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PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
DEPARTMENT LABOR 
Employee Benefits Security Administration CFR Chapter XXV CFR Part 2590 amended follows: 

Preexisting condition exclusion means limitation exclusion benefits (including denial coverage) based the fact that the condition was present before the effective date coverage (or coverage denied, the date the denial) under group health plan group 

individual health insurance coverage (or other coverage provided Federally eligible individuals pursuant CFR Part 148), whether not any medical advice, diagnosis, care, treatment was recommended received before that day. preexisting condition exclusion 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
includes any limitation exclusion benefits (including denial coverage) applicable individual result information relating individuals health status before the individuals effective date coverage (or coverage denied, the date the denial) under group health plan, group individual health insurance coverage (or other coverage provided 
(2)  Examples. The rules this paragraph (a) are illustrated the following examples 
(for additional examples illustrating the definition preexisting condition exclusion, see  
2590.701-3(a)(1)(ii) this Part): 
Example (i) Facts. group health plan provides benefits solely through insurance policy offered Issuer the expiration the policy, the plan switches coverage policy offered Issuer Ns policy excludes benefits for oral surgery required result traumatic injury the injury occurred before the effective date coverage under the policy. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(ii)  
Conclusion. this Example the exclusion benefits for oral surgery required result traumatic injury the injury occurred before the effective date coverage preexisting condition exclusion because operates exclude benefits for condition based the fact that the condition was present before the effective date coverage under the policy. 

Example (i) Facts. Individual applies for individual health insurance coverage with Issuer denies Cs application for coverage because pre-enrollment physical revealed that has type diabetes. 

(ii)
  Conclusion. See Example CFR 147.108(a)(2) for conclusion that Ms denial Cs application for coverage preexisting condition exclusion because denial application for coverage based the fact that condition was present before the date denial exclusion benefits based preexisting condition.   

(b) Applicability(1) General applicability date. Except provided paragraph 
(b)(2) this section, the requirements this section apply for plan years beginning after 
January 2014.   
The rules this paragraph (b) are illustrated the following example: 
Example. (i) Facts. Individual commences employment and enrolls and Fs 16-yearold child the group health plan maintained Fs employer, with first day coverage October 15, 2010.  Fs child had significant break coverage because lapse more than days without creditable coverage immediately prior enrolling the plan.  Fs child was treated for asthma within the six-month period prior the enrollment date and the plan imposes 12-month preexisting condition exclusion for coverage asthma.  The next plan year begins January 2011. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(ii)  
Conclusion. this Example, the plan year beginning January 2011 the first plan year the group health plan beginning after September 23, 2010.  Thus, beginning January 2011, because the child under years age, the plan cannot impose preexisting condition exclusion with respect the childs asthma regardless the fact that the preexisting condition exclusion was imposed the plan before the applicability date this provision. Section 2590.715-2711 added subpart read follows: 

(a) 
Prohibition(1) Lifetime limits. Except provided paragraph (b) this section, group health plan, health insurance issuer offering group health insurance coverage, may 
not establish any lifetime limit the dollar amount benefits for any individual. 

(2) Annual limits(i) General rule.  Except provided paragraphs (a)(2)(ii), (b), and 

(d) this section, group health plan, health insurance issuer offering group health 

insurance coverage, from placing annual lifetime dollar limits with respect any individual specific covered benefits that are not essential health benefits the extent that such limits are otherwise permitted under applicable Federal State law.  (The scope essential health benefits addressed paragraph (c) this section). 
(2) Condition-based exclusions. The rules this section not prevent group health plan, health insurance issuer offering group health insurance coverage, from excluding all 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
benefits for condition. However, any benefits are provided for condition, then the requirements this section apply. Other requirements Federal State law may require coverage certain benefits.  
(c) 
Definition essential health benefits. The term essential health benefits means essential health benefits under section 1302(b) the Patient Protection and Affordable Care Act and applicable regulations. 

(d) Restricted annual limits permissible prior 2014(1) general. With respect plan years beginning prior January 2014, group health plan, health insurance issuer offering group health insurance coverage, may establish, for any individual, annual limit the dollar amount benefits that are essential health benefits, provided the limit less than determining whether individual has received benefits that meet exceed the applicable amount described paragraph (d)(1) this section, plan issuer must take into account only essential health benefits.  
(3) Waiver authority the Secretary Health and Human Services. For plan years beginning before January 2014, the Secretary Health and Human Services may establish 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
program under which the requirements paragraph (d)(1) this section relating annual limits may waived (for such period specified the Secretary Health and Human Services) for group health plan health insurance coverage that has annual dollar limit benefits below the restricted annual limits provided under paragraph (d)(1) this section compliance with paragraph (d)(1) this section would result significant decrease access benefits under the plan health insurance coverage would significantly increase premiums for the plan health insurance coverage.  

(e) Transitional rules for individuals whose coverage benefits ended reason reaching lifetime limit(1) general. The relief provided the transitional rules this paragraph (e) applies with respect any individual 
paragraph (e)(1) this section eligible for benefits (or required become eligible for benefits) under the group health plan  group health insurance coverage  described paragraph (e)(1) this section, the plan and the issuer are required give the individual written notice that the lifetime limit the dollar value all benefits longer applies and that the individual, covered, once again eligible for benefits under the plan.  Additionally, the 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
individual not enrolled the plan health insurance coverage, enrolled individual eligible for but not enrolled any benefit package under the plan health insurance coverage, then the plan and issuer must also give such individual opportunity enroll that continues for least days (including written notice the opportunity enroll).  The notices and enrollment opportunity required under this paragraph (e)(2)(i) must provided beginning not later than the first day the first plan year beginning after September 23, 2010.   

(ii)  The notices required under paragraph (e)(2)(i) this section may provided employee behalf the employees dependent. addition, the notices may included with other enrollment materials that plan distributes employees, provided the statement prominent.  For either notice, notice satisfying the requirements this paragraph (e)(2) 
special enrollee, provided under the rules 2590.701-6(d) this Part.  Accordingly, the individual (and, the individual would not participant once enrolled the plan, the participant through whom the individual otherwise eligible for coverage under the plan) must offered all the benefit packages available similarly situated individuals who did not lose coverage reason reaching lifetime limit the dollar value all benefits.  For this purpose, any difference benefits cost-sharing requirements constitutes different benefit 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
package.  The individual also cannot required pay more for coverage than similarly situated 
individuals who did not lose coverage reason reaching lifetime limit the dollar value all benefits. 
(5) Examples. The rules this paragraph (e) are illustrated the following examples: 
Example (i) Facts.  Employer maintains group health plan with calendar year plan year.  The plan has single benefit package. For plan years beginning before September 23, 2010, the plan has lifetime limit the dollar value all benefits.  Individual employee was enrolled Ys group health plan the beginning the 2008 plan year. June 10, 2008,
 incurred claim for benefits that exceeded the lifetime limit under Ys plan and ceased enrolled the plan. still eligible for coverage under Ys group health plan. before January 2011, Ys group health plan gives written notice informing that the lifetime limit the dollar value all benefits longer applies, that individuals whose coverage ended reason reaching lifetime limit under the plan are eligible enroll the plan, and that individuals can request such enrollment through February 2011 with enrollment effective retroactively January 2011.   
Same facts Example except that Zs plan had two benefit packages low-cost and high-cost option).  Instead dropping coverage, switched the low-cost benefit package option. 
(ii) Conclusion. this Example not later than October 2010, the plan must provide and opportunity enroll any benefit package available similarly situated individuals who enroll when first eligible.  The plan would have provide and the opportunity enroll any benefit package available similarly situated individuals who enroll when first eligible, even had not switched the low-cost benefit package option.   

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
Example (i) Facts.  Employer maintains group health plan with plan year beginning October and ending September 30.  For the plan year beginning October 2009, has annual limit the dollar value all benefits $500,000.    
(ii) 
Conclusion. this Example must raise the annual limit the dollar value essential health benefits least $750,000 for the plan year beginning October 2010.  For the plan year beginning October 2011, must raise the annual limit least $1.25 million.  For the plan year beginning October 2012, must raise the annual limit least million. may also impose restricted annual limit million for the plan year beginning October 2013.  After the conclusion that plan year, cannot impose overall annual limit.  

Example (i) Facts. Same facts Example except that the annual limit for the plan year beginning October 2009 million and
 lowers the annual limit for the plan year beginning October 2010 $750,000.   

(ii) 
Conclusion. this Example complies with the requirements this paragraph (e).  However, Q's choice lower its annual limit means that under 2590.7151251(g)(1)(vi)(C), the group health plan will cease grandfathered health plan and will generally subject all the provisions PHS Act sections 2701 through 2719A.  

offering group health insurance coverage, must not rescind coverage under the plan, under the 
policy, certificate, contract insurance, with respect individual (including group 
which the individual belongs family coverage which the individual included) once the 
individual covered under the plan coverage, unless the individual (or person seeking 
coverage behalf the individual) performs act, practice, omission that constitutes 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
fraud, unless the individual makes intentional misrepresentation material fact, 
prohibited the terms the plan coverage. group health plan, health insurance issuer 
offering group health insurance coverage, must provide least days advance written notice 
each participant who would affected before coverage may rescinded under this paragraph 
(a)(1), regardless whether the coverage insured self-insured, whether the rescission 
applies entire group only individual within the group.  (The rules this paragraph 
(a)(1) apply regardless any contestability period that may otherwise apply.)   

