On September 3, 2010, the Department of Health and Human Services (HHS) issued guidance (the Guidance) regarding the process for obtaining waivers of the restricted annual limits requirement of the Patient Protection and Affordable Care Act (PPACA). PPACA generally prohibits plans from imposing annual dollar limits on essential health benefits. However, plans can impose restricted annual limits on essential health benefits for plan years beginning on or after September 23, 2010, and prior to January 1, 2014. The restricted annual limits cannot be less than the following amounts:

  • $750,000 for plan years beginning on or after September 23, 2010, but before September 23, 2011  
  • $1.25 million for plan years beginning on or after September 23, 2011, but before September 23, 2012  
  • $2 million for plan years beginning on or after September 23, 2012, but before January 1, 2014  

Previous guidance noted there would be a program to allow limited benefit or mini-med plans to receive a waiver from the restricted annual limit requirements. While the Guidance does not specifically explain what constitutes a limited benefit or mini-med plan, it notes that these plans often offer lower-cost coverage to part-time workers, seasonal workers, and volunteers with annual limits well below the restricted annual limits set forth above.  

The Guidance provides some details requiring how a group health plan can apply for a waiver from the restricted annual limits. The plan must submit an application not less than 30 days prior to the beginning of each relevant plan year. For plan years that begin before November 2, 2010, the plan must submit an application not less than 10 days prior to the beginning of the plan year.

The application must include the following information:

  • The terms of the plan program for which the waiver is sought.  
  • The number of individuals covered by the plan program.  
  • The annual limit(s) and rates applicable to the plan program.  
  • A brief description, with supporting documentation, explaining why compliance with the restricted annual limits requirement would result in a (1) significant decrease in access to benefits for individuals currently covered by the plan, or (2) significant increase in premiums paid by such individuals.  
  • An attestation signed by the plan administrator or chief executive officer of the issuer of the coverage that certifies that the plan was in force prior to September 23, 2010, and that the application of the restricted annual limits to the plan would result in a (1) significant decrease in access to benefits for individuals currently covered by the plan, or (2) significant increase in premiums paid by those individuals.  

Plans should submit the above information to the HHS Office of Consumer Information and Insurance Oversight by mail or e-mail. HHS will process complete applications within 30 days of receipt, or no later than five days in advance of the plan year for plans beginning before November 2, 2010. Plans should retain documents to support the application in case HHS wants to examine the application.  

If a plan receives an approved waiver now, it will apply for the plan year beginning between September 23, 2010, and September 23, 2011, only. A plan will have to reapply for each subsequent plan year prior to January 1, 2014.