Plans may impose annual dollar limits on essential health benefits no lower than:
- $750,000 for plan years beginning on or after September 23, 2010;
- $1.25 million for plan years beginning on or after September 23, 2011; and
- $2 million for plan years beginning on or after September 23, 2012.
Annual limits are prohibited for plan years beginning on or after January 1, 2014.
Note: The restrictions on annual limits only apply to certain types of health plans, such as major medical insurance. They do not apply to HIPAA excepted benefits, such as disability, cancer, hospital indemnity, or accident insurance. Click here for more information about the types of benefits that are exempt from the Health Care Reform plan design mandates.
Annual Limits Hot Topics & FAQs
- Do the annual limit restrictions apply to mini-med plans?
Answer: Mini-med, or expense-based limited medical plans, may apply to the U.S. Department of Health and Human Services (HHS) for an annual limit waiver prior to 2014. The waiver does not apply to any other Health Care Reform requirements. Mini-med plans that receive waivers must reapply each year and must comply with certain notice requirements.
- May plans still impose service-based limits?
Answer: Generally yes. For example, a plan may limit physical therapy coverage to a certain number of treatment sessions per illness or injury. However, a plan that limits coverage to a certain number of events (such as treatment sessions) and to a certain dollar limit per event (such as $100 per treatment session) probably would be considered to include an annual limit.
- What are essential health benefits?
Answer: Non-grandfathered insured, small group plans must provide coverage for all essential health benefits, to be defined by state regulations. At a minimum, essential health benefits include ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness, disease management, and pediatric services. Click here to learn more about essential health benefits.
American Fidelity Assurance Company does not provide tax or legal advice.