(2) For purposes this section, rescission cancellation discontinuance 
coverage that has retroactive effect. For example, cancellation that treats policy void from 
the time the individuals groups enrollment rescission. addition, cancellation that 
Individual seeks enrollment insured group health plan.  The plan terms permit rescission coverage with respect individual the individual engages fraud makes intentional misrepresentation material fact.  The plan requires complete questionnaire regarding As prior medical history, which affects setting the group rate the health insurance issuer.  The questionnaire complies with the other requirements this part.  The questionnaire includes the following question: Is there anything else relevant your health that should know? inadvertently fails list that visited psychologist two occasions, six years previously. later diagnosed with breast cancer and seeks benefits under the plan. around the same time, the issuer receives information about As visits the psychologist, which was not disclosed the questionnaire. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(ii) 
Conclusion. this Example the plan cannot rescind As coverage because As failure disclose the visits the psychologist was inadvertent.  Therefore, was not fraudulent intentional misrepresentation material fact.   

Example (i) Facts. employer sponsors group health plan that provides coverage for employees who work least hours per week.  Individual has coverage under the plan full-time employee.  The employer reassigns part-time position. Under the terms the plan, longer eligible for coverage.  The plan mistakenly continues provide health coverage, collecting premiums from and paying claims submitted After routine audit, the plan discovers that longer works least hours per week.  The plan rescinds Bs coverage effective the date that changed from full-time employee part-time employee. 

(ii) Conclusion. this Example the plan cannot rescind Bs coverage because there was fraud intentional misrepresentation material fact.  The plan may cancel coverage for prospectively, subject other applicable Federal and State laws. 

(b)  Compliance with other requirements. 
 2590.715-2719A Patient protections. 
general. group health plan, health insurance issuer offering group health insurance 
coverage, requires provides for designation participant beneficiary participating 
primary care provider, then the plan issuer must permit each participant beneficiary 
designate any participating primary care provider who available accept the participant 
beneficiary. such case, the plan issuer must comply with the rules paragraph (a)(4) 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
this section informing each participant the terms the plan health insurance coverage 
regarding designation primary care provider. 
(ii)  Example. The rules this paragraph (a)(1) are illustrated the following example: 
Example. (i) Facts. group health plan requires individuals covered under the plan designate primary care provider.  The plan permits each individual designate any primary care provider participating the plans network who available accept the individual the individuals primary care provider. individual has not designated primary care provider, the plan designates one until one has been designated the individual.  The plan provides notice that satisfies the requirements paragraph (a)(4) this section regarding the ability designate primary care provider. 

(ii)  Conclusion. this Example, the plan has satisfied the requirements paragraph (a) this section. 
(2) Designation pediatrician primary care provider(i) general. group health 
Nothing paragraph (a)(2)(i) this section construed 
waive any exclusions coverage under the terms and conditions the plan health insurance 
coverage with respect coverage pediatric care. 
(iii) Examples. The rules this paragraph (a)(2) are illustrated the following examples: 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
Example (i) Facts. group health plans HMO designates for each participant physician who specializes internal medicine serve the primary care provider for the participant and any beneficiaries.   Participant requests that Pediatrician designated the primary care provider for As child. participating provider the HMOs network. 
(ii) 
Conclusion. this Example the HMO must permit As designation the primary care provider for As child order comply with the requirements this paragraph (a)(2). 

Example (i) Facts. Same facts Example except that takes As child for treatment the childs severe shellfish allergies. wishes refer As child allergist for treatment.  The HMO, however, does not provide coverage for treatment food allergies, nor does have allergist participating its network, and therefore refuses authorize the 
referral. 

(ii) 
Conclusion. this Example the HMO has not violated the requirements this paragraph (a)(2) because the exclusion treatment for food allergies accordance with the terms As coverage. gynecological care participating health care professional who specializes obstetrics gynecology.  The plan issuer may require such professional agree otherwise adhere the plans issuers policies and procedures, including procedures regarding referrals and obtaining prior authorization and providing services pursuant treatment plan (if any) approved the plan issuer.  For purposes this paragraph (a)(3), health care professional who specializes obstetrics gynecology any individual (including person other than 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
physician) who authorized under applicable State law provide obstetrical gynecological care. 
(B) 
Obstetrical and gynecological care. group health plan health insurance issuer described paragraph (a)(3)(ii) this section must treat the provision obstetrical and gynecological care, and the ordering related obstetrical and gynecological items and services, pursuant the direct access described under paragraph (a)(3)(i)(A) this section, participating health care professional who specializes obstetrics gynecology the 
authorization the primary care provider. 

(ii) 
Application paragraph. group health plan health insurance issuer offering group health insurance coverage described this paragraph (a)(3) the plan issuer 

the obstetrical gynecological provider notify the primary care health care professional the 
 (iv) Examples. The rules this paragraph (a)(3) are illustrated the following 
examples: 
Example (i) Facts. group health plan requires each participant designate physician serve the primary care provider for the participant and the participants family.   Participant female, requests gynecological exam with Physician in-network 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
physician specializing gynecological care.  The group health plan requires prior authorization from As designated primary care provider for the gynecological exam. 
(ii) 
Conclusion. this Example the group health plan has violated the requirements this paragraph (a)(3) because the plan requires prior authorization from As primary care provider prior obtaining gynecological services.   

Example (i) Facts. Same facts Example except that seeks gynecological services from out-of-network provider. 

(ii) 
Conclusion. this Example the group health plan has not violated the requirements this paragraph (a)(3) requiring prior authorization because not participating health care provider. 

Example (i) Facts. Same facts Example except that the group health plan only requires inform As designated primary care physician treatment decisions. 

(ii) 
Conclusion. this Example the group health plan has not violated the requirements this paragraph (a)(3) because has direct access without prior 

embolization. group health plan health insurance issuer requires the designation participant beneficiary primary care provider, the plan issuer must provide notice informing each participant the terms the plan health insurance coverage regarding designation primary care provider and the rights  
(A) Under paragraph (a)(1)(i) this section, that any participating primary care provider who available accept the participant beneficiary can designated;  

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(B)
 Under paragraph (a)(2)(i) this section, with respect child, that any participating physician who specializes pediatrics can designated the primary care provider; and 

(C)
 Under paragraph (a)(3)(i) this section, that the plan may not require authorization referral for obstetrical gynecological care participating health care professional who specializes obstetrics gynecology.

 (ii) 
Timing. The notice described paragraph (a)(4)(i) this section must included whenever the plan issuer provides participant with summary plan description other 
similar description benefits under the plan health insurance coverage.   

(iii) Model language. The following model language can used satisfy the notice requirement described paragraph (a)(4)(i) this section: 
providers participants beneficiaries, insert: 
For children, you may designate pediatrician the primary care provider. 
(C) For plans and issuers that provide coverage for obstetric gynecological care and 
require the designation participant beneficiary primary care provider, add: 
You not need prior authorization from [name group health plan issuer] from any other person (including primary care provider) order obtain access obstetrical gynecological care from health care professional our network who 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
specializes obstetrics gynecology.  The health care professional, however, may required comply with certain procedures, including obtaining prior authorization for certain services, following pre-approved treatment plan, procedures for making referrals. For list participating health care professionals who specialize obstetrics gynecology, contact the [plan administrator issuer] [insert contact information]. 
(b) 
Coverage emergency services(1) Scope. group health plan, health insurance issuer offering group health insurance coverage, provides any benefits with respect services emergency department hospital, the plan issuer must cover emergency services (as defined paragraph (b)(4)(ii) this section) consistent with the rules this 
paragraph (b). 

