What are the Health Insurance Requirements under the Affordable Care Act for Health Insurance Companies?

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Per the Affordable Care Act, Health Insurers must make available to consumers, an Insurance Plan that includes:

(1) Expansion of Dependent Health Insurance Coverage up to the age of 26. Under the Affordable Care Act, health plans that allow coverage of children as dependents must make dependent coverage available to children up to age 26. These young adults can join or remain on a parent's plan even if they:

(a) Are married, however coverage does not extend to a married child's spouse)

(b) Are not living with a parent

(c) Are not attending school

(d) Are not financially dependent on a parent

(e) Are eligible to enroll in their own employer's plan

(f) Have or adopt a child

Some States require dependent coverage beyond 26 years of age if certain criteria are met.

(2) A "Guaranteed Issue" and "Guaranteed Renewability" requirement to ensure that Health Insurance Providers offer Group and Individual Market Policies to any Eligible Employer and Individual in a State, regardless of Health Status, and coverage of recommended preventive services without cost sharing. The Act generally requires health Insurance carriers to offer all of their non-grandfathered individual market and grouo market plans to any eligible applicant in the state. It also requires health insurance companies to accept any eligible employer and individual who applies for those policies, subject to certain exceptions. The provision is called "guaranteed issue" or "guaranteed availability". Individual market coverage offered through and outside the Marketplace may restrict guaranteed issue coverage to certain specified Open Enrollment and special enrollment periods. Additionally, the Affordable Care Act generally requires health insurance issuers to renew or continue in force coverage at the option of the policyholder. This is called "guaranteed renewability". To ensure continuity of coverage for consumers, if an insurer is undergoing a corporate reorganization, a product transferred from one issuer to a different issuer within an issuer's controlled group may be considered to be the same product for purposes of " guaranteed renewability" if certain criteria are met.

(3) Prohibition on coverage limitations or exclusions based upon pre-existing conditions. Effective for pln years beginning on or after January 1, 2014, the Affordable Care Act prohibits group health plans and non-grandfathered health insurance plans from limiting or excluding coverage related to pre-existing health conditions, regardless of the age of covered individual. A pre-existing condition is any health condition or illness that was present before the coverage effective date, regardless of whether medical advice or treatment was actually received or recommended. 

(4) Prohibition on precluding a qualified individual's participation in an approved clinical trial, or discriminating against the individual based on such participation. The Act prohibits group health plans and health insurance issuers from:

(a) Precluding participation of qualified individuals in an approved clinical trial

(b) Denying, limiting or placing additional conditions on the coverage of routine patient costs for items and services furnished in connection with participation in an approved clinical trial

(c) Discriminating against qualified individuals on the bsis of their participation in an approved clinical trial

The Affordable Care Act defines "qualified individual" for purposes of this provision, as an Individual who is eligible to partipate in an approved clinical trial according to the trial protocol with respect to the treatment of cancer or other life-threatening diseases or conditions. A qualified Individual either ha sa referral from a participating health care provider who has concluded that the individual's participation in the clinical trial is appropriate, or has provided medical and scientific information establishing that the individual's participation in the clinical trial would be appropriate. 

(5) Introduction of an 80/20 MLR (Medical Loss Ratio) rule to ensure that at least 80% of the premium dollars in the Individual and small group markets (and 85% in the large group market) paid to health insurance issuer are spent on providing health care services or quality improvement activities. MLR is a basic financial measurement that generally shows how much of the premium dollars a health insurance issuer spends on health care expenses, as opposed to profits or administrative costs. A Health Insurance Provider that does not spend enough of its premiums on Health Care services or quality improvement activities must provide rebates to individuals and employers. MLR is not calculated at the Individual level, but State Level for each issuer and separately for small group, large group, and Individual markets. The Affordable Care Act sets minimum MLR standards for different markets, as do some state laws. Federal Law requires health insurance issuers in the large group market (in most states, more than 50 employees) to spend at least 85% of premium dollars on medical care. The Affordable ACre Act also requires issuers in the small group market (in most states, 50 or fewer employees) and individual market to spend at least 80% of premiums on medical care. 

(6) Requirement to cover Essential Health Benefits (EHB) for Individual and Small Group Policies. The Affordable Care Act requires that non-grandfathered health plans offered in the individual and small group markets offer a comprehensive package of benefits, known as essential health benefits (EHB). EHB includes items and services within the following ten categories:

(a) Maternity and Newborn care

(b) Pediatric Services (under certain circumstances, pediatric oral care may be excluded from health plan's coverage if the benefits area avilable as part of a Marketplace-certified stand-alone dental plan). 

(c) Preventive and Wellness services and chronic disease management

(d) Prescription drugs

(e) Mental Health and substance use disorder services, including behavioral health treatment. The Mental Health Parity and Addiction Equity ACt of 2008 (MHPAEA) is a federal law that generally prohibits most group health plans and health insurance issuers that provide mental health or substance use disorder (MH/SUD) benefits from imposing less favorable financial requirements (such as coinsurance) and treatment limitations (such as visit limits) on those benefits that they do on medical/surgical benefits. The affordable care Act extended MHPAEA provisions to also apply to individual health insurance coverage. 

(f) Laboratory services

(g) Rehabilitative and habilitative services and devices

(h) Hospitalization

(i) Emergency Services

(j) Ambulatory Patient Services, such as doctor visits

Among other things, the Affordable Care Act requires that EHB reflects appropriate balance among the above ten categories, does not discriminate based on age, disability, or expected length of life and takes into account the healthcare needs of diverse segments of the population. Specific healthcare benefits may vary by state. Even within the same state, there can be differences between health insurance plans. When consumers fill out applications and compare plans, they will see the specific health care benefits each plan offers. 

(7) Prohibition on the annual and lifetime dollar limits on EHB

(8) Establishment of rating variation standards that permit premium rates in the Individual and small group markets to vary based only on age, number of covered family members, geographic location, and tobacco use

(9) Prohibition on rating individual and small group health insurance policies based on the individual health status, or the health status of individuals within a group.

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