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Small Business Employee Benefits and HR Blog

Health Reform - New Annual and Lifetime Limits Requirements

August 4, 2010
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annual lifetime limitsEffective September 23, 2010, the health reform bill prohibits group health insurance plans from imposing lifetime limits on essential health benefits.  However, plans may impose certain annual limits on essential health benefits until January 1st, 2014.  This new requirement applies to plans with effective dates of coverage on September 23, 2010 or later. 

The annual limits restrictions phase in over the next few years as follows:
    • Phase 1 (September 23, 2010 through September 22, 2011) - $750,000 maximum per participant

    • Phase 2 (September 23, 2011 through September 22, 2012) - $1,000,000 maximum per participant

    • Phase 3 (September 23, 2012 through December 31, 2013) - $2,000,000 maximum per participant

    • Phase 4 (January 1st, 2014 Year 5 and beyond) - no annual limit allowed 


Health Reimbursement Arrangements (HRAs)

Health Reimbursements Arrangements are not affected by these requirements provided an underlying plan complies with the dollar limit rules.

Flexible Spending Accounts (FSAs)

Flexible Spending Accounts are not affected by these requirements.

Health Savings Accounts (HSAs)

Health Savings Accounts are not affected by these requirements.

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Photo Credit: Flickr,  julian-

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