(iv) the emergency services are provided out network, complying with the cost-sharing requirements paragraph (b)(3) this section; and 

(v) 
 Without regard any other term condition the coverage, other than  

(A) 
The exclusion coordination benefits; 

(B) affiliation waiting period permitted under part ERISA, part title XXVII the PHS Act, chapter 100 the Internal Revenue Code; 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(C)  Applicable cost sharing. 
(3)  Cost-sharing requirements  (i) Copayments and coinsurance. Any cost-sharing requirement expressed copayment amount coinsurance rate imposed with respect participant beneficiary for out-of-network emergency services cannot exceed the cost-sharing requirement imposed with respect participant beneficiary the services were provided in-network. However, participant beneficiary may required pay, addition the in-network cost sharing, the excess the amount the out-of-network provider charges over the 
amount the plan issuer required pay under this paragraph (b)(3)(i). group health plan health insurance issuer complies with the requirements this paragraph (b)(3) provides benefits with respect emergency service amount equal the greatest the three 
respect the participant beneficiary. determining the median described the preceding sentence, the amount negotiated with each in-network provider treated separate amount (even the same amount paid more than one provider). there per-service amount negotiated with in-network providers (such under capitation other similar payment arrangement), the amount under this paragraph (b)(3)(i)(A) disregarded. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(B) The amount for the emergency service calculated using the same method the plan generally uses determine payments for out-of-network services (such the usual, customary, and reasonable amount), excluding any in-network copayment coinsurance imposed with respect the participant beneficiary. The amount this paragraph (b)(3)(i)(B) determined without reduction for out-of-network cost sharing that generally applies under the plan health insurance coverage with respect out-of-network services.  Thus, for example, plan generally pays percent the usual, customary, and reasonable amount for out-of-network 
services, the amount this paragraph (b)(3)(i)(B) for emergency service the total (that is, 100 percent) the usual, customary, and reasonable amount for the service, not reduced the percent coinsurance that would generally apply out-of-network services (but reduced the 
respect emergency services provided out network the cost-sharing requirement generally applies out-of-network benefits. deductible may imposed with respect out-of-network emergency services only part deductible that generally applies out-of-network benefits. out-of-pocket maximum generally applies out-of-network benefits, that out-of-pocket maximum must apply out-of-network emergency services. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(iii)  Examples. The rules this paragraph (b)(3) are illustrated the following 
examples. all these examples, the group health plan covers benefits with respect 
emergency services. 
Example (i) Facts. group health plan imposes 25% coinsurance responsibility individuals who are furnished emergency services, whether provided network out network. covered individual notifies the plan within two business days after the day individual receives treatment emergency department, the plan reduces the coinsurance rate 15%.  

(ii) Conclusion. this Example the requirement notify the plan order receive reduction the coinsurance rate does not violate the requirement that the plan cover emergency services without the need for any prior authorization determination.  This the result even the plan required that notified before the time receiving services the emergency department order receive reduction the coinsurance rate. 
Each provider has agreed provide the service for certain amount.  Among all the providers for the service: one has agreed accept $85, two have agreed accept $100, two have agreed accept $110, three have agreed accept $120, and one has agreed accept $150.  Under the agreement, the plan agrees pay the providers 80% the agreed amount, with the individual receiving the service responsible for the remaining 20%. 
(ii) Conclusion. this Example the values taken into account determining the median are $85, $100, $100, $110, $110, $120, $120, $120, and $150.  Therefore, the median amount among those agreed for the emergency service $110, and the amount under paragraph (b)(3)(i)(A) this section 80% $110 ($88). 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
Example (i) Facts. Same facts Example Subsequently, the plan adds another provider its network, who has agreed accept $150 for the emergency service. 
(ii) Conclusion. this Example the median amount among those agreed for the emergency service $115. (Because there one middle amount, the median the average the two middle amounts, $110 and $120.) Accordingly, the amount under paragraph (b)(3)(i)(A) this section 80% $115 ($92).   
Example (i) Facts. Same facts Example individual covered the plan receives the emergency service from out-of-network provider, who charges $125 for the service.  With respect services provided out-of-network providers generally, the plan reimburses covered individuals 50% the reasonable amount charged the provider for medical services.  
For this purpose, the reasonable amount for any service based information charges all providers collected third party, zip code zip code basis, with the plan treating charges specified percentile reasonable.  For the emergency service received the individual, the reasonable amount calculated using this method $116.  The amount that would paid under Medicare for the emergency service, excluding any copayment coinsurance for the service, $80. this Example the plan not responsible for paying anything with respect the emergency service furnished the out-of-network provider because the covered individual has not satisfied the higher deductible that applies generally all health care provided out network.  However, the amount the individual required pay credited against the deductible. 
 (4) 
Definitions. The definitions this paragraph (b)(4) govern applying the provisions this paragraph (b). 

(i) 
Emergency medical condition. The term emergency medical condition means medical condition manifesting itself acute symptoms sufficient severity (including severe 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
pain) that prudent layperson, who possesses average knowledge health and medicine, could reasonably expect the absence immediate medical attention result condition described clause (i), (ii), (iii) section 1867(e)(1)(A) the Social Security Act (42 U.S.C. 1395dd(e)(1)(A)). (In that provision the Social Security Act, clause (i) refers placing the health the individual (or, with respect pregnant woman, the health the woman her unborn child) serious jeopardy; clause (ii) refers serious impairment bodily functions; and clause (iii) refers serious dysfunction any bodily organ part.) 

(ii) Emergency services. The term emergency services means, with respect emergency medical condition  
(A) medical screening examination (as required under section 1867 the Social 
defined paragraph (b)(4)(i) this section) has the meaning given section 1867(e)(3) the Social Security Act (42 U.S.C. 1395dd(e)(3)). 
(c) Applicability date. The provisions this section apply for plan years beginning after September 23, 2010.    See  2590.715-1251 this Part for determining the application this section grandfathered health plans (providing that these rules regarding patient protections not apply grandfathered health plans). 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution DEPARTMENT HEALTH AND HUMAN SERVICES Office Consumer Information and Insurance Oversight CFR Subtitle 
For the reasons stated the preamble, the Ddepartment Health and Human Services amends CFR Subtitle A144 follows: 

PART 144REQUIREMENTS RELATING HEALTH INSURANCE COVERAGE  The authority citation for part 144 continues read follows: 

treatment was recommended received before that day. preexisting condition exclusion includes any limitation exclusion benefits (including denial coverage) applicable individual result information relating individuals health status before the individuals effective date coverage (or coverage denied, the date the denial) under group health plan, group individual health insurance coverage (or other coverage provided 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution Federally eligible individuals pursuant CFR Part 148), such condition identified 
result pre-enrollment questionnaire physical examination given the individual,
 review medical records relating the pre-enrollment period. 

Limitations Preexisting Condition Exclusion Periods  Section 146.111(a)(1)(i) revised read follows: 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(2)  Examples. The rules this paragraph (a) are illustrated the following examples 
(for additional examples illustrating the definition preexisting condition exclusion, see  
146.111(a)(1)(ii)): 
Example (i) Facts. group health plan provides benefits solely through insurance policy offered Issuer the expiration the policy, the plan switches coverage policy offered Issuer Ns policy excludes benefits for oral surgery required result traumatic injury the injury occurred before the effective date coverage under the policy. 
(ii)  Conclusion. this Example the exclusion benefits for oral surgery required result traumatic injury the injury occurred before the effective date coverage 
preexisting condition exclusion because operates exclude benefits for condition based the fact that the condition was present before the effective date coverage under the policy. 
Example (i) Facts. Individual applies for individual health insurance coverage with Issuer denies Cs application for coverage because pre-enrollment physical revealed that has type diabetes. 
The requirements this section apply with respect enrollees, including applicants for enrollment, who are under years age for plan years beginning after September 23, 2010; the case individual health insurance coverage, for policy years beginning, applications denied, after September 23, 2010. 
(3) Applicability grandfathered health plans. See  147.140 for determining the application this section grandfathered health plans (providing that grandfathered health plan that group health plan group health insurance coverage must comply with the 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
prohibition against preexisting condition exclusions; however, grandfathered health plan that 
individual health insurance coverage not required comply with PHS Act section 2704). 
(4) Examples. The rules this paragraph (b) are illustrated the following examples: 
Example (i) Facts. Individual commences employment and enrolls and Fs 16year-old child the group health plan maintained Fs employer, with first day coverage October 15, 2010.  Fs child had significant break coverage because lapse more than days without creditable coverage immediately prior enrolling the plan.  Fs child was treated for asthma within the six-month period prior the enrollment date and the plan imposes 12-month preexisting condition exclusion for coverage asthma.  The next plan year begins January 2011. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(2) Annual limits(i) General rule.  Except provided paragraphs (a)(2)(ii), (b), and 
(d) this section, group health plan, health insurance issuer offering group individual health insurance coverage, may not establish any annual limit the dollar amount benefits for any individual. 

(ii) 
Exception for health flexible spending arrangements. health flexible spending arrangement (as defined section 106(c)(2) the Internal Revenue Code) not subject the requirement paragraph (a)(2)(i) this section. 

 (b) Construction(1) Permissible limits specific covered benefits.  The rules this section not prevent group health plan, health insurance issuer offering group individual health insurance coverage, from placing annual lifetime dollar limits with respect 

(c) 
Definition essential health benefits. The term essential health benefits means essential health benefits under section 1302(b) the Patient Protection and Affordable Care Act and applicable regulations. 

(d) 
Restricted annual limits permissible prior 2014(1) general. With respect plan years (in the individual market, policy years) beginning prior January 2014, group 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
health plan, health insurance issuer offering group individual health insurance coverage, may establish, for any individual, annual limit the dollar amount benefits that are essential health benefits, provided the limit less than the amounts the following schedule: 
(i) 
For plan year (in the individual market, policy year) beginning after September 23, 2010 but before September 23, 2011, $750,000. 

(ii) 
For plan year (in the individual market, policy year) beginning after September 23, 2011 but before September 23, 2012, $1,250,000. 

