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Judicial Watch • Obamacare records from DOH HS Part 4 982011

Obamacare records from DOH HS Part 4 982011

Obamacare records from DOH HS Part 4 982011

Page 1: Obamacare records from DOH HS Part 4 982011

Category:General

Number of Pages:658

Date Created:July 8, 2011

Date Uploaded to the Library:February 20, 2014

Tags:PRELIMINARY, Discussion, Conclusion, Plans, coverage, affordable, benefits, facts, draft, paragraph, Department of the Treasury, health, HHS, Insurance, Group, Distribution, individual, September, section, federal, EPA, IRS, ICE, CIA


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From:  Mayhew, James (CMS/CPC)  
To:  Larsen, Steven (HHS/OCIIO)  
Subject:  FW: Pkg Omnibus 6.14.10 6pm  
Date:  Tuesday, June 15, 2010 9:13:00  

Heres the latest from the WH. 
From: Turner, Amy EBSA [mailto:Turner.Amy@dol.gov] Sent: Monday, June 14, 2010 8:34 To: Baum, Beth EBSA; Butikofer, James EBSA; Corrigan, Dara (HHS/ASPE); Cosby, Chris EBSA; Kevin.Knopf@do.treas.gov; Kosin, Donald (HHS/OGC); Karen.B.Levin@irscounsel.treas.gov; Mayhew, James (CMS/CPC); russell.e.weinheimer@irscounsel.treas.gov; Schumacher, Elizabeth EBSA; REWeinheim@aol.com; kevin.paul.knopf@gmail.com; ehschumacher@gmail.com Subject: Re: Pkg Omnibus 6.14.10 6pm 
Following earlier email, below summary the 5:30 call ... 
General: 
The reg will released June 22, which day there will Presidential event. 
The clear message this package and the event will that are providing strong consumer protections. 
Package OMB cob tomorrow. will circulate something later tonight that makes changes based the decisions below. Decisions: 
The HHS opt-out reg out the package; now 5-pack. 
The 2714 fix out the package; will find another vehicle for this later. 
Rescission/ burden proof issue will table until can get better legal read. 
30-day advance notice required for rescissions. can add the preamble that this gives people opportunity find out their rights, look for new coverage, etc. 
Regarding prospective cancellations coverage, will solicit comments the preamble whether more guidance needed and include stmt about our ability issue sub-regulatory guidance, needed. 
Waiver program The standard "or". That is, substantially decrease access substantially increase premiums. Waiver process will housed HHS, even for self-insured plans. will delete the preamble language soliciting comments the waiver process advance its implementation The process will and running Aug Sept. 
Restricted annual limits will add good faith enforcement period for determining which benefits which "buckets". Because expect most almost all benefits essential health benefits, may indicate that plans can apply RAL reasonable, broad definition benefits, least until more guidance issued. 
Median Option two. The median determined taking into account the number provider contracts (but not charges) each rate. 
RIA issues. Still evolving. The Depts will get the best draft together that they can cob tommorrow, but will initial draft that wiill continue evolve over the OMB review period. 

And so, rock on! 
Sent via Blackberry 

From: Turner, Amy EBSA 
To: Baum, Beth EBSA; Butikofer, James EBSA; 'Dara.Corrigan@hhs.gov' ; 
Cosby, Chris EBSA; 'helen.morrison@do.treas.gov' ; 
'joan.dailey@hhs.gov' ; 'Kevin.Knopf@do.treas.gov' 
; 'Donald.Kosin@HHS.GOV' ; 
'leslie.stafford@hhs.gov' ; 'Karen.B.Levin@irscounsel.treas.gov' 
; 'James.Mayhew@cms.hhs.gov' 
; 'russell.e.weinheimer@irscounsel.treas.gov' 
; Schumacher, Elizabeth EBSA; 
'Alan.Tawshunsky@irscounsel.treas.gov' ; Taylor, William SOL 
Cc: Lynett, Elena EBSA 
Sent: Mon Jun 18:29:44 2010 
Subject: Re: Pkg Omnibus 6.14.10 6pm 

We're issue the call. Heads up: 2722 out; it's 5-pack now. Also, 2714 change/clarification out this package. Can done future package. I'll summary the rest later. 
Sent via Blackberry 

From: Baum, Beth EBSA To: Baum, Beth EBSA; Butikofer, James EBSA; 'Corrigan, Dara (HHS/ASPE)' ; Cosby, Chris EBSA; Helen.Morrison@do.treas.gov ; Joan Dailey ; 'Knopf Kevin OTP' ; 'Kosin, Donald (HHS/OGC)' ; Leslie Stafford ; 'Levin Karen' ; 'Mayhew, James (CMS/CPC)' ; 'Russell.E.Weinheimer@IRSCOUNSEL.TREAS.GOV' ; Schumacher, Elizabeth EBSA; Tawshunsky Alan ; Taylor, William SOL; Turner, Amy EBSA (Turner.Amy@dol.gov) Cc: Lynett, Elena EBSA Sent: Mon Jun 18:23:16 2010 Subject: Pkg Omnibus 6.14.10 6pm 
Here the current draft the six pack with the changes made today redline. made the 
parallel changes all reg texts. 

The plan meet 930 tomorrow morning pick with making the edits conform with the 
policy decisions that come out the 530 call this evening. 

See you then! 
 

From:  Mayhew, James (CMS/CPC)  
To:  Larsen, Steven (HHS/OCIIO)  
Subject:  FW: Pkg Omnibus 6.14.10 6pm  
Date:  Tuesday, June 15, 2010 9:13:00  

