Federal Agencies Issue Interim Final Rules for the Patient's Bill of Rights

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The U.S. Departments of Treasury, Labor, and Health and Human Services have issued interim final rules for group health plans and health insurance coverage on certain patient protections under the Patient Protection and Affordable Care Act. These rules, commonly referred to as the Patient's Bill of Rights, provide important guidance for employers and insurers as they work to ensure that their health plans and benefits are compliant for upcoming plan years.

Lifetime and Annual Limits

Under the Act, both self-insured and fully-insured health plans are prohibited from: (1) imposing lifetime limits on “essential health benefits” for plan years beginning on or after September 23, 2010, (2) imposing annual limits on essential health benefits, other than “restricted annual limits,” for plan years beginning prior to January 1, 2014, and (3) imposing any annual limits on essential health benefits for plan years beginning on or after January 1, 2014. The rules clarify that lifetime and annual limits may still be imposed on specific covered benefits which are not essential health benefits (to the extent otherwise permitted by Federal and State law). Also, a group health plan or a health insurer offering group health insurance coverage may continue to exclude all coverage for a specific condition (so long as such exclusion complies with other requirements of Federal or State law) without violating the Act, but if any benefits are provided for a condition, the rules governing lifetime and annual limits apply. Importantly, the term "essential health benefits" has yet to be further defined. Until it is, employers will have to reasonably rely on the description of benefits provided in Section 1302 of the Act.....

Prohibition of Preexisting Condition Exclusions

Under the Act, a group health plan or health insurer offering group health insurance coverage may not impose any preexisting condition exclusions on any participant for plan years beginning on or after January 1, 2014 and, for children under the age of 19, for plan years beginning on or after September 23, 2010. The rules define a “preexisting condition exclusion” as a limitation or exclusion of benefits based on the fact that the condition was present before the effective date of coverage, whether or not any medical advice, diagnosis, care or treatment was received before that date.....

Patient Protections

The Act loosens any restrictions imposed on the choice of certain health care providers and on access to emergency services. The rules state that a plan or issuer that requires or provides for participant designation of a primary care physician must permit each participant to select any available participating primary care provider who is part of the plan’s network. Similarly, a plan or issuer that requires or provides for designation of a primary care physician for a child must permit the participant to designate any available pediatrician who practices in the plan network. Finally, a female participant who seeks coverage for obstetrical or gynecological care may not be required by the plan or issuer to obtain authorization or a referral for care provided by a participating health care professional who specializes in obstetrics and gynecology.....

Rescission

The Act provides that a group health plan or insurer may not rescind coverage under a health plan for plan years beginning on or after September 23, 2010, unless the rescission is due to an individual's act that constitutes fraud or an intentional misrepresentation of a material fact. The rules clarify that a rescission is any cancellation or discontinuance of coverage with a retroactive effect, however, coverage may be withdrawn retroactively to the extent that it is attributable to the participant’s failure to pay premiums or contribution amounts in a timely manner. Under the rules, rescissions are only permitted to the extent that the individual's actions leading to the rescission are prohibited by the terms of the plan. The rules also expressly allow any cancellation of coverage which has only a prospective effect. Notice must be given in writing at least 30 days in advance of any rescission of coverage. Although the rules do not define fraud or intentional misrepresentation of material facts, examples illustrate that an inadvertent omission of information on a medical history questionnaire or a mistake made by the plan or insurer do not meet the criteria for rescinding coverage.....

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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