Exec Summary - Lifetime Limits

No Lifetime Limits on Essential Benefits


Who:             Any individual covered by an insurance plan or a self-insured contract providing group or individual health coverage.


When:          Plan years beginning on or after September 23, 2010. For most plans, this date is likely to be January 1, 2011.



Summary:  Group and individual health coverages cannot have dollar restrictions on lifetime limits for government defined “essential benefits.”  However, prior to January 1, 2014, plans may establish a “restricted annual limit” on the dollar value of essential benefits. 


A plan using a “restricted annual limit” must ensure that there is access to needed services.  The law states, “In defining the term ‘restricted annual limit’ the Secretary of Health and Human Services (HHS) shall ensure that access to needed services is made available with a minimal impact on premiums.”   NOTE: As of October 2010, HHS has not clarified “restricted annual limits” or established standards for determining “access to needed services.”


The law defines “Essential health benefits” as follows:

·         Ambulatory patient services

·         Emergency services

·         Hospitalization

·         Maternity and newborn care

·         Mental health and substance use disorder services, including behavioral health treatment.  Note: Mental health parity is required under the legislation.

·         Prescription drugs

·         Rehabilitative and habilitative services and devices

·          Laboratory services

·         Preventive and wellness services and chronic disease management

·         Pediatric services, including oral and vision care


Plans can place dollar annual limits or dollar lifetime limits on covered benefits that are not “essential health benefits.”  Note: As of October 2010, HHS has not defined “essential health benefits” beyond the general service categories listed above.



Required:  Most employers will want to discuss the new legislation with their insurer, TPA,               agent,

 broker, or benefit consultant.  Currently, some plans use dollar limits for certain benefits. With the exception of the mental health parity requirement, plans may be able to implement day limits, visit limits, episodic limits, or other allowed coverage restrictions for benefits classified as “essential health benefits”.  The law only states that plans cannot use dollar lifetime limits for “essential health benefits.”


The information presented and contained within this article was submitted by Ronald E. Bachman, President & CEO of Healthcare Visions This information is general information only, and does not, and is not intended to constitute legal advice. You should consult your legal advisors to determine the laws and regulations impacting your business.