New federal guidance sets a September 2011 deadline for limited benefit, or “mini-med,” plans to apply for a new waiver from a federal requirement to raise annual limits for certain benefits. Mini-med plans typically have lower premiums and offer fewer benefits such that consumers may be without coverage if they incur large medical expenses.
The Affordable Care Act requires insurers to comply with an interim schedule of annual benefit limits until these limits are eliminated altogether in 2014 (except for grandfathered individual market policies). Some mini-med plans have asked to be exempt from this requirement because they say compliance would result in a significant decrease in benefits or a significant increase in premiums.
Plans have until September 22, 2011 to apply for a new waiver, after which the federal government will no longer consider new applications (although plans with existing waivers could still ask for annual extensions).
The new federal guidance also revises the waiver renewal process and implements stricter consumer disclosure requirements for all plans that receive waivers. Waiver recipients must now:
- Tell consumers that the plan has lower annual limits than what is allowed by law. Insurers must include the dollar amount of the annual limit along with a description of the benefits to which the limit applies.
- Explain how many days of hospitalization the plan covers, based on an average cost of $1,853 per day.
- Tell consumers that because federal requirements for annual benefit limits would result in a significant premium increase or a significant reduction in benefits, these requirements have been waived for this plan.
- Prove compliance with the new disclosure requirement on a yearly basis.
Click here to read more about the waiver process and to see a complete list of approved and denied waiver requests, including for mini-med plans based in New York State.