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Administration Lays Down Rules For Future Health Insurance

You've got questions about the health law? The Obama administration has some answers. Finally.

Now that the Supreme Court has found the Affordable Care Act constitutional and the president's re-election made clear that big chunks of the law will take effect Jan. 1, 2014, the administration is finally releasing rules of the road that states and insurance companies have been clamoring for.

The big one makes clear how companies will have to comply with anti-discrimination requirements starting in 2014. The law requires that health insurance be made available to everyone regardless of health status and that people with pre-existing conditions not be charged higher premiums.

Premiums are allowed to vary according to certain factors, including age, smoking status, location and family size. But, and it's an important but, coverage can't be cancelled because of an illness.

"The proposed rules and guidance we're releasing today would make it illegal for insurance companies to discriminate against the approximately 129 million Americans with pre-existing health conditions," Health and Human Services Secretary Kathleen Sebelius told health reporters on a conference call.

The rules could still change some, but there's not much time for people to complain or ask for tweaks. The comment period ends Dec. 26.

A second rule lays out more detail on how states and insurance plans will have to determine which benefits to offer. This is the third iteration of the rule regarding so-called essential health benefits. The department said it received more than 11,000 public comments on the first two documents it published on the subject.

This rule continues to stipulate that every health plan for individuals and small businesses offer a core package of benefits. The requirements are grouped into 10 separate categories, including inpatient and outpatient care, maternity care, prescription drugs and laboratory services.

The rule also seeks to establish that the minimum benefits "be equal in scope to benefits offered by a 'typical employer plan.' " The precise plan, however, will vary by state, since generosity of benefits tends to vary by state.

The rule allows states to pick an existing plan as a benchmark for measure new plans. The yardstick plan can be:

(1) the largest plan by enrollment in any of the three largest products in the state's small group market; (2) any of the largest three state employee health benefit plans options by enrollment; (3) any of the largest three national Federal Employees Health Benefits Program (FEHBP) plan options by enrollment; or (4) the largest insured commercial HMO in the state.

If a state doesn't select a benchmark plan, HHS will use option 1, the largest plan for small groups in the state.

The National Retail Federation was generally pleased with the administration's action. "We appreciate the Administration's outreach and general restraint in these proposed regulations," said NRF's Neil Trautwein in a statement. "It is important that essential health benefits echo available market coverage today. More extensive but unaffordable coverage would help no one in the end."

The rule also lays out a complex formula to help consumers figure out how much each plan (labeled a little like Olympic medals) will cover in medical bills. Generally, bronze plans will cover 60 percent of costs, silver plans 70 percent, gold plans 80 percent and platinum plans 90 percent.

Finally, the administration is laying out rules to govern the use of employer-provided "wellness programs." These popular programs encourage employees to meet certain health goals, such as losing weight, quitting smoking, or lowering cholesterol.

The rules spell out that programs must not be "overly burdensome" and must provide a "reasonable alternative means of qualifying for the reward" for individuals whose medical conditions "make it unreasonably difficult, or for whom it is medically inadvisable, to meet the specified health-related standard."

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