This chart contains an illustrative summary of some of the new health reform provisions and does not cover all the
specifics of the provisions. This chart provides an informal explanation of the new health reform provisions and should
not be considered legal advice or interpretive guidance.
Application of the New Health Reform Provisions of Part A of Title XXVII of the PHS Act to Grandfathered Plans
PHS Act Section Summary of Provision Application to Grandfathered plans
§2701 Fair health insurance
premiums
Health insurance issuers may not charge
discriminatory premium rates. The rate may
vary only by whether such plan or coverage
covers an individual or family, rating area,
actuarial value, age, and tobacco use.
Not applicable; also does not apply
to large group insurance market
coverage in States that do not
allow such coverage to be offered
through the State exchanges.
§2702 Guaranteed availability of
coverage
Health insurance issuers in both the individual
and group markets must accept every employer
and individual in the State that applies for
coverage, but are permitted to limit enrollment
to annual open and special enrollment periods
for those with qualifying lifetime events.
Not applicable
§2703 Guaranteed renewability
of coverage
Requires guaranteed renewability of coverage
regardless of health status, utilization of health
services, or any other related factor. Coverage
can only be cancelled under specific,
enumerated circumstances.
Not applicable
§2704 Prohibition of preexisting
condition exclusion or other
discrimination based on health
status
Group health plans and health insurance issuers
offering group or individual coverage may not
impose a preexisting condition exclusion or
discriminate based on health status.
Applicable to grandfathered group
health plans and group health
insurance coverage.
Not applicable to grandfathered
individual health insurance
coverage.
§2705 Prohibiting discrimination
against individual participants
and beneficiaries based on health
status
Retains the HIPAA
1
nondiscrimination
provisions for group health plans and group
health insurance issuers. Specifically, plans and
group health insurance issuers may not set
eligibility rules based on factors such as health
status and evidence of insurability – including
acts of domestic violence or disability. Provides
limits on the ability of plans and issuers to vary
premiums and contributions based on health
status.
The Affordable Care Act adds new provisions
regarding wellness programs and extends all the
nondiscrimination protections to the individual
market.
The HIPAA nondiscrimination
provisions are applicable to
grandfathered group health plans
and group health insurance issuers.
The new Affordable Care Act
extensions are not applicable to
grandfathered group health plans
and group health insurance
coverage.
Not applicable to grandfathered
individual health insurance
coverage.
§2706 Nondiscrimination in
health care
Prohibits discrimination by group health plans
and health insurance issuers against health care
providers acting within the scope of their
professional license and applicable State laws.
Not applicable
§2707 Comprehensive health
insurance coverage
Requires health insurance issuers in the small
group and individual markets (and large group
markets in State exchanges) to include coverage
which incorporates defined essential benefits,
provides a specified actuarial value, and requires
all group health plans to comply with limitations
on allowable cost sharing.
Not applicable
1
HIPAA is the Health Insurance Portability and Accountability Act of 1996.
This chart contains an illustrative summary of some of the new health reform provisions and does not cover all the
specifics of the provisions. This chart provides an informal explanation of the new health reform provisions and should
not be considered legal advice or interpretive guidance.
§2708 Prohibition on excessive
waiting periods
Prohibits any waiting periods that exceed 90
days for group health plans and group health
insurance coverage.
Applicable
§2709
2
Coverage for individuals
participating in approved clinical
trials
Prohibits health insurance issuers from dropping
coverage because an individual (who requires
treatment for cancer or another life-threatening
condition) chooses to participate in a clinical
trial. Issuers also may not deny coverage for
routine care that they would otherwise provide
because an individual is enrolled in a clinical
trial.
Not applicable
§2711 No lifetime or annual
limits
Prohibits group health plans and health
insurance issuers offering group or individual
health insurance coverage from establishing
lifetime limits and annual limits on the dollar
value of benefits. Prior to 2014, plans and
issuers may establish certain restricted annual
limits (as defined in regulations).
Prohibition on lifetime limits:
Applicable
Prohibition and limits on annual
limits: Applicable to grandfathered
group health plans and group
health insurance coverage; not
applicable for grandfathered
individual health insurance
coverage.
§2712 Prohibition on rescissions Group health plans and health insurance issuers
may not rescind health coverage after coverage
begins except in the case of fraud or intentional
misrepresentation.
Applicable
§2713 Coverage of preventive
health
Group health plans and health insurance issuers
offering group or individual health insurance
coverage must cover certain preventive services,
immunizations, and screenings, without any cost
sharing.
