By Sophie E. Zdatny, Esq., Contributor
On July 2, 2013, the Obama administration surprised everyone by announcing a delay in the “play or pay” provision of the Affordable Care Act (“ACA”) until 2015. Attention is now being given to the delay of another provision of the ACA - the consumer protection provision that limits annual out-of-pocket costs for individuals and families. The provision places an overall limit on annual costs for deductibles, co-payments, and co-insurance of $6,350/year for individuals and $12,700/year for families, under Section 1302(c)(1)of the Act. It was scheduled to go into effect next year but it has now been delayed to January 1, 2015.
The Departments of Labor, Health and Human Services and the Treasury have recognized, in an FAQ about the Act, that plans may utilize multiple service providers to help administer benefits (such as one third-party administrator for major medical coverage, a separate pharmacy benefit manager, and a separate managed behavioral health organization). Additionally, separate plan service providers may impose different levels of out-of-pocket limitations and may utilize different methods for crediting participants' expenses against any out-of-pocket maximums. Given the resulting complexity, these processes will need to be coordinated under section 1302(c)(1), which may require new regular communications between service providers. In light of this, there will be a one year grace period for group health plans that use multiple independent administrators to handle health insurance benefits. Individual polices will still have to comply with the out-of-pocket limits next year.
The FAQ states that the Departments “have determined that, only for the first plan year beginning on or after January 1, 2014, where a group health plan or group health insurance issuer utilizes more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket maximums under section 2707(a) or 2707(b), the Departments will consider the annual limitation on out-of-pocket maximums to be satisfied if both of the following conditions are satisfied:
(a) The plan complies with the requirements with respect to its major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage); and
(b) To the extent the plan or any health insurance coverage includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (for example, if a separate out-of-pocket maximum applies with respect to prescription drug coverage), such out-of-pocket maximum does not exceed the dollar amounts set forth in section 1302(c)(1).”
Ten groups, representing consumers, have sent a letter protesting the delay of this consumer protection provision to the Secretary of Health and Human Services, the Secretary of the Treasury and the Acting Secretary of the Department of Labor asking the administration to reconsider its decision to delay enforcement the provision.