Health Care Annual Limit Waiver Program Closing Early

June 20, 2011 (PLANSPONSOR.com) - The Obama administration has announced an early end to the health care annual limit waiver program.

The Associated Press reports that Steve Larsen, head of a section of the Health and Human Services department that oversees the health care law, said no new applications for waivers will be considered after September 22. Approvals or renewals received by the deadline will be good through 2013. 

The AP explained that the waivers address a provision of the law that phases out annual dollar limits on coverage by health insurance plans. Starting this year, plans could not impose a limit below $750,000, but some plans, offered mainly to low-income workers, currently provide $50,000 a year in coverage, and in certain cases much less. Those plans would have been forced to close down or jack up premiums significantly, leaving more people uninsured.  

The waivers were established to avoid disrupting existing coverage, the news report said. In 2014, taxpayer-subsidized insurance will be available to most of the people now covered by the affected plans.  

Some Republicans charged favoritism in the granting of the waivers, alleging that they were being granted to unions, according to the AP. However, a review by the Government Accountability Office found that HHS had approved over 95% of the 1,400 waiver applications it received, most of them involving employer plans. It also found that the administration used objective standards to make its decisions (see GAO Reports on Waiver Limit Requests).  

Larsen said insurance experts have advised his office that most plans that needed waivers probably already applied for them this year. For that reason, the effects of ending the program early would be negligible. 

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