New Guidance on Waiver Process for Annual Dollar Limits

As most employers were shutting their doors for the long Labor Day weekend, the U.S. Department of Health & Human Services (HHS) released guidance on the process for waiver applications related to the annual dollar limit policy under the Patient Protection and Affordable Care Act (PPACA), which bans certain annual limits in medical benefits coverage.  The interim final regulations detailing certain patient protections, which HHS jointly released with the Departments of Treasury and Labor on June 22, 2010, set forth a program whereby the restricted annual limit requirements would be waived if compliance would result in a significant decrease in access to benefits or a significant increase in premiums.  The waiver of the new restrictions will be available up until 2014, when PPACA’s phased-in, restricted annual limits for essential health benefits is complete.  The possibility of a waiver helps ensure that individuals with certain types of coverage – particularly coverage under “mini-med” plans – will not be denied access to needed services or experience more than a minimal impact on their premiums. 

According to the guidance (pdf), plan sponsors may apply for a waiver if the plan was in existence and offered prior to September 23, 2010, and the waiver will apply only for the plan year beginning between September 23, 2010 and September 23, 2011.  Therefore, a plan sponsor must reapply for any subsequent plan year until 2014.  Because HHS announced it will process complete waiver applications within 30 days of receipt, the application should be filed 30 days in advance of the 2011 and subsequent plan years.

The application must include:      

1. The terms of the plan or policy form(s) for which a waiver is sought;
2. The number of individuals covered by the plan or policy form(s) submitted;
3. The annual limit(s) and rates applicable to the plan or policy form(s) submitted;
4. A brief description of why compliance with the interim final regulations would result in a significant decrease in access to benefits for those currently covered by such plans or policies, or significant increase in premiums paid by those covered by such plans or policies, along with any supporting documentation; and
5. An attestation, signed by the plan administrator or Chief Executive Officer of the issuer of the coverage, certifying: (1) that the plan was in force prior to September 23, 2010; and (2) that the application of restricted annual limits to such plans or policies would result in a significant decrease in access to benefits for those currently covered by such plans or policies, or a significant increase in premiums paid by those covered by such plans or policies.

 Melissa B. Kurtzman authored this entry.