Heres the latest from the WH. 
From: Turner, Amy EBSA [mailto:Turner.Amy@dol.gov] Sent: Monday, June 14, 2010 8:34 To: Baum, Beth EBSA; Butikofer, James EBSA; Corrigan, Dara (HHS/ASPE); Cosby, Chris EBSA; Kevin.Knopf@do.treas.gov; Kosin, Donald (HHS/OGC); Karen.B.Levin@irscounsel.treas.gov; Mayhew, James (CMS/CPC); russell.e.weinheimer@irscounsel.treas.gov; Schumacher, Elizabeth EBSA; REWeinheim@aol.com; kevin.paul.knopf@gmail.com; ehschumacher@gmail.com Subject: Re: Pkg Omnibus 6.14.10 6pm 
Following earlier email, below summary the 5:30 call ... 
General: 
The reg will released June 22, which day there will Presidential event. 
The clear message this package and the event will that are providing strong consumer protections. 
Package OMB cob tomorrow. will circulate something later tonight that makes changes based the decisions below. Decisions: 
The HHS opt-out reg out the package; now 5-pack. 
The 2714 fix out the package; will find another vehicle for this later. 
Rescission/ burden proof issue will table until can get better legal read. 
30-day advance notice required for rescissions. can add the preamble that this gives people opportunity find out their rights, look for new coverage, etc. 
Regarding prospective cancellations coverage, will solicit comments the preamble whether more guidance needed and include stmt about our ability issue sub-regulatory guidance, needed. 
Waiver program The standard "or". That is, substantially decrease access substantially increase premiums. Waiver process will housed HHS, even for self-insured plans. will delete the preamble language soliciting comments the waiver process advance its implementation The process will and running Aug Sept. 
Restricted annual limits will add good faith enforcement period for determining which benefits which "buckets". Because expect most almost all benefits essential health benefits, may indicate that plans can apply RAL reasonable, broad definition benefits, least until more guidance issued. 
Median Option two. The median determined taking into account the number provider contracts (but not charges) each rate. 
RIA issues. Still evolving. The Depts will get the best draft together that they can cob tommorrow, but will initial draft that wiill continue evolve over the OMB review period. 

And so, rock on! 
Sent via Blackberry 

From: Turner, Amy EBSA 
To: Baum, Beth EBSA; Butikofer, James EBSA; 'Dara.Corrigan@hhs.gov' ; 
Cosby, Chris EBSA; 'helen.morrison@do.treas.gov' ; 
'joan.dailey@hhs.gov' ; 'Kevin.Knopf@do.treas.gov' 
; 'Donald.Kosin@HHS.GOV' ; 
'leslie.stafford@hhs.gov' ; 'Karen.B.Levin@irscounsel.treas.gov' 
; 'James.Mayhew@cms.hhs.gov' 
; 'russell.e.weinheimer@irscounsel.treas.gov' 
; Schumacher, Elizabeth EBSA; 
'Alan.Tawshunsky@irscounsel.treas.gov' ; Taylor, William SOL 
Cc: Lynett, Elena EBSA 
Sent: Mon Jun 18:29:44 2010 
Subject: Re: Pkg Omnibus 6.14.10 6pm 

We're issue the call. Heads up: 2722 out; it's 5-pack now. Also, 2714 change/clarification out this package. Can done future package. I'll summary the rest later. 
Sent via Blackberry 

From: Baum, Beth EBSA To: Baum, Beth EBSA; Butikofer, James EBSA; 'Corrigan, Dara (HHS/ASPE)' ; Cosby, Chris EBSA; Helen.Morrison@do.treas.gov ; Joan Dailey ; 'Knopf Kevin OTP' ; 'Kosin, Donald (HHS/OGC)' ; Leslie Stafford ; 'Levin Karen' ; 'Mayhew, James (CMS/CPC)' ; 'Russell.E.Weinheimer@IRSCOUNSEL.TREAS.GOV' ; Schumacher, Elizabeth EBSA; Tawshunsky Alan ; Taylor, William SOL; Turner, Amy EBSA (Turner.Amy@dol.gov) Cc: Lynett, Elena EBSA Sent: Mon Jun 18:23:16 2010 Subject: Pkg Omnibus 6.14.10 6pm 
Here the current draft the six pack with the changes made today redline. made the 
parallel changes all reg texts. 

The plan meet 930 tomorrow morning pick with making the edits conform with the 
policy decisions that come out the 530 call this evening. 

See you then! 
 

From:  Shaw, Adam (CMS/CM)  
To:  Mayhew, James (CMS/CPC)  
Subject:  Pkg Reg Text AMSchanges.doc  
Date:  Monday, June 14, 2010 10:34:03  
Attachments:  Pkg Reg Text AMSchanges.doc  

Good morning. substantive points (some all which the group may have considered.) have added minor changes the enclosed. 	Add definition similarly situated individual (pg. Consider adding definition primary care provider page 13. This defined term many plans including FEHB Blue plans. can encompass and non-MD (PA) and various types MDs (internist, family doctor). Here, pediatrician must but PCP generally and OB/GYN does not have be. 	Consider adding reference Newborns/Mothers mandate pg. 16. Some the examples deal with pre-authorization which bumps against. can provide text for items and/or you wish. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution This document currently represents single joint DOL/IRS/HHS reg text.  The final document will actually include parallel regulations  one IRS regulation (26 CFR Part 54), followed one DOL regulation (29 CFR Part 2590), followed one HHS regulation (45 CFR Parts 144, 146, and 147). The IRS and HHS reg texts will reformatted include the correct citations for their Part. addition, DOL and IRS will delete references requirements for issuers individual market coverage, but will include cross-references appropriate. 

DEPARTMENT LABOR 
Employee Benefits Security Administration CFR Chapter XXV CFR Part 2590 amended follows: 
105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. 110-343, 122 Stat. 3881; sec. 
1001, 1201, and 1562(e), Pub. 111-148, 124 Stat. 119, amended Pub. 111-152, 124 
Stat. 1029; Secretary Labors Order 6-2009, 21524 (May 2009). 
Subpart BOther Requirements  Section 2590.701-2 amended revising the definition preexisting condition 
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 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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 includes any limitation exclusion benefits (including denial coverage) applicable 

preexisting condition exclusion (as defined  2590.701-2 this Part).   

PRELIMINARY DISCUSSION DRAFT 6.11.10 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  
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. 
(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  2590.715-1251 this Part for determining the application this section grandfathered health plans (providing that grandfathered health plan that group health plan group health insurance coverage must 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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). 
(4) Examples. The rules this paragraph (b) are illustrated the following examples: 
Example (i) Facts. Individual commences employment and enrolls and Fs year-old child the group health plan maintained Fs employer, with first day coverage October 15, 2010.  Fs child went 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. 
(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 
Except provided paragraph (b), group health plan, health insurance issuer offering group individual 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 individual 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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 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 

may require coverage certain 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 health plan, health insurance issuer offering group individual health insurance coverage, 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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 policy year beginning after September 23, 2010 but before September 23, 2011, $750,000. 

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

(iii) For plan years policy years beginning after September 23, 2012 but before January 2014, $2,000,000. 

(2) 
 Only essential health benefits taken into account. determining whether individual has received benefits that meet exceed the applicable amount described 

this section will result significant decrease access benefits under the plan health insurance coverage significant increase premiums for the plan health insurance coverage. 
(e) Transitional rules for individuals whose coverage benefits ended reason reaching lifetime limit. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(1) general. The relief provided the transitional rules this paragraph (e) applies with respect any individual 

(i) 
Whose coverage benefits ended under group health plan group individual health insurance coverage 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 limit the dollar value all benefits under the group health plan group individual health 
insurance coverage the first day the first plan year beginning after September 23, 2010 reason the application this section.   

