When considering design changes to a self-insured group health plan, it’s crucial to understand the regulations surrounding annual dollar limits on benefits. Specifically, group health plans and insurers are prohibited from establishing annual limits on the dollar amount of essential health benefits for any individual. This means that your plan cannot be amended to impose a $1.5 million annual dollar limit on benefits.
Key Points to Consider
- Prohibition of Annual Limits:
- Since January 1, 2014, group health plans cannot impose annual dollar limits on essential health benefits.
- Essential health benefits include categories such as emergency services, hospitalization, and prescription drugs.
- Permissible Limits:
- While annual dollar limits on essential health benefits are prohibited, limits can be imposed on specific covered benefits that are not considered essential health benefits.
- These limits must comply with other federal and state laws.
- Definition of Essential Health Benefits:
- Essential health benefits encompass a range of categories and services within those categories.
- Self-insured health plans and insured plans in the large group market are not required to cover all essential health benefits but cannot impose annual dollar limits on those they do cover.
- Flexibility in Defining Essential Health Benefits:
- Group health plans not required to cover all essential health benefits have the discretion to define these benefits for the purpose of the dollar-limit prohibition.
- This definition is generally based on any state benchmark plan.
Understanding these regulations is vital for ensuring compliance and making informed decisions about your self-insured group health plan. While you cannot impose an annual dollar limit on essential health benefits, there is flexibility in defining these benefits and imposing limits on non-essential benefits within the bounds of federal and state laws.
Source: Thomson Reuters
