Limited Benefit Plans
Limited Benefit Plans have not been well received since their inception, many health insurers have resisted offering them, and there hasn’t been a strong customer demand for them either despite their low-cost.
Given the economic climate that we are facing across the country, these stripped down health plans have been generating more chatter than in past years.
There are several states that have passed legislation to allow for limited benefit plans to be offered that do not contain the entire list of madated benefits that major medical plans are required to provide
According to Statecoverage.net the list of states that allow for exceptions to state mandates are as follows:
- Arkansas - The Health Insurance Consumer Choice Act of 2001 allowed health insurers and HMOs to offer health insurance plan options to consumers that include all, some, or none of the Arkansas coverage mandates; and requires certain disclosures to be made to consumers so they may make a fully informed choice of offerings.
- Colorado - In 2003, the Colorado legislature passed HB 1164, which requires carriers in the small group market to offer one of three basic health benefit plans: Basic Health Benefit Plan without specified mandates; Basic High Deductible Health Benefit Plan; or Basic High Deductible Plan without specified mandates.
- Florida - In 2002, the Florida legislature passed SB46E, which allowed a Health Flex Plan to be sold by insurers, HMOs, provider-sponsored organizations, and public or private community-based organizations as a pilot in areas of the state with a high uninsured rate.
- Georgia - In 2005, Georgia enacted the Georgia Consumer Choice Benefits Health Insurance Plan Act which allows health plans to offer products without all of the state mandated benefit requirements.
- Kentucky - In 2005, the Kentucky legislature passed HB278, the Small Business Insurance Relief Act, which creates a state-established basic health benefit plan to make insurance more affordable by tailoring benefits to specific needs. Available to groups with less than 50 employees
- Maryland - The Minimum Benefit Legislation (SB 570), enacted in 2004, requires carriers who insure > 10 percent of the covered lives in the small group market to offer a limited-benefit plan.
- Minnesota - In 2005, the Minnesota legislature enacted a new law that allows health plans to sell “small employer flexible benefit plans” that do not include any of the benefit mandates (except maternity).
- Montana - In 2003, the Montana legislature passed HB 384 which allowed for limited-benefit plans to be available to those who purchase health insurance in the individual market as long as they are notified which services are not covered and have remained uninsured for 90 days or more.
- New Jersey - In 2002, the New Jersey legislature passed legislation which required individual market carriers to offer a limited-benefit plan, called Basic and Essential Health Care Services Plan (B&E).
- North Dakota - In 2001, the North Dakota legislature passed HB 1226, The Individual and Small Employer Health Insurance Act, which allows an insurance company to offer a basic health insurance policy to individuals and small businesses with 50 or fewer employees.
- Texas - Beginning in 2004, Texas required all small employer insurance carriers to offer at least one plan offering all the mandated benefits by law, and at least one Consumer Choice Plan that may exclude or limit coverage of certain mandated benefits.
- Utah - In 2002, the legislature passed HB 122, which permitted insurance carriers to offer coverage that is similar to what is covered under Utah ’s 1115 Medicaid waiver (Utah ’s Primary Care Network).
- Washington - In 2004, Washington passed legislation redefining the small group market, changing group size to 2 to 50, from 1 to 50.
