Health Care Reform restricts until 2014, and then bans after 2014, a group health plan from imposing annual dollar limits on essential health benefits provided to participants. The agencies recognized, however, that requiring certain types of health plans (e.g., mini-med plans) to comply with the new rules could cause the premiums for such plans to increase significantly, forcing employers to drop coverage and leaving some workers without even the minimal insurance coverage they have today. As a result, CMS (through its Center for Consumer Information and Insurance Oversight (“CCIIO”) accepted formal waiver requests from certain health plans to be exempt from the restrictions on annual dollar limits at least through 2014. CCIIO recently revised its guidance on the waiver-request process for plans that have already received a waiver and want to renew it for plan or policy years beginning before January 1, 2014. The new guidance extends the duration of waivers granted through 2013, but only if applicants submit annual information about their plan and comply with requirements to ensure that their enrollees understand the limits of their coverage. Existing waiver recipients must apply to extend their current waiver, and all applications must be submitted by September 22, 2011. After that date, applications for an extension will no longer be considered. Any plans that have not yet applied for a waiver also must apply by September 22, 2011.
Pursuant to federal regulations, certain types of health reimbursement arrangements (“HRAs”) may continue to impose annual dollar limits on essential health benefits (even without applying for a waiver). These HRAs include an arrangement that reimburses active employees solely for deductible expenses incurred under an employer’s major medical plan, or an arrangement that reimburses the eligible medical expenses of only retired employees. This means that an HRA linked to an employer’s major medical plan or a standalone retiree HRA are not subject to Health Care Reform’s restrictions/ban on imposing annual dollar limits on essential health benefits. Until recently, a stand-alone HRA maintained to reimburse active employees for any eligible medical expenses (without limiting such reimbursements to deductible expenses incurred under the employer’s major medical plan) appeared to be subject to the new annual dollar restrictions under Health Care Reform; thus, an employer could maintain such a general-purpose HRA only if it was willing to comply with such new rules (i.e., increase and then completely remove by 2014 the annual dollar limit) or if it applied with CCIIO for a formal waiver to be exempt from such rules. Thankfully, CCIIO published supplemental guidance on August 19, 2011, that exempts HRAs that are subject to the restricted annual limits as a class from having to apply individually for a waiver. To take advantage of this class exemption, which remains effective until January 1, 2014, the HRA must have been in effect prior to September 23, 2010, and must continue to comply with the record retention and annual notice requirements to participants, as set forth in the guidance issued by CCIIO (visit http://cciio.cms.gov/resources/files/annual%20_limit_waivers_technical_instructions_update_081911.pdf for a model notice unique to HRAs and applicable requirements and deadlines in connection with the model notice). The annual notice must be provided to newly eligible participants and subscribers at the beginning of the plan year. If the plan year has already begun and the annual notice has not been issued, it must be provided within 60 days of the publication of the supplemental guidance, or October 18, 2011.