The Facts
Health insurance issuers face immediate deadlines as well as long-term timeframes for implementing health care reform. Several initiatives are underway, such as the Early Retiree Reinsurance Program. Other market reforms, including lifetime and annual dollar limit restrictions, apply to new issues and renewals beginning September 23, 2010, although limited exceptions may exist for grandfathered plans.
Quickly following are federal review of premium rate increases and medical loss ratio (MLR) standards (along with the risk of mandatory rebates if exceeded). Multiple, and differing, statutory provisions, such as the small groups definitions, add complexities.
What’s at Stake
Implementing these reforms raises several common questions and issues:
- How do health insurance issuers modify existing products and prepare state product and rate filings to reflect new benefit requirements that are vague or undefined and for which guidance may not yet exist?
- How should health insurance issuers advise their customers? Should grandfathered status be preserved, or will the conditions be too limiting to be practical? The answer may differ for self-funded and fully insured plans.
- How do health insurance issuers implement new operating requirements, such as MLR standards, where state filings will need to be prepared prior to adoption of the standards? How should existing small group requirements be reconciled with new definitions for small groups?
Steps to Consider
In addition to monitoring the release of regulations and other guidance, health insurance issuers should consider strategies for implementing reforms for which there is minimal guidance. Consistency as to approach, coupled with a good faith defense of actions taken following critical legal analysis, may mitigate some of the potential risks. Developing a schedule for immediate requirements is advisable, while keeping in mind the longer-term reforms that take effect upon launch of health insurance exchanges.