(iii) For plan years (in the individual market, policy years) beginning after September 23, 2012 but before January 2014, $2,000,000. 
(2)  Only essential health benefits taken into account. determining whether 
has annual dollar limit benefits below the restricted annual limits provided under paragraph (d)(1) this section compliance with paragraph (d)(1) this section would result significant decrease access benefits under the plan health insurance coverage would significantly increase premiums for the plan health insurance coverage. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(e) 
Transitional rules for individuals whose coverage benefits ended reason reaching lifetime limit(1) general. The relief provided the transitional rules this paragraph (e) applies with respect any individual 

(i) 
Whose coverage benefits under group health plan group individual health insurance coverage ended reason reaching lifetime limit the dollar value all benefits for any individual (which, under this section, longer permissible); and  

(ii) Who becomes eligible (or required become eligible) for benefits not subject lifetime limit the dollar value all benefits under the group health plan group individual health insurance coverage the first day the first plan year (in the individual market, policy year) beginning after September 23, 2010 reason the application this section. 

Additionally, the individual not enrolled the plan health insurance coverage, enrolled individual eligible for but not enrolled any benefit package under the plan health insurance coverage, then the plan and issuer must also give such individual opportunity enroll that continues for least days (including written notice the opportunity enroll).  The notices and enrollment opportunity required under this paragraph (e)(2)(i) must provided 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
beginning not later than the first day the first plan year (in the individual market, policy year) beginning after September 23, 2010.   
(ii)  The notices required under paragraph (e)(2)(i) this section may provided employee behalf the employees dependent (in the individual market, the primary subscriber behalf the primary subscribers dependent). addition, for group health plan group health insurance coverage, the notices may included with other enrollment materials that plan distributes employees, provided the statement prominent.  
For either notice, with respect group health plan group health insurance coverage, notice satisfying the requirements this paragraph (e)(2) provided individual, the obligation provide the notice with respect that individual satisfied for both the plan and the issuer.  
participant through whom the individual otherwise eligible for coverage under the plan) must offered all the benefit packages available similarly situated individuals who did not lose coverage reason reaching lifetime limit the dollar value all benefits.  For this purpose, any difference benefits cost-sharing requirements constitutes different benefit package.  The individual also cannot required pay more for coverage than similarly situated 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
individuals who did not lose coverage reason reaching lifetime limit the dollar value all benefits. 
(5) Examples. The rules this paragraph (e) are illustrated the following examples: 
Example (i) Facts.  Employer maintains group health plan with calendar year plan year.  The plan has single benefit package. For plan years beginning before September 23, 2010, the plan has lifetime limit the dollar value all benefits.  Individual employee was enrolled Ys group health plan the beginning the 2008 plan year. June 10, 2008, incurred claim for benefits that exceeded the lifetime limit under Ys plan and ceased enrolled the plan. still eligible for coverage under Ys group health plan. before January 2011,
s group health plan gives written notice informing that the lifetime limit the dollar value all benefits longer applies, that individuals whose coverage ended reason reaching lifetime limit under the plan are eligible enroll the plan, and that individuals can request such enrollment through February 2011 with enrollment effective retroactively January 2011.   
(ii) Conclusion. this Example the plan has complied with the requirements this 
Same facts Example except that Zs plan had two benefit packages low-cost and high-cost option).  Instead dropping coverage, switched the 
(ii) Conclusion. this Example not later than October 2010, the plan must provide and opportunity enroll any benefit package available similarly situated individuals who enroll when first eligible.  The plan would have provide and the opportunity enroll any benefit package available similarly situated individuals who enroll when first eligible, even had not switched the low-cost benefit package option.   

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
Example (i) Facts.  Employer maintains group health plan with plan year beginning October and ending September 30.  For the plan year beginning October 2009, has annual limit the dollar value all benefits $500,000.    
(ii) 
Conclusion. this Example must raise the annual limit the dollar value essential health benefits least $750,000 for the plan year beginning October 2010.  For the plan year beginning October 2011, must raise the annual limit least $1.25 million.  For the plan year beginning October 2012, must raise the annual limit least million. may also impose restricted annual limit million for the plan year beginning October 2013.  After the conclusion that plan year, cannot impose overall annual limit.  

Example (i) Facts. Same facts Example except that the annual limit for the plan year beginning October 2009 million and
 lowers the annual limit for the plan year beginning October 2010 $750,000.   

(ii) 
Conclusion. this Example complies with the requirements this paragraph (e).  However, Q's choice lower its annual limit means that under 147.140(g)(1)(vi)(C), the group health plan will cease grandfathered health plan and will generally subject all the provisions PHS Act sections 2701 through 2719A. 

The provisions this section apply for plan years (in 
the individual market, for policy years) beginning after September 23, 2010.  See  
147.140 this Part for determining the application this section grandfathered health plans 
(providing that the prohibitions lifetime and annual limits apply all grandfathered health 
plans that are group health plans and group health insurance coverage, including the special rules 
regarding restricted annual limits, and the prohibition lifetime limits apply individual health 
PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
insurance coverage that grandfathered plan but the rules annual limits not apply individual health insurance coverage that grandfathered health plan). 

67. Add 147.128 part 147 read follows: 

 147.128 Rules regarding rescissions. 
(a)  
Prohibition rescissions(1) group health plan, health insurance issuer offering group individual health insurance coverage, must not rescind coverage under the 

(2) 
For purposes this section, rescission cancellation discontinuance coverage that has retroactive effect. For example, cancellation that treats policy void from the time the individuals groups enrollment rescission. addition, cancellation that 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
voids benefits paid year before the cancellation also rescission for this purpose. cancellation discontinuance coverage not rescission  
(i) The cancellation discontinuance coverage has only prospective effect; 
(ii) The cancellation discontinuance coverage effective retroactively the extent attributable failure timely pay required premiums contributions towards the cost coverage. 

(3)  The rules this paragraph (a) are illustrated the following examples:
 Example (i) Facts. Individual seeks enrollment insured group health plan.  The plan terms permit rescission coverage with respect individual the individual engages fraud makes intentional misrepresentation material fact.  The plan requires complete questionnaire regarding As prior medical history, which affects setting the group rate the health insurance issuer.  The questionnaire complies with the other requirements this 
After routine audit, the plan discovers that longer works least hours per week.  The plan rescinds Bs coverage effective the date that changed from full-time employee part-time employee. 
(ii) 
Conclusion. this Example the plan cannot rescind Bs coverage because there was fraud intentional misrepresentation material fact.  The plan may cancel coverage for prospectively, subject other applicable Federal and State laws. 

(b) 
 Compliance with other requirements. Other requirements Federal State law may apply connection with rescission coverage.  

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(c) Applicability date. The provisions this section apply for plan years (in the individual market, for policy years) beginning after September 23, 2010. See  
147.140 this Part for determining the application this section grandfathered health plans (providing that the rules regarding rescissions and advance notice apply all grandfathered 

general. 

insurance coverage, requires provides for designation participant, beneficiary, enrollee participating primary care provider, then the plan issuer must permit each participant, 
care provider participating the plans network who available accept the individual the individuals primary care provider. individual has not designated primary care provider, the plan designates one until one has been designated the individual.  The plan provides notice that satisfies the requirements paragraph (a)(4) this section regarding the ability designate primary care provider. 

(ii)  Conclusion. this Example, the plan has satisfied the requirements paragraph (a) this section. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(2) Designation pediatrician primary care provider(i) general. group health plan health insurance issuer offering group individual health insurance coverage requires provides for the designation participating primary care provider for child participant, beneficiary, enrollee, the plan issuer must permit the participant, beneficiary, enrollee designate physician (allopathic osteopathic) who specializes pediatrics the childs primary care provider the provider participates the network the plan issuer and available accept the child. such case, the plan issuer must comply with the rules paragraph (a)(4) this section informing each participant (in the individual market, primary subscriber) the terms the plan health insurance coverage regarding designation pediatrician the childs primary care provider.
primary care provider for As child. participating provider the HMOs network. 
(ii) Conclusion. this Example the HMO must permit As designation the primary care provider for As child order comply with the requirements this paragraph (a)(2). 
Example (i) Facts. Same facts Example except that takes As child for treatment the childs severe shellfish allergies. wishes refer As child allergist for treatment.  The HMO, however, does not provide coverage for treatment food allergies, nor does have allergist participating its network, and therefore refuses authorize the referral. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(ii) 
Conclusion. this Example the HMO has not violated the requirements this paragraph (a)(2) because the exclusion treatment for food allergies accordance with the terms As coverage. 

