On June 17, 2011, the Department of Health and Human Services (HHS) issued new guidance substantially revising the annual limit waiver program under PPACA. PPACA generally prohibited plans from imposing annual limits on essential benefits beginning with the 2014 plan year. Until then, plans can impose only restricted annual limits that equal or exceed a specified threshold ($750,000 for the 2011 plan year, $1.25 million for the 2012 plan year and $2 million for the 2013 plan year). PPACA simultaneously authorized HHS to grant waivers of the new restricted annual limit requirements to plans that could prove that compliance would result in a significant decrease in access to benefits or a significant increase in premiums. This waiver program would allow these plans to continue their current, lower annual limits until the 2014 plan year.
Under the original program, the waiver was valid for one plan year and the plan sponsor would be required to reapply for the waiver annually. Under the new guidance, HHS has announced that it will no longer accept new waiver applications after September 22, 2011. Plans that have already received a waiver can obtain an extension of the waiver that will allow it to remain in effect until the 2014 plan year if the plan sponsor submits an extension application (the Waiver Extension Form) to HHS by September 22, 2011. If the Waiver Extension Form is accepted, the plan sponsor would be required to provide an annual update to HHS by the end of each calendar year and to provide an annual notice to participants.