NU Online News Service, sept. 15, 3:30 p.m.EDT

WASHINGTON–An insurance agents' group is lauding thedecision of federal officials to provide the industry greatflexibility when selling limited-benefit medical plans.

The decision was announced last week by the Health and HumanServices' Office of Consumer Information and Insurance Oversight(OCIIO).

The decision allows group health plan or health insuranceissuers to apply for a waiver from the new federal restrictions onannual major medical plan benefit limits if the plan was offeredbefore Sept. 23, for a plan or policy year beginning between Sept.23, 2010 and Sept. 23, 2011, said Steve Larsen, head of the OCIIOand former Maryland insurance commissioner.

In a recent insurance standards bulletin, Mr. Larsen said thewaiver application should include:

o The annual limits and rates applicable to the plan or policyforms submitted.

o A description of why compliance with the new annual benefitslimits would increase the cost or decrease the availability of theaffected limited-benefit products.

o An attestation, signed by the plan administrator or chiefexecutive officer of the issuer of the coverage, certifying thatthe plan was in force before Sept. 23 and certifying the applyingannual benefits limit restrictions to the plans would hurt theplans.

Joel Kopperud, a director of government relations for theCouncil of Insurance Agents and Brokers, said

the bulletin "essentially told us that if we can prove thatmeeting the new annual limit regulations would result in premiumincreases or reduced coverage, companies would get a waiver fromthe requirements."

Mr. Kopperud said that is "exactly what would happen in thelimited medical benefit space" if the waiver wasn't allowed.

"In a perfect world, companies wouldn't have to shoulder theburden of demonstrating the impact, but this is a case where weshould avoid making perfect the enemy of good," Mr. Kopperudsaid.

Mr. Kopperud said he believes the policy regarding mini-medplans "is an example of how the administration and the insuranceindustry can work together to find a solution that serves bothinterests well."

"I hope we continue to see more collaboration with HHS on otherkey PPACA regulations moving forward," he added.

In other comments, Brian Robertson, executive vice president ofFringe Benefit Group, Austin, Texas, a company that sellslimited-benefit plans, says in a commentary on the Larsen bulletinthat health care reform law provisions other than the annualbenefits limit provisions also could make writing limited-benefitproducts difficult or impossible, and that it's not clear how manylimited-benefit plan carriers will get relief through the annualbenefits maximum waiver program.

Three agencies–the Internal Revenue Service, an arm of the U.S.Treasury Department; the Employee Benefits Security Administration,an arm of the U.S. Labor Department; and the OCIIO–teamed up inJune to release a 196-page batch of interim final rules andguidance.

The rules and guidance implemented provisions in the AffordableCare Act–the legislative package that includes the Patient Protection and Affordable Care Act(PPACA)–that Congress included in an effort to helppatients.

The regulatory materials deal with topics such as major medicalbenefits maximums, rescissions of

major medical policies and provisions for limited-benefitmedical plans, which are also known as "mini-med plans."

Insurers developed the plans to provide small amounts oflow-cost coverage for temporary workers, part-time workers whootherwise might be unable to afford, or even qualify to buy,conventional major medical coverage.

Critics of the mini-med products argue that the owners often areunsophisticated consumers who end up thinking they have far morecoverage than they really have.

Supporters of the products contend that they provide enoughcoverage to meet the needs of relatively healthy insureds and mayhelp insureds with more serious problems enter the system asinsured patients.

Under the provisions of the new PPACA regulations, conventionalmajor medical plans will have to offer annual benefits maximums ofat least $750,000 for plan or policy years beginning on or afterSept. 23, 2010 and before Sept. 23, 2011.

The minimum annual limits for conventional plans will increaseto $1.25 million Sept. 23, 2011 and to $2 million Sept. 23,2012.

Federal agencies reported in June that they would make specialallowances for mini-med plans, to keep the new PPACA restrictionson benefits maximums and other PPACA provisions from makingmini-med plans impossible to sell.

The agencies said the OCIIO would set up a waiver program tohelp mini-med plan providers cope with restrictions on annualbenefits maximums.