(3) 
Patient access obstetrical and gynecological care(i) General rights(A) Direct access. group health plan health insurance issuer offering group individual health insurance coverage described paragraph (a)(3)(ii) this section may not require authorization referral the plan, issuer, any person (including primary care provider) the case female participant, beneficiary, enrollee who seeks coverage for obstetrical gynecological 
care provided participating health care professional who specializes obstetrics gynecology. such case, the plan issuer must comply with the rules paragraph (a)(4) this section informing each participant (in the individual market, primary subscriber) that the 

(B) 
Obstetrical and gynecological care. group health plan health insurance issuer described paragraph (a)(3)(ii) this section must treat the provision obstetrical and gynecological care, and the ordering related obstetrical and gynecological items and services, pursuant the direct access described under paragraph (a)(3)(i)(A) this section, 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
participating health care professional who specializes obstetrics gynecology the authorization the primary care provider. 
(ii) 
Application paragraph. group health plan health insurance issuer offering group individual health insurance coverage described this paragraph (a)(3) the plan issuer 

(A) Provides coverage for obstetrical gynecological care; and 

(B) Requires the designation participant, beneficiary, enrollee participating primary care provider.

 (iii) Construction.  Nothing paragraph (a)(3)(i) this section construed to 
(A) Waive any exclusions coverage under the terms and conditions the plan 
Participant female, requests gynecological exam with Physician in-network physician specializing gynecological care.  The group health plan requires prior authorization from As designated primary care provider for the gynecological exam. 
(ii) Conclusion. this Example the group health plan has violated the requirements this paragraph (a)(3) because the plan requires prior authorization from As primary care provider prior obtaining gynecological services.   
Example (i) Facts. Same facts Example except that seeks gynecological services from out-of-network provider. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(ii) 
Conclusion. this Example the group health plan has not violated the requirements this paragraph (a)(3) requiring prior authorization because not participating health care provider. 

Example (i) Facts. Same facts Example except that the group health plan only requires inform As designated primary care physician treatment decisions. 

(ii) 
Conclusion. this Example the group health plan has not violated the requirements this paragraph (a)(3) because has direct access without prior authorization.  The fact that the group health plan requires notification treatment decisions the designated primary care physician does not violate this paragraph (a)(3). 

Example (i) Facts. group health plan requires each participant designate physician serve the primary care provider for the participant and the participants family.  The group health plan requires prior authorization before providing benefits for uterine fibroid embolization.   

(ii) 
Conclusion. this Example the plan requirement for prior authorization before providing benefits for uterine fibroid embolization does not violate the requirements this 

(B)
 Under paragraph (a)(2)(i) this section, with respect child, that any participating 

(C)
 Under paragraph (a)(3)(i) this section, that the plan may not require authorization 

physician who specializes pediatrics can designated the primary care provider; and referral for obstetrical gynecological care participating health care professional who 
specializes obstetrics gynecology. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
 (ii) Timing. the case group health plan group health insurance coverage, the notice described paragraph (a)(4)(i) this section must included whenever the plan issuer provides participant with summary plan description other similar description benefits under the plan health insurance coverage. the case individual health insurance coverage, the notice described paragraph (a)(4)(i) this section must included whenever the issuer provides primary subscriber with policy, certificate, contract health insurance. 
(iii) Model language The following model language can used satisfy the notice requirement described paragraph (a)(4)(i) this section: 
(A) 
For plans and issuers that require allow for the designation primary care providers participants, beneficiaries, enrollees, insert: 

(C)
 For plans and issuers that provide coverage for obstetric gynecological care and require the designation participant, beneficiary, enrollee primary care provider, add: 

You not need prior authorization from [name group health plan issuer] from any other person (including primary care provider) order obtain access obstetrical gynecological care from health care professional our network who specializes obstetrics gynecology.  The health care professional, however, may required comply with certain procedures, including obtaining prior authorization for certain services, following pre-approved treatment plan, procedures for making 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
referrals. For list participating health care professionals who specialize obstetrics gynecology, contact the [plan administrator issuer] [insert contact information]. 
(b) 
Coverage emergency services.(1) Scope. group health plan, health insurance issuer offering group individual health insurance coverage, provides any benefits with respect services emergency department hospital, the plan issuer must cover emergency services (as defined paragraph (b)(4)(ii) this section) consistent with the rules this paragraph (b). 

(2) 
General rules. plan issuer subject the requirements this paragraph (b) must provide coverage for emergency services the following manner   

(i)
  Without the need for any prior authorization determination, even the emergency 

(v) 
 Without regard any other term condition the coverage, other than  

(A) 
The exclusion coordination benefits; 

(B) affiliation waiting period permitted under part ERISA, part title XXVII the PHS Act, chapter 100 the Internal Revenue Code; 

(C)  Applicable cost sharing. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(3)  Cost-sharing requirements  (i) Copayments and coinsurance. Any cost-sharing requirement expressed copayment amount coinsurance rate imposed with respect participant, beneficiary, enrollee for out-of-network emergency services cannot exceed the cost-sharing requirement imposed with respect participant, beneficiary, enrollee the services were provided in-network.  However, participant, beneficiary, enrollee may required pay, addition the in-network cost-sharing, the excess the amount the out-ofnetwork provider charges over the amount the plan issuer required pay under this 
paragraph (b)(3)(i). group health plan health insurance issuer complies with the requirements this paragraph (b)(3) provides benefits with respect emergency service amount equal the greatest the three amounts specified paragraphs (b)(3)(i)(A), 
respect the participant, beneficiary, enrollee. determining the median described the preceding sentence, the amount negotiated with each in-network provider treated separate amount (even the same amount paid more than one provider). there per-service amount negotiated with in-network providers (such under capitation other similar payment arrangement), the amount under this paragraph (b)(3)(i)(A) disregarded. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(B) The amount for the emergency service calculated using the same method the plan generally uses determine payments for out-of-network services (such the usual, customary, and reasonable amount), excluding any in-network copayment coinsurance imposed with respect the participant, beneficiary, enrollee.  The amount this paragraph (b)(3)(i)(B) determined without reduction for out-of-network cost sharing that generally applies under the plan health insurance coverage with respect out-of-network services.  Thus, for example, plan generally pays percent the usual, customary, and reasonable amount for out-of-
network services, the amount this paragraph (b)(3)(i)(B) for emergency service the total (that is, 100 percent) the usual, customary, and reasonable amount for the service, not reduced the percent coinsurance that would generally apply out-of-network services (but reduced 
respect emergency services provided out network the cost-sharing requirement generally applies out-of-network benefits. deductible may imposed with respect out-of-network emergency services only part deductible that generally applies out-of-network benefits. out-of-pocket maximum generally applies out-of-network benefits, that out-of-pocket maximum must apply out-of-network emergency services. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(iii)  Examples. The rules this paragraph (b)(3) are illustrated the following 
examples. all these examples, the group health plan covers benefits with respect 
emergency services. 
Example (i) Facts. group health plan imposes 25% coinsurance responsibility individuals who are furnished emergency services, whether provided network out network. covered individual notifies the plan within two business days after the day individual receives treatment emergency department, the plan reduces the coinsurance rate 15%.  

(ii) Conclusion. this Example the requirement notify the plan order receive reduction the coinsurance rate does not violate the requirement that the plan cover emergency services without the need for any prior authorization determination.  This the result even the plan required that notified before the time receiving services the emergency department order receive reduction the coinsurance rate. 
Example (i) Facts. group health plan imposes $60 copayment emergency 
for the service: one has agreed accept $85, two have agreed accept $100, two have agreed accept $110, three have agreed accept $120, and one has agreed accept $150.  Under the agreement, the plan agrees pay the providers 80% the agreed amount, with the individual receiving the service responsible for the remaining 20%. 
(ii) Conclusion. this Example the values taken into account determining the median are $85, $100, $100, $110, $110, $120, $120, $120, and $150.  Therefore, the median amount among those agreed for the emergency service $110, and the amount under paragraph (b)(3)(i)(A) this section 80% $110 ($88). 
Example (i) Facts. Same facts Example Subsequently, the plan adds another provider its network, who has agreed accept $150 for the emergency service.   

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
(ii) 
Conclusion. this Example the median amount among those agreed for the emergency service $115. (Because there one middle amount, the median the average the two middle amounts, $110 and $120.) Accordingly, the amount under paragraph (b)(3)(i)(A) this section 80% $115 ($92).   

Example (i) Facts. Same facts Example individual covered the plan receives the emergency service from out-of-network provider, who charges $125 for the service.  With respect services provided out-of-network providers generally, the plan reimburses covered individuals 50% the reasonable amount charged the provider for medical services.  For this purpose, the reasonable amount for any service based information charges all providers collected third party, zip code zip code basis, with the plan treating charges specified percentile reasonable.  
For the emergency service received the individual, the reasonable amount calculated using this method $116.  The amount that would paid under Medicare for the emergency service, excluding any copayment coinsurance for the service, $80.   

(ii) 
Conclusion. this Example the plan responsible for paying $92.80, 80% $116.  The median amount among those agreed for the emergency service $115 and the 

out network.  However, the amount the individual required pay credited against the deductible. 
 (4) Definitions. The definitions this paragraph (b)(4) govern applying the provisions this paragraph (b). 
(i) Emergency medical condition. The term emergency medical condition means medical condition manifesting itself acute symptoms sufficient severity (including severe pain) that prudent layperson, who possesses average knowledge health and medicine, 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
could reasonably expect the absence immediate medical attention result condition described clause (i), (ii), (iii) section 1867(e)(1)(A) the Social Security Act (42 U.S.C. 1395dd(e)(1)(A)). (In that provision the Social Security Act, clause (i) refers placing the health the individual (or, with respect pregnant woman, the health the woman her unborn child) serious jeopardy; clause (ii) refers serious impairment bodily functions; and clause (iii) refers serious dysfunction any bodily organ part.) 