(2) 
Notice and enrollment opportunity requirements  (i) individual described 

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 notice 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 notice 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
may included with other enrollment materials that plan distributes employees, provided the statement prominent.  For group health plan group health insurance coverage, notice satisfying the requirements this paragraph (e)(2) provided employee whose dependent entitled enrollment opportunity under this paragraph (e), the obligation provide the notice enrollment opportunity under this paragraph (e)(2) with respect that dependent satisfied for both the plan and the issuer. 

(3) Effective date coverage. the case individual who enrolls under paragraph (e)(2) this section, coverage must take effect not later than the first day the first plan year beginning after September 23, 2010.  

(4) 
Treatment enrollees group health plan. Any individual enrolling group 

requirements constitutes different benefit 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 the 2010 plan year, the plan has lifetime limit the dollar value all benefits.  Individual employee was enrolled Ys group health plan the beginning the 2010 plan year. June 10, 2010, incurred claim 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
for benefits that exceeded the lifetime limit under Ys plan and ceased enrolled the plan. before January 2011, Ys group health plan gives written notice Bs right enroll the plan, and that 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 paragraph (e) providing enrollment opportunity that lasts least days and written notice concerning opportunity enroll. 

Example (i) Facts.  Employer maintains group health plan with plan year beginning October and ending September 30.  Prior October 2010, the group health plan has lifetime limit the dollar value all benefits. Individual employee and Individual Ds child, were enrolled family coverage under Zs group health plan for the plan year beginning October 2008. May 2009, incurred claim for benefits that exceeded the lifetime limit under Zs plan. dropped family coverage but remains employee 

(ii) 
Conclusion. this Example not later than October 2010, the plan must provide and opportunity enroll (including written notice opportunity enroll) that 

plans (providing that the prohibition lifetime limits applies all grandfathered health plans, 
while the prohibition annual limits, including the special rules regarding restricted annual 
limits, applies group health plans and group health insurance coverage that are grandfathered 
health plans, but does not apply individual health insurance coverage that grandfathered 
health plan). Section 2590.715-2712 added Subpart read follows: 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(a)  
Prohibition rescissions(1) group health plan, health insurance issuer 
plan, under the policy, certificate, contract insurance, with respect individual (including group which the individual belongs) once the individual covered under the plan coverage, unless the individual (or person seeking coverage behalf the individual) performs act, practice, omission that constitutes fraud, unless the individual makes 

(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. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(3)  The rules this paragraph (a) are illustrated the following examples:
 Example (i) Facts. Individual seeks enrollment insured group health plan.  The plans 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 ago. 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. 

(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 
The provisions this section apply for plan years 
(in the individual market, for policy years) beginning after September 23, 2010. See  
2590.715-1251 this Part for determining the application this section grandfathered health 
plans (providing that the rules regarding rescissions and advance notice apply all 
grandfathered health plans). 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution  Section 2590.715-2714 amended revising paragraphs (d) and (h) read follows: 
(d) 
Uniformity irrespective age.(1) general. Subject paragraph (d)(2) this section, the terms the plan health insurance coverage providing dependent coverage children cannot vary based age (except for children who are age older). 

(2) 
Preexisting condition exclusions for children age and older before 2014. For plan years (in the individual market, policy years) beginning before January 2014, the terms the 
plan health insurance coverage may impose preexisting condition exclusion (consistent with the rules section 2590.701-3 this Part [HHS add: in the group market]) children who are age older even though this prohibited with respect children under age for plan 

The provisions section 105(h) the Internal Revenue Code (and applicable regulations) described this paragraph (b) apply for purposes this section. 
(1) Nondiscrimination rules. The nondiscriminatory eligibility classification rules section 105(h)(3) the Internal Revenue Code and the nondiscriminatory benefits rule section 105(h)(4) the Internal Revenue Code apply group health plan (other than self

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
insured plan) under this section the group health plan were self-insured medical expense reimbursement plan. 
(2) 
 Controlled group rules. The controlled group rules and other related rules referenced section 105(h)(8) the Internal Revenue Code apply for purposes this section. 

(3) 
Highly compensated individual defined. Highly compensated individual has the meaning given section 105(h)(5) the Internal Revenue Code. 

(c) 
Applicability date. 

apply grandfathered health plans). 

market, primary subscriber) the terms the plan health insurance coverage regarding 

(ii)  Example. The rules this paragraph (a)(1) are illustrated the following example: 
Comment [C2]: Primary care provider defined term FEHBP make the point that can internist, family doctor, GP, well non-physician (PA).Consider adding that.  Pediatrician has DO, Ob/gyn doesnt. out situations here allow non-physician. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
Example. (i) Facts. group health plan requires individuals covered under the plan designate primary care provider.  The plan permits each individual designate any participating primary care provider 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 

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 
(iii) Examples. The rules this paragraph (a)(2) are illustrated the following 
examples: 
Example (i) Facts. HMO designates for each enrollee physician who specializes internal medicine serve the primary care provider for the enrollee and the enrollees family.   Enrollee requests that Pediatrician designated the primary care provider for As child. participating provider the HMOs network. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(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 peanut 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. 

(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. 

approved the plan issuer.  For purposes this paragraph (a)(3), health care professional 
who specializes obstetrics gynecology any individual who authorized under applicable 
State law provide obstetrical gynecological care,

Comment [C3]: Some this potentially bumps against Newborn and Mothers. the group hasnt already, consider note that this not meant limit protections under Newborn and Mothers. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(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 individual health insurance coverage described this paragraph the plan issuer 

(A) 
Provides coverage for obstetrical gynecological care; and 

 (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 physician specializing gynecological care.  The group health plan requires prior authorization from As designated primary care provider for the gynecological exam. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(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 authorization.  The fact that the group health plan requires notification treatment decisions the designated primary care physician does not violate this paragraph (a)(3). 

the individual market, primary subscriber) 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, enrollee can designated;  

