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HHS releases three new rules implementing the ACA

Rules would prohibit discrimination, establish exchanges

November 20, 2012

The Obama administration on Tuesday proposed three rules under the Affordable Care Act (ACA) that would prohibit insurers from discriminating against individuals with pre-existing conditions, establish essential health benefits, and expand employer-based wellness programs.

The three rules are open for comment and are not yet final.

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Proposed rule: Prohibiting insurers from discriminating against certain patients

HHS proposed a rule implementing an ACA provision that prevents insurers from discriminating against individuals with pre-existing or chronic conditions.

The rule will prevent insurers from denying coverage to patients with pre-existing or chronic conditions. It also will prevent insurers from charging higher premiums to certain beneficiaries because of current or past insurance programs, gender, occupation, and industry or small employer size.  

However, the rule will allow insurance companies to vary premiums—within limits—based on age, tobacco use, family size, and geography.

According to HHS, the rule targets 50 million to 129 million U.S. residents who have conditions that insurance companies have cited in coverage denials or insurance increases. "Thanks to the health care law, no one will be discriminated against because of a pre-existing condition," HHS Secretary Kathleen Sebelius said in a statement.

The rule also requires states to establish a single statewide risk pool for individual and small employer markets, unless a state opts to combine the two pools. Premiums and yearly rates would be based on the entire pool. In addition, the rule calls for a catastrophic plan in the individual market for young adults and individuals who cannot find affordable coverage.

Proposed rule: Establishing essential health benefits

The agency also proposed a rule implementing an ACA provision that creates essential health benefits for plans in the individual and small group markets.

Specifically, the rule ties essential benefits to a state's benchmark plan, including the state's largest small group plan, and must include items and services in at least the following 10 categories:

  • Ambulatory patient services;
  • Emergency services;
  • Hospitalization;
  • Maternity and newborn care;
  • Mental health and substance use disorder services;
  • Prescription drugs;
  • Rehabilitative services and devices;
  • Laboratory services;
  • Preventive and wellness services and chronic disease management; and
  • Pediatric services.

According to an HHS factsheet, the rule would require that states "select a benchmark plan from among several options identified in the proposed rule, and that all plans that cover EHB must offer benefits that are substantially equal to the benefits offered by the benchmark plan."

The proposed rule also addressed the actuarial value component of the essential health benefits, which is the percentage of the total average costs for covered benefits that a plan covers. In 2014, a "bronze" plan must cover 60% of all covered benefits, a "silver" plan must cover 70%, a "gold" plan must cover 80%, and a "platinum" plan must cover 90%.

The rule would allow plans to be within two percentage points of the standard. For example, a silver plan could cover 68% to 72% of the benefits.

Proposed rule: Establishing, expanding wellness programs

HHS, the Department of Labor, and the Treasury Department proposed a rule that would establish and expand workplace wellness programs that promote health and control health spending.

The rule allows employers to award employees as much as 30% of their health coverage costs for participating in wellness programs. According to HHS, the limit is currently 20%. Meanwhile, workers that enroll in smoking cessation programs could earn back as much as 50% of their coverage costs (HHS release, 11/20; Wayne, Bloomberg, 11/20; Zigmond, Modern Healthcare, 11/20 [subscription required]; Fox, NBC News, 11/20; HHS factsheet, 11/20).

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