The Internal Revenue Service (IRS) on May 14 issued Revenue Procedure 2009-29 providing inflation-adjusted limits for health savings accounts (HSAs) for use in 2010.

The annual contribution limits have been increased to:

• $3,050 for those with self-only coverage (up $50 from 2009)
• $6,150 for those with family coverage (up $200 from 2009)

As in previous years, you must be covered under a High Deductible Health Plan (HDHP) to qualify to make an HSA contribution. The limits defining what qualifies as an HDHP have also been increased for 2010:

• Self-only coverage must have a deductible of at least $1,200 (up $50 from 2009)
• Family coverage must have a deductible of at least $2,400 (up $100 from 2009)

These updates for 2010 will allow you to shelter even more of your investment dollars from taxes since any contribution to an HSA counts as a full deduction at the end of the year in addition to the ability to pay for nearly any medical expense with tax-free distributions from the account.

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The House and Senate have approved a compromise budget resolution that sets parameters for spending and revenue legislation. As requested by the President, the budget resolution includes a reserve fund for health care reform initiatives that must be deficit-neutral for fiscal years 2009 through 2014 or fiscal years 2009 through 2019. The resolution allows Medicare physician payment legislation, that would likely prevent cuts to physician payment rates for two years, to be exempt from the deficit-neutral requirement.

The budget resolution also allows for the ability to consider health care reform legislation under the reconciliation process. Reconciliation is a procedure that Congress may use to make it easier to pass budget bills related to tax and entitlement spending programs. A reconciliation bill can not be filibustered as debate is limited to 20 hours, and this allows a bill to be passed quickly with a simple majority vote.

Tags: Health care reform, health care reform agreement

1) What is the effective date of changes mandated by Public Act 95-0958?

The changes need to be reflected in individual and group health insurance policies and HMO contracts as they are delivered, issued, or renewed on and after June 1, 2009. Policies in force prior to June 1, 2009, will have to reflect the changes on the first renewal date after June 1, 2009, and no later than May 31, 2010.

2) Does the law require group and individual policies to provide dependent coverage?

No. The law only applies if dependent coverage is included in the policy.

3) Who must be covered under the law?

Policies that include dependent coverage must allow unmarried dependents under the age of 26 to apply for coverage. In addition, policies must allow military veteran dependents under age 30 to apply for coverage if the military veterans:1) are Illinois residents; 2) are not married; 3) have served in the active or reserve components of the U.S. Armed Forces (which includes the National Guard); and 4) have received a release or discharge other than a dishonorable discharge.

To prove that they have served in the U.S. Armed Forces and received a release or discharge other than a dishonorable discharge, veterans must submit to insurers a DD2-14 (Member 4 or 6), otherwise known as a “Certificate of Release or Discharge from Active Duty.”

A policy shall not condition eligibility for dependent coverage on enrollment in any educational institution.

4) Do covered dependents need to re-apply for coverage?

No. After June 1, 2009, dependents covered under a policy at the time of that policy’s delivery, issuance or renewal do not need to re-apply. After June 1, 2009, dependents not covered at the policy’s delivery, issuance or renewal may need to re-apply for coverage.

5) When will dependents be allowed to enroll?

a) Policies in force as of June 1, 2009 must provide for a 90-day open enrollment period for all dependents that meet the criteria established in (3) beginning on the policy renewal date, but not later than May 31, 2010. During the initial 90-day enrollment period, requirements for creditable coverage, continuous coverage or breaks in coverage may not be applied, but preexisting condition limitations may be applied if creditable coverage has not been established.

b) Policies issued on or after June 1, 2009 must provide for a 90-day open enrollment period for all dependents that meet the criteria established in (3). The 90-day open enrollment requirement only applies to policies issued on or before May 31, 2010. During the initial 90-day enrollment period, requirements for creditable coverage, continuous coverage or breaks in coverage may not be applied, but preexisting condition limitations may be applied if creditable coverage has not been established.

c) After the initial 90-day open enrollment period, insurers must provide eligible dependents not already covered under the policy annual enrollment during an open enrollment period. For policies that do not currently provide for an open enrollment period, enrollment must be allowed for the 30-day period prior to the policy’s annual renewal date or anniversary date if the policy does not have a renewal date. During this annual enrollment period the insurer may decline coverage if the dependent does not meet the requirement of 90 days of continuous coverage without a break in coverage of more than 63 days. If the dependent meets these requirements, preexisting condition limitations may not be imposed.

d) This law does not change HIPAA special enrollment requirements. As such, an eligible dependent that meets the limiting age requirements of P.A. 095-0958, may be added to a group policy if a HIPAA special enrollment event occurs.

6) Can the insurer decline coverage for eligible dependents due to health conditions?

No policy may decline coverage to an eligible dependent due to age (as defined in P.A. 095-0958), health status, or enrollment in an educational institution. The law does not otherwise restrict the definition of dependent. However, the Division will take appropriate enforcement action if the Division finds that an insurer imposed any eligibility requirement as a proxy for age (e.g., restricting coverage based on IRS dependency rules).

During the annual enrollment period, the insurer may decline coverage if the dependent does not meet the requirement of 90 days of continuous coverage without a break in coverage of more than 63 days. If the dependent meets these requirements, preexisting condition limitations may not be imposed.

7) Will companies be required to amend existing policies in order to comply with new enrollment and eligibility requirements?

Yes. Companies must amend an existing policy if the policy does not currently contain a provision for annual open enrollment or if the definition of “dependent” does not conform with these new requirements. For example, an individual policy that is guaranteed renewable and contains no open enrollment provision and has no renewal date must be amended to establish an enrollment period for the 30-day period preceding the annual anniversary date. In addition, if the policy’s definition of dependent varies from the requirements established by this new law, that definition will need to be amended.

Any required amendments to in-force polices must be incorporated by way of a rider that must be filed with and approved by the Director.

After the effective date of the new law, policies will either need to be refiled or amended to accommodate these new requirements or must be issued with a rider in order to be in compliance.

8.) Does the dependent coverage law apply to dental and vision plans?

Yes. Because the new law applies to all accident and health plans, the dependent coverage requirement applies to dental and vision plans.

Tags: HB 5285, Illinois dependent age increase, Illinois dependent age limit change, Illinois dependent age limit frequently asked questions, Illinois depenent age law, Illinois insurance dependent age law

Every day, thousands of individuals are rejected by insurance companies because of pre-existing medical conditions such as diabetes, obesity, and heart problems. Now with the Guaranteed Issue Health Insurance offered by Homeland HealthCare Plans, people who are uninsurable under traditional health insurance policies can now obtain insurance coverage with no medical exams required, no health questions and possibly no waiting period if you’re eligible. If you are suffering from diabetes, obesity, heart problems, rheumatoid arthritis, and other medical conditions, you can have health coverage when you purchase guaranteed issue health insurance.

Although there are many companies offering this type of insurance product, not all of these companies provide reliable guaranteed health plans. Most options on the internet today are discount cards and should never be mistaken for actual insurance. Faulty guaranteed issue programs have left consumers with millions of dollars worth of unpaid claims and medical debt.

With Homeland HealthCare Plans, the guaranteed issue health insurance products are not only underwritten by an “A rated” insurance company, but they are HIPAA compliant, meaning if you have credible coverage when applying, your waiting period would be waived. However, Guaranteed Issue Health Insurance should not be looked at as a replacement for major medical insurance. These are defined benefit plans designed solely for people who aren’t able to obtain traditional major medical plans. If you’ve been declined for health insurance, visit Homeland HealthCare Plans website.

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