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(B)
 Under paragraph (a)(2)(i) this section, that any participating physician who specializes pediatrics the childs primary care provider who available accept the participant, beneficiary, enrollee can designated; 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 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 
designate any primary care provider who participates the network [name plan coverage] and who available accept you your family members.  [If the plan health insurance coverage designates primary care provider automatically, insert: Until you make this designation, [name group health plan health insurance issuer] designates one for you.]  For information how select primary care provider, and for list the participating primary care providers, contact the plan administrator [insert contact information].  
(B) For plans and issuers that require allow for the designation primary care provider for child, insert: 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution you have child who enrolled [name group health plan health insurance issuer], you have the right designate any pediatrician who participates the network [plan coverage] and who available accept your child your childs primary care provider.  [If the plan health insurance coverage designates primary care provider automatically, insert: Until you make this designation, [name group health plan health insurance issuer] designates one.]  For information how select pediatrician, and for list the participating pediatricians, contact the plan administrator [insert contact information]. group health plan, health 
(i)
  Without the need for any prior authorization determination, even the emergency 

(ii)
  Without regard whether the health care provider furnishing the emergency services 

services are provided out-of-network basis; participating network provider with respect the services; 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(iii) the emergency services are provided out-of-
administrative requirement limitation coverage that more restrictive than the requirements limitations that apply emergency services received from in-network providers;  
(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; amount equal the greatest the three amounts specified paragraphs (b)(3)(i)(A), (b)(3)(i)(B), and (b)(3)(i)(C) this section (which are adjusted for in-network cost-sharing requirements).  

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(A) The amount negotiated with in-network providers for the emergency service furnished, excluding any in-network copayment coinsurance imposed with respect the participant, beneficiary, enrollee. there more than one amount negotiated with in-network providers for the emergency service, the amount described under this paragraph (b)(3)(i)(A) [the median these amounts irrespective the number providers charging][the median these amounts, ranking them the number providers with which the rates were negotiated], excluding any in-network copayment coinsurance imposed with respect the participant, 
beneficiary, enrollee. there per-service amount negotiated with in-network providers (such under capitation other similar arrangement), the amount under this paragraph (b)(3)(i)(A) disregarded. 
Any cost-sharing requirement other than copayment coinsurance requirement (such deductible out-of-pocket maximum) may imposed with 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. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution out-of-pocket maximum generally applies out-of-network benefits, that out-of-pocket 
maximum must apply out-of-network emergency services. 
(iii)  Examples. The rules this paragraph (b)(3) are illustrated the following examples. all these examples, the group health plan covers benefits with respect services emergency department hospital. 
Example (i) Facts. group health plan imposes percent coinsurance responsibility individuals who are furnished emergency services, whether provided network out network. covered individual provides notice the plan within two business days after the day individual receives screening treatment emergency department, the plan reduces the coinsurance rate percent. 

(ii) Conclusion. this Example the requirement provide notice 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 notice before the time receiving services the emergency department order receive reduction the coinsurance rate. group health plan covers individuals who receive emergency services with respect emergency medical condition from out-of-network provider.  The plan has agreements with in-network providers with respect certain emergency service.  Each provider has agreed provide the service for certain amount.  Among all the providers there are five amounts: $85, $100, $110, $120, and $150.  Under the agreement, the plan agrees pay the providers percent the agreed amount, with the individual receiving the service responsible for the remaining percent. 
(ii) Conclusion. this Example the median amount among those agreed for the emergency service $110, and the amount under paragraph (b)(3)(i)(A) this section percent $110 ($88). 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
Example (i) Facts. Same facts Example Subsequently, the plan adds provider its network and agrees pay the provider percent $170 for the emergency service, with the individual responsible for the remaining percent. 
(ii) Conclusion. this Example the median amount among those agreed for the emergency service $115. (Because there one middle amount among $85, $100, $110, $120, $150, and $170, the median the average the two middle amounts, $110 and $120.) Accordingly, the amount under paragraph (b)(3)(i)(A) this section percent $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 percent 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, would $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. 
 (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 6.11.10 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 (in the individual market, policy years) beginning after September 23, 2010.   See  2590.715-1251 this Part for determining the application this section grandfathered 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
health plans (providing that these rules regarding patient protections not apply all grandfathered health plans). 
10. Section 146.180 amended follows: Revising paragraph (a)(1). Adding new paragraph (a)(2). Renumbering paragraphs (a)(2), (a)(3) and (a)(4) (a)(3), (a)(4) and (a)(5), respectively. Replacing 2706 with 2727 each place appears paragraph (a)(1)(i)(F) and 
Example paragraph (a)(3) (previously designated (a)(2)). Making conforming change paragraph (a)(4)(i) (previously designated (a)(3)(i)). 	Updating paragraph (c) reflect the current address which exemption elections may mailed and providing facsimile number which elections may faxed alternative mailing elections. 

(i) Plan sponsor non-Federal governmental plan may elect exempt its plan, the extent that the plan not provided through health insurance coverage, (that is, self-funded), for plan years commencing before September 23, 2010, from any all the following requirements: 
(A)
  Limitations preexisting condition exclusion periods described  146.111. 

(B)  
Special enrollment periods for individuals and dependents described  146.117. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(C)
 Prohibitions against discriminating against individual participants and beneficiaries based health status described  146.121, except that the sponsor self-funded non-Federal governmental plan cannot elect exempt its plan from requirements  146.121(a)(1)(vi) and  146.122 that prohibit discrimination with respect genetic information. 

(D)
  Standards relating benefits for mothers and newborns described  146.130. 

(E)  
Parity the application certain limits mental health and substance use disorder benefits described  146.136. 

(F)  Required coverage for reconstructive surgery and certain other services following mastectomy under section 2727 the PHS Act. 

(G)
  Coverage dependent students medically necessary leave absence under section 2728 the PHS Act. 

funded group health plan from all the requirements described paragraph (a)(1)(i).  The plan year commences September each year.  The plan not subject the limitations paragraph (a)(1)(ii) until the plan year that commences September 2011.  Accordingly, for that plan year and any subsequent plan years, the plan sponsor may elect exempt its plan only from one more the requirements described paragraph (a)(1)(i)(D), (E), (F) and (G). 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(iv) 
Example  Same facts Example except the plan year commences October each year.  The plan subject the limitations paragraph (a)(1)(ii) beginning with the plan year that commences October 2010.  Accordingly, for that plan year and any subsequent plan years, the plan sponsor may elect exempt its plan only from one more the requirements described paragraph (a)(1)(i)(D), (E), (F) and (G). 

(2) 
Collectively bargained plans.  (i) Special rule. Without regard paragraph (b)(2) this section, group health plan that governed collective bargaining agreement that was 
ratified before March 23, 2010, subject the limitations set forth paragraph (a)(1)(ii) beginning with the commencement the first plan year following the expiration the last plan year governed the collective bargaining agreement.  The notices required paragraph (f) 

paragraph (a)(1)(i)(A), (B) and (C).  Accordingly, for that plan year and any subsequent plan years, the plan sponsor may elect exempt its plan only from one more the requirements described paragraph (a)(1)(i)(D), (E), (F) and (G). 
(3) 
Limitations. 