(ii) Emergency services. The term emergency services means, with respect emergency medical condition  
(A) medical screening examination (as required under section 1867 the Social Security Act, U.S.C. 1395dd) that within the capability the emergency department 
The provisions this section apply for plan years (in the individual market, policy years) beginning after September 23, 2010.   See  147.140 this Part for determining the application this section grandfathered health plans (providing that these rules regarding patient protections not apply grandfathered health plans). 
From: Baum, Beth -EBSA To: Mayhew, James (CMS/CPC); Corrigan, Dara (HHS/OHR); Kosin, Donald (HHS/OGC); Turner, Amy -EBSA; Schumacher, Elizabeth -EBSA; Knopf Kevin -OTP; Levin Karen; 
Russell.E.Weinheimer@IRSCOUNSEL.TREAS.GOV Cc: Baum, Beth -EBSA Subject: Pkg Overview and Reg Text 6.18.10 245pm clean Date: Friday, June 18, 2010 2:44:56 Attachments: Pkg Overview and Reg Text 6.18.10 245pm clean.doc 
 Here the clean document that will upload ROCIS when get the RIA. 
PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
[Billing Codes: 4830-01-P; 4510-29-P; 4120-01-P] 
DEPARTMENT THE TREASURY Internal Revenue Service 

Security Administration, Department Labor; Office Consumer Information and Insurance Oversight, Department Health and Human Services. ACTION:  Interim final rules with request for comments. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
SUMMARY: This document contains interim final regulations implementing the rules for group health plans and health insurance coverage the group and individual markets under provisions the Patient Protection and Affordable Care Act regarding preexisting condition exclusions, lifetime and annual dollar limits benefits, rescissions, and patient protections.    DATES: Effective date. These interim final regulations are effective [INSERT DATE DAYS AFTER PUBLICATION FEDERAL REGISTER]. 

Comment date. Comments are due before [INSERT DATE DAYS AFTER PUBLICATION FEDERAL REGISTER]. 
Applicability dates:  Group health plans and group health insurance coverage. These interim final 
under PHS Act section 2704 (45 CFR 147.108), generally apply individual health insurance issuers for policy years beginning after September 23, 2010.  These interim final regulations under PHS Act section 2704 (45 CFR 147.108) generally apply individual health insurance issuers for policy years beginning after January 2014, except that the case 
PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution enrollees who are under years age, these interim final regulations under PHS Act section 2704 apply for policy years beginning after September 23, 2010. 
ADDRESSES: Written comments may submitted any the addresses specified below.  Any comment that submitted any Department will shared with the other Departments.  Please not submit duplicates.  
All comments will made available the public.  WARNING: not include any personally identifiable information (such name, address, other contact information) 
confidential business information that you not want publicly disclosed.  All comments are posted the Internet exactly received, and can retrieved most Internet search engines. deletions, modifications, redactions will made the comments received, they are 
Assistance, Employee Benefits Security Administration, Room N-5653, U.S. Department Labor, 200 Constitution Avenue NW, Washington, 20210, Attention: RIN 1210-AB43. 
Comments received the Department Labor will posted without change http://www.regulations.gov and http://www.dol.gov/ebsa, and available for public inspection the Public Disclosure Room, N-1513, Employee Benefits Security Administration, 200 Constitution Avenue, NW, Washington, 20210.   

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
Department Health and Human Services. commenting, please refer file code OCIIO-XXXX-IFC.  Because staff and resource limitations, cannot accept comments facsimile (FAX) transmission. You may submit comments one four ways (please choose only one the ways listed): Electronically. You may submit electronic comments this regulation http://www.regulations.gov.  Follow the instructions under the More Search Options tab. regular mail. You may mail written comments the following address ONLY: 

Mail Stop C4-26-05,
 7500 Security Boulevard,   
Baltimore, 21244-1850. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution hand courier. you prefer, you may deliver (by hand courier) your written comments before the close the comment period either the following addresses: For delivery Washington, DC-Office Consumer Information and Insurance Oversight,
 Department Health and Human Services,  
Room 445-G, Hubert Humphrey Building, 
200 Independence Avenue, SW, 
Washington, 20201
 
(Because access the interior the Hubert Humphrey Building not readily
 
available persons without Federal government identification, commenters are encouraged 
7500 Security Boulevard, you intend deliver your comments the Baltimore address, please call (410) 7867195 advance schedule your arrival with one our staff members.   
Comments mailed the addresses indicated appropriate for hand courier delivery may delayed and received after the comment period. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
Submission comments paperwork requirements. You may submit comments this documents paperwork requirements following the instructions the end the Collection Information Requirements section this document.
  Inspection Public Comments: All comments received before the close the comment period are available for viewing the public, including any personally identifiable confidential business information that included comment. post all comments received before the close the comment period the following website soon possible after they received, generally beginning approximately three weeks after publication document, the headquarters the Centers for Medicare Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday each week from 8:30 a.m. p.m. EST. schedule appointment view public comments, phone 1-800-743-3951. Internal Revenue Service. Comments the IRS, identified REG-120399-10, one the following methods:  Federal eRulemaking Portal: http://www.regulations.gov. have been received:  http://www.regulations.gov.  Follow the search instructions that Web site view public comments.  
Comments received timely will also available for public inspection they are 
Follow the instructions for 
  Mail: CC:PA:LPD:PR (REG-120399-10), Room 5205, Internal Revenue Service, 
P.O. Box 7604, Ben Franklin Station, Washington, 20044. 
 Hand courier delivery: Monday through Friday between the hours a.m. and p.m. to: CC:PA:LPD:PR (REG-120399-10), Couriers Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington 20224. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
All submissions the IRS will open public inspection and copying Room 1621, 1111 Constitution Avenue, NW, Washington, from a.m. p.m. FOR FURTHER INFORMATION CONTACT: Amy Turner Beth Baum, Employee Benefits Security Administration, Department Labor, (202) 693-8335; Karen Levin, Internal Revenue Service, Department the Treasury, (202) 622-6080; Jim Mayhew, Office Consumer Information and Insurance Oversight, Department Health and Human Services, (410) 786-1565. CUSTOMER SERVICE INFORMATION: 
Individuals interested obtaining information from the Department Labor concerning employment-based health coverage laws may call the EBSA Toll-Free Hotline 1-866-444-EBSA (3272) visit the Department Labors website 
148, was enacted March 23, 2010; the Health Care and Education Reconciliation Act (the Reconciliation Act), Pub. 111-152, was enacted March 30, 2010.  The Affordable Care Act and the Reconciliation Act reorganize, amend, and add the provisions part title XXVII the Public Health Service Act (PHS Act) relating group health plans and health insurance issuers the group and individual markets.  The term group health plan includes both insured 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
and self-insured group health plans.1  The Affordable Care Act adds section 715(a)(1) the Employee Retirement Income Security Act (ERISA) and section 9815(a)(1) the Internal Revenue Code (the Code) incorporate the provisions part title XXVII the PHS Act into ERISA and the Code, and make them applicable group health plans, and health insurance issuers providing health insurance coverage connection with group health plans.  The PHS Act sections incorporated this reference are sections 2701 through 2728.  PHS Act sections 2701 through 2719A are substantially new, though they incorporate some provisions prior law. 

prevents the application requirement the Affordable Care Act. 
 Accordingly, State laws that impose health insurance issuers requirements that are stricter than the requirements imposed the Affordable Care Act will not superseded the Affordable Care Act. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
The Departments Health and Human Services, Labor, and the Treasury (the Departments) are issuing regulations implementing the revised PHS Act sections 2701 through 2719A several phases.  The first publication this series was Request for Information relating the medical loss ratio provisions PHS Act section 2718, published the Federal Register April 14, 2010 (75 19297).  The second publication was interim final regulations implementing PHS Act section 2714 (requiring dependent coverage children age 26), published the 
Federal Register May 13, 2010 (75 27122).  The third publication was interim final regulations implementing section 1251 the Affordable Care Act (relating status grandfathered health plan), published the Federal Register June 17, 2010 (75 34538).  These interim final regulations are being published implement PHS Act sections 
 The rest these provisions generally are effective for plan years (in the individual market, policy years) beginning after September 23, 2010, which six months after the March 23, 2010 date enactment the Affordable Care Act.  The implementation other provisions PHS Act sections 2701 through 2719A will addressed future regulations. Section 1255 the Affordable Care Act. See also section 10103(e)-(f) the Affordable Care Act. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
II. Overview the Regulations PHS Act Section 2704, Prohibition Preexisting Condition Exclusions (26 CFR 54.98152704T, CFR 2590.715-2704, CFR 147.108)   Section 1201 the Affordable Care Act adds new PHS Act section 2704, which amends the HIPAA4 rules relating preexisting condition exclusions provide that group health plan and health insurance issuer offering group individual health insurance coverage may not impose any preexisting condition exclusion.  The HIPAA rules (in effect prior the effective date these amendments) apply only group health plans and group health insurance 

