Jennifer Staman
Legislative Attorney
The Patient Protection and Affordable Care Act (PPACA), as amended to date, greatly expanded the scope of federal regulation over health insurance coverage provided through employmentbased group health coverage, as well as coverage sold in the individual insurance market. Federal health insurance standards created by PPACA include an extension of dependent coverage to age 26; the elimination of preexisting condition exclusions; a bar on lifetime annual limits on the dollar value of certain benefits; a prohibition on health insurance rescissions except under limited circumstances; and coverage of preventive health services without cost-sharing, among many other things. While some of these standards began to take effect in 2010, others are scheduled to begin in 2014. These new health insurance standards were added to Title XXVII of the Public Health Service Act (PHSA), and incorporated by reference into Part 7 of the Employee Retirement Income Security Act (ERISA) and Chapter 100 of the Internal Revenue Code (IRC). While PPACA does not expressly include any new means for enforcing these new health insurance standards, enforcement of these reforms may be carried out through mechanisms that existed prior to PPACA in these three federal statutes.
The IRC, the PHSA, and ERISA apply to different types of private health insurance coverage and contain different types of enforcement mechanisms. ERISA applies to group health coverage provided by private-sector employers. Section 502(a) of ERISA authorizes various civil actions that may be brought by a participant or beneficiary of a plan against both group health plans and health insurers. In general, the private health insurance requirements of Title XXVII of the PHSA apply to health insurers offering group and individual health coverage, as well as health plans offered to government employees. With respect to health insurers, the PHSA allows states to be the primary enforcers of the private health insurance requirements, but the Secretary of Health and Human Services (HHS) assumes responsibility for enforcing them with respect to governmental plans. Chapter 100 of the IRC applies to group health coverage, and the Department of Treasury can enforce the health plan requirements through the imposition of an excise tax. This report examines these enforcement provisions in ERISA, the PHSA, and the IRC that could be used to enforce new PPACA health insurance standards.
In addition, PPACA provides that, beginning in 2014, each state, or if a state fails to do so, the Secretary of HHS, must establish at least one American Health Benefit Exchange that facilitates the purchase of individual and group health insurance plans from insurers. PPACA’s new federal health insurance standards appear to apply to health insurers both inside and outside an exchange. However, insurers that offer coverage through an exchange will be subject to additional requirements. This report will also briefly address enforcement of health coverage offered through an exchange.
Date of Report: February 7, 2011
Number of Pages: 13
Order Number: R41624
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Legislative Attorney
The Patient Protection and Affordable Care Act (PPACA), as amended to date, greatly expanded the scope of federal regulation over health insurance coverage provided through employmentbased group health coverage, as well as coverage sold in the individual insurance market. Federal health insurance standards created by PPACA include an extension of dependent coverage to age 26; the elimination of preexisting condition exclusions; a bar on lifetime annual limits on the dollar value of certain benefits; a prohibition on health insurance rescissions except under limited circumstances; and coverage of preventive health services without cost-sharing, among many other things. While some of these standards began to take effect in 2010, others are scheduled to begin in 2014. These new health insurance standards were added to Title XXVII of the Public Health Service Act (PHSA), and incorporated by reference into Part 7 of the Employee Retirement Income Security Act (ERISA) and Chapter 100 of the Internal Revenue Code (IRC). While PPACA does not expressly include any new means for enforcing these new health insurance standards, enforcement of these reforms may be carried out through mechanisms that existed prior to PPACA in these three federal statutes.
The IRC, the PHSA, and ERISA apply to different types of private health insurance coverage and contain different types of enforcement mechanisms. ERISA applies to group health coverage provided by private-sector employers. Section 502(a) of ERISA authorizes various civil actions that may be brought by a participant or beneficiary of a plan against both group health plans and health insurers. In general, the private health insurance requirements of Title XXVII of the PHSA apply to health insurers offering group and individual health coverage, as well as health plans offered to government employees. With respect to health insurers, the PHSA allows states to be the primary enforcers of the private health insurance requirements, but the Secretary of Health and Human Services (HHS) assumes responsibility for enforcing them with respect to governmental plans. Chapter 100 of the IRC applies to group health coverage, and the Department of Treasury can enforce the health plan requirements through the imposition of an excise tax. This report examines these enforcement provisions in ERISA, the PHSA, and the IRC that could be used to enforce new PPACA health insurance standards.
In addition, PPACA provides that, beginning in 2014, each state, or if a state fails to do so, the Secretary of HHS, must establish at least one American Health Benefit Exchange that facilitates the purchase of individual and group health insurance plans from insurers. PPACA’s new federal health insurance standards appear to apply to health insurers both inside and outside an exchange. However, insurers that offer coverage through an exchange will be subject to additional requirements. This report will also briefly address enforcement of health coverage offered through an exchange.
Date of Report: February 7, 2011
Number of Pages: 13
Order Number: R41624
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
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