Since President Obama signed the Patient Protection and Affordable Care Act (PPACA) and the subsequent Health Care and Education Reconciliation Act of 2010 in March, Blue Cross Blue Shield of Arizona (BCBSAZ) has been working diligently to interpret the law and what it means for our members and others interested in obtaining health insurance from us.
One of the most common questions we receive is when all of the reforms become effective. Different provisions become effective at different times over the course of the next four years, with most reforms effective by 2014. In addition, there are many regulations yet to be fully developed by the government before BCBSAZ can provide concrete answers for certain provisions. These regulations are pending and will be issued by the United States Department of Health and Human Services (HHS) and other state and federal agencies.
The following information is based on our current understanding of the law and our best estimation of how those regulations are likely to be written. As the regulations become finalized, we will share how we expect them to affect you.
Frequently Asked Questions and Topics
- Count on Blue Cross Blue Shield of Arizona
- What Reforms Take Effect This Year?
- Am I Guaranteed Health Insurance Coverage Today?
- No Pre-existing Conditions Exclusions for Children
- Coverage for My Dependent Adult(s)
- My Health Insurance Premium
- Grandfathering: “Keep the Plan You Are On”
- What Is a High-Risk Pool?
- Blue Cross Blue Shield of Arizona’s Rescission Policy
- Health Savings Accounts and Flex Spending Accounts
- How Can I Get in Touch with Blue Cross Blue Shield of Arizona?
Related Materials
- The Arizona Department of Insurance maintains a list of frequently asked questions regarding federal health care reform.
Count on Blue Cross Blue Shield of Arizona
At this moment of change, our customers can rest assured that we will remain true to the heritage that always has differentiated Blue Cross Blue Shield of Arizona. In that spirit, we are committed to moving forward and helping make the legislation work for our customers.
As we have done throughout our 71-year history, we will continue to help people navigate the health care system, especially at this time when many people are confused and unsure of what reform means to them. Being a part of the Blue Cross Blue Shield of Arizona family is about so much more than a simple membership card. It is a commitment to service excellence regardless of where you live or what kind of health plan you have. It is financial security in times of health care necessity. It is investments in the communities where you live, work and play.
What Reforms Take Effect This Year?
Q: How does health care reform affect me in the immediate future?
A: There are several changes and regulations within the Patient Protection and Affordable Care Act (PPACA) that take effect over a period of years, from 2010 to 2014.
2010 reforms that may affect you include:
- Access to a temporary federal Pre-existing Condition Insurance Plan
- People with pre-existing conditions who have been uninsured for at least six months are eligible to apply for a new national high risk pool plan established by the federal government, beginning July 1, 2010. The new plan is called the federal Pre-existing Condition Insurance Plan, and is now available in certain states, including Arizona.
- Effective Date: July 1, 2010
- Elimination of Pre-existing Condition Exclusions for Children
- The law says children under age 19 can no longer be subject to pre-existing condition waiting periods. New HHS regulations amend the definition of pre-existing condition so that plans may no longer deny an application of coverage to an individual under 19 due to a pre-existing condition. Additionally, waivers or pre-existing condition waiting periods to these individuals will not be applied.
- Effective Date: For plans starting or renewing on or after September 23, 2010.
- Coverage of Adult Children
- The Patient Protection and Affordable Care Act (PPACA) signed into law in March 2010 requires insurers that offer dependent coverage to children to allow young adults up to age 26 to remain on their parents’ insurance plan. Eligibility for health insurance up to age 26 will no longer require verification of student status or marital status.
- Effective Date: BCBSAZ started implementing this provision with its group plans effective June 1, 2010. Refer to the employer questions and answers for details on the impact of this provision for small and large groups.
- Grandfathering
- A “grandfathered health plan” is any group health plan or individual coverage that was in effect on March 23, 2010, the date of the health care reform law’s enactment. The law provides that grandfathered plans do not need to comply with certain reform provisions. Regulations have been issued by the federal government clarifying what changes can be made to plans without jeopardizing grandfathered status. For more information, read Grandfathering—Keep the Plan You are On.
