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HHS Annual Limit Waiver Program

September 22, 2010


The Patient Protection and Affordable Care Act restricts an employer’s ability to impose annual dollar limits on “essential health benefits” for any participant or beneficiary in a group health plan with a plan year beginning on or after September 23, 2010.

Interim final regulations issued in June provided that an employer health plan could retain annual limits if the Secretary of Health and Human Services (“HHS”) granted a waiver to the employer.  Such a waiver would be granted if removing the annual limits would result in either (1) a significant decrease in access to benefits or (2) a significant increase in premiums.  No other details regarding this program were provided.

On September 3, 2010, HHS issued guidance relating to the annual limit waiver program.  A group health plan or health insurance issuer may apply for a waiver for its plan year beginning between September 23, 2010 and September 23, 2011 by submitting an application not less than 30 days before the beginning of such plan year, or, in the case of a plan year that begins before November 2, 2010 not less than 10 days before the beginning of such plan year. The application must include:

1. The terms of the plan for which a waiver is sought;

2. The number of individuals covered by the plan;

3. The annual limit(s) and rates applicable to the plan;

4. A brief description of why compliance with the restriction on annual limits would result in a significant decrease in access to benefits for those currently covered by the plan, or a significant increase in premiums paid by those covered by the plan, along with any supporting documentation; and

5. An attestation, signed by the plan administrator or Chief Executive Officer of the issuer of the coverage, certifying 1) that the plan was in force prior to September 23, 2010, and 2) that the application of the restricted annual limits to the plan would result in a significant decrease in access to benefits for those currently covered by the plan, or a significant increase in premiums paid by those covered by the plan.

HHS will process complete waiver applications within 30 days of receipt.  A waiver approval granted under this program applies only for the one plan year beginning between September 23, 2010 and September 23, 2011. A group health plan or health insurance issuer must reapply for any subsequent plan or policy year.