News Release

Affordable Care Act increases transparency for consumers in “mini-med” plans

New rules require insurers to notify consumers if their coverage has lower annual limit; Limits sale of mini-med plans

The Department of Health and Human Services (HHS) today released new guidance that will give consumers more information about their health insurance plan. Under the new rules, health insurers offering “mini-med” plans must notify consumers in plain language that their plan offers extremely limited benefits and direct them to www.HealthCare.gov where they can get more information about other coverage options. HHS has also issued guidance restricting the sale of new mini-med plans except under very limited circumstances.

“The Affordable Care Act is giving consumers more control over their health care by providing them with information about their health insurance options”, said Secretary Kathleen Sebelius. “Now, we’re taking an unprecedented step to ensure consumers are informed when they purchase policies that offer limited coverage”.

The Affordable Care Act will end limited-benefit health insurance plans, sometimes called “mini-med” plans, in 2014 and provide Americans with affordable, high-quality coverage options. Unfortunately, today, mini-med plans are often the only type of private insurance available to some workers. In order to protect coverage for these workers, HHS has issued temporary waivers from rules restricting the level of annual limits to some group health plans and health insurance issuers. Waivers only last for one year and are only available if the plan certifies that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage.

Guidance issued today ensures that consumers in plans with low annual limits are notified of the quality of their health plan so that they can make informed decisions about whether mini-med coverage is right for them. The supplemental guidance requires health plans with waivers to tell consumers if their health care coverage is subject to an annual dollar limit lower than what is required under the law. Specifically, the notice must include the dollar amount of the annual limit along with a description of the plan benefits to which the limit applies. 

Additional guidance issued today also provides new rules on when mini-med plans can continue to be sold. Under limited circumstances, insurers that have obtained a waiver of the annual limit requirement can sell policies to new employers and individuals. 

The Affordable Care Act bans annual dollar limits beginning in 2014. Until then, annual limits are phased out under HHS regulations published in June 2010. For plan years starting between September 23, 2010 and September 22, 2011, plans may not limit annual coverage of essential health benefits such as hospital, physician and pharmacy benefits to less than $750,000. The restricted annual limit will be $1.25 million for plan years starting on or after September 23, 2011, and $2 million for plan years starting between September 23, 2012 and January 1, 2014.

More information about the new guidance can be found at http://www.healthcare.gov/news/factsheets/increasing_transparency.html. The guidance can be found at http://www.hhs.gov/ociio/regulations/annual_limit_waivers.html.

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Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.

Last revised: January 03, 2011