(A) 
Example plan subject requirements section 2727 the PHS Act, under which plan that covers medical and surgical benefits with respect mastectomy must 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
cover reconstructive surgery and certain other services following mastectomy. enrollee who has had mastectomy receives reconstructive surgery August 24.  Claims with respect the surgery are submitted and processed the plan September. The group health plan commences new plan year each September  Effective September the plan sponsor elects exempt its plan from section 2727 the PHS Act.  The plan cannot, the basis its exemption election, decline pay for the claims incurred August 24. 
(4) 
Stop-loss excess risk coverage.(a)(4)(ii), 

(5) 
Construction. 

(c) 
Mailing address.

applicable, from which the plan sponsor electing exempt the plan, and statement that, 
general, Federal law imposes these requirements upon group health plans. 

(h) 

(4) 

(i) 
Example (A) 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(B) However, regarding plan years that begin after September 23, 2010, the plan 
sponsor longer can elect exempt its plan from prohibitions against enrollment 
discrimination based health status-related factors. 

(i) 

(2) 

From: Mayhew, James (CMS/CPC) To: "Baum, Beth -EBSA"; Corrigan, Dara (HHS/OHR); Kosin, Donald (HHS/OGC); Dailey, Joan (HHS/OGC); Stafford, Leslie (HHS/OGC); "Weinheimer Russell E"; "Knopf Kevin -OTP"; "Russ Weinheimer -HOME"; "Kevin 
Knopf -HOME"; "Levin Karen"; "Schumacher, Elizabeth -EBSA"; "Turner, Amy -EBSA" Subject: RE: Clean Drafts Date: Sunday, June 13, 2010 11:58:00 Attachments: Pkg Reg Text 10.HHS version.doc 
Here the HHS version the regulation text. 
-----Original Message----From: Baum, Beth EBSA [mailto:baum.beth@dol.gov] Sent: Friday, June 11, 2010 6:20 To: Corrigan, Dara (HHS/ASPE); Mayhew, James (CMS/CPC); Kosin, Donald (HHS/OGC); Dailey, Joan (HHS/OGC); Stafford, Leslie (HHS/OGC); Weinheimer Russell Knopf Kevin OTP; Russ Weinheimer HOME; Kevin Knopf HOME; Levin Karen; Schumacher, Elizabeth EBSA; Baum, Beth EBSA; Turner, Amy EBSA Subject: Clean Drafts 
This what are going circulate internally for comment over the weekend. 
The plan meet 11am start incorporating comments and send OMB COB Monday. 
PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
DEPARTMENT HEALTH AND HUMAN SERVICES 
Office Consumer Information and Insurance Oversight CFR Subtitle 
review medical records relating the pre-enrollment period. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 146.111(a)(1)(i) revised read follows: 

 146.111 Limitations preexisting condition exclusion period.   
(a) Preexisting condition exclusion(1) Defined(i) preexisting condition exclusion means preexisting condition exclusion within the meaning  144.103 this Part. Section 146.180 amended follows: Revising paragraph (a)(1). Adding new paragraph (a)(2). Renumbering paragraphs (a)(2), (a)(3) and (a)(4) (a)(3), (a)(4) and (a)(5), respectively. Replacing 2706 with 2727 each place appears paragraph (a)(1)(i)(F) and Example paragraph (a)(3) (previously designated (a)(2)). 

 146.180 Treatment non-Federal governmental plans. 
(a) Requirements subject exemption(1) Non-collectively bargained plans. (i) Plan years commencing before September 23, 2010. sponsor non-Federal governmental plan may elect exempt its plan, the extent that the plan not provided through health insurance 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
coverage, (that is, self-funded), for plan years commencing before September 23, 2010, from any all the following requirements: 
(A) 
Limitations preexisting condition exclusion periods described  146.111. 

(B) 
Special enrollment periods for individuals and dependents described  146.117. 

(C)
 Prohibitions against discriminating against individual participants and beneficiaries based health status described  146.121, except that the sponsor self-funded non-Federal governmental plan cannot elect exempt its plan from requirements  
146.121(a)(1)(vi) and  146.122 that prohibit discrimination with respect genetic information. 

(D) Standards relating benefits for mothers and newborns described  146.130. 

(E) 
Parity the application certain limits mental health and substance use disorder benefits described  146.136. 

September 23, 2010, only from one more the requirements described paragraph (a)(1)(i)(D), (E), (F) (G).  With respect those plan years, the notices required paragraph 
(f) this section must reflect the limitations set forth this paragraph (a)(1)(ii). 
(iii) Example non-Federal governmental employer has elected exempt its self-funded group health plan from all the requirements described paragraph (a)(1)(i).  The plan year commences September each year.  The plan not subject the limitations paragraph 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(a)(1)(ii) until the plan year that commences September 2011.  Accordingly, for that plan year and any subsequent plan years, the plan sponsor may elect exempt its plan only from one more the requirements described paragraph (a)(1)(i)(D), (E), (F) and (G). 
(iv) 
Example Same facts Example except the plan year commences October each year. The plan subject the limitations paragraph (a)(1)(ii) beginning with the plan year that commences October 2010. Accordingly, for that plan year and any subsequent plan years, the plan sponsor may elect exempt its plan only from one more the 
requirements described paragraph (a)(1)(i)(D), (E), (F) and (G). 

(2) 
Collectively bargained plans. Without regard paragraph (b)(2) this section, group health plan that governed collective bargaining agreement that was 

(a)(1)(i) this section. The collective bargaining agreement applies five plan years, October 2007 through September 30, 2012. For the plan year that commences October 2012, the plan sponsor longer permitted elect exempt its plan from the requirements described paragraph (a)(1)(i)(A), (B) and (C).  Accordingly, for that plan year and any subsequent plan years, the plan sponsor may elect exempt its plan only from one more the requirements described paragraph (a)(1)(i)(D), (E), (F) and (G). 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(3) 
Limitations. 

(A) 
Example plan subject requirements section 2727 the PHS Act, under which plan that covers medical and surgical benefits with respect mastectomy must cover reconstructive surgery and certain other services following mastectomy. enrollee who has had mastectomy receives reconstructive surgery August 24.  

(a)(4)(ii), 
(5)
 Construction. 

(2) 

(ii) the case collectively bargained plan, with regard the initial plan year which 

(3) 

(i) 
The specific requirements described paragraphs (a)(1) (a)(2) this section, 
applicable, from which the plan sponsor electing exempt the plan, and statement that, 
general, Federal law imposes these requirements upon group health plans. 

