Standard Policy Provisions And Clauses (Individual And Group)
This chapter begins with a discussion of the federal Patient Protection and Affordable Care Act (PPACA), also known as the Affordable Care Act (ACA). Luckily, there are only a few things that you will need to know regarding this substantial law to be successful in the licensing process. The ACA mandates that policies offered in the marketplace (the exchanges) insure certain essential coverages. Before, health insurance policies could cover certain items or exclude them, controlling the insured's premium in this way.
You will see that health plans that were in place on or prior to March 23, 2010 may be grandfathered, meaning they are governed under old law and therefore do not have to follow all of the requirements that are set forth by the new law. If a plan is grandfathered it is because it has existed on or prior to March 23, 2010 and because it has covered at least one person under the plan since that date (this applies to both individual and group plans).
If an insurance company offering a grandfathered plan changes anything about the plan that would result in increased out-of-pocket expenses during a health claim, then the plan ceases being grandfathered, and would then have to follow all of the new requirements under the ACA. This means that it would be a nongrandfathered plan. All plans that started after the ACA took effect are nongrandfatered, and so have to follow the new law. Insurance companies offering grandfathered plans must include a disclosure to the consumer that the plan believes itself to be grandfathered and that it therefore is not required to offer all of the coverages required under new law.
For exam purposes, you just need to know the difference between grandfathered and nongrandfathered plans.
Nongrandfathered health plan
Nongrandfathered health plans are new plans, meaning they are subject to all the federal Patient Protection and Affordable Care Act (PPACA) requirements. So all nongrandfathered plans have to follow the Affordable Care Act (ACA).
Grandfathered Health Plan
Grandfathered plans are old plans and so follow the old law, and do not have to follow the new law of the ACA. Grandfathered plans may not have to meet all the requirements contained in the PPACA. As stated in the introduction, a plan would lose grandfathered status if the insurance company offering a grandfathered plan changes anything about the plan that would result in increased out-of-pocket expenses during a health claim.
The only other thing to remember about the Affordable Care Act is that dependent children must be allowed to be covered on their parents’ plans up to age 26. This does not mean that the parents are required to cover their children on their health plans. It means that if they want to, that the insurer must allow it at least until the child is 26 years old. This applies to both group and individual policies.
Note: We have completed our discussion on the Affordable Care Act. Beginning now, the rest of the chapter discusses Florida laws specifically.
Please use the charts contained in this chapter as a summary or and be sure to print the Big Dawg notes for review.