Pre-existing conditions. While it’s no doubt this term has been a hot topic in recent months — and notably misconstrued — one thing has not changed: Insurers cannot deny coverage to anyone with a pre-existing condition.
Now that House Resolution 1628 has moved to the Senate floor, what can employers and individuals alike expect?
If passed by the Senate as is and signed into law, some provisions will take place as early as 2019 — possibly 2018 for special enrollment cases. It’s instrumental for companies to gear up now with a plan on how to tackle open enrollment, regardless of whether your company offers medical coverage or not.
Under the current proposed American Health Care Act (AHCA) insurance companies can price premiums based on health care status or age. The AHCA will provide “continuous coverage” protections to guarantee those insured are not charged more than the standard rate, as long as they do not have a break in coverage.
However, insurers will be allowed to underwrite certain policies for those that do lapse — hence charging up to 30 percent more for a pre-existing condition if coverage lapses for more than 63 days. This is more common than not, especially for those who are on a leave of absence for illness or need extensive treatment. In addition, under current law, insurers are only allowed to charge individuals 50 and older three times as much than those under this age threshold. This ratio will increase to 5-to-1 under AHCA.
Under the Affordable Care Act’s current law, employers must provide coverage for 10 essential health care benefits. Under AHCA, beginning as early as 2020, insurers will allow states to mandate what they consider essential benefit requirements. This could limit coverage offered to individuals and within group plans by eliminating high-cost care like mental health and substance abuse.
Not that it’s likely, but large employers could eventually opt out whether they want to provide insurance and/or choose the types of coverage they will provide to their employees.
It’s important to note that states must apply for waivers to increase the ratio on insurance premiums due to age and to determine what they will cover for essential health benefits. In order to have these waivers granted, they would need to provide extensive details on how doing so will help their state and the marketplace.
So what can employers do moving forward?
It’s not too soon to think about changing up your benefits package as open enrollment approaches, and educating yourself and your staff on AHCA and what resources are out there if you don’t offer health coverage.
Make a variety of supplemental tools available to your employees. Anticipate the coming changes by offering or adding more supplemental insurance and tools to your benefits package come open enrollment.
Voluntary worksite benefits, such as cancer, critical illness and accident insurance handle a variety of services at no out-of-pocket cost to the employer. Health saving accounts (HSAs), flexible spending accounts (FSAs) and health reimbursement accounts (HRAs) are also valuable supplemental tools to provide your employees, if you’re able to do so.
Along with the changes listed above, the AHCA has proposed to also increase the contribution amounts in these plans and will allow these plans to cover over-the-counter (OTC) medications.
Continue to customize wellness programs. Most companies offer wellness programs for their employees. Employers that provide this option should continue advancing in this area.
Jordan Shields is a partner in Arrow Benefits Group of Petaluma. He opened his first agency in 1985. He has served on the United Benefit Advisors (UBA) board from 2009–2012, holding positions of finance chairman, vice chairman and chairman.