Removing Lifetime & Annual Dollar Limits for Essential Health Benefits

As part of the health care reform law, health insurance companies must remove lifetime and annual dollar limits on covered services (in network and out of network) that the U.S. Department of Health and Human Services (HHS) considers "essential health benefits." This change goes into effect September 23, 2010, although certain annual limits can be removed in phases over the next four years.  

HHS has not provided the final definition of "essential health benefits" yet, but based on the information and examples it has released, insurance carriers have come up with a list of approximately 26 services they believe will be affected. There may be variations in certain states. The services still may be subject to copays and other cost shares. 

This provision of the health care reform law also restricts annual or lifetime dollar limits at the plan level except transitional annual dollar limits as defined in the legislation.  

A waiver program will be available for certain types of plans like mini-med and limited benefit plans so they can retain annual plan limits. Insurance carriers are waiting for more information on this program from HHS.

Administrative services only (ASO) plans also are required to comply with the health care reform law lifetime and annual limits provision for plan years that start on or after September 23, 2010.