New Rules on Insurers
The health care reform law calls for changes that will affect insurance companies six months after the bill was signed into law (March 23, 2010). These changes will apply to the rules and regulations that insurance companies will be required to comply with beginning in September 2010.
2010 Changes
Health insurance companies are currently prohibited from denying coverage to children with pre-existing conditions. As a result of this new law, children will longer be declined coverage when applying for coverage as a family unit. Also, insurance companies will be banned from engaging in practices that include insurance “riders,” which excluded specific injuries or illnesses from receiving coverage.
Health plans are prohibited in the future from placing lifetime caps on spending for individuals. The new law also gives the Secretary of the Department of Health and Human Services the ability to severely limit the yearly spending limits.
Private plans will now be required to cover preventive services and impose no co-payments or cost sharing for preventive care. Items covered are preventive services rated A or B by the U.S. Preventive Services Task Force, recommended immunizations, preventive care for infants, children, and adolescents, and additional preventive care and screenings for women.
A 2009 law in Ohio mandated that employers offer parents the opportunity to keep their children on their health plans up to age 28. (This means that once the dependent turns 28, they are no longer eligible to be on their parents plan). This is more expansive than the age 26 requirement in the new federal law. To be eligible, the dependent must be the following:
1. The natural child, stepchild, or adopted child of the employee;
2. An Ohio resident or a full-time student at an accredited public or private institution of higher education;
3. Not employed by an employer that offers any health benefit plan under which the child is eligible for coverage; and
4. Not eligible for coverage under Medicaid or Medicare
Please note that the child does not have to live with the parent, be financially dependent upon the parent or be a student. The Ohio Department of Insurance has a FAQ available.
2011 Changes
The law will start requiring plans in the individual and small group market to spend 80 percent of premium dollars on medical services, and plans in the large group market to spend 85 percent. Insurers that do not meet these thresholds must provide rebates to policyholders.
2014 Changes
Starting with the establishment of the Health Insurance Exchanges, new regulations will prevent health insurers from denying coverage to people for any reason, including their health status, and from charging people more based on their health status and gender. Rates will be limited to allow only variations based on age (limited to 3 to 1 ratio), premium rating area, family composition, and tobacco use (limited to 1.5. to 1 ratio) in the individual and the small group market and the Exchange. This means that people will no longer get a different price because they have been unhealthy.
All insurance plans must offer the “Essential Benefit Package”, which must cover the following items: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care. The Health and Human Services agency will review this list annually.
In addition, all future insurance plans must cover at least 60 percent of the actuarial value of the covered benefits and limit annual out-of-pocket cost-sharing to the current law HSA limits ($5,950/individual and $11,900/family in 2010). Waiting periods for coverage will be limited to 90 days for both employers and insurers.
Insurers with plans participating in the Exchange must meet marketing requirements, have adequate provider networks, contract with essential community providers, contract with navigators to conduct outreach and enrollment assistance, be accredited with respect to performance on quality measures, use a uniform enrollment form and standard format to present plan information.
Deductibles will be limited for health plans in the small group market to $2,000 for individuals and $4,000 for families unless contributions are offered that offset deductible amounts above these limits. This deductible limit will not affect the actuarial value of any plans.
For questions or additional information on the new rules and regulations on insurance companies, email COSE’s advocacy team.