Not applicable
§2714 Extension of dependent
coverage
Group health plans and health insurance issuers
offering group or individual health insurance
coverage that provide dependent coverage must
continue to make such coverage available to
children until age 26.
Applicable
3
2
After the amendments made by the Affordable Care Act, there are two PHS Act sections 2709. The first
section 2709 was PHS Act section 2713 before the amendments made by the Affordable Care Act and was
redesignated PHS Act section 2733 by section 1001(3) of the Affordable Care Act and then, as PHS Act
section 2733, was again redesignated by section 1562(c)(10) of the Affordable Care Act as PHS Act section
2709. The second section 2709 was added by section 10103 of the Affordable Care Act and relates to
coverage for individuals participating in approved clinical trials. Grandfathered health plans are subject to
the first PHS Act section 2709 because as PHS Act section 2713 it was part of the PHS Act before the
enactment of the Affordable Care Act. However, grandfathered health plans are not subject to the second
PHS Act section 2709.
3
For a group health plan or group health insurance coverage that is a grandfathered health plan for plan
years beginning before January 1, 2014, PHS Act section 2714 is applicable in the case of an adult child
only if the adult child is not eligible for other employer-sponsored health plans coverage. The interim final
regulations relating to PHS Act 2714, published in 75 FR 27122 (May 13, 2010), and these interim final
regulations clarify that, in the case of an adult child who is eligible for coverage under the employer-
sponsored plans of both parents, neither parent’s plan may exclude the adult child from coverage based on
the fact that the adult child is eligible to enroll in the other parent’s employer-sponsored plan.
This chart contains an illustrative summary of some of the new health reform provisions and does not cover all the
specifics of the provisions. This chart provides an informal explanation of the new health reform provisions and should
not be considered legal advice or interpretive guidance.
§2715 Development and
utilization of uniform
explanation of coverage
documents and standardized
definitions
Requires the Federal government to develop
standards for use by group health plans and
health insurance issuers in compiling and
providing an accurate summary of benefits and
explanation of coverage for applicants,
policyholders or certificate holders, and
enrollees. The explanation of coverage must
describe any cost sharing, exceptions,
reductions, and limitations on coverage, and
give examples to illustrate common benefits
scenarios.
Applicable
§2715A Provision of additional
information
Requires group health plans and health
insurance issuers offering group or individual
health insurance coverage to disclose, to the
Federal government and the State insurance
commissioner, certain enrollee information such
as claims payment policies and practices and
enrollee rights. Requires such plans and issuers
to provide information to enrollees on the
amount of cost-sharing for a specific item or
service.
Not applicable
§2716 Prohibition on
discrimination in favor of
highly-compensated individuals
Prohibits fully-insured group health plans from
discriminating in favor of highly compensated
individuals with respect to eligibility and
benefits.
Not applicable
§2717 Ensuring quality of care Requires the Federal government to develop
guidelines for use by health insurance issuers to
report information on initiatives and programs
that improve health outcomes. Prohibits a
wellness program from requiring the disclosure
or collection of any information relating to the
presence or storage of a lawfully possessed
firearm or ammunition in the residence or the
lawful use, possession or storage of a firearm or
ammunition by an individual.
Not applicable
§2718 Bringing down cost of
health care coverage (medical
loss ratio provisions)
Requires health insurance issuers offering group
or individual health insurance coverage to
submit annual reports to the Federal government
on the percentages of premiums that the
coverage spends on reimbursement for clinical
services and activities that improve health care
quality, and to provide rebates to enrollees if this
spending does not meet minimum standards for
a given plan year.
Applicable to insured
grandfathered plans
§2719 Appeals process Group health plans and health insurance issuers
offering group or individual health insurance
coverage must provide an effective internal
appeals process of coverage determinations and
claims and comply with any applicable State
external review process. If the State has not
established an external review process that
meets minimum standards or the plan is self-
insured, the plan or issuer shall implement an
external review process that meets standards
established by the Federal government.
Not applicable
This chart contains an illustrative summary of some of the new health reform provisions and does not cover all the
specifics of the provisions. This chart provides an informal explanation of the new health reform provisions and should
not be considered legal advice or interpretive guidance.
§2719A Patient protections Group health plans and health insurance issuers
offering group or individual health insurance
coverage must permit an individual to select a
participating primary care provider, or
pediatrician in the case of a child. Provides
direct access to obstetrical or gynecological care
without a referral. Prohibits prior authorization
or increased cost sharing for out-of-network
emergency services.
Not applicable
