For LIUNA health and welfare funds, the first of a myriad of new rules under the Patient Protection and Affordable Care Act and Reconciliation Bill (PPACA) took effect on September 23, 2010. Anticipating the changes, LIUNA funds had already begun implementing some of them.
The two changes that will have the most immediate impact are the extension of coverage to age 26 for adult children and the elimination of lifetime and annual maximums. All lifetime dollar maximums on essential benefits are barred, effective the first plan year after September 23, 2010. Also on that date, annual dollar maximums cannot be less than $750,000, and they must increase to $1.25 million in 2011 and $2 million in 2012. After September 23, 2013, no annual limits on essential benefits are allowed.
The changes come with increased cost for LIUNA’s health and welfare funds. While funds must cover some participants for a longer period, they also must insure themselves against accumulating, open-ended chronic illness claims as well as the possibility of catastrophic claims. These added costs could become an issue in future wage and benefit negotiations between LIUNA and its signatory employers.
The contradictory nature of the Patient Protection and Affordable Care Act and Reconciliation Bill was discussed extensively at the 2010 LIUNA Tri-Fund Conference (see Health Care Reform Legislation in Spotlight in San Diego). Further regulatory developments will be monitored and evaluated by the LHSFNA’s Health Promotion Division. To access updates and information as it becomes available, sign up for free notifications at the LIFELINES subscription service.