Lifetime and annual limits

Applies to grandfathered and non-grandfathered group plans (but not grandfathered individual plans).

Requirement overview

• Lifetime limits on essential health benefits are no longer allowed.
  Note: Essential health benefits aren't required to be covered until 2014. If a plan does cover them, the benefits must follow these rules.
• Restrictive annual limits on the dollar value of essential health benefits are allowed until 1/1/2014.
• Lifetime and annual limits continue to be allowed for non-essential health benefits.

"Restrictive" annual limits

• For plan years that begin:
• 9/23/2010 - 9/22/2011, the annual limit is $750,000
• 9/23/2011 - 9/22/2012, the annual limit is $1,250,000
• 9/23/2012 - 12/31/2013, the annual limit is $2,000,000
• 1/1/2014, annual limits on essential benefits are no longer allowed
• Annual limits must apply to each individual (not each family)
• Annual limits may take into account only essential benefits

Essential health benefits defined

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care

Note: This list is determined by the Secretary of HHS and is not yet final.

What Priority Health is doing

• Remove lifetime limits on in-network benefits for all plans renewing 9/23/10 and after
• Out-of-network limits will still be in place.
• Add new annual limits on in-network essential services for PPO plans renewing 9/23/10 and after:
• Plans with a $1 or $2 million lifetime maximum will have a $2 million annual maximum.
• Plans with a $5 million lifetime maximum will have a $5 million annual maximum.
• Keep day/visit limits on certain services such as rehabilitation therapy
• Keep benefit-specific annual limits on all services
• Notify members who met the lifetime limit in the past and are now eligible for coverage

What you need to do

• Fully funded employers don't need to do anything related to this provision.
• Our sales team will work with self-funded employers to:
  • Remove all in-network lifetime limits and modify annual limits that are lower than what the law allows.
  • Add an annual limit on all essential benefits instead of having a lifetime limit. The new annual limit cannot be lower than the former lifetime limit to keep grandfathered status.
  • Notify individuals who met the lifetime limit in the past and are still eligible for coverage that they can re-enroll in the plan.