(h) 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(4) 

(i) 
Example (A) 

(B) However, regarding plan years that begin after September 23, 2010, the plan 
sponsor longer can elect exempt its plan from prohibitions against enrollment 
discrimination based health status-related factors. 

(i) 

(2) 

(iv) 
Example non-Federal governmental employer has elected exempt its collectively bargained self-funded plan from the requirements paragraph (a)(1)(i)(E) this section.  The collective bargaining agreement applies five plan years, 2007 through 2011.  For the first three plan years, enrollees are notified annually and the time enrollment the election under this section.  The notice specifies that the election applies the period January Sections 147.108, 147.126, 147.128, 147.132, and 147.138 are added read 
follows: 

 147.108 Prohibition preexisting condition exclusions.   
(a) preexisting condition exclusions(1) general. group health plan, health 
insurance issuer offering group individual health insurance coverage, may not impose any 
preexisting condition exclusion (as defined  144.103 this Part).   

PRELIMINARY DISCUSSION DRAFT 6.11.10 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  
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. 
(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 this Part for determining the application this section grandfathered health plans (providing that grandfathered health plan that group health plan group health insurance coverage must 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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). 
(4) Examples. The rules this paragraph (b) are illustrated the following examples: 
Example (i) Facts. Individual commences employment and enrolls and Fs year-old child the group health plan maintained Fs employer, with first day coverage October 15, 2010. Fs child went 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. 
(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 
Except provided paragraph (b), group health plan, health insurance issuer offering group individual 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 individual 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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 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 

may require coverage certain 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 health plan, health insurance issuer offering group individual health insurance coverage, 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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 policy year beginning after September 23, 2010 but before September 23, 2011, $750,000. 

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

(iii) For plan years policy years beginning after September 23, 2012 but before January 2014, $2,000,000. 
(2) Only essential health benefits taken into account. determining whether individual has received benefits that meet exceed the applicable amount described 

this section will result significant decrease access benefits under the plan health insurance coverage significant increase premiums for the plan health insurance coverage. 
(e) Transitional rules for individuals whose coverage benefits ended reason reaching lifetime limit. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(1) general. The relief provided the transitional rules this paragraph (e) applies with respect any individual 

(i)
 Whose coverage benefits ended under group health plan group individual health insurance coverage 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 limit the dollar value all benefits under the group health plan group individual health 
insurance coverage the first day the first plan year beginning after September 23, 2010 reason the application this section.   

(2) Notice and enrollment opportunity requirements  (i) individual described 
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 notice 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 notice 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
may included with other enrollment materials that plan distributes employees, provided the statement prominent.  For group health plan group health insurance coverage, notice satisfying the requirements this paragraph (e)(2) provided employee whose dependent entitled enrollment opportunity under this paragraph (e), the obligation provide the notice enrollment opportunity under this paragraph (e)(2) with respect that dependent satisfied for both the plan and the issuer. 

(3) Effective date coverage. the case individual who enrolls under paragraph (e)(2) this section, coverage must take effect not later than the first day the first plan year beginning after September 23, 2010.  
(4) Treatment enrollees group health plan. Any individual enrolling group 
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 the 2010 plan year, the plan has lifetime limit the dollar value all benefits.  Individual employee was enrolled Ys group health plan the beginning the 2010 plan year. June 10, 2010, incurred claim 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
for benefits that exceeded the lifetime limit under Ys plan and ceased enrolled the plan. before January 2011, Ys group health plan gives written notice Bs right enroll the plan, and that 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 paragraph (e) providing enrollment opportunity that lasts least days. 

Example (i) Facts. Employer maintains group health plan with plan year beginning October and ending September 30.  Prior October 2010, the group health plan has lifetime limit the dollar value all benefits.  Individual employee and Individual Ds child, were enrolled family coverage under Zs group health plan for the plan year beginning October 2008. May 2009, incurred claim for benefits that exceeded the lifetime limit under Zs plan. dropped family coverage but remains employee 

(ii) 
Conclusion. this Example not later than October 2010, the plan must provide and opportunity enroll (including written notice opportunity enroll) that continues for least days, with enrollment effective not later than October 2010.   

the prohibition annual limits, including the special rules regarding restricted annual limits, 
applies group health plans and group health insurance coverage that are grandfathered health 
plans, but not apply individual health insurance coverage that grandfathered health plan). 
 147.128 Rules regarding rescissions. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(a) 
Prohibition rescissions(1) group health plan, health insurance issuer offering group individual 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) once the individual covered under the plan coverage, unless the individual (or person seeking coverage behalf the individual) performs act, practice, omission that constitutes fraud, unless the individual makes intentional misrepresentation material fact, prohibited the terms the plan coverage. group health plan, health insurance issuer offering group individual health insurance coverage, must provide [at least days] advance notice each participant (in the individual market, primary subscriber) who would affected before coverage may rescinded under this 

(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: 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
 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 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 ago. 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. 
(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 
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 
health plans). 
 147.132 Prohibiting discrimination favor highly compensated individuals. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(a) general. group health plan (other than self-insured plan) must satisfy the requirements section 105(h)(2) the Internal Revenue Code (prohibiting discrimination favor highly compensated individuals under self-insured medical expense reimbursement plan eligibility participate and the benefits provided). 

(b) 
Rules and definitions. The provisions section 105(h) the Internal Revenue Code (and applicable regulations) described this paragraph (b) apply for purposes this section. 

(1) Nondiscrimination rules. The nondiscriminatory eligibility classification rules section 105(h)(3) the Internal Revenue Code and the nondiscriminatory benefits rule section 105(h)(4) the Internal Revenue Code apply group health plan (other than self-insured plan) under this section the group health plan were self-insured medical expense reimbursement plan. 

application this section grandfathered health plans (providing that the rules prohibiting discrimination favor highly compensated individuals insured group health plans not apply grandfathered health plans). 
 147.138 Patient protections. 
(a) Choice health care professional  (1) Designation primary care provider(i) general. group health plan, health insurance issuer offering group individual health 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
insurance coverage, requires 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. 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 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 participating primary care provider who available accept the individual the individuals 
designate physician (allopathic osteopathic) who specializes pediatrics the childs primary care provider the provider participates the network the plan issuer. 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. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(ii) Construction. 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: 
Example (i) Facts. HMO designates for each enrollee physician who specializes internal medicine serve the primary care provider for the enrollee and the enrollees family.  
Enrollee 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). 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 plan may not require authorization referral for obstetrical gynecological care 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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 who authorized under applicable State law provide obstetrical gynecological care and not limited physician.  

