Biden Administration Released Short Term Limited Duration Proposed Rule

Biden Administration Released Short-Term Limited Duration Proposed Rule 

Friday, July 7th a notice of proposed rulemaking (NPRM) for The Short-Term, Limited-Duration Insurance; Independent, Noncoordinated Excepted Benefits Coverage; Level-Funded Plan Arrangements; and Tax Treatment of Certain Accidents and Health Insurance proposed rule was released under ” the Departments” collectively; Department of Health and Human Services (HHS), the Department of Labor, and the Department of the Treasury. NADP is currently reviewing the scope and impact of the rule and will provide further details. The rule will also be reviewed by the Government Funded Programs Workgroup.  

The Biden administration lists new restrictions on short-term, limited-duration insurance plans  and details steps to prevent surprise medical bills. Friday in a press release, the administration states that “Short-term” plans must be truly short-term. In many ways, the proposed rule reverts to the original structure created by the Obama administration of three months of coverage. The new rule will allow enrollees to extend one additional month of coverage. The new guidelines apply to policy issues following the final rule effective date. The Trump administration extended the plans to last up to a year and set renewal for up to three years. The proposed rule does not limit the sale of short-term plans during open enrollment on Healthcare.gov. 

The proposed rule clarifies that income replacement “fixed indemnity” plans can no longer mimic comprehensive health insurance. Indemnity plans are now required to disclose to the consumer that they are not comprehensive medical coverage, but are instead a defined benefit, for when the consumer has an illness. 

The administration also details guidelines on surprise billing. Due to a loophole in the No Surprises Act of 2020, regulators have had difficulty implementing the act. The proposed rule sets out to limit health plans’ ability to claim hospitals which they’re in a contract with are not actually in-network. “Under federal law: health care services provided by these providers are either out-of-network and subject to the surprise billing protections, or they are in-network and subject to the ACA’s annual limitation on cost-sharing, further protecting consumers from excessive out-of-pocket costs,” said the administration. 

Plans are now required to disclose facility fees.  Any charges for care provided outside of hospitals, but hospital-owned, sites must be made available to consumers, along with other costs and information. The administration says, “In addition, nonparticipating providers and nonparticipating emergency facilities cannot evade the protections of the No Surprises Act, including the prohibition on balance billing, by renaming charges otherwise prohibited under the No Surprises Act as “facility fees.