiting Periods for group insurance coverage

The Patient Protection and Affordable Care Act (PPACA) provides that for plan years beginning on or after Jan. 1, 2014, a group health plan or health insurance issuer offering group health insurance coverage shall not apply any waiting period that exceeds 90 days. A waiting period is defined by the Public Health Service Act as a “period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective.”

An employer whose waiting period exceeds 90 days may be subject to penalties under Code 4980H, beginning in 2014, for every month the employer does not offer coverage if any employee obtains coverage through an exchange and is eligible for a premium tax subsidy.

Some employer plans provide that employees will become eligible for insurance coverage on the first of the month after 90 days (or longer). IRS guidance indicates that this plan design is not acceptable as it would typically exceed the 90-day limit. In these circumstances, employers would need to change their eligibility to the first of the month after 60 days or any other shorter waiting period that does not exceed 90 days to avoid penalties.

Employer mandate delay, minimum value, out-of-pocket maximum cost sharing: Is there a connection?

Recent headlines from certain news outlets are leading some to think that the out-of-pocket maximum and minimum value plan certification parts of the Affordable Care Act (ACA, or health care reform law) have been delayed until 2015. This is not true. The delay is for combining a shared out-of-pocket maximum for plans that have “multiple service providers” (like a separate pharmacy benefits manager). Medical plans, new and renewing January 1, 2014, and later do need to have out-of-pocket maximums that are not more than $6,350 for single coverage and $12,700 for coverage of spouse or family. Our plans and systems are being updated so that cost shares do not go over the out-of-pocket maximum.

To help sort out the facts from fiction, read this fact sheet that tells what the link is among the employer mandate, the parts that were delayed, the minimum value plan certification requirement and the out-of-pocket maximum cost sharing rule.

Article Courtesy:  Anthem BCBS

A Limit on Consumer Costs is Delayed in Health Care Law

New York Times
WASHINGTON - In another setback for President Obama's health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care.

The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014.

The grace period has been outlined on the Labor Department's Web site since February, but was obscured in a maze of legal and bureaucratic language that went largely unnoticed. When asked in recent days about the language - which appeared as an answer to one of 137 "frequently asked questions about Affordable Care Act implementation" - department officials confirmed the policy.