HHS delivers new rules on key features of the health care reform law

Rules proposed for benefit packages, premiums and wellness programs

As states and the federal government lay the groundwork for implementing Health Insurance Exchanges in 2014, the Department of Health and Human Services (HHS) has released further guidance on benefit, premium, and wellness program requirements under the Patient Protection and Affordable Care Act (PPACA).

Rules reaffirm earlier guidance on benefit packages

The most recent HHS guidance on benefits reaffirms earlier direction. States may choose the exact package of health benefits that insurers must provide in their medical plans, based largely on the most popular plans currently sold in their states. HHS has asked states to pick a comprehensive, but affordable health plan to serve as a “benchmark” plan or model for the Essential Health Benefits (EHB).

There is one notable change from guidance issued in December 2011, concerning prescription drug coverage: the original guidance required that one class of drugs be covered for each major diagnostic category (depression, heart disease, asthma, etc.). The new proposed rule would require that plans cover the number of drugs per category covered in the state’s chosen benchmark plan, or one drug, whichever is greater. HHS also announced that the National Committee for Quality Assurance and URAC, formerly known as the Utilization Review Accreditation Commission, will be in charge of accrediting the Qualified Health Plans that will be eligible to participate in Health Insurance Exchanges.

A Qualified Health plan must:

• Meet certain criteria for certification issued or recognized by each exchange through which the plan is offered
• Provide a package of "Essential Health Benefits"
• Be offered by an approved health insurer

Broadly speaking, a plan provides Essential Health Benefits if it offers coverage in the following categories (at a minimum):

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive, wellness and chronic disease management
• Pediatric services, including oral and vision care

• Mammograms
• Blood pressure tests
• Breast feeding counseling and equipment

HHS-proposed rules on pricing of health insurance premiums allow insurers to vary rates based on age, tobacco use, family size, and geography, but not on sex or health condition. Insurers may charge tobacco users 50 percent more than non-users, with an exemption for those who participate in smoking-cessation programs. The proposed rules also provide further guidance on how insurers may increase premiums as a person ages. It prohibits rate variation for people under 21, and after that allows insurers to gradually increase annual rates until a person reaches 64. All enrollees age 64 and older in a plan would pay the same rate. Finally, PPACA limits premiums for older people to no more than three times what younger people are charged. The proposal also gives more flexibility to the states and carriers to vary annual deductibles, co-payments and other policy elements, provided that policy coverage meets minimum actuarial value requirements.

Antidiscriminatory rules require that discounts from wellness programs be available to all "similarly situated" participants, but that if a person's health conditions make it "unreasonably difficult" or "medically unadvisable" to participate, the plan must offer an alternative method of earning the incentive. The new guidance clarifies that most PPACA antidiscriminatory rules apply only to “health-contingent” programs: those that require participants to show performance on specific health measures, such as losing weight or decreasing blood pressure. "Participatory wellness" activities such as exercise classes do not fall under the antidiscriminatory rules. The new rules also propose increasing the value of incentives for participating in wellness programs from 20% to 30% of the value of the health care coverage. For anti-tobacco programs, the maximum discount would be 50%, basically eliminating the tobacco-use surcharge allowed under the premium-pricing rules.^1,2

What you need to know now

• Employers – Employers will need to stay up to date on these criteria if their plans are subject to the Essential Health Benefits requirement. They will also need to comply with the wellness plan requirements.
  
  
• Brokers – To help employers formulate benefits strategies for health care reform, brokers must stay up to date on the Essential Health Benefits requirements and how they are implemented in various states.