Agencies Start Crafting Health Insurance Reform Guidelines
Quist, Janet, Nation's Cities Weekly
Efforts are underway in three federal agencies to craft implementation guidelines for the new, enormously complex health insurance reform law, P.L. 104-191. In general, these regulations must be issued no later than April 1, 1997, although enforcement actions will not kick in until January 1, 1998.
Municipal employers and state municipal league health insurance pools will need to pay close attention to the new requirements, although the impact on them will depend upon the manner in which they provide health insurance coverage to employees and if the municipality chooses to adopt the "opt-out" provisions. Municipal employers will also need to look carefully at how their respective states choose to address areas in which they have broad discretion, such as in the case of Medical Savings Accounts (MSA's). Regardless, there are some provisions with which all employers need to comply. More specifically, municipal employers like all others will need to immediately craft plans to deal with the "creditable coverage age" and "certification" procedures described under the new laws' portability provisions.
What Are These Requirements and
When Must My City Comply?
Among the first provisions of the new law of particular concern to municipal employers, and for which they should work immediately to craft their compliance plans, are those that require them to keep detailed records of the continuous group health coverage - i.e. "creditable coverage" provisions, of current employees. The new law also requires employers to be pre pared to provide written "certification" of the period of creditable coverage for employees who seek to change jobs or who lose their jobs. This means that a municipal employer must be able to provide written documentation of an employees' group continuous coverage that he or she can take with them to a new job. The purpose being that any previous coverage for which there has not been a break in coverage of more than 63 days can be credited toward the preexisting condition waiting period of a new employers' policy. Employers must comply with the "creditable coverage" provisions as of October 1, 1996, and the "certification" provisions beginning June 1, 1997.
The portability provisions prohibit group health plans and health insurance issuers from imposing a preexisting condition exclusion period of more than 12 months after the enrollment date of a new employee. If the new employee can provide certification that he or she was covered by a group plan through prior employment, without a break in coverage of more than 63 days, that individual would receive a credit that would reduce the preexisting condition limitation period. …