The Truth About Waivers: Protecting Coverage for Millions of Americans

Today, you might have seen news stories about waivers from certain provisions of the Affordable Care Act. There has been no shortage of confusion and deliberate obfuscation on this issue and we want to ensure you have the facts.

Under the Affordable Care Act, we have implemented new rules that phase out, by 2014, health insurance companies’ ability to slap restrictive annual dollar limits on the amount they will pay for your care.  But between now and 2014, we also want to make sure workers are able to maintain their existing insurance, because on their own they would likely be shut out of the individual market or face unaffordable options. To do that, the Affordable Care Act allows the Department of Health and Human Services to issue temporary waivers from the annual limit provision of the law if it would disrupt access to existing insurance arrangements or adversely affect premiums, causing people to lose coverage. So far, we have granted 1,372 of these waivers to employers, health plans, and others in all 50 states, covering less than 2 percent of the insurance market and protecting coverage for more than 3.1 million Americans. We have been completely transparent about this process, announcing the waiver process in a regulation last summer, publishing clear guidance on the application process on our website, and posting a list of waivers we have granted on our website.   

These temporary waivers will not be available beginning in 2014 when annual limits are banned and all Americans will have affordable coverage options. And millions of Americans – including many small business owners – will be able to shop for affordable coverage in new competitive marketplaces. 

Some have raised questions about waivers that were recently granted to companies in California. So there’s no confusion, here are the facts:

  • A company called Flex Plan Services is a third-party administrator that provides benefit administration services for employers in a number of states, including: California, Washington, Alaska, and Georgia. One type of plan they administer is known as a health reimbursement arrangements (HRA or employer contributions to a tax free account).  Many of the company’s clients are hotels, restaurants and home health agencies, all of whom employ low-wage workers.
  • On March 23, Flex Plan Services submitted 92 waiver requests on behalf of 45 employer clients. On April 4, 2011, HHS approved the request.
  • HHS applied the same standard to the application from Flex Plan Services that it uses when reviewing any application for a temporary waiver. Waivers 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. 
  • In addition, enrollees must be informed that their plan offers coverage with a restricted annual limit.
  • No other provision of the Affordable Care Act is affected by these waivers: they only apply to the annual limit policy.

The Affordable Care Act puts an end to many of the worst insurance company practices including refusing to sell a policy to a family because someone had cancer or a child has asthma; cancelling coverage when a patient files claims because of an unintentional mistake in their paperwork; and slapping annual or lifetime limits on how much care you can receive. When these rules are fully in place in 2014, our country will be much better off and the cost of coverage will be within reach for the millions of Americans who now live day to day without coverage, worrying about an injury or an illness that could plunge them into bankruptcy. To get from today’s broken system to tomorrow’s patient-centered system takes time and patience through a reasonable transition period. But, together, we will get there.

Richard Sorian is the Assistant Secretary for Public Affairs at the U.S. Department of Health and Human Services.

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