Mandatory Coverage Of Preventive Health Services For Non-Grandfathered Plans

July 15, 2010

The Patient Protection and Affordable Care Act (PPACA) mandates that a group health plan (self-funded or insured) must cover a list of preventive health services with no cost-sharing, which means that the plan cannot assess a copayment, deductible or coinsurance charge with respect to the service. This requirement does not apply to a grandfathered health plan.

The Departments of Treasury, Labor and Health and Human Services issued interim final regulations on July 15, 2010 identifying the list of preventive services that must be covered and clarifying how the costsharing requirements apply when a preventive service is provided as part of an office visit. Recommended preventive services must be covered for plan years beginning on or after September 23, 2010. However, if a new service or item is added to the list of recommended preventive services, it must be covered for the plan year that begins on or after the date that is one year after the date the recommendation or guidance is issued.

A non-grandfathered group health plan must provide for the following preventive services with no cost-sharing:

• Evidence-based items or services that have a rating of A or B in the current recommendations of the U.S. Preventive Services Task Force;
• Immunizations for routine use in children, adolescents and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention;
• Evidence-informed preventive care and screenings for infants, children and adolescents provided for in comprehensive guidelines supported by the Health Resources and Services Administration; and
• Evidence-informed preventive care and screenings for women provided for in comprehensive guidelines supported by the Health Resources and Services Administration.

The complete list of guideline that are required to be covered can be accessed at http.//www.Healthcare.gov/center/regulations/ prevention.html.

If a recommended preventive service is provided as part of an office visit, the following rules apply:

• If the preventive service is billed separately from the office visit, then the plan may impose cost-sharing for the office visit. For example, if an individual receives a cholesterol screening as part of an office visit and there is a separate charge for the office visit and the lab work for the cholesterol screening, the plan may charge a copayment for the office visit but may not charge any cost-sharing for the lab work.

• If the preventive service is not billed separately from the office visit and the primary purpose of the office visit is to receive the preventive service, then no cost-sharing can be imposed for the office visit.

• If the preventive service is not billed separately from the office visit and the primary purpose of the office visit is not to receive the preventive service, then the plan may impose cost-sharing for the office visit.

With respect to preventive services provided by out-of-network providers, a plan may provide that:

• Preventive services provided by an out-of-network provider will not be covered; or
• Cost-sharing requirements may be imposed.

The Departments project that covering the recommended preventive services will increase premiums for non-grandfathered plans by approximately 1.5%. These increased premium costs are anticipated to be passed through to consumers. We presume that a like increase in costs can be expected for a self-insured plan, and employers will need to determine how much of that increase will be passed on to employees. The Departments anticipate that, among the benefits to result from covering preventive services are healthier individuals (due to earlier treatment of disease), a more productive workforce because fewer days of work will be missed due to illness, and cost savings due to an expected reduction in the incidence or severity of illness. It remains to be seen whether individuals will take advantage of these “free” preventive services and if, in time, these benefits are realized.

If you need any further information about the PPACA or coverage of preventive services, please contact:

Cynthia A. Moore is a member in the Troy 
office and Practice Department Manager for the
Tax, Estate Planning, Employee Benefits, Health Care,
Immigration and Gaming departments. She can be
reached at 248.433.7295 or cmoore@dickinsonwright.
com.