This week, I am answering readers’ questions about maternity coverage requirements in the new health insurance exchanges, long-term-care insurance and switching employer health plans.
Q. Under the Affordable Care Act, will all plans have to cover maternity benefits in 2014? I do not want maternity coverage. Will I have the option to decline maternity coverage in an individual plan?
A. Maternity and newborn care are together considered one of the 10 “essential health benefits” that most individual and small-group plans sold on the state-based health insurance exchanges and the private market will be required to offer in 2014. (If the plans have grandfathered status under the law, they’ll be exempt, however.) Declining coverage will not be an option.
This requirement will bring small-group and individual plans into line with the coverage that’s already required under the Pregnancy Discrimination Act for companies with 15 or more workers, says Adam Sonfield, a senior public policy associate at the Guttmacher Institute, a research and policy center on issues of sexual and reproductive health.
“Not offering maternity coverage when you cover other types of care is sex discrimination,” he says. “The Affordable Care Act is trying to close that loophole.”
From a practical standpoint, there’s another consideration. Insurance is intended to protect people against the unexpected, explains Sonfield. Nearly half of all pregnancies are unintended, according to the federal Centers for Disease Control and Prevention.
“Pregnancy happens,” he says. “They’re not always planned.”
Q. If I purchase a long-term-care insurance policy in my 60s and don’t need to use it for another 10 or 20 years, what happens in the event that the company that I’ve contracted with goes out of business or changes corporate structure and assumes a different identity? Are there any states that have protections in place for cases like this?
A. Every state and the District have life and health insurance guaranty associations that protect consumers if they buy a long-term-care policy from an insurer that later fails. Funded by insurers that do business in a state, the associations ensure that coverage continues and benefits are provided even if an insurer is no longer in existence. The associations do this by either taking over the policies themselves or placing them with another, healthy insurer.
Insolvencies are uncommon but not unheard of, says Bonnie Burns, a policy specialist at California Health Advocates, a Medicare advocacy and education organization.
There is one potential wrinkle, however, she says. Although your coverage and benefits will continue if your insurer fails, each state caps the maximum amount that policies taken over by the guaranty association pay out, typically between $100,000 and $300,000.
It’s much more common for insurers to change hands or sell their long-term-care insurance business than to shut down. If that happens, your coverage shouldn’t be jeopardized.
“It doesn’t affect the policy,” Burns says. “That’s a legally binding contract that’s guaranteed under state law.”
Q. My family and I are members of my employer’s health insurance plan. We are considering opting out at the next available opportunity and switching to the plan offered by my spouse’s employer. However, my employer has recently decided that soon employees will no longer be allowed to opt out and that all of those who opted out in the past will be recalled. Can they do that?
A. If both spouses have health insurance through their jobs, they can generally choose the plan that best meets their needs. Switching from one plan to the other is typically allowed, although there may be enrollment periods or other rules.
The experts I asked think that your employer’s decision to soon disallow opting out may be a misreading of a provision of the health law.
Under the law, most people are required to have health insurance starting in 2014 or pay a penalty. A provision in the law requires employers with more than 200 employees to automatically enroll employees in a company health plan, although the government has announced it is pushing back implementation of that requirement. Employees can decline the coverage if they choose.
The provision applies to new full-time employees and to current employees who are enrolled in a company plan. Your employer appears to believe the law applies to any current employee, including those who may have opted out in the past.
That’s not what the law says, according to J.D. Piro, a senior vice president at Aon Hewitt who leads the firm’s health law consulting group.
“There’s nothing in the law about recalling previous opt outs,” he says.
Originally, the Department of Labor was to have issued rules about implementing automatic enrollment by 2014, but that process has been delayed, according to DOL. The department says it “has concluded that its automatic enrollment guidance will not be ready to take effect by 2014.”
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