April 16, 2014

Federal Agencies Release Key Health Reform Rules

As anticipation about the Obama Administration’s regulatory policy has swelled in the wake of President Obama’s reelection, the federal Departments of Health and Human Services, Labor, and Treasury on Nov. 20, 2012 released rules that propose to implement critical provisions of the Affordable Care Act (ACA), the 2010 federal health reform law. Issued in three separate rules that respectively address health insurance plan benefit requirements, insurance market reforms, and employer-provided wellness programs, the rules promise to have a significant impact on insurers, providers, state governments, and consumers, all of whom are likely to influence the development of the rules from proposed to final form.

Intended to aid consumers as they look for non-grandfathered private health insurance options in the individual and small group markets, the rule on essential health benefits, actuarial value, and accreditation standards seeks to promote consistency across health plans by requiring that health insurance plans include certain categories of essential health benefits (EHB), such as ambulatory patient services and prescription drugs. As insurance regulation generally falls under the jurisdiction of state governments, the rule provides states with significant flexibility in defining EHB. Under the rule, states are to select a benchmark plan from various listed options (e.g., the largest plan by enrollment in any of the three largest products in the state’s small group market), and all plans including EHB must offer benefits that are substantially similar to the benefits offered by the benchmark plan. If a state does not select a benchmark, HHS will set the default benchmark plan. The rule also contains a number of provisions to prevent discrimination against consumers.

Additionally, the rule outlines standards related to the determination of actuarial value (AV), which refers to the percentage of total average costs for covered benefits that a plan will cover, and proposes a timeline for when insurers offering coverage in a federal or state partnership exchange must become accredited. In 2014, non-grandfathered health plans in individual and small group markets must meet certain AV levels.

The rule on health insurance market requirements aims to complement these requirements by implementing major structural reforms. Among other things, the rule would generally require insurers to accept every individual or employer who applies for coverage in the individual or group market, and require insurers to renew all coverage in such markets. Additionally, the rule would allow insurers in the individual and small group markets to vary premiums based only on limited factors, such as age and tobacco use, and within restricted ratio limits.

Finally, the rule on incentives for nondiscriminatory wellness programs in group health plans endeavors to promote employer-sponsored wellness programs designed to incentivize employees to develop healthy behaviors while protecting against consumer discrimination in such programs. For programs that require individuals to meet a specific standard related to their health to obtain a reward—for example, programs that reward individuals who do not use or stop using tobacco products—the rule specifies requirements governing program design, participation, and reward size.


About the Author

Nita Garg, Health Care Attorney, Barnes Thornburg, Law firm
Staff Attorney

Nita Garg is an associate in Barnes & Thornburg LLP’s Chicago office and a member of the firm’s Healthcare Department. Ms. Garg assists clients with healthcare issues, including physician employment, physician-hospital contracting, Medicare and Medicaid reimbursement, and various state and federal regulatory matters, including fraud and abuse and HIPAA. 


About the Author

Gayland Hethcoat, Health care Attorney, Barnes Thornburg, Law firm
Staff Attorney

Gayland O. Hethcoat II is a staff attorney in Barnes & Thornburg LLP’s Chicago, Ill., office and a member of the Health Care Department. Prior to joining Barnes & Thornburg, Mr. Hethcoat served as a law clerk for McDermott Will & Emery in Miami, Fla., where he focused on matters affecting health insurers and care providers. Mr. Hethcoat also served as a judicial intern for the Honorable Leslie B. Rothenberg of the Florida Third District Court of Appeal.


Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is  intended to be  a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 

Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.

The National Law Review - National Law Forum LLC 4700 Gilbert Ave. Suite 47 #230 Western Springs, IL 60558  Telephone  (708) 357-3317 If you would ike to contact us via email please click here.