Last week, BlueCross BlueShield of Tennessee announced that it is extending the dependent age limit to 26, effective June 1, 2010, in accordance with the Patient Protection and Affordable Care Act (“PPACA”). This change will impact members of group medical, dental and vision plans (fully insured) and members of individual medical and dental plans with renewal or effective dates of June 1, 2010 or later. Dependents anticipated to “age-off” on May 1, 2010 or later will be allowed to remain as a covered dependent. All insured groups with renewal dates of June 1, 2010 or later can allow subscribers to add coverage for eligible dependents up to age 26 at the time of open enrollment. The extension of coverage will remain in effect until the dependent reaches the age of 26, as long as the dependent continues to qualify under other PPACA and BlueCross eligibility guidelines.
On May 10, 2010, HHS issued an Interim Final Rule on this provision, including its definition of dependent. BlueCross will review the Interim Final Rule in its entirety and provide further detail and guidance.
An FAQ with questions and answers specific to the change in dependent age limits is available for review in the secure site of bcbst.com, BlueAccess. You can also request a copy of the FAQ from your broker, consultant or BlueCross sales or account executive.
New Insurance Oversight Office
The Department of Health and Human Services (“HHS”) has created The Office of Consumer Information and Insurance Oversight (“OCIIO”), which is tasked with helping HHS implement many of the provisions of the health care reform legislation. The OCIIO website can be found at http://www.hhs.gov/ociio/index.html, and will be a resource for information on initiatives and programs such as the high risk pool program and MLR requirements, as well as providing links to proposed regulations and requests for comments. Responsibilities for OCIIO include:
- Ensure compliance with new insurance market rules
- Provide guidance and oversight for state-based Exchanges
- Compile and maintain data for the HHS internet portal on insurance options
- Administer the temporary high risk pool program and early retiree reinsurance program
Early Retiree Reinsurance Program
HHS released an Interim Final Rule for the early retiree reinsurance program established by PPACA, with a 30-day comment period and to be effective June 1, 2010.
The program will reimburse sponsors of employment-based plans for a portion of the costs of providing health coverage to early retirees – including eligible spouses, surviving spouses and dependents. Employment-based plans include group health plans (fully insured and self-funded), state and local government employee plans, voluntary employees’ beneficiary associations and multiemployer plans. An “early retiree” is defined as a plan participant age 55 or older who is not an active employee and is not eligible for Medicare coverage.
Under the provisions of PPACA, the program will pay for 80% of the claim costs for each retiree or covered dependent that exceed $15,000 but are below $90,000 during a plan year
. Funding for the reinsurance program is limited to $5 billion and the program will sunset on Jan. 1, 2014. Sponsors may apply for reimbursement for costs incurred during plan years that start before June 1, 2010, provided the plan year ends after that date (e.g., calendar year 2010 plans). Sponsors must file an application with the HHS Secretary to be certified for participation in the program. The application must include the following information:
- The projected amount of reimbursement to be received for the first two plan-year cycles, with specific amounts for each plan year.
- An attestation that policies and procedures are in place to detect and reduce fraud, waste and abuse.
- A description of the procedures or programs the sponsor has in place with the potential to generate cost savings with respect to chronic and high-cost conditions.
- An assurance that the sponsor has a written agreement with its health insurance issuer or group health plan to provide the HHS Secretary with information and data necessary to verify compliance with the program requirements, including access to individually identifiable health information subject to the HIPAA Privacy Rule.
- A summary of how the sponsor will use reimbursed amounts to maintain a level of effort in contributing support to the plan (e.g., using funds to lower participant deductibles, coinsurance or copayments in future years).
Once a plan is certified by HHS, a reimbursement request may be made based on submitted claim costs. If a request for reimbursement is denied, a plan sponsor has 15 calendar days from the date of determination to appeal to the HHS Secretary. According to the Interim Final Rule, the HHS Secretary will provide additional information on the reinsurance program, including the procedure for submitting reimbursement requests and for correcting any inaccuracies in submitted requests.
BlueCross is in the process of reviewing the Interim Final Rule and will be providing guidance on implementing the early retiree reinsurance program in the near future.
BCBSA Letter on “Good Faith Compliance”
Given the September effective dates for many of the “immediate impact” provisions – no lifetime limits, restricted annual limits, bans on cost-sharing for preventive services and dependent coverage changes – employers and health plans will be making many changes, including policy and contract revisions, IT system upgrades and modifications to marketing materials, either in the absence of final regulations or with little time between the issuance of rules and their effective dates. Given this short timeframe and the number of changes required, the Blue Cross and Blue Shield Association (“BCBSA”), along with key employer organizations, including the U.S. Chamber of Commerce, the NFIB and the National Association of Manufacturers, sent a letter to HHS Secretary Kathleen Sebelius, Treasury Secretary Timothy Geithner and Labor Secretary Hilda Lucia Solis requesting that the agencies provide affected entities with a “good faith compliance standard”. You can view the letter by clicking here.