Health Insurance Reform Update

Interim final rules have been published regarding pre-existing conditions, limits, rescissions and other patient protections mandated by the new federal healthcare reform.

Pre-existing conditions: No longer allowed for children up to age 19 beginning with plan years/policy anniversaries after September 23, 2010. The prohibition of pre-existing condition exclusions and denial of health insurance due to pre-existing conditions begins for all others January 2014. Grandfathered individual plans are exempt from this provision, but not grandfathered group health plans or newly issued individual plans.

Rescissions: Rescissions must be based on fraud or intentional misrepresentation of material fact and a health plan can only be terminated prospectively, not retroactively. In the event of a valid rescission, a 30 day advance notification is required.

Lifetime and annual limits: Health insurance plans can no longer include annual or lifetime dollar limits. Individuals who have previously reached their annual or lifetime maximums must be given a special enrollment period to reinstate their benefits.

Patient protections: Health plans that require primary care physicians must allow members to choose any available in network doctor including a pediatrician for children. Plans must also allow members to receive OB/GYN care without a referral. Members needing emergency room services cannot be required to get preauthorization and insurers must cover out of network emergency room care at the same level as in network services.

As these were, perhaps, the most egregious issues with individual health insurance plans, these provisions should protect consumers against insurer abuses highlighted in recent years as stories of members being cancelled in the midst of expensive and life threatening illnesses have been reported.