HHS Releases Final Interim Guidance Coverage of Preventive Health Services without Cost-Sharing

On July 14, the Departments of Treasury, Labor, and Health and Human Services jointly released Interim Final Rules (IFRs) for group health plans and health insurance issuers related to coverage of preventive services under the Patient Protection and Affordable Care Act (PPACA).

Under the regulations, plans must cover without copay, coinsurance or deductible certain preventive services that have strong scientific evidence of their health benefits.

These are interim final rules (IFRs), which means final rules may eventually differ, but these rules are final in the interim. As additional clarification is made available whether through rule-making or otherwise, well share that information with you.

General highlights of new regulations:

  • Grandfathered plans are exempt for as long as they remain grandfathered.
  • Non-grandfathered plans (i.e., plans either not in effect on 3/23/10 or that made changes since then  resulting in loss of grandfathered status) must comply with the no-cost-sharing requirement beginning with the  first plan year on or after September 23, 2010.
  • Preventive services are to be covered without any cost-sharing requirement when delivered by a network  provider.
  • Employers and insurers are not required to provide coverage for recommended preventive services  delivered by an out-of-network provider or may impose cost-sharing for recommended preventive services delivered by an out-of-network health care provider.
  • If a guideline for a recommended preventive service does not specify the frequency, method, treatment,  or setting for the service, the plan or issuer may use “reasonable medical management techniques” to determine  any coverage limitations on the service.

General list of services to be offered without copay, coinsurance or deductible:
Evidence-based preventive services: This list of items is taken from the current recommendations of the  United States Preventive Services. They are included only if they have a rating of A or B. This broad list  generally includes:

  • Breast cancer and cervical cancer screenings
  • Colon cancer screenings
  • Screening for vitamin deficiencies during pregnancy
  • Screenings for diabetes, high cholesterol and high blood pressure

Routine vaccinations: A list of immunizations recommended by the Advisory Committee on Immunization Practices  of the Centers for Disease Control and Prevention are included in the rule. They are considered routine for  use with children, adolescents, and adults and range from childhood immunizations to periodic tetanus shots  for adults.  Prevention for children: The rule includes preventive care guidelines for children from birth to age 21  developed by the Health Resources and Services Administration with the American Academy of Pediatrics.  Services include regular pediatrician visits, vision and hearing screening, developmental assessments, immunizations,  and screening and counseling to address obesity.

Prevention for women: The regulation mandates certain preventive care measures for women. These recommendations  will be in place until new requirements for prevention for women are issued by the United States Preventive Services  Task Force or appear in comprehensive guidelines supported by the Health Resources and Services Administration.

Full list of covered preventive services issued as part of the Interim Final Regulations:

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Small Business Health Care Tax Credit

Health reform legislation signed by President Obama includes a Small Business Health Care Tax Credit to help small businesses afford the cost of covering their workers. See how the Small Business Health Care Tax Credit might affect four hypothetical small businesses.

Key Facts about the Small Business Health Care Tax Credit

  • The tax credit, which is effective immediately, can cover up to 35 percent of the premiums a small business pays to cover its workers. In 2014, the rate will increase to 50 percent.
  • The Congressional Budget Office estimates that the tax credit will save small businesses $40 billion by 2019.
  • Both small for-profit businesses and small not-for-profit organizations are eligible.

Key Elements

  • Available Immediately. The credit is effective January 1, 2010. As a result, small businesses that provide health care for their workers will receive immediate help with their premium costs, and additional firms that initiate coverage this year will get a tax cut as well.
  • Broad Eligibility. The Council of Economic Advisors estimates that 4 million small businesses are eligible for the credit if they provide health care to their workers. Qualifying firms must have less than the equivalent of 25 full-time workers (e.g., a firm with fewer than 50 half-time workers would be eligible), pay average annual wages below $50,000, and cover at least 50 percent of the cost of health care coverage for their workers.
  • Substantial Benefit. The credit is worth up to 35 percent of a small business’s premium costs in 2010. On January 1, 2014, this rate increases to 50 percent.
  • Non-Profits Eligible. Tax-exempt organizations are eligible for a 25 percent tax credit in 2010. In 2014, this rate increases to 35 percent. (The credit rates are lower for non-profits to ensure that the value of the credit is approximately equal to that provided to for-profit firms that cannot claim a tax deduction for the amount of the credit claimed.)
  • Gradual Phase-Outs. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
  • Premium Cost Eligibility. To avoid an incentive to choose a high-cost plan, an employer’s eligible contribution is limited to the average cost of health insurance in that state.
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