- Effective Date: Health insurance coverage in effect on March 23, 2010, is considered grandfathered.
- Mini Exchange
- The mini exchange, now commonly referred to as “the web portal,” aims to assist consumers in locating and researching available health coverage options. Produced by the U. S. Department of Health and Human Services (HHS), you can now visit the site at http://www.healthcare.gov.
- The portal includes information for consumers about small group and individual insurance products, Medicaid, Children’s Health Insurance Plans and the new Pre-existing Condition Insurance Plan. Consumers can receive information about available coverage options after answering some preliminary questions (e.g., marital status, reason for seeking coverage) and identifying their residential zip code. BCBSAZ has benefit plan and rate information for its individual plans available to consumers on this site.
- Effective Date: July 1, 2010.
- Coverage of Preventive Services
- Effective for plan years or policy years beginning on or after Sept. 23, 2010, group or individual health insurance plans must cover certain recommended preventive services from an in-network provider without cost sharing. This requirement does not apply to grandfathered plans.
- The recommended preventive services include select services with a grade of ‘A’ or ‘B,’ in the current recommendations by the U.S. Preventive Services Task Force
- Immunizations for routine use in children, adolescents and adults recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention (CDC). For a list of routine use immunizations, see the Immunization Schedule from the CDC.
- Preventive care and screenings for infants, children and adolescents supported by the Health Resources and Services Administration
- Preventive care and screenings for women provided in guidelines supported by the Health Resources and Services Administration
- The complete list of recommended preventive services is included on the federal government’s health reform website, managed by the U.S. Department of Health and Human Services.
- Rescissions
- PPACA places restrictions on the practice of rescinding (terminating) a policy. The law states that a policy may only be rescinded in cases of fraud or intentional misrepresentation of material fact.
- Effective Date: September 23, 2010.
- Lifetime limits
- Insurance policies will no longer be allowed to require a specific dollar cap on essential benefits. New regulations also permit individuals who previously reached a lifetime maximum and who are otherwise still eligible for coverage an opportunity to re-enroll. The prohibition on lifetime limits applies to all group and individual plans.
- Effective Date: For plans starting or renewing on or after September 23, 2010.
- Annual limits
- This provision restricts and later prohibits insurance policies from imposing dollar amount-based annual limits on essential benefit plan services. Annual limits are restricted for plan years beginning on or after September 23, 2010 and prohibited for plan years beginning on or after January 1, 2014. The limitation on annual limits does not apply to individual grandfathered plans. The term grandfathering means policies that were in effect on March 23, 2010, are exempt from many of the health care reforms. Specific guidelines for what is defined as essential benefits are pending from HHS.
- Effective Date: For plans starting or renewing on or after September 23, 2010.
The following reforms do not begin until 2014:
- Guaranteed access to private insurance regardless of any pre-existing medical conditions
- Beginning in 2014, the new Patient Protection and Affordable Care Act (PPACA) signed into law in March 2010 will require that all individuals have coverage and insurers must offer coverage to anyone regardless of health status and cannot vary premiums based on health status.
- Effective Date: For plans starting or renewing on or after January 1, 2014.
- Creation of government marketplaces or “exchanges” to buy an insurance plan
- The legislation provides for the creation of new health insurance exchanges to enable individuals and small businesses (and large businesses, if a state elects) to compare and purchase policies and apply for subsidies. A person must buy insurance through the exchange to be eligible for subsidies.
- Effective Date: January 1, 2014
- Subsidies to help cover the cost of health insurance
- The law also offers subsidies to people who might have a difficult time buying insurance. Subsidies are available to those with household incomes of up to 400 percent of the federal poverty level (FPL). For a family of four, 400 percent FPL is $88,200.
- The subsidy is set up so that a person pays no more than a certain percentage of their income for health insurance.
- Effective Date: January 1, 2014
- A requirement to have insurance
- Almost all Americans will be required to have health insurance, whether it is through an employer, a government program or the individual insurance market. The law penalizes people who fail to carry insurance. The penalty is phased in. When it is fully implemented, a person who fails to buy insurance will be subject to a penalty of $695 or 2.5 percent of their income, but not more than the cost of a bronze level policy sold through the exchange. Penalties for uninsured children are half the adult penalty.
