HHS Rules on Pre Existing Condition Exclusions Issued June 22

The departments of Health and Human Services (HHS), Labor and Treasury on June 22, 2010, issued new rules to implement a "new patient's bill of rights" under the health care reform law enacted earlier this year.

According to an accompanying fact sheet, the regulations will "help children (and eventually all Americans) with pre-existing conditions gain coverage and keep it, protect all Americans' choice of doctors and end lifetime limits on the care consumers may receive."

The new rules will help enforce the reform law's provisions that prohibit insurance companies and group health plans from imposing pre-existing condition exclusions on children, rescinding or taking away coverage based on an unintentional mistake on an application, or setting lifetime limits on coverage.

The rules also restrict the use of annual limits on coverage and ensure that employees can choose the primary care doctor or pediatrician they want from a plan's provider network.

In addition, insurance companies will not be able to require prior approval before employees seek emergency care at a hospital outside a plan's network.

Pre-existing Conditions
The Affordable Care Act amended current Health Insurance Portability and Accountability Act (HIPAA) rules relating to pre-existing condition exclusions to provide that a group health plan may not impose any pre-existing condition exclusion. This prohibition generally is effective for plan years beginning on or after January 1, 2014, but for enrollees younger than 19, it becomes effective for plan years beginning on or after September 23, 2010.

The interim final regulations do not change the HIPAA rule that an exclusion of benefits for a condition is not considered a pre-existing condition exclusion if it applies regardless of when the condition arose.

Benefits Limits
The interim final regulations also generally prohibit group health plans from imposing lifetime or annual limits on the dollar value of health benefits. The restriction applies differently to certain account-based plans though, especially where other rules apply to limit the benefits available. These restrictions do not apply to medical savings accounts or health savings accounts.

The interim final regulations phase in restricted limits over three years. Annual limits on the dollar value of essential health benefits may not be less than the following amounts for plan years beginning before January 1, 2014:

• For plan years beginning on or after September 23, 2010, but before September 23, 2011, $750,000.
• For plan years beginning on or after September 23, 2011, but before September 23, 2012, $1.25 million.
• For plan years beginning on or after September 23, 2012, but before January 1, 2014, $2 million.

The interim final rule takes effect August 27, 2010.