On Jan. 29, 2015, Insurance and Safety Fire Commissioner Hudgens issued Executive Directive 15-EX-2 related to hospital and other fixed indemnity insurance products. The state has implemented new procedures and enforcement to align with federal requirements for such policies. As background, in May 2014, CMS issued final regulations related to fixed indemnity insurance products. An individual fixed indemnity policy would be exempt from PPACA's coverage mandates (regarding, for example, essential health benefits, annual dollar limits and maximum out-of-pocket limits) if it qualified as a HIPAA-excepted benefit. To qualify as an excepted benefit:
To qualify as an excepted benefit:
The policy must only cover individuals who have other coverage considered minimum essential coverage (MEC).There is no coordination of benefits with another health plan.The benefits are paid as a fixed-dollar amount per day or service regardless of the amount incurred.The participant is provided with a written notice explaining that the policy would not qualify as MEC for individual mandate purposes.
For new policies issued with an effective date beginning on or after Jan. 1, 2015, the Georgia Department of Insurance requires that the participant certify that they have other coverage that qualifies as MEC. There is a safe harbor extension until no later than May 1, 2015 for issuers that filed policy form amendments by Oct. 1, 2014 (to allow previously approved amendments to be finish the their use for the year). For coverage that is already in force or that will take effect later in 2015, the notice and attestation requirements would apply to the first renewal application with an effective date on or after Oct. 1, 2016.
An employer offering fixed indemnity products to employees should review them carefully for compliance.
Executive Directive 15-EX-2 »