How the Patient Protection and Affordable Care Act (PPACA) affects HFHP’s commercial group plans

On March 23, 2010, President Obama signed H.R. 3590, the Patient Protection & Affordable Care Act (PPACA) into law. One week later, the President signed H.R. 4872, the Health Care & Education Reconciliation Act of 2010 into law. Combined, these two laws are now referred to as “The Affordable Care Act” (ACA) and will significantly alter how consumers access health insurance in several ways over the next few years.

Once the PPACA law was signed, some changes were scheduled to take effect in six months, which was September 23, 2010, but many changes do not take effect until 2014, and there are some provisions which became effective almost immediately. The following information applies to HFHP group plans (fully-funded and self-funded plans, large and small groups) that begin or renew coverage on or after September 23, 2010:

Lifetime limits – Plans are not allowed to have lifetime limits on “essential” health benefits. The Health & Human Services (HHS) Secretary must first define which benefits are “essential,” but the law does not include a deadline for this to happen. At this time the law does not prohibit lifetime limits on “non-essential” benefits.

• HFHP has voluntarily removed all lifetime limits on all plans. We have not limited this change to benefits we expect may be considered “essential.”

Annual maximums – Plans may not have annual dollar limits on “essential” benefits after January 2014. Like lifetime limits, the law allows us to continue annual maximums until HHS defines essential benefits, and the law does not prohibit annual maximums on non-essential benefits.

• HFHP has voluntarily removed annual maximums on several benefit categories (i.e. inpatient and outpatient mental health) for all plans. The only annual maximums remaining are for Durable Medical Equipment.

Extended coverage for adult children – Plans that begin or renew a policy on or after September 23, 2010 will be required to offer coverage through a parent’s policy to their children up to age 26 who are not eligible for other employer-sponsored coverage, but are not required to offer coverage for grandchildren. Before ACA, the State of Florida already required fully-funded groups to offer coverage for children up to age 30, so this ACA change will not affect those groups. When a self-funded group begins or renews a policy, ACA now requires them to offer coverage for children up to age 26.

For all groups:

• The opportunity to add children to their parent’s coverage is only available during a group’s normal open enrollment period or with a qualifying event. (The passage of health care reform laws did not constitute a qualifying event.)
• There is no requirement to offer coverage to a child’s spouse.
• Financial dependency, residency with a parent, student status, marital status, and employment may no longer be used to determine eligibility for coverage of any child.
• Premiums may be increased based on the number of people covered in a family/group.
• Children under age 26 receiving COBRA coverage after “aging out” may rejoin a parent’s group coverage during the normal open enrollment period. (After they turn 26, they will be eligible for a new COBRA continuation period.)

Since this provision is especially complicated, we’ll explain it another way:

• Fully-insured groups: Under ACA law, if children up to age 26 don’t have access to other insurance, they can be covered on their parent’s policy with no requirements regarding the child’s marital or student status, residency, etc. Under Florida law, children can be covered on a parent’s policy beyond age 26 up to age 30 if they:
  • do not have access to other insurance, are not married, do not have dependents and live in Florida, or
  • do not have access to other insurance and are a full- or part-time student
• Self-insured groups: Under ACA law, if children up to age 26 don’t have access to other insurance, they can be covered on a parent’s policy with no requirements regarding the child’s marital or student status, residency, etc. Under Florida law, self-funded employers have the option to offer children over age 26 coverage on a parent’s policy, and to set age limits or other eligibility requirements.

Pre-existing condition exclusions for kids – Plans may not exclude coverage for pre-existing conditions for members under the age of 19. (A pre-existing condition is any condition for which a patient has received medical advice or treatment before enrolling in a new health plan.)

• HFHP has updated our policies to reflect this change and now covers pre-existing conditions for children under age 19.

Rescissions & cancellations of coverage – Organizations are prohibited from rescinding coverage during the plan year except in cases of fraud or intentional misrepresentation of material fact. Organizations can still cancel policies for operational reasons, such as nonpayment of premium, but only after advance notice is given to the member. Also, rescissions are now considered adverse benefit determinations, so they are eligible for internal and external appeal review (except for cases of non-payment of premium).

• HFHP appeal policies and procedures have been updated to meet the new requirement.

Preventive services – Plans must cover specific preventive services, immunizations, and screenings identified by the US Preventive Services Task Force (USPSTF), US Centers for Disease Control (CDC), and Health Resources and Services Administration (HRSA), and are not allowed to require a cost share on these benefits.

• Our plans already covered many preventive services with no cost share in-network, so we only needed to make a few changes. Since these agencies update their recommendations periodically, we’ll monitor any future changes and adjust our benefits as needed.  
  •  List of covered preventive services 

Emergency services – Plans must cover emergency services without prior authorization and at the in-network cost share, but the HHS Secretary has not yet defined what is included in “emergency services.”

• HFHP policies already comply with the intent of requirement, so we didn’t need to make any changes. When the HHS Secretary officially defines emergency services, we’ll make adjustments as needed.

Access to pediatricians – If a plan requires members to choose a Primary Care Physician (PCP), pediatricians must be available to select as a PCP.

• HFHP has always allowed members to choose a pediatrician as their PCP, so no changes were needed.

Access to OB/GYNs – Plans are not allowed to require authorizations or referrals for covered OB/GYN care provided by participating OB/GYN physicians.

• HFHP did not need to change any policies to meet this requirement.

Internal review and external appeal rights – Plans must now review urgent pre-service coverage requests within 24 hours. The new rules also allow members to request independent external review of appeals through either a state or federal process, and include new requirements for denial notices and other operational procedures.

• HFHP has reduced our urgent pre-service review period from 72 to 24 hours.
• Fully-insured members already had access to a state external review process, however Florida’s process must be updated by July 2011 to come into full compliance. External review for self-funded members is new, and we implemented the federal process when affected plans renewed on January 1, 2011.
  

Last updated: 3/28/2011