coverage, and permit limited exclusions coverage based preexisting condition under certain circumstances.  The Affordable Care Act provision prohibits any preexisting condition benefits relating condition based the fact that the condition was present before the date enrollment for the coverage, whether not any medical advice, diagnosis, care, treatment 
was recommended received before that date.  Based this definition, PHS Act section 2704, added the Affordable Care Act, prohibits not just exclusion coverage specific 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
benefits associated with preexisting condition the case enrollee, but complete exclusion from such plan coverage, that exclusion based preexisting condition.  
The protections the new PHS Act section 2704 generally apply for plan years (in the individual market, policy years) beginning after January 2014.   The Affordable Care Act provides, however, that these protections apply with respect enrollees under age for plan years (in the individual market, policy years) beginning after September 23, 2010. enrollee under age thus could not denied benefits based preexisting condition. order for individual seeking enrollment receive the same protection that applies the case such enrollee, the individual similarly could not denied enrollment specific benefits based preexisting condition.  Thus, for plan years (in the individual market, for policy years) 
with examples the HIPAA regulations preexisting condition exclusions, which remain effect.6  (Other requirements Federal State law, however, may prohibit certain benefit exclusions.)   
Application grandfathered health plans. Under the statute and these interim final regulations, grandfathered health plan that group health plan group health insurance 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
coverage must comply with the prohibition against preexisting condition exclusions; however, grandfathered health plan that individual health insurance coverage not required comply with PHS Act section 2704.  See CFR 54.9815-1251T, CFR 2590.715-1251, and CFR 
147.140 regarding status grandfathered health plan. PHS Act Section 2711, Lifetime and Annual Limits (26 CFR 54.9815-2711T, CFR 2590.715-2711, CFR 147.126) Section 2711 the PHS Act, added the Affordable Care Act, and these interim final regulations generally prohibit group health plans and health insurance issuers offering 
group individual health insurance coverage from imposing lifetime annual limits the dollar value health benefits. 

treated group health plans because the amounts available under the plans are available for both medical and non-medical expenses.7  Moreover, annual contributions MSAs and HSAs are 
subject specific statutory provisions that require that the contributions limited.  
subject additional tax, under sections 220(f)(1), (4) and 223(f)(1), (4) the Code. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
year certain amount, with unused amounts available reimburse medical expenses future years. See Notice 2002-45, 2002-28 IRB 93; Rev. Rul. 2002-41, 2002-28 IRB 75.  When HRAs are integrated with other coverage part group health plan and the other coverage alone would comply with the requirements PHS Act section 2711, the fact that benefits under the HRA itself are limited does not violate PHS Act section 2711 because the combined benefit satisfies the requirements.  Also, the case stand-alone HRA that limited retirees, the exemption from the requirements ERISA and the Code relating the Affordable 
Care Act for plans with fewer than two current employees means that the retiree-only HRA generally not subject the rules PHS Act section 2711 relating annual limits.  The Departments request comments regarding the application PHS Act section 2711 stand-alone 
specific covered benefits.  These interim final regulations define essential health benefits cross-reference section 1302(b) the Affordable Care Act8 and applicable regulations.  Regulations under section 1302(b) the Affordable Care Act have not yet been issued. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
For plan years (in the individual market, policy years) beginning before the issuance regulations defining essential health benefits, for purposes enforcement, the Departments will take into account good faith efforts comply with reasonable interpretation the term essential health benefits.  For this purpose, plan issuer must apply the definition essential health benefits consistently.  For example, plan could not both apply lifetime limit particular benefit  thus taking the position that was not essential health benefit  and the same time treat that particular benefit essential health benefit for purposes applying 
the restricted annual limit. 
These interim final regulations clarify that the prohibition under PHS Act section 2711 does not prevent plan issuer from excluding all benefits for condition, but any benefits 
services made available with minimal impact premiums.  For detailed discussion the basis for determining restricted annual limits, see section IV.B.3 later this preamble. order mitigate the potential for premium increases for all plans and policies, while the same time ensuring access essential health benefits, these interim final regulations adopt three-year phased approach for restricted annual limits.  Under these interim final regulations, annual limits the dollar value benefits that are essential health benefits may not less than 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
the following amounts for plan years (in the individual market, policy years) beginning before January 2014:   For plan policy years beginning after September 23, 2010 but before September 23, 2011, $750,000;   For plan policy years beginning after September 23, 2011 but before September 23, 2012, $1.25 million; and 
 For plan policy years beginning after September 23, 2012 but before 
January 2014, million. these are minimums for plan years (in the individual market, policy years) beginning before 2014, plans issuers may always use higher annual limits impose limits. Plans and 
year (in the individual market, policy year).  These interim final regulations clarify that, applying annual limits for plan years (in the individual market, policy years) beginning before January 2014, the plan health insurance coverage may take into account only essential health benefits.   
The restricted annual limits provided these interim final regulations are designed ensure that, the vast majority cases, that individuals would have access needed services 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
with minimal impact premiums. that individuals with certain coverage, including coverage under limited benefit plan, would not denied access needed services experience more than minimal impact premiums, these interim final regulations provide for the Secretary Health and Human Services establish program under which the requirements relating annual limits may waived compliance with these interim final regulations would result significant decrease access benefits significant increase premiums.  
Guidance from the Secretary Health and Human Services regarding the scope and process for applying for waiver expected issued the near future. 
Under these interim final regulations, individuals who reached lifetime limit under plan health insurance coverage prior the applicability date these interim final regulations 
policy the individual market while other family members remain the coverage.  These notices and the enrollment opportunity must provided beginning not later than the first day the first plan year (in the individual market, policy year) beginning after September 23, 2010.  Anyone eligible for enrollment opportunity must treated special enrollee.9 That 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
is, they must given the right enroll all the benefit packages available similarly situated individuals upon initial enrollment. 
Application grandfathered health plans. The statute and these interim final regulations relating the prohibition lifetime limits apply all group health plans and health insurance issuers offering group individual health insurance coverage, whether not the plan qualifies grandfathered health plan, for plan years (in the individual market, policy years) beginning after September 23, 2010.  
The statute and these interim final regulations relating the prohibition annual limits, including the special rules regarding restricted annual limits for plan years beginning before January 2014, apply group health plans and group health insurance coverage that qualify grandfathered health plan, but not apply grandfathered health 
limit the dollar value all benefits but overall annual limit the dollar value all benefits ceases grandfathered health plan the plan health insurance coverage adopts overall annual limit dollar value that lower than the dollar value the lifetime limit March 23, 2010.   
 plan health insurance coverage that, March 23, 2010, imposed overall annual limit the dollar value all benefits ceases grandfathered health plan the plan 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution health insurance coverage decreases the dollar value the annual limit (regardless whether the plan health insurance coverage also imposed overall lifetime limit March 23, 2010 the dollar value all benefits). 	PHS Act Section 2712, Prohibition Rescissions (26 CFR 54.9815-2712T, CFR 2590.715-2712, CFR 147.128) 
PHS Act section 2712 provides rules regarding rescissions health coverage for group health plans and health insurance issuers offering group individual health insurance coverage. Under the statute and these interim final regulations, group health plan, health insurance issuer offering group individual health insurance coverage, must not rescind coverage except the case fraud intentional misrepresentation material fact.  This standard sets 