- Employers and insurers will report policy information to the Internal Revenue Service, which will play a role in enforcing the mandate.
- Effective Date: January 1, 2014
Am I Guaranteed Health Insurance Coverage Today?
Q: I have been previously denied for insurance coverage up to now. When can I apply and be guaranteed coverage?
A: Another requirement under the PPACA is that all individuals have coverage. Insurers must offer coverage to anyone regardless of health status and cannot vary premiums based on health status. However, this provision does not go into effect until plan years beginning on and after January 2014.
Q: I have been unable to get insurance because of pre-existing conditions. What are my options?
A: The new health care reform law requires that by 2014, insurers must offer coverage to anyone regardless of health status. In the interim, the federal Pre-existing Condition Insurance Plan offers comprehensive health coverage to individuals who otherwise would be unable to secure such coverage because of their health status.
Q: Is my employer now required to offer me health insurance?
A: At this time, no employer is required to offer health insurance to its employees, but a small employer tax credit is designed to encourage small businesses to offer or continue to offer health insurance to their employees.
No Pre-existing Conditions Exclusions for Children
Q: Is my child with a pre-existing condition able to get health insurance under the new health reform law?
A: The law says children under age 19 can no longer be subject to pre-existing condition waiting periods. New HHS regulations amend the definition of pre-existing condition so that plans may no longer deny an application of coverage to an individual under 19 due to a pre-existing condition. Additionally, waivers or pre-existing condition waiting periods to these individuals cannot be applied.
This regulation applies to all group plans and only non-grandfathered individual plans. It does not apply to grandfathered individual plans. The term grandfathering means policies that were in effect on March 23, 2010, are exempt from many of the health care reforms.
Coverage for My Dependent Adult(s)
Q: What does the federal mandate about dependent coverage require?
A: The new federal law says that health policies that provide coverage for dependent children must offer coverage to dependents up to the age of 26, effective September 23, 2010, and after at the start of the group’s plan year/open-enrollment or individual contract renewal date.
BCBSAZ began to allow implementation of this new law to its group policy holders to continue coverage for young adult dependents effective June 1, 2010.
For Those with an Individual Health Insurance Plan
Q: I am an individual policy holder, what does this mean to me?
A: In 2006, Blue Cross Blue Shield of Arizona began allowing dependent coverage on individual policies through age 29, regardless of student status. The dependent coverage through age 29 is available to married dependents as well, effective on and after October 1, 2010, at the renewal of the individual’s contract. Members can add dependents to their policy at any time subject to policy requirements.
Q: My dependent is currently not on my individual health insurance plan. Can I add them to my coverage?
A: In 2006, BCBSAZ began allowing dependent coverage on individual policies through age 29, regardless of student status. Effective for individual plan contract renewals beginning on and after October 1, 2010, a married dependent can continue coverage as a dependent on the parent’s individual plan up to age 29. Members can add dependents to their policy at any time, subject to policy requirements.
For Those with Insurance through an Employer
Q: My dependent is currently not on my employer-sponsored health insurance plan. Can I add them to my coverage?
A: Dependents up to age 26 who are currently not covered under their parents’ coverage will be eligible to enroll at the start of the group’s next plan year, on or after September 23, 2010. Dependents no longer have to be enrolled in college full-time, on a gratuitous humanitarian endeavor or unmarried to continue on the parent’s plan. Group plans in effect on or before March 23, 2010, are generally considered grandfathered plans under the law. Prior to plan years beginning on or after Jan. 1, 2014, a grandfathered plan need only offer this coverage if the adult child is not eligible for any other employer-sponsored coverage.
Q: I am 23 and just got off my parents’ group health coverage – can I get back on right now?
A: Dependents up to age 26 who are not covered under their parents’ coverage will be eligible to enroll at the start of the group’s next plan year, on or after September 23, 2010.
Q: What about my child who previously rolled off my group policy but is still under 26?
