Regulating Insurance: Pre-Existing Conditions, 25-Year-Old Dependents and More

Pre-Existing Conditions

Starting in 2014, the PPACA will no longer allow insurance plans to deny coverage based on the existence of pre-existing conditions. Additionally, charging higher rates to any individual on the basis of preexisting conditions will be prohibited. Plans must offer comprehensive coverage with an actuarial value of 65 percent of total allowed cost and with out-of-pocket limits no higher than those permitted for high-deductible health plans accompanying health savings accounts.

The individual mandate was intended to counteract the greater risk these individuals pose to insurers by increasing the overall pool of applicants.

Dependent Coverage

Under the PPACA, employer sponsored health insurance plans which provide dependent coverage must now provide said coverage to dependents up to the age of 26. However, companies are not required to offer health care plans with dependent coverage, so they may drop dependent coverage altogether rather than extend it to age 26. The requirement applies regardless of the dependent’s financial situation, marital status, residency, student status, or any combination thereof.

Flexible Spending Accounts

The PPACA places a $2,500 cap on contributions to flexible spending accounts (FSAs). It also prohibits using FSAs on over the counter medication.

Eliminate lifetime and annual dollar maximums on “essential health benefits”

“Essential health benefits” are defined under the PPACA as falling into ten categories: “(1) ambulatory patient services, (2) emergency services (3) hospitalization, (4) maternity and newborn care, (5) mental health and substance use disorder services, including behavioral health treatment, (6) prescription drugs, (7) rehabilitative and habilitative services and devices, (8) laboratory services, (9) preventive and wellness services and chronic disease management, and (10) pediatric services, including oral and vision care.”

Starting in 2014, group health plans may not establish any annual or lifetime dollar limits on any of these services.

Additional Resources

Congressional Research Service PPACA Pre-Existing Conditions: http://www.achp.org/themes/ACPH_Main/files/CRS_Preexisting_and_dependent_coverage.pdf

Health Policy Monitor Pre-Existing Condition Coverage Post-Health Reform: http://www.hpm.org/en/Surveys/Johns_Hopkins_Bloomberg_School_of__Publ._H_-_USA/16/Pre-existing_condition_coverage_post-health_reform.html

CMS “Essential Health Benefits”:  http://cciio.cms.gov/resources/files/Files2/12162011/essential_health_benefits_bulletin.pdf

 

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