The Patient Protection and Affordable Care Act undoubtedly has created angst for many employers. While much of the law’s impact will not be felt for several years, limited medical plans (aka, mini-med plans) are in PPACA’s crosshairs right now.
If your company is currently using a mini-med plan, there are five key things you need to be aware of before some of PPACA’s provisions related to mini-meds go into effect as early as this fall.
PPACA mandates that group health plans will have to meet new requirements, including no lifetime and annual limits, on or after Sept. 23. All limited medical plans that were considered “group health insurance plans” are subject to these new regulations and the effective date.
In July, the Department of Health and Human Services provided new guidance stating that limited medical plans with annual limits may apply for a waiver from these regulations if they can demonstrate that removing these limits will result in a significant decrease in access to benefits or a significant increase in premiums.
As employers wait for HHS to release more information regarding the conditions and the process for applying for a waiver, this recent guidance has provided more details on how limited medical plans will likely be affected by health care reform.
With this mind and knowing that changes are underway, as you head into renewal season this fall, be aware of the following four things:
1. Copay limited medical plans (or coinsurance-based plans or expense-incurred plans) are not eligible to be grandfathered without an exception from HHS. Starting with October 2010 renewals, plans without an exception will be out of compliance with PPACA. Questions you should ask their benefits adviser are:
* How will plan changes impact the rates of my plan?
* If I receive an exception, how will I be sure that my plan can maintain grandfathered status if my carrier has to raise rates at renewal?
* Which regulations will I be required to meet under PPACA? Both those that are known today and those that are yet to come from HHS in the future?
* What will I be required to communicate to my employees both now and in the future as HHS continues to release guidance?
2. Know whether your current limited medical plan is eligible for an exception and how to apply for one.
3. Group supplemental fixed indemnity benefit plans (sometimes called indemnity-based plans) are not impacted by PPACA. This is important because many limited medical plans are filed on this kind of chassis. Due to their supplemental nature, these plans will continue to operate well past 2014.
While they will not qualify as a health plan in 2014 under the current rules, they will be much easier to operate and keep in force in the interim as the government issues further guidance on health care law. Group supplemental fixed indemnity plans operate as a group plan and are competitive with coinsurance based limited medical plans.
4. If you have an expense-incurred limited medical plan, ask your broker for a contingency plan, especially if your plan is scheduled for renewal in the next six months.
Without a back-up plan in place, you are risking a lot based on what the government might or might not do. It will be easier on you and your employees using limited medical plans to lock in a solid solution now and let it operate for the next three years.
Employers will face many time-consuming changes as a result of PPACA. Being able to focus resources on those issues, instead of worrying about your limited medical plan, will make life much easier. —E.B.N.
Brian Robertson is executive vice president of the Fringe Benefit Group, which markets and administers the Framework Health Plan, a group supplemental fixed indemnity benefit plan. Contact Robertson at 800-551-3424 or firstname.lastname@example.org.
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