(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, 

(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 health insurance coverage with respect coverage obstetrical gynecological care; 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(B) Preclude the group health plan health insurance issuer involved from requiring that 
the obstetrical gynecological provider notify the primary care health care professional the 
plan issuer treatment decisions. 
(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 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. 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 scheduled cesarean section. 
(ii) Conclusion. this Example the plan requirement for prior authorization before providing benefits for scheduled cesarean section does not violate the requirements this paragraph (a)(3) because, though the prior authorization requirement applies services for treatments, does not restrict access any providers specializing obstetrics gynecology. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(4) 
Notice right designate primary care provider. (i) general. group health plan health insurance issuer requires the designation participant, beneficiary, enrollee primary care provider, the plan issuer must provide notice informing each participant (in the individual market, primary subscriber) 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, enrollee can designated;  

(B)
 Under paragraph (a)(2)(i) this section, that any participating physician who specializes pediatrics the childs primary care provider who available accept the participant, beneficiary, enrollee can designated; and 

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: 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
Because [name group health plan health insurance issuer] generally [requires/allows] the designation primary care provider, you have the right designate any primary care provider who participates the network [name plan coverage] and who available accept you your family members.  [If the plan health insurance coverage designates primary care provider automatically, insert: Until you make this designation, [name group health plan health insurance issuer] designates one for you.] For information how select primary care provider, and for list the participating primary care providers, contact the plan administrator [insert contact information].   
(B) For plans and issuers that require allow for the designation primary care 
provider for child, insert: you have child who enrolled [name group health plan health insurance issuer], you have the right designate any pediatrician who participates the network [plan coverage] and who available accept your child your childs primary care provider. [If the plan health insurance coverage designates primary care provider automatically, insert: Until you make this designation, [name group health 
referrals.  For list participating health care professionals who specialize obstetrics gynecology, contact the plan administrator [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). 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(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 services are provided out-of-network basis; 

(ii) 
Without regard whether the health care provider furnishing the emergency services participating network provider with respect the services; 

(iii) the emergency services are provided out network, without imposing any administrative requirement limitation coverage that more restrictive than the requirements limitations that apply emergency services received from in-network providers;  

(iv) the emergency services are provided out network, complying with the cost-
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 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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), (b)(3)(i)(B), and (b)(3)(i)(C) this section (which are adjusted for in-network cost-sharing requirements).  
(A) The amount negotiated with in-network providers for the emergency service furnished, excluding any in-network copayment coinsurance imposed with respect the 
participant, beneficiary, enrollee. there more than one amount negotiated with in-network providers for the emergency service, the amount described under this paragraph (b)(3)(i)(A) [the median these amounts irrespective the number providers charging][the median 
and reasonable charges), excluding any in-network copayment coinsurance imposed with respect the participant, beneficiary, enrollee. 
(C) The amount that would paid under Medicare (part part title XVIII the Social Security Act, U.S.C. 1395 seq.) for the emergency service, excluding any in-network copayment coinsurance imposed with respect the participant, beneficiary, enrollee. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(ii) Other cost sharing. Any cost-sharing requirement other than copayment 
coinsurance requirement (such deductible out-of-pocket maximum) may imposed with 
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. 

(iii) Examples. The rules this paragraph (b)(3) are illustrated the following examples. all these examples, the group health plan covers benefits with respect services emergency department hospital. 
Example (i) Facts. group health plan imposes percent coinsurance responsibility this Example requiring individual pay more for emergency services the individual does not obtain prior authorization, the plan violates the requirement that the plan cover emergency services without the need for any prior authorization determination.  (By contrast, if, have the copayment waived, the plan merely required that receive notification rather than prior authorization, then the plan would not violate the requirement that the plan cover emergency services without the need for any prior authorization determination.) 
Example (i) Facts. group health plan covers individuals who receive emergency services with respect emergency medical condition from out-of-network provider.  The plan has agreements with in-network providers with respect certain emergency service.  

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
Each provider has agreed provide the service for certain amount.  Among all the providers there are five amounts: $85, $100, $110, $120, and $150.  Under the agreement, the plan agrees pay the providers percent the agreed amount, with the individual receiving the service responsible for the remaining percent. 
(ii)
 Conclusion. this Example the median amount among those agreed for the emergency service $110, and the amount under paragraph (b)(3)(i)(A) this section percent $110 ($88). 

Example (i) Facts. Same facts Example Subsequently, the plan adds provider its network and agrees pay the provider percent $170 for the emergency service, with the individual responsible for the remaining percent.   

(ii) Conclusion. this Example the median amount among those agreed for the emergency service $115. (Because there one middle amount among $85, $100, $110, $120, $150, and $170, the median the average the two middle amounts, $110 and $120.) Accordingly, the amount under paragraph (b)(3)(i)(A) this section percent $115 ($92).   

Example (i) Facts. Same facts Example individual covered the plan 
greatest amount $92.80. The individual responsible for the remaining $32.20 charged the 
Example (i) Facts. Same facts Example The group health plan generally imposes $250 deductible for in-network health care. With respect all health care provided out-ofnetwork providers, the plan imposes $500 deductible.  (Covered in-network claims are credited against the deductible.)  The individual has incurred and submitted $260 covered claims prior receiving the emergency service out network. 
(ii) Conclusion. this Example the plan not responsible for paying anything with respect the emergency service furnished the out-of-network provider because the covered 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
individual has not satisfied the higher deductible that applies generally all health care provided out network. 
(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, 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 

(B) Such further medical examination and treatment, the extent they are within the capabilities the staff and facilities available the hospital, are required under section 1867 the Social Security Act (42 U.S.C. 1395dd) stabilize the patient. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(iii) Stabilize. The term stabilize, with respect emergency medical condition (as 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 (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 all grandfathered health plans). Section 147.120 amended revising paragraph (d) read follows: 
(d) Uniformity irrespective age.(1) general. Subject paragraph (d)(2) this 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
DEPARTMENT HEALTH AND HUMAN SERVICES 
Office Consumer Information and Insurance Oversight CFR Subtitle 
review medical records relating the pre-enrollment period. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 146.111(a)(1)(i) revised read follows: 

 146.111 Limitations preexisting condition exclusion period.   
(a) Preexisting condition exclusion(1) Defined(i) preexisting condition exclusion means preexisting condition exclusion within the meaning  144.103 this Part. Section 146.180 amended follows: Revising paragraph (a)(1). Adding new paragraph (a)(2). Renumbering paragraphs (a)(2), (a)(3) and (a)(4) (a)(3), (a)(4) and (a)(5), respectively. Replacing 2706 with 2727 each place appears paragraph (a)(1)(i)(F) and Example paragraph (a)(3) (previously designated (a)(2)). 

