A Quick Look at Consumer Health Coverage and Protections

Coverage changes and consumer protections are among the biggest provisions of the Patient Protection and Affordability Care Act (ACA). A number of the more sweeping changes take effect January 1, 2014. Here’s your quick reference guide:


Guaranteed availability of insurance: Requires guarantee issue and renewability of health insurance for individuals and business groups.


No annual limits: Prohibits annual dollar limits on coverage for Essential Health Benefits.


Rating variation limits: Allows rating variation in the Individual and Small Group market and health insurance exchanges based only on:

• Age – limited to a 3:1 ratio. This means that the rate for a 64-year-old can’t be more than three times (i.e., 300 percent) the rate for a 21-year-old.

• Geographic area.

• Family composition – with member-level rating applied. Instead of composite rating, each family member will be rated individually. Carriers can charge only for the three oldest children in the family who are under 21. For example, in a family of six, the rate would be the subscriber rate + spouse rate + the 0-21 rate x 3.

• Tobacco use (limited to 1.5:1 ratio).

Note: Health Net will not be factoring tobacco use into our rates.


Limits on waiting periods: Group health plans and health insurers may not apply a waiting period that exceeds 90 days. California law limits the waiting period to 60 days.


Annual limitation on cost-sharing and deductibles: The annual cost-sharing incurred must not exceed the maximum out-of-pocket amounts of $6,350/$12,700 for self-only and family coverage.

The annual deductible for Small Group plans may generally not exceed $2,000 for self-only coverage or $4,000 for family coverage (certain exceptions apply).


No pre-existing conditions exclusions: Plans may not impose any pre-existing condition exclusions.


Essential Health Benefits: All health plans offered in the Individual and Small Group markets must provide a comprehensive package of items and services that are called Essential Health Benefits, which fit in 10 categories:

• ambulatory patient services

• emergency services

• hospitalization

• maternity and newborn care

• mental health and substance use disorder services, including behavioral health treatment

• prescription drugs

• rehabilitative and habilitative services and devices

• laboratory services

• preventive and wellness services, and chronic disease management

• pediatric services, including dental and vision care

The benefits generally will be based on those provided now in the Small Group market with some variation from state to state.


Wellness programs: Permits employers to offer employees rewards of up to 30%, potentially increasing to 50%, of the cost of coverage for participating in a wellness program and meeting certain health-related standards.

If certain conditions are met, health plans may provide a discount or rebate when an individual satisfies a standard related to a health factor.


Every Health Net nongrandfathered plan (effective January 1, 2014, and later) will satisfy all ACA requirements. We’re here to work with you to evaluate your plans, coverage and options for 2014 and beyond.


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Stacy Madden