That rule included new limitations on plans imposing pre-existing condition exclusions.
This week we discuss questions frequently asked questions we have been receiving from plan sponsors on this new requirement.
What is considered a “pre-existing condition exclusion?”
The IFR defines a “pre-existing condition exclusion” or PCE as a limitation or exclusion of benefits, including a denial of coverage, based on the fact that a condition was present before the effective date of coverage. For example, an exclusion for oral surgery related to a traumatic injury that occurred before the date of coverage would be considered a PCE because the exclusion is based on the fact that the condition was present before the effective e date of coverage.
How does the new IFR differ from the PCE rules already in place under HIPAA?
PPACA and the IFR change both the definition of a PCE and how it may be applied.
The HIPAA portability rules already included fairly extensive examples and descriptions of what is considered a PCE for HIPAA portability purposes. The IFR appears to build on these examples and also includes denials of coverage related to eligibility, in addition to denial of specific benefits.
With respect to how a PCE may be applied, the current HIPAA portability rules limit when a plan can impose a PCE. Generally, the plan only may consider pre-existing conditions that arose in the six months prior to enrollment and then only may apply a PCE for 12 months, of 18 months for late enrollees. PPACA will prohibit PCEs altogether.
When does the pre-existing condition exclusion become effective?
The new restriction takes effect in two stages. First, for enrollees under age 19, the provision is effective for plan years beginning on or after September 23, 2010 (or January 1, 2011 for calendar yea plans). The provision is extended to all plan participants for plan years beginning on or after January 1, 2014.
Do these rules apply to grandfathered plans?
Yes, these restrictions apply to both grandfathered and non-grandfathered plans. They also apply to both self-funded and insured (individual and group coverage) plans.
Got a health-care reform question? You can ask YOUR health-care reform legislation question online at http://www.surveymonkey.com/s/second_opinions
You can find a handy list of Key Provisions of the Patient Protection and Affordable Care Act and their effective dates at http://www.groom.com/HCR-Chart.html
Christy Tinnes is a Principal in the Health & Welfare Group of Groom Law Group in Washington, D.C. She is involved in all aspects of health and welfare plans, including ERISA, HIPAA portability, HIPAA privacy, COBRA, and Medicare. She represents employers designing health plans as well as insurers designing new products. Most recently, she has been extensively involved in the insurance market reform and employer mandate provisions of the health-care reform legislation.
Brigen Winters is a Principal at Groom Law Group, Chartered, where he co-chairs the firm’s Policy and Legislation group. He counsels plan sponsors, insurers, and other financial institutions regarding health and welfare, executive compensation, and tax-qualified arrangements, and advises clients on legislative and regulatory matters, with a particular focus on the recently enacted health-reform legislation.
PLEASE NOTE: This feature is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
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