Understanding Annual Dollar Limits on Benefits for Self-Insured Group Health Plans

Understanding Annual Dollar Limits on Benefits for Self-Insured Group Health Plans

by | Sep 5, 2024 | Blog

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
  1. 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.
  2. 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.
  3. 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.
  4. 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

Can Self-Insured State and Local Governmental Plans Still Opt Out of Complying With Certain Group Health Plan Mandates?

Can Self-Insured State and Local Governmental Plans Still Opt Out of Complying With Certain Group Health Plan Mandates?

by | Jun 22, 2023 | Blog

QUESTION: Is an opt-out election still available to exempt self-insured state and local governmental plans from compliance obligations under certain group health plan mandates?

ANSWER: Originally, self-insured group health plans of state and local governments could opt out of a wide range of group health plan mandates, including certain HIPAA portability requirements (e.g., special enrollment periods and health status nondiscrimination), the mental health parity rules, standards related to newborns and mothers, reconstructive surgery following mastectomies, and coverage for dependent students on medically necessary leaves of absence (Michelle’s Law). The opt-out right has since been eliminated for certain group health plan mandates, but it is still available for others.

The Affordable Care Act (ACA) eliminated the ability of self-insured plans of state and local governments to opt out of the HIPAA portability requirements for plan years beginning on or after September 23, 2010. And the Consolidated Appropriations Act, 2023 eliminated the election to opt out of compliance with the mental health parity requirements as of December 29, 2022. (No new mental health parity opt-out elections may be made on or after that date, and elections expiring on or after June 27, 2023, may not be renewed. Limited extensions are available for plans subject to multiple collective bargaining agreements.) Still, the opt-out election remains available with respect to three other group health plan mandates: standards related to newborns and mothers, reconstructive surgery following mastectomies, and Michelle’s Law (now obsolete for most plans due to the ACA’s requirement to cover dependent children to age 26). Detailed election and notification requirements apply for plans wishing to rely on the opt-out.

Source: Thomson Reuters