A: Dependents up to age 26 who are currently not covered under their parents’ coverage will be eligible to enroll at the start of the group’s next plan renewal on or after September 23, 2010.
General Questions
Q: Does an adult child dependent need to be financially dependent upon the subscriber?
A: At this time, there is nothing in the law that requires that an adult child be financially dependent upon the policy holder. Nor does the law require that the adult child reside with the policy holder.
Q: Can the adult child be married and still be eligible?
A: Yes, adult children who are married qualify for coverage under this provision if under the age of 26. This is effective for group coverage at the start of the group’s next plan year and for individual coverage on and after October 1, 2010, when the individual member renews their contract with BCBSAZ.
Q: Does the adult child have to be a student to be eligible?
A: No. The requirement for dependents over age 19 to be a full-time student is no longer applicable.
Q: Will grandchildren be covered?
A: Not at this time.
Q: Will the spouse of a married dependent be covered?
A: No.
Q: If I am age 26 now, can I get dependent coverage on my parent’s plan?
A: The dependent coverage is up to age 26 for most group coverage (some large employers may extend dependent coverage beyond age 26). On BCBSAZ individual products, you can remain on your parents’ policy through age 29.
If you can’t qualify as a dependent under your parent’s plan, you may be eligible for one of BCBSAZ’s affordable individual health insurance policies. To reach BCBSAZ’s Sales Department, please call 602-864-4400.
Q: Can an adult child be eligible for dependent coverage if the adult child is eligible for coverage through an employer?
A: Group plans in effect on or before March 23, 2010, are generally considered grandfathered plans under the law. Prior to plan years beginning on or after January 1, 2014, grandfathered plans need only offer this coverage if the adult child is not eligible for any other employer-sponsored coverage.
My Health Insurance Premium
Q: Are my premiums going to go up?
A: Based on a research study commissioned by the Blue Cross Blue Shield Association, we believe that premiums will increase as a result of provisions in the reform legislation that will guarantee richer levels of benefits than most consumers who obtain their own insurance purchase today. Insufficient discounts for the young and healthy could encourage many of them to forgo coverage. New fees and taxes mandated by the new law will also likely increase the cost of premiums as they are phased in.
There are a number of factors that are driving health insurance premiums, including rising health care costs. Increasing utilization attributable to an aging population, obesity and chronic illnesses; new treatments; prescription drugs and expensive new technologies are the biggest causes of increasing health care premiums. The new law establishes a few pilot programs, but does not aggressively attempt to control rising health care costs.
BCBSAZ will continue to work with doctors, hospitals, employers and consumers to contain costs and insurance premiums while improving access to quality health care. To help accomplish this, BCBSAZ has initiatives in place to reduce unnecessary hospital readmissions, eliminate infections acquired during hospital visits and promote paying doctors and hospitals for quality outcomes to help achieve this goal.
How much premiums increase will depend on the further interpretations by the HHS and the extent to which those who are currently uninsured opt to get insurance coverage.
Q: How much will insurance premiums be for someone who was previously denied coverage?
A: There are too many unknown factors at this time to be able to answer this question. Premiums will depend on the further interpretations by the HHS and the extent to which those who are currently uninsured opt to get insurance coverage.
Grandfathering: “Keep the Plan You Are On”
Q: How does the new health care reform law affect the current health insurance plan I have?
A: President Obama said that if you like the insurance you have, you can keep it. If you purchased a policy on or before March 23, 2010, the plan you purchased is now considered a “grandfathered” plan. It is possible that there will be some minor changes to your plan in order to make the plan compliant with some of the health care reform law requirements.
A policy can lose its grandfathered status. If it does, it becomes subject to all health insurance under the new law.
Q: What does grandfathering mean?
A: A “grandfathered health plan” is any group health plan or individual coverage that was in effect on March 23, 2010, the date of the new health care reform law’s enactment. The law provides that grandfathered plans do not need to comply with certain reform provisions.
Some of the reforms that do apply to grandfathered policies include:
- Extended dependent coverage to age 26
- Rescission restrictions
- Annual limits and lifetime limits
- Pre-existing condition limitations for children
A policy can lose its grandfathered status. If it does, it becomes subject to most of the health insurance reforms set forth in the law. On June 15, 2010 the federal government issued regulations providing guidance on grandfathered plans. The regulation identifies factors that will result in the loss of a plan’s grandfathered status. In summary, these changes include:
- Eliminating all (or substantially all) benefits to diagnose or treat a particular condition;
- Increasing coinsurance by any amount above the level at which it was set on March 23, 2010;
- Increasing fixed amount cost-sharing (e.g., deductibles and out-of-pocket maximums) more than the sum of medical inflation plus 15 percentage points from the level of March 23, 2010;
- Increasing copayments by an amount that exceeds the greater of: (1) a total percentage (measured from March 23, 2010) that is more than the sum of medical inflation plus 15 percentage points, or (2) $5 increased by medical inflation;
- Reducing employer or employee organization contributions based on the cost of coverage or a formula by more than 5 percentage points below the contribution rate on March 23, 2010; and
- Reducing an overall annual dollar limit or adding a new overall annual dollar limit, compared to what was in effect on March 23, 2010.
The regulation generally provides that grandfathered status applies separately to each benefit option offered under a group health plan.
What Is the Federal Pre-existing Condition Insurance Plan?
People with pre-existing conditions who have been uninsured for at least six months are eligible to apply for a plan established by the federal government, beginning July 1, 2010. The plan is called the federal Pre-existing Condition Insurance Plan, and is now available in certain states, including Arizona.
To be eligible, the following guidelines must be met:
- Uninsured for at least six months
- Have had a problem getting insurance due to a pre-existing condition
- Citizen of the United States or reside in the United States legally
For further information regarding eligibility, visit www.healthcare.gov. In Arizona, the U.S. Department of Health and Human Services is administering the plan.
The Pre-Existing Condition Insurance Plan is a transitional program until December 31, 2013, when the exchange and guaranteed issue are fully implemented in January 2014.
Blue Cross Blue Shield of Arizona’s Rescission Policy
Q: What is a rescission?
A: Rescission is the voiding of a health insurance policy by the health insurer. The PPACA places restrictions on the practice of rescinding or voiding a policy, stating that a policy may only be rescinded in cases of fraud or intentional misrepresentation of material fact during the underwriting process.
Q: What is BCBSAZ’s rescission history?
A: In 2009, BCBSAZ processed 31,376 individual under-age-65 applications and initiated one rescission. This is due to BCBSAZ’s controls and safeguards in our rigorous review process, which involves medical services and legal specialists as well as an appeals process for the policyholder.
Health Savings Accounts and Flex Spending Accounts
Effective Jan. 1, 2011, the cost of an over-the-couter medicine or drug cannot be reimbursed from Flexible Spending Arrangements or health reimbursements unless a prescription is obtained. The change does not affect insullin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 can still be reimbursed in 2011, if allowed by the employer’s plan. A similar rule goes into effect on Jan. 1, 2011, for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs). For more information, see IRC news release IR-2010-95, Notice 2010-59, Revenue Ruling 2010-23 and the IRC questions and answers.
FSA and HSA participants can continue using debit cards to buy prescribed over-the-counter medicines, if requiurements are met. For more information, see IRC news release IR-2010-128 and Notice 2011-5.
How Can I Get in Touch with Blue Cross Blue Shield of Arizona?
There are many questions about health care reform that have yet to be answered, and BCBSAZ is hard at work to determine how health care reform will affect you. We want to keep you updated on the status of the implementation through continual updates to this site. To have updates delivered right to your in-box, sign up for e-mail alerts.
After reviewing the frequently asked questions and topics, if you have further questions, you can reach BCBSAZ representatives at the following numbers:
- If you are enrolled in a BCBSAZ health insurance plan, please call the number on the back of your BCBSAZ ID card to reach a customer service representative.
- If you are looking to purchase a health insurance plan, please call the BCBSAZ Sales Department at 602-864-4400. Members of the BCBSAZ Sales team will be happy to answer any questions you may have.
