New provisions of health care reform law take effect
by Government Relations Staff
October 27, 2010 — On September 23, 2010, several new benefits, rights and protections went into effect under the federal Patient Protection and Affordable Care Act (PPACA).
Not all health insurers or plans are subject to the new provisions. Most of these provisions apply to group health insurance plans created or individual plans purchased after PPACA was enacted on March 23, 2010. For such group health plans and individual policies, most provisions apply as of September 23, 2010.
Group plans created or individual plans purchased on or before March 23, 2010, are exempted from the provisions of the PPACA under the “grandfathering” provision unless the insurer makes significant changes to a plan that reduce benefits or increase costs to consumers.
The following provisions that took effect on September 23, 2010, could have implications for practicing psychologists and their patients:
Lifetime and annual limits eliminated. Health plans and insurance policies issued on or after September 23, 2010, may not have a lifetime limit on most benefits. Annual limits on essential covered benefits, which include doctor’s office visits, hospitalization, and prescriptions, will be phased out over the next three years, and no annual limits will be allowed on most covered benefits after January 1, 2014.
Children with pre-existing conditions can no longer be denied coverage. Insurers and health plans that cover children can no longer deny coverage based on a pre-existing condition.
Coverage can no longer be retroactively cancelled. An insurance company cannot retroactively rescind coverage unless it can prove “fraud or … an intentional misrepresentation of material fact.” Policies can be cancelled only if there is proof of an intentional misrepresentation of significant information.
Benefit appeal rights added. Consumers have the right to ask insurers to internally review decisions that deny payment for a service or treatment. If a claim is still denied after an internal review, consumers are permitted to obtain an independent external reviewer. Insurers are also required to provide information on how to appeal a denied claim.
This is not a complete list of all the new provisions provided for under the Affordable Care Act. Further, several important provisions, such as health insurance tax credits for small employers and additional coverage for preventive services, took effect earlier this year.