 146.180 Treatment non-Federal governmental plans. 
(a) Requirements subject exemption(1) Non-collectively bargained plans. (i) Plan years commencing before September 23, 2010. sponsor non-Federal governmental plan may elect exempt its plan, the extent that the plan not provided through health insurance 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
coverage, (that is, self-funded), for plan years commencing before September 23, 2010, from any all the following requirements: 
(A) 
Limitations preexisting condition exclusion periods described  146.111. 

(B) 
Special enrollment periods for individuals and dependents described  146.117. 

(C)
 Prohibitions against discriminating against individual participants and beneficiaries based health status described  146.121, except that the sponsor self-funded non-Federal governmental plan cannot elect exempt its plan from requirements  
146.121(a)(1)(vi) and  146.122 that prohibit discrimination with respect genetic information. 

(D) Standards relating benefits for mothers and newborns described  146.130. 

(E) 
Parity the application certain limits mental health and substance use disorder benefits described  146.136. 

September 23, 2010, only from one more the requirements described paragraph (a)(1)(i)(D), (E), (F) (G).  With respect those plan years, the notices required paragraph 
(f) this section must reflect the limitations set forth this paragraph (a)(1)(ii). 
(iii) Example non-Federal governmental employer has elected exempt its self-funded group health plan from all the requirements described paragraph (a)(1)(i).  The plan year commences September each year.  The plan not subject the limitations paragraph 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(a)(1)(ii) until the plan year that commences September 2011.  Accordingly, for that plan year and any subsequent plan years, the plan sponsor may elect exempt its plan only from one more the requirements described paragraph (a)(1)(i)(D), (E), (F) and (G). 
(iv) 
Example Same facts Example except the plan year commences October each year. The plan subject the limitations paragraph (a)(1)(ii) beginning with the plan year that commences October 2010. Accordingly, for that plan year and any subsequent plan years, the plan sponsor may elect exempt its plan only from one more the 
requirements described paragraph (a)(1)(i)(D), (E), (F) and (G). 

(2) 
Collectively bargained plans. Without regard paragraph (b)(2) this section, group health plan that governed collective bargaining agreement that was 

(a)(1)(i) this section. The collective bargaining agreement applies five plan years, October 2007 through September 30, 2012. For the plan year that commences October 2012, the plan sponsor longer permitted elect exempt its plan from the requirements described paragraph (a)(1)(i)(A), (B) and (C).  Accordingly, for that plan year and any subsequent plan years, the plan sponsor may elect exempt its plan only from one more the requirements described paragraph (a)(1)(i)(D), (E), (F) and (G). 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(3) 
Limitations. 

(A) 
Example plan subject requirements section 2727 the PHS Act, under which plan that covers medical and surgical benefits with respect mastectomy must cover reconstructive surgery and certain other services following mastectomy. enrollee who has had mastectomy receives reconstructive surgery August 24.  

(a)(4)(ii), 
(5)
 Construction. 

(2) 

(ii) the case collectively bargained plan, with regard the initial plan year which 

(3) 

(i) 
The specific requirements described paragraphs (a)(1) (a)(2) this section, 
applicable, from which the plan sponsor electing exempt the plan, and statement that, 
general, Federal law imposes these requirements upon group health plans. 

(h) 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(4) 

(i) 
Example (A) 

(B) However, regarding plan years that begin after September 23, 2010, the plan 
sponsor longer can elect exempt its plan from prohibitions against enrollment 
discrimination based health status-related factors. 

(i) 

(2) 

(iv) 
Example non-Federal governmental employer has elected exempt its collectively bargained self-funded plan from the requirements paragraph (a)(1)(i)(E) this section.  The collective bargaining agreement applies five plan years, 2007 through 2011.  For the first three plan years, enrollees are notified annually and the time enrollment the election under this section.  The notice specifies that the election applies the period January Sections 147.108, 147.126, 147.128, 147.132, and 147.138 are added read 
follows: 

 147.108 Prohibition preexisting condition exclusions.   
(a) preexisting condition exclusions(1) general. group health plan, health 
insurance issuer offering group individual health insurance coverage, may not impose any 
preexisting condition exclusion (as defined  144.103 this Part).   

PRELIMINARY DISCUSSION DRAFT 6.11.10 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  
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. 
(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 this Part for determining the application this section grandfathered health plans (providing that grandfathered health plan that group health plan group health insurance coverage must 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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). 
(4) Examples. The rules this paragraph (b) are illustrated the following examples: 
Example (i) Facts. Individual commences employment and enrolls and Fs year-old child the group health plan maintained Fs employer, with first day coverage October 15, 2010. Fs child went 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. 
(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 
Except provided paragraph (b), group health plan, health insurance issuer offering group individual 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 individual 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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 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 

may require coverage certain 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 health plan, health insurance issuer offering group individual health insurance coverage, 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
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 policy year beginning after September 23, 2010 but before September 23, 2011, $750,000. 

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

(iii) For plan years policy years beginning after September 23, 2012 but before January 2014, $2,000,000. 
(2) Only essential health benefits taken into account. determining whether individual has received benefits that meet exceed the applicable amount described 

this section will result significant decrease access benefits under the plan health insurance coverage significant increase premiums for the plan health insurance coverage. 
(e) Transitional rules for individuals whose coverage benefits ended reason reaching lifetime limit. 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
(1) general. The relief provided the transitional rules this paragraph (e) applies with respect any individual 

(i)
 Whose coverage benefits ended under group health plan group individual health insurance coverage 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 limit the dollar value all benefits under the group health plan group individual health 
insurance coverage the first day the first plan year beginning after September 23, 2010 reason the application this section.   

(2) Notice and enrollment opportunity requirements  (i) individual described 
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 notice 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 notice 

PRELIMINARY DISCUSSION DRAFT 6.11.10 Not for Public Distribution 
may included with other enrollment materials that plan distributes employees, provided the statement prominent.  For group health plan group health insurance coverage, notice satisfying the requirements this paragraph (e)(2) provided employee whose dependent entitled enrollment opportunity under this paragraph (e), the obligation provide the notice enrollment opportunity under this paragraph (e)(2) with respect that dependent satisfied for both the plan and the issuer. 

(3) Effective date coverage. the case individual who enrolls under paragraph (e)(2) this