insured self-insured coverage.  These rules also apply regardless any contestability period that may otherwise apply. 
This provision PHS Act section 2712 builds already-existing protections PHS Act sections 2703(b) and 2742(b) regarding cancellations coverage.  These provisions generally provide that health insurance issuer the group and individual markets cannot cancel, fail renew, coverage for individual group for any reason other than those 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
enumerated the statute (that is, nonpayment premiums; fraud intentional misrepresentation material fact; withdrawal product withdrawal issuer from the market; movement individual employer outside the service area; or, for bona fide association coverage, cessation association membership). Moreover, this new provision also builds existing HIPAA nondiscrimination protections for group health coverage ERISA section 702, Code section 9802, and PHS Act section 2705 (previously included PHS Act section 2702 prior the Affordable Care Acts amendments and reorganization PHS Act title 
XXVII).  The HIPAA nondiscrimination provisions generally provide that group health plans and group health insurance issuers may not set eligibility rules based factors such health status and evidence insurability  including acts domestic violence disability.   They also State law applicable health insurance issuers were provide that rescissions are permitted only cases fraud, only within contestability period, which more protective individuals, such law would not conflict with, preempted by, the federal standard and would apply. 
These interim final regulations include several clarifications regarding the standards for rescission PHS Act section 2712.  First, these interim final regulations clarify that the rules 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
PHS Act section 2712 apply whether the rescission applies single individual, individual within family, entire group individuals.  Thus, for example, issuer attempted rescind coverage entire employment-based group because the actions individual within the group, the standards these interim final regulations would apply. Second, these interim final regulations clarify that the rules PHS Act section 2712 apply representations made the individual person seeking coverage behalf the individual.  Thus, plan sponsor seeks coverage from issuer for entire employment-based group and makes 
representations, for example, regarding the prior claims experience the group, the standards these interim final regulations would also apply. Finally, PHS Act section 2712 refers acts practices that constitute fraud.  These interim final regulations clarify that, the extent that 
rescission for this purpose. cancellation discontinuance coverage with only prospective effect not rescission, and neither cancellation discontinuance coverage that effective retroactively the extent attributable failure timely pay required premiums contributions towards the cost coverage.  Cancellations coverage are addressed under other Federal and State laws, including section PHS Act section 2703(b) and 2742(b), which limit the grounds for cancellation non-renewal coverage, discussed above.  Moreover, 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
PHS Act section 2719, added the Affordable Care Act and incorporated ERISA section 715 and Code section 9815, addresses appeals coverage determinations and includes provisions for keeping coverage effect pending appeal.  The Departments expect issue guidance PHS Act section 2719 the very near future. addition setting new Federal floor standard for rescissions, PHS Act section 2712 adds new advance notice requirement when coverage rescinded where still permissible.   Specifically, the second sentence section 2712 provides that coverage may not cancelled must provided regardless whether the rescission group individual coverage; whether, the case group coverage, the coverage insured self-insured, the rescission applies entire group only individual within the group.  This 30-day period will provide individuals and plan sponsors with opportunity explore their rights contest the rescission, look for alternative coverage, appropriate.  The Departments expect issue future guidance any notice requirements under PHS Act section 2712 for cancellations coverage other than the case rescission. unless prior notice provided.  These interim final regulations provide that group health plan, health insurance issuer offering group health insurance coverage, must provide least calendar days advance notice individual before coverage may rescinded.10  The notice 
provides new rights individuals who, for example, may have done their best complete what can sometimes long, complex enrollment questionnaires but may have made some errors, for which the consequences were overly broad and unfair.  These interim final regulations provide initial guidance with respect the statutory restrictions rescission. the Departments Even though prior notice must provided the case rescission, applicable law may permit the rescission void coverage retroactively. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
become aware attempts the marketplace subvert these rules, the Departments may issue additional regulations administrative guidance ensure that individuals not lose health coverage unjustly without due process. 
Application grandfathered health plans. The rules regarding rescissions and advance notice apply all grandfathered health plans. 	 PHS Act Section 2719A, Patient Protections (26 CFR 54.9815-2719AT, CFR 2590.715 2719A, CFR 147.138) 
Section 2719A the PHS Act imposes, with respect group health plan, group 
individual health insurance coverage, set three requirements relating the choice health care professional and requirements relating benefits for emergency services.  The three 
requirements.  None these requirements apply grandfathered health plans.	  Choice Health Care Professional 
The statute and these interim final regulations provide that group health plan, health insurance issuer offering group individual health insurance coverage, requires The statute and these interim final regulations refer providers both terms their participation (participating provider) and terms network (in-network provider). both situations, the intent refer provider that has contractual relationship other arrangement with plan issuer. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
provides for designation participant, beneficiary, enrollee participating primary care provider, then the plan issuer must permit each participant, beneficiary, enrollee designate any participating primary care provider who available accept the participant, beneficiary, enrollee. Under these interim final regulations, the plan issuer must provide notice informing each participant (or the individual market, the primary subscriber) the terms the plan health insurance coverage regarding designation primary care provider.  

The statute and these interim final regulations impose requirement for the designation pediatrician similar the requirement for the designation primary care physician. Specifically, plan issuer requires provides for the designation participating primary care provider for child participant, beneficiary, enrollee, the plan issuer must permit health insurance issuer offering group individual health insurance coverage, that provides coverage for obstetrical gynecological care and requires the designation in-network primary care provider. such case, the plan issuer may not require authorization referral the plan, issuer, any person (including primary care provider) for female participant, beneficiary, enrollee who seeks obstetrical gynecological care provided in-network health care professional who specializes obstetrics gynecology.  The plan issuer must 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
inform each participant (in the individual market, primary subscriber) that the plan issuer may not require authorization referral for obstetrical gynecological care participating health care professional who specializes obstetrics gynecology.  Nothing these interim final regulations precludes the plan issuer from requiring in-network obstetrical gynecological provider otherwise adhere policies and procedures regarding referrals, prior authorization for treatments, and the provision services pursuant treatment plan approved the plan issuer. 
 The plan issuer must treat the provision obstetrical and gynecological care, and the ordering related obstetrical and gynecological items and services, the professional who specializes obstetrics gynecology the authorization the primary care provider.  For this purpose, health care professional who specializes obstetrics gynecology any individual 
coverage know their rights (1) choose primary care provider pediatrician when plan issuer requires designation primary care physician; (2) obtain obstetrical gynecological care without prior authorization.  Accordingly, these interim final regulations require such plans and issuers provide notice participants (in the individual market, primary subscribers) these rights when applicable.   Model language provided these interim final regulations.  The notice must provided whenever the plan issuer provides 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
participant with summary plan description other similar description benefits under the plan health insurance coverage, the individual market, provides primary subscriber with policy, certificate, contract health insurance.  Emergency Services plan health insurance coverage provides any benefits with respect emergency services emergency department hospital, the plan issuer must cover emergency services way that consistent with these interim final regulations.  
These interim final regulations require that plan providing emergency services must without the individual the health care provider having obtain prior authorization (even the emergency services are provided out network) and without regard whether the health care provider furnishing the 
services that more restrictive than the requirements limitations that apply in-network emergency services.   
Additionally, for plan health insurance coverage with network, these interim final regulations provide rules for cost-sharing requirements for emergency services that are expressed copayment amount coinsurance rate, and other cost-sharing requirements.  Cost-sharing requirements expressed copayment amount coinsurance rate imposed for out-of-network 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
emergency services cannot exceed the cost-sharing requirements that would imposed the services were provided in-network.  Out-of-network providers may, however, also balance bill patients for the difference between the providers charges and the amount collected from the plan issuer and from the patient the form copayment coinsurance amount.  Section 1302(c)(3)(B) the Affordable Care Act excludes such balance billing amounts from the definition cost sharing, and the requirement section 2719A(b)(1)(C)(ii)(II) that cost sharing for out-of-network services limited that imposed network only applies cost sharing 
expressed copayment coinsurance rate. 
Because the statute does not require plans issuers cover balance billing amounts, and does not prohibit balance billing, even where the protections the statute apply, patients 
account for wide variation how plans and issuers determine both in-network and out-ofnetwork rates.  For example, for plan using capitation arrangement determine in-network payments providers, there in-network rate per service. Accordingly, these interim final regulations consider three amounts: the in-network rate, the out-of-network rate, and the Medicare rate.  Specifically, plan issuer satisfies the copayment and coinsurance limitations 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution the statute provides benefits for out-of-network emergency services amount equal the greatest three possible amounts 
(1) 
The amount negotiated with in-network providers for the emergency service furnished;  

(2) 
The amount for the emergency service calculated using the same method the plan generally uses determine payments for out-of-network services (such the usual, customary, and reasonable charges) but substituting the in-network cost-sharing provisions for the out-of-
network cost-sharing provisions; 

(3) 
The amount that would paid under Medicare for the emergency service.12 Each these three amounts calculated excluding any in-network copayment coinsurance 

amounts, treating the amount negotiated with each provider separate amount determining the median.  Thus, for example, for given emergency service plan negotiated rate $100 with three providers, rate $125 with one provider, and rate $150 with one provider; the amounts taken into account determine the median would $100, $100, $100, $125, and $150; and the median would $100.  Following the commonly accepted definition median, the date publication these interim final regulations, these rates are available the public http://www.cms.hhs.gov/MedicareAdvtgSpecRateStats/downloads/oon-payments.pdf. 

PRELIMINARY DISCUSSION DRAFT 6.16.10 Not for Public Distribution 
there are even number amounts, the median the average the middle two.  (Cost sharing imposed with respect the participant, beneficiary enrollee would deducted from this amount before determining the greatest the three amounts above.) 
The second amount above determined without reduction for out-of-network cost sharing that generally applies under the plan health insurance coverage with respect out-ofnetwork services.  Thus, for example, plan generally pays percent the usual, customary, and reasonable amount for out-of-network services, the second amount above for emergency 
service the total (that is, 100 percent) the usual, customary, and reasonable amount for the service, not reduced the percent coinsurance that would generally apply out-of-network services (but reduced the in-network copayment coinsurance that the individual would 
deductible out-of-pocket maximum, may imposed with respect out-of-network emergency services only the cost-sharing requirement generally applies out-of-network benefits.  Specifically, deductible may imposed with respect out-of-network emergency services only part deductible that generally applies out-of-network benefits. Similarly, out-of-pocket maximum generally applies out-of-network benefits, that out-of-pocket maximum must apply out-of-network emergency services. plan health insurance 

PRELIMINARY DISCUSSION DRAF



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