NU Online News Service

Critical first steps in implementing the healthcare reform lawgo into effect Sept. 23, and a flurry of new proposals, guidanceand directives regarding the law are being issued by federalagencies.

The new rules, effective for plans that go into effect Jan. 1,2011, bar lifetime limits on essential benefits. This provisionapplies to all plans.

Annual limits will be phased out through 2014 for all plans,except grandfathered individual plans, according to officials atthe National Association of Insurance and Financial Advisors andthe National Association of Insurance Commissioners.

Also going into effect is a ban on rescissions, that is,retroactive cancellation of policies. The law bans rescissionsexcept in cases of fraud or intentional misrepresentation ofmaterial fact.

Under the new rules, a wide range of preventive care includingimmunizations, well baby and child screenings, and well women examsmust be covered without cost-sharing under all non-grandfatheredplans.

Moreover, plans that cover dependent children must extendcoverage until the child's 26th birthday. This applies to all typesof plans. Before 2014, however, group health plans will be requiredto cover adult children only if the adult child is not eligible foremployer-sponsored coverage. Adult children cannot be charged morethan any other dependent.

Also, effective as of the 23rd, children under 19 years of agecannot be denied coverage or benefits based on medical status orpast illnesses. This applies to all plans except grandfatheredindividual plans.

As to new issues, Joel Kopperud, a director of governmentrelations at the Council of Insurance Agents and Brokers, said theCIAB's primary focus right now is the latest request for commentson the law's nondiscrimination requirements. "Our fear is that ifthe evaluation is based on actual enrollment and not eligibility,the requirement could completely stymie new plans," he said.

The health are reform law extended Internal Revenue Code Section105(h) nondiscrimination rules to insured health plans. The lawprohibits fully insured group health plans from discriminating infavor of highly compensated individuals with respect to eligibilityand benefits.

These requirements apply to non-grandfathered plans and areeffective for plan years beginning on or after September 23, 2010.The rules of section 105(h) continue to apply to any self-insuredplan regardless of whether the plan is grandfathered.

The agencies Monday provided a grace period through July 1, 2011for employers and health plans to comply with several significantchanges in federal claims review and appeals standards. They alsoexpanded the "safe harbor" standard for complying with the newexternal review requirements included in the health care law.

James A. Klein president of the American Benefits Council, saidthe actions by the Departments of Health and Human Services,Treasury and Labor, were prompted by the ABC, which voiced "seriousconcerns" over the past several weeks regarding various aspects ofthe claims procedure rules issued by the agencies on July 17.

"As initially issued, the regulations could not feasibly havebeen implemented for plan years beginning on or after September 23,2010, as the agencies originally would have required," he said.

"The new guidance will help ensure that employers and healthplans have much-needed additional time to make complex changes inthe procedures they use to make accurate and efficientdeterminations on hundreds of millions of healthcare claims eachyear," Klein said.