HHS Promises Flexibility on HCR Waiver Requests

October 1, 2010 (PLANSPONSOR.com) – The U.S. Department of Health and Human Services (HHS) has promised to be flexible when dealing with waiver requests from health care reform law mandates filed by mini-med or other health plans “with special circumstances.”

The statement of HHS intent comes just after word got out that McDonalds had told HHS it may have to make other health care coverage arrangements for some employees because its current insurer was unable to meet medical loss ratio requirements (see McDonalds Reported Seeking HCR Waivier).

The medical loss ratio mandates that insurers spend at least 80% to 85% of premium revenue on medical care by 2011.

“HHS remains committed to implementing the law in a way that minimizes disruption to coverage that is available today while also ensuring that consumers receive the benefits the (health reform law) provides,” said Jay Angoff, director of the Office of Consumer Information and Insurance Oversight, in the HHS statement.

Angoff pointed out the department recently announced a waiver process for the reform law’s mandate on minimum coverage limits when complying with those limits would decrease access or boost premiums (see HHS Releases Annual Health Coverage Limit Waiver Guidance). The official said HHS has approved dozens of these waiver requests, most often filed by so-called “mini-med” plans with complete waiver applications generally processed in 48 hours.

Angoff explained that the agency has not yet released minimum loss ration requirements to be applied to mini-med or other special circumstance plans because a study by the National Association of Insurance Commissioners (NAIC) required by the health reform law is not yet completed.

“Although the NAIC is close to completing its work, we understand that some employers must soon make decisions regarding coverage options for 2011,” Angoff said in the statement. “As such, we fully intend to exercise [Sebelius’] discretion under the new law to address the special circumstances of mini-med plans in the medical loss ratio calculations.  We recognize that mini-med plans are often characterized by a relatively high expense structure relative to the lower premiums charged for these types of policies. We intend to address these and other special circumstances in forthcoming regulations.”