On March 23, 2010, President Obama signed into law one of the most sweeping series of changes on the insurance industry since the enactment of Medicare for Senior in the 1960s.  The premise was that the American Healthcare system was broken and needed a massive overhaul in order to provide affordable health insurance options for all Americans.

Modifications to existing practices have already begun:

Immediate Access to Insurance for Uninsured Individuals with a Pre-Existing Condition.Provides eligible individuals access to coverage that does not impose any coverage exclusions for pre-existing health conditions. In Florida, this Guarantee Issue coverage is provided through a State operated program. However, to be eligible for this Guarantee Issue plan offered through the State of Florida, an individual must have been without insurance for a period of six months prior to making application for this plan.  It is good that individuals have access to this plan if they cannot obtain other insurance, but it creates a risky situation for uninsurable individuals who are losing their coverage and cannot afford the cost of the expensive “continuation” plans available through their former group coverage.  These individuals are being forced to go without any type of coverage for 6 months in order to be eligible for the state plan.

Eliminating Pre-Existing Condition Exclusions for Children. Beginning September 23, 2010, health insurance companies are barred from imposing pre-existing condition exclusions on coverage for children under 19 when applying as dependents on a parents’ plan.

Prohibiting Rescissions. Prohibits abusive practices whereby health insurance companies rescind existing health insurance policies when a person gets sick as a way of avoiding covering the costs of enrollees’ health care needs.  Insurance companies who have been operating in Florida as admitted carriers, controlled by the Florida Office of Insurance Regulation, have always been prohibited from singling out an insured for cancellation for any reason other than non-payment.

Eliminating Lifetime Limits and Restricting Use of Annual Limits. Prohibits lifetime limits on benefits in all group health plans and in the individual market and prohibits the use of restrictive annual limits.

Covering Preventive Health Services. All new group health plans and plans in the individual market must provide first-dollar coverage for preventive services.  For fully-insured group and self-insured group and individual health plans, mandates coverage of specific preventive services with no cost-sharing. The services that must be covered at no cost to the insured include:

• Evidence-based items or services with a rating of `A' or `B' in the current recommendations of the United States Preventive Services Task Force;
• Immunizations recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved;
• For infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration.
• For women, additional preventive care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration.

Extending Dependent Coverage. Requires any group health plan or plan in the individual market that provides dependent coverage for children to continue to make that coverage available up to age 26.

Small Business Tax Credit. Initiates the first phase of the small business tax credit for qualified small employers for contributions to purchase health insurance for employees. The credit is up to 35 percent of the employer’s contribution to provide health insurance for employees. There is also up to a 25 percent credit for small nonprofit organizations.

Bringing Down the Cost of Health Care Coverage. Health plans, including grandfathered plans, must annually report on the share of premium dollars spent on medical care and provide consumer rebates for excessive medical loss ratios.

On September 23, 2010, all plans available for sale must reflect the above required provisions.  Therefore, companies are making available new plans for effective dates on or after September 23, 2010 and discontinuing the sale of all prior comprehensive plans.  Individuals and employer group plans that wish to keep their pre-September 23, 2010, policy on a “grandfathered basis” can only do so if the only plan changes made are to add or delete new employees and any new dependents.  If any other type of change is made, it must be to one of the new plans that include all of the mandated benefits.

On September 23, 2010, all comprehensive health insurance plans, regardless of length of time in effect, will no longer contain a limitation on the lifetime dollar value of benefits for any participant or beneficiary.  This elimination of benefit limits does not apply to “specialty plans” or “limited benefit plans” which were never classed as comprehensive health insurance plans.

Healthcare Reform is confusing, and it is not always clear how these changes will affect you and your insurance.  Please, if you are confused or just need sound advice, call our office.  800-829-5270.