HHS, Treasury Propose New Rule for Group Health Plans
A new rule will prevent group health plans that exclude inpatient hospitalization services and/or physician services.
- The Department of Health and Human Services (HHS) and the Department of the Treasury (including the Internal Revenue Service), announced a pending rule that state’s group health plans that exclude coverage for inpatient hospitalization services and/or physician services do not meet minimum value requirements under the Affordable Care Act.
Some of these plans are being promoted to employers. Those that promote the plans contend that they satisfy minimum value within the Affordable Care Act (section 36B (c)(2)(C)(ii) of the Internal Revenue Code and final HHS regulations), as determined through the online Minimum Value Calculator.
The report mentions that there has been questions as to whether plans that fail to provide substantial coverage for inpatient hospitalization services should satisfy the requirements for providing minimum value. These include whether standard population or other underlying assumptions used in developing the Minimum Value Calculator and associated continuance tables are based on typical self-insured employer-sponsored plans, which have traditionally been included for these services and the designing a plan to exclude such coverage could substantially affect the composition of the population coverage by discouraging enrollment by employees who have, or anticipate that they might have, significant health issues.
The departments believe plans that fail to provide substantial coverage for inpatient hospitalization services of for physician services do not provide the minimum value intended by the minimum value requirement.
The agencies plan to propose new regulations and have it finalized around March 1, 2015. The final regulation will not apply to employers who enter into a binding written commitment before November 4, 2014 to adopt a non-hospital/non-physician services plan based on results of HHS’s MV Calculator for a plan year that begins when the rule is finalized. Pending issuance of final regulations, an employee will not be required to treat a non-hospital/non-physician services plan as providing minimum value for purposes of determining their eligibility for premium tax credit.
The Treasury and the IRS intent to issue proposed regulations that apply these proposed HHS regulations under Code section 36B. This means an employer will not be permitted to use the MV calculator (or any actuarial certification or valuation) to demonstrate that a Non-Hospital/Non-Physician Services Plan provides minimum value.
The concern that group health plans may be excluding inpatient hospitalization services is something that the American Hospital Association (AHA) has been urging HHS to address.
“While these types of insurance offerings may not be widespread, hospitals and health systems were deeply concerned about plans that potentially excluded important hospitalization and are pleased with the action to address the matter in the best interest of patients,” said AHA President and CEO Rich Umbdenstock.
