Blue Cross and Blue Shield of Illinois

 

September 6, 2013

Legislative Update
BCBSIL 2014 Approach: EHB “Authorized” Definition to Address Dollar Limits and Out of Pocket Maximum (OOPM)

Why is this important for fully insured and self-funded large groups (51+)?
Large groups regardless of funding type and grandfathered small group plans are not required by the Affordable Care Act (ACA) to cover essential health benefits (EHBs) in 2014. However, for any EHBs covered beginning with the 2014 plan year, insurers and self-funded plan sponsors must use an “authorized” definition when designing their benefit plans to meet the following ACA requirements for these plan types:

  • No annual or lifetime dollar limits on any EHBs that happen to be covered; and
  • Non-grandfathered plans must set limits on member cost-sharing for any in-network EHBs (and out-of-network emergency services) they cover. The out-of-pocket maximum cannot exceed $6,350 for individual coverage and $12,700 for family coverage in the 2014 plan year.

Previously, insurers and self-funded plan sponsors could use a “good faith” approach to determine which benefits are considered EHBs for the purpose of removing lifetime and annual dollar limits on EHBs.

Starting with the 2014 plan year, insurers and self-funded plan sponsors must use an “authorized” definition to determine which benefits are EHBs. This means using a definition authorized by the Secretary of the United States Department of Health and Human Services (HHS). For now, HHS has indicated that a state EHB benchmark plan, as supplemented (if necessary) by HHS to include coverage of all 10 EHB categories, is considered an “authorized” definition. Future guidance is expected from the federal government on this topic.

What is Blue Cross and Blue Shield of Illinois’ (BCBSIL) standard approach to an EHB “authorized” definition for 2014?
Our standard approach to an “authorized” definition for EHBs will be to follow the benchmark plan1 for the state in which the coverage has been issued.
Important notes for large accounts: 

  • Only custom accounts (both self-insured and fully insured) can select which EHBs will be covered for their 2014 plan year. 
  • Custom accounts can request an alternative “authorized” definition through their BCBSIL account representative.  
  • Any dollar limits on EHBs that may be covered by standard (pre-packaged) plans (51+) will be removed or converted to visit or item limits. To identify EHBs, we will follow the EHB benchmark plan in the state in which the coverage has been issued.
  • Contact your BCBSIL account representative with additional questions about our standard approach to EHB and OOPM requirements.

1 The link provided for the state benchmark plans goes to the cms.gov website. The benchmark plans published on this site may not include comprehensive details for each state.
                 
This information does not constitute legal or tax advice and it may be subject to change.

The information provided here is only intended to be a brief summary of the laws that have been enacted and is not intended to be an exhaustive description of the laws or a legal opinion of such laws.

 
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