Archive for December, 2011

HHS Provides Guidance on Essential Health Benefits Package

December 16, 2011

Today HHS released an informational bulletin outlining how it intends to define  “essential health benefits” for purposes of the Affordable Care Act.  The definition is important as beginning in 2014 all health plans offered in the individual and small-group market must cover the essential health benefits package.  The bulletin announces that HHS will allow each State to define its own “essential health benefits package” based on a “benchmark” chosen by the State.  A State may choose from one of the following 4 benchmarks:

  • One of the three largest small group plans in the state by enrollment;
  • One of the three largest state employee health plans by enrollment; 
  • One of the three largest federal employee health plan options by enrollment;
  • The largest HMO plan offered in the state’s commercial market by enrollment.  

The benefits and services included in the benchmark chosen by the State will be the State’s “essential health benefits package.”   States with benefit mandates that exceed essential health benefits will be responsible for defraying the costs associated with these mandates.  A copy of the HHS bulletin is available at

The HHS bulletin is not a rule and HHS will still need to proceed with the rule-making process at some time in the future.


Early Retiree Reinsurance Program Ending

December 9, 2011

CMS announced today that based on the amount of program funds remaining, the Early Retiree Reinsurance Program  will stop accepting claims starting with claims  incurred on or after January 1, 2012.  Until further notice, CMS will continue to accept claims incurred on or before December 31, 2011, including those paid by the Plan after December 31, 2011.  However, any claim list that is submitted to ERRP containing claims incurred by early retirees on or after January 1, 2012 will be rejected in its entirety, even if it includes claims incurred on or before December 31, 2011.   

The Early Retiree Reinsurance Program is a program that reimburses employer-sponsored group health plans for qualifying claims paid on behalf of early retirees.  The Program was created by the Affordable Care Act and was appropriated $5 billion in federal funding.

CO-OP Rules Finalized

December 8, 2011

Today CMS released final rules for the CO-OP (Consumer Operated & Oriented Plans) Program created by the Affordable Care Act.  The Program provides federal loans to private organizations seeking to establish new health insurers through consumer-operated cooperatives.   The rules adopt standards for CO-OPs and for qualifying for federal assistance to establish a CO-OP.  The final rules can be accessed at

DOL Issues Guidance to Employers on Use of MLR Rebates

December 5, 2011

On Friday the DOL issued Technical Release No. 2011-04 providing guidance to employers who receive rebates from their health insurance carriers due to the carriers’ failure to meet required medical loss ratios under the Affordable Care Act.  According to the DOL’s guidance, rebates received by an employer may be plan assets which must be used for the exclusive benefit of plan participants.  Employers should review the terms of their insurance policies and governing plan documents, as well as their contribution percentages,  to determine whether all or a portion of any rebates received will be considered plan assets.   In addition to being used for the exclusive benefit of plan participants, plan assets must also be held in trust.    In Friday’s guidance the DOL extended the trust exemption for cafeteria plans and certain other contributory welfare plans to rebates received by employers who rely on this trust exemption to the extent the rebates are used within three months of receipt.   The DOL guidance can be accessed at

%d bloggers like this: