Annual Limits Policy: Protecting Consumers, Maintaining Options, and Building a Bridge to 2014

In 2014, the Affordable Care Act will ensure all Americans have access to high-quality, affordable, and comprehensive health insurance plans that cannot include lifetime or annual dollar limits on benefits.

To implement the ban on restrictive annual limits before 2014, most insurance plans began phasing out their annual limits in September 2010.  Millions of Americans are now in plans that cannot impose annual limits below $750,000, and that limit will increase in the coming years until 2014 when no annual dollar limits will be permitted for non-grandfathered plans.  The law also restricts the sale of new plans with low annual limits except under very limited circumstances.

Protecting Worker's Coverage

A small number of workers and individuals only have access to limited benefit, or “mini-med,” plans with lower annual limits than are generally permitted by law and which can provide very limited protection from high health care costs.  Employers and insurers estimated that requiring mini-med plans to comply with the new rules could cause mini-med premiums to increase significantly, forcing employers to drop coverage and leaving some workers without even the minimal insurance coverage they have today.

In order to protect coverage for workers in mini-med plans until more affordable and more valuable coverage is available in 2014, the law and regulations issued on annual limits allow the Department of Health and Human Services (HHS) to grant temporary waivers from this one provision of the law that phases out annual limits if compliance would result in a significant decrease in access to benefits or a significant increase in premiums.  Plans that receive waivers must comply with all other provisions of the law and must alert consumers that the plan has restrictive coverage and includes low annual limits.  Additionally, these waivers are temporary and after 2014, no waivers of the annual limit provision are allowed.

On June 17, 2011, the Centers for Medicare & Medicaid Services (CMS) introduced a process for plans that have already received waivers and want to renew those waivers for plan or policy years beginning before January 1, 2014.  The new guidance extends the duration of waivers that have been granted through 2013, if applicants submit annual information about their plan and comply with requirements to ensure that their enrollees understand the limits of their coverage.  Existing waiver recipients must apply to extend their current waiver and all applications must be submitted by September 22, 2011; after that date applications for an extension will no longer be considered.  Any plans that have not yet applied for a waiver also must apply by September 22, 2011.

Increasing Transparency for Consumers

The Affordable Care Act includes consumer protections that will require plans, particularly mini-med plans, to give consumers more information about their health insurance plans.  Health insurers offering mini-med plans must notify consumers in plain language that their plan offers extremely limited benefits and direct them to www.HealthCare.gov where they can get more information about other coverage options.

The new guidance issued on June 17, 2011 requires more stringent disclosure standards and a new version of this consumer notice that will make the information easier for families to understand.  Health plans with waivers must tell consumers that their health care coverage is subject to an annual dollar limit that is lower than what is required under the law.  Specifically, the yearly notice must include the dollar amount of the annual limit along with a description of the plan benefits to which the limit applies.  Plans must illustrate how the annual limit would impact a consumer who was hospitalized, so families can understand how far their coverage will reach if they become seriously ill.

Additionally, HHS periodically posts the list of the plans that have been granted waivers to ensure the public is aware of the annual limits policy and stakeholders understand how they are affected.

Applications for Waiver of the Annual Limits Requirements

Updated January 6, 2012

Click on the links below for a list of approved waiver applicants organized by type:

Persons using assistive technology may not be able to fully access information in this file. For assistance, please email HealthInsurance@hhs.gov.

• Self-Insured Employers (PDF) (722)
• Multi-Employer Plans (PDF) (417)
• Non-Taft Hartley Union Plans (PDF) (34)
• Health Insurance Issuers (PDF) (50)
• State-Mandated Policies (PDF) (5)
• Association Plans (PDF) (3)

CCIIO has issued guidance with respect to the application of the existing annual limit waiver criteria to Health Reimbursement Arrangements (“HRAs”).  CCIIO published supplemental guidance (PDF) on August 19, 2011 that exempts HRAs that are subject to the restricted annual limits as a class from having to apply individually for an annual limit waiver.  An HRA in effect prior to September 23, 2010 is exempt from applying for an annual limit waiver for plan years beginning on or after September 23, 2010 but before January 1, 2014.  These HRAs still must comply with the record retention and Annual Notice requirements to participants and subscribers set forth in the supplemental guidance issued on June 17, 2011.  CCIIO has tailored the model notice to the unique circumstances of HRAs. The following HRAs received waivers before the august 19, 2011 policy was issued.

• Health Reimbursement Arrangements (PDF) (491)

Some applicants for waivers of the annual limits requirements received denial letters.  Denied applicants did not demonstrate that compliance with the minimum annual limits requirements would significantly increase premiums or decrease access to benefits.  These applicants are notified of the opportunity to be reconsidered for an approval if they provide additional materials explaining how their plan will experience a significant increase in premium or decrease in access to benefits as a result of the denial of the waiver.  Those plans that were approved upon reconsideration are also listed on the public approval list.

• Annual Limits Waiver Applicants Receiving Denial Letters (PDF)