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Can health insurance policies still have lifetime benefit maximums in 2014? What about annual benefit maximums?

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  • contributor
  • September 24, 2013

Q.  Can health insurance policies still have lifetime benefit maximums in 2014?  What about annual benefit maximums?

A.  All individual and small group plans must cover essential health benefits (EHBs) starting in 2014, and there cannot be lifetime or annual benefit maximums on these benefits.  Lifetime benefit maximums were eliminated in 2010, and annual benefits were gradually phased out between 2010 and 2013.

For policies purchased or renewed between September 23, 2012 and the end of 2013, annual limits on essential health benefits must be no lower than $2 million.  Once a policy renews in 2014, the annual limits must be eliminated.

Although the ACA has introduced many new regulations in the individual and small-group markets to make them more consumer-friendly, there is some concern that large-group plans might still be issued in 2014 without unlimited coverage for essential health benefits.

If a large-group plan covers essential health benefits, it must do so without lifetime or annual benefit maximums.  But the “minimum value” requirements for large-group plans do not include the ten EHBs.  So it’s possible that a large group plan could be offered with no coverage at all in some of those benefit categories.

Employers who offer “skinny” plans will face fines if their employers opt for subsidized individual plans in the marketplace (exchange), but in some cases the fines might be less expensive than paying for higher quality health insurance.  Employees should be aware of this – read the fine print on your company’s health insurance policy before you sign up.

If you qualify for a premium subsidy in your state’s health insurance marketplace, you may want to apply for an individual policy instead of accepting a “skinny” group plan.