Because of the relative complexity of the Health Care Reform Act, I am breaking my analysis down into a series of discrete issues that I think will be relevant to employers. The first part of the summary deals with the creation of the concept of a "qualified health plan."
Before the 2010 Health Care Act, there was no federal program making health care coverage available to all individuals, and the concept of a “qualified health plan” did not exist. We had used the term “qualified” to refer to ERISA health plans meaning that they qualified for treatment as an employer sponsored health plan, and most people believed the term “qualified” meant self-funded. Now, we have a new standard by which health plans will be measured, thereby “qualifying” them as sufficient under the terms of the Act.
Note that it appears throughout the regulations that the funding status of the plan is of little significance. So whether it is an insured plan, self-insured or self-funded, it still has to meet these “qualifications.” ERISA “qualified” status will still have some significance for the purpose of preemption of state law. But for the remainder of this discussion, the term “qualified” will mean what it does under the 2010 Health Care Act.
1. Defining a “Qualified Health Plan”
For purposes of the 2010 Health Care Act, a “qualified health plan” is a “health plan” that:
(1) has in effect a certification (which may include a seal or other indication of approval) that the plan meets certain criteria for certification, issued or recognized by each Exchange through which the plan is offered;
(2) provides the “essential health benefits package”; and
(3) is offered by a health insurance issuer that:
(a) is licensed and in good standing to offer health insurance coverage in each state in which the issuer offers health insurance coverage under the Act;
(b) agrees to offer at least one qualified health plan in the silver level, and at least one plan in the gold level, in each exchange;
(c) agrees to charge the same premium rate for each qualified health plan of the issuer without regard to whether the plan is offered through an exchange, or whether the plan is offered directly from the issuer, or through an agent; and
(d) complies with the regulations that apply to exchanges, and any other requirements that an applicable exchange may establish.
The term “essential health benefits package” means, with respect to any health plan, coverage that:
(A) provides for “essential health benefits”;
(B) limits cost-sharing for such coverage; and
(C) provides either bronze, silver, gold, or platinum level of coverage (i.e., benefits that are actuarially equivalent to 60%, 70%, 80% or 90% (respectively) of the full actuarial benefits provided under the plan).
The essential health benefits must include at least the following general categories (sometimes referred to as “minimum essential coverage”), and the items and services covered within the categories:
… ambulatory patient services;
… emergency services;
… maternity and newborn care;
… mental health and substance use disorder services, including behavioral health
… prescription drugs;
… rehabilitative and habilitative services and devices;
… laboratory services;
… preventive and wellness services and chronic disease management; and
… pediatric services, including oral and vision care.
Incidentally, HHS is required to establish the criteria for certifying a qualified health plan. That criteria has to require that, to be certified, a plan must:
… meet certain marketing requirements;
… ensure sufficient provider choice;
… include essential community providers that serve low-income and medically-
… be accredited for clinical quality, patient experience, consumer access, and quality
… implement a quality improvement strategy;
… use a uniform enrollment form;
… use a standard format for presenting plan options; and
… provide information on quality standards used to measure plan performance.
What this means is that at some point, we can anticipate that plan sponsors will have to have their plans “certified” as “qualified” by meeting the required standards set forth by HHS.
These qualified health plans can cross state lines and become a “multi state qualified health plan.” Generally, a multi-state qualified health plan is a plan that offers a benefits package that is uniform in every state, and consists of the essential benefits described above. In addition, the plan must satisfy all of the requirements for a qualified health plan, as described above, including requirements relating to the offering of the bronze, silver, and gold levels of coverage and catastrophic coverage in each state exchange (which we will define later).
So having created a concept of a "qualified" health plan, we will next look to see what a "health plan" will be.