12/08/2010
Annual dollar limits on essential benefits update
The new federal health care reform law requires health insurers to remove annual dollar limits on covered services deemed essential by the U.S. Department of Health and Human Services (HHS).
The definition of essential benefits in the new law is broad, and specific clarification through federal rule-making is not expected until late 2011. Therefore, we're treating all benefits—except dental and vision—as essential and we'll be making changes accordingly on plans new and renewing after Sept. 23, 2010. We've requested a waiver from the annual dollar-limit requirement for our Individual Regence EvolveSM plans, so no changes will be made to those products while the waiver process runs its course.
We're implementing these changes retroactively without rate changes for group policies of all sizes that renewed Oct.1 through Dec.1, as well as any renewals for January 2011. Groups still in negotiation for January 2011 and policies new or renewing for February 2011 and after may see minor rate adjustments to reflect these benefit adjustments. We'll reprocess any claims impacted for members on or after Oct. 1.
In addition, we'll implement a $2 million annual maximum for all groups of 1 to 99, which is aligned with federal minimum requirements beginning October 2012. Implementing the 2012 minimum now will improve benefit continuity for our members; it also improves administrative efficiency by avoiding the need to update plans annually to keep up with increasing federal minimum requirements. Annual dollar limits on essential benefits are prohibited altogether beginning in 2014.
See our FAQ for a table outlining the specific benefit changes being made for groups of 1 to 99. Groups of 100 or more enrolled employees with custom benefits will receive a spreadsheet detailing current and alternative benefit limits. Regence account managers will contact those producers with groups of 100+ to discuss these changes and determine benefit alternatives that meet the group's needs and comply with federal and state regulations.
The FAQ provides additional details about these changes.
We'll send a letter to group administrators notifying them of updates being made to benefit booklets and contracts to reflect these changes. Per our standard policy, group administrators will receive one printed copy. Additional copies are available upon request. Members can access the most up-to-date benefit and contract information on myRegence.com.
We hope the information provided here helps you with basic information about these changes and how they'll be implemented for your clients. Please reach out to your Regence Sales contact with questions.
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