HHS Releases Guidance Related to Annual Dollar Limit Waivers

PUTTING PEOPLE FIRST

On Feb. 13, 2012, the Department of Health and Human Services (HHS) stated a health insurance issuer that has received a waiver of the annual dollar limit requirements pursuant to Section 2711 of the Public Health Service Act for a group health insurance product can sell that product to a self-insured grandfathered group health plan that has itself been granted a waiver and wishes to switch from being a self-insured plan to a fully insured plan, as long as the following criteria are satisfied:

1. In all cases, the plan sponsor must have been offering group health coverage to its employees before Sept. 23, 2010, for which it obtained from HHS a waiver of the annual limits requirement;

2. The issuer from which the group health plan is now obtaining the insured policy must have obtained a waiver from HHS for the newly purchased policy;—

3. The annual limits of the new policy may not be lower than the annual limits of the previous policy, except in the situation outlined in No. 4;

4. The plan sponsor may obtain a replacement policy with a lower annual limit only if other comparable coverage is not available.  If a plan purchases a lower annual limit policy due to lack of comparable coverage, this change would cause a loss of status under 45 CFR 147.140(g)(1)(vi)(C), relating to status as a grandfathered health plan.-

5. The health insurance issuer must obtain from the plan sponsor an attestation that the criteria outlined above are satisfied, and the attestation must be accompanied by documentation outlining the terms of the prior coverage. Issuers shall retain this information in accordance with the data retention requirements of the Sept. 3, 2010, and Nov. 5, 2010, annual limits guidance documents.

6. To the extent not superseded here, all prior HHS guidance regarding annual limits waivers continues to apply to the plan and policies described here.

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