By Danielle Capilla
Chief Com­pli­ance Offi­cer at Unit­ed Ben­e­fit Advisors

Capitol Building, Washington DCFed­er­al agen­cies recent­ly issued a final rule that essen­tial­ly com­bined a vari­ety of inter­im final rules and non-reg­u­la­to­ry guid­ance on a vari­ety of Patient Pro­tec­tion and Afford­able Care Act (ACA) ini­tia­tives such as grand­fa­thered health plans, pre­ex­ist­ing con­di­tion exclu­sions, inter­nal and exter­nal appeals, rescis­sion’s of cov­er­age, life­time and annu­al lim­its, emer­gency care access and depen­dent cov­er­age. The final rule was very sim­i­lar to the pre­vi­ous guid­ance it con­sol­i­dat­ed. The final rule goes into effect on Jan­u­ary 1, 2017. At that time all of the pri­or inter­im rules will be superseded.

The final rule also not­ed that var­i­ous tran­si­tion­al rules are now void, such as the allowance of grand­fa­thered health plans to exclude chil­dren under age 26 who were eli­gi­ble for oth­er group health plan cov­er­age, and rules that pro­vid­ed a spe­cial enroll­ment peri­od for chil­dren under age 26 who had been exclud­ed from coverage.

Infor­ma­tion on grand­fa­thered health plans is shared below. For more infor­ma­tion on the final rules relat­ed to pre-exist­ing con­di­tions, life­time and annu­al cov­er­age lim­its, rescis­sion’s, adult chil­dren, appeals, des­ig­na­tion of a pri­ma­ry care provider and access to emer­gency care, down­load UBA’s free ACA Advi­sor, “Agen­cies Issue Final Rule on Grand­fa­thered Health Plans and Oth­er Initiatives.”

The final rule reaf­firmed that grand­fa­thered sta­tus applies sep­a­rate­ly with respect to each ben­e­fit pack­age. For exam­ple, a group health plan with a pre­ferred provider orga­ni­za­tion (PPO) plan, a point of ser­vice (POS) arrange­ment, and a health main­te­nance orga­ni­za­tion (HMO) option would each car­ry grand­fa­thered sta­tus (or not) sep­a­rate­ly. Require­ments for grand­fa­thered sta­tus noti­fi­ca­tion remain the same — plans must include a state­ment that the plan or health insur­ance cov­er­age believes it is a grand­fa­thered health plan in any sum­ma­ry of ben­e­fits pro­vid­ed under the plan. The mod­el dis­clo­sure notice remains the same.

Grand­fa­thered plans have been gov­erned by anti-abuse rules, to pre­vent plans from main­tain­ing grand­fa­thered sta­tus when employ­ees trans­ferred into the plan are from a trans­fer­ee plan that would have caused the trans­fer­or plan to lose grand­fa­thered sta­tus if its terms were adopt­ed. There is an excep­tion for bona fide rea­sons for employ­ee trans­fers, such as a plan being elim­i­nat­ed by the carrier.

The final rule not­ed that a plan that elim­i­nat­ed sub­stan­tial­ly all ben­e­fits need­ed to diag­nose a con­di­tion would cause a plan to lose its grand­fa­thered sta­tus, but pur­pose­ful­ly declined to pro­vide a bright line rule to inter­pret the require­ment. Exces­sive increas­es to a sin­gle or lim­it­ed num­ber of copay­ments would cause a plan to lose grand­fa­thered sta­tus, even if the remain­ing copay­ments remained the same.

Plans that add addi­tion­al tiers (such as indi­vid­ual plus one, indi­vid­ual plus two) will not lose grand­fa­thered sta­tus if the con­tri­bu­tion rate for the new tiers is not below the pre­vi­ous non-self-only tier by more than five per­cent. Employ­ers with grand­fa­thered health plans that offer well­ness pro­grams should take great cau­tion if the well­ness pro­gram impos­es penal­ties for fail­ing to meet stan­dards, this could put the plan’s grand­fa­thered sta­tus at risk. Final­ly, grand­fa­thered health plans may move brand-name ver­sions of drugs that become gener­ic to a high­er cost-shar­ing tier.

For more infor­ma­tion on the final rules relat­ed to pre-exist­ing con­di­tions, life­time and annu­al cov­er­age lim­its, rescis­sion’s, adult chil­dren, appeals, des­ig­na­tion of a pri­ma­ry care provider and access to emer­gency care, down­load UBA’s free ACA Advi­sor, “Agen­cies Issue Final Rule on Grand­fa­thered Health Plans and Oth­er Ini­tia­tives

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