Health Care Reform: New Guidance for Group Health Plans on Coverage of Preventive Services

Only July 19, 2010, the Departments of Treasury, Labor, and Health and Human Services jointly released interim final regulations relating to the coverage of recommended preventive services mandated by the Patient Protection and Affordable Care Act. The new regulations provide guidance to group health plans on what treatment qualifies as “recommended preventive services,” and when cost-sharing requirements may be imposed.

The new requirements generally apply to insured and self-insured group health plans beginning with the first plan year commencing on or after Sept. 23, 2010 (Jan. 1, 2011, for calendar-year plans), but do not apply to group health plans that are treated as “grandfathered plans.”

What treatments are considered recommended preventive services?

The regulations define “recommended preventive services” based on guidelines established by multiple federal agencies. The list of services required to be covered will be updated from time to time, based on ongoing recommendations and guidelines provided by these agencies. The list can be found on the U.S. Department of Health & Human Services' HealthCare.gov website.

Based on current recommendations, recommended preventive services are generally comprised of routine immunizations, screenings, and treatment. Examples include screenings for various forms of cancer, high cholesterol, depression in adults and adolescents, diabetes, obesity, HIV, hepatitis, and tobacco use. Additional examples include iron supplements for children, aspirin use for adults for certain conditions, and counseling for diet, depression, and tobacco and alcohol use.

Plans are not required to make changes to coverage and cost-sharing requirements based on new recommendations or guidelines until the first plan year beginning on or after the date that is one year after the new recommendation or guideline goes into effect. Plans can remain in compliance with the preventive service coverage requirements by visiting the HealthCare.gov website once per year and updating the terms of their plans.

Once a preventive service ceases to be recommended on the list, a group health plan may continue to cover the service and impose cost-sharing requirements on participants, or in the alternative, cease to provide coverage for that service.

When must participants be notified of a change in coverage for preventive services?

When a group health plan makes any material change in coverage, including a change in the range of preventive services that will be covered without cost-sharing requirements, the plan must notify participants. Under health care reform, a material change that is not reflected in the most recently provided summary of benefits and coverage provided by the plan must be included in a notification to participants at least 60 days before the change is effective. Willful failure of a plan sponsor or plan administrator of a self-insured plan to provide timely notice to participants will result in a fine up to $1,000 for each enrollee in the plan.

When is cost sharing for preventive services permitted?

Group health plans are generally required to cover recommended preventive services without requiring a copayment, deductible, or co-insurance from the plan participant. However, cost-sharing requirements may be applied in the following circumstances:

• Out-of-network providers. If a group health plan provides coverage for a network of providers, the plan is not required to provide coverage for recommended preventive services delivered by an out-of-network provider. Alternatively, a plan may impose cost-sharing requirements for recommended preventive services delivered by an out-of-network provider.
• Services not listed. Preventive services that are not listed in the recommendations may be covered under a group health plan and cost-sharing requirements may be imposed on participants on any such preventive service at the discretion of the plan.
• Treatment resulting from preventive service. A treatment resulting from a preventive screening can be subject to cost-sharing requirements if the treatment is not itself a recommended preventive service.
• Office visits. When a preventive service is provided during an office visit, but billed separately from the office visit, or when the office visit and the preventive service are not billed or tracked separately, but the purpose of the office visit is not the delivery of the preventive service, the plan may impose cost-sharing requirements on a plan participant with respect to the office visit.

Can a plan impose coverage limitations on preventive services other than cost-sharing requirements?

If the federal guidelines do not specify the frequency, method, treatment, or setting for the provision of a particular preventive service, a plan can impose coverage limitations. The limitations should be determined by the plan using reasonable medical management techniques.