Big Changes Ahead for Limited Medical Industry as a Result of Health Care Reform

AUSTIN, Texas--(BUSINESS WIRE)-- With the passage of the Patient Protection and Affordable Care Act (“PPACA”) and the Health Care and Education Reconciliation Act of 2010, Americans face a new era in health insurance. While there is still much guidance to come from the government, Fringe Benefit Group today announced it is providing answers and resources about the future of limited medical plans for employers and the insurance advisors who serve them at

“Major changes to the limited medical industry are coming this Fall and right now is the calm before the storm,” said John Conkling, vice president of national accounts for Fringe Benefit Group. “Coinsurance-based, expense incurred limited medical plans will be subject to new rules. Brokers who currently market limited medical plans – or have customers utilizing limited medical plans – should contact their carrier partner immediately to find out their product strategy as a result of health care reform. They should ask ‘How will health care reform affect renewals? Are you still accepting new business?’ If the carrier can’t give you straight answers, find a new limited medical partner who can.”

Employers utilizing limited medical plans (also known as limited benefit plans or mini-meds) are facing many changes, beginning as soon as September 24, 2010 when grandfathered health insurance plans begin to renew. Group health plans, even those which have been grandfathered, will have to meet new requirements, including no lifetime and annual limits, on or after September 23, 2010. All limited medical plans that were considered “group health insurance plans;” plans that issued Letters of Creditable Coverage under HIPAA; plans identified as Limited Major Medical Plans that function similarly to traditional group plans with co-pays, deductibles, co-insurance and an annual overall maximum or a separate inpatient/outpatient maximum; will be subject to these new regulations effective September 23, 2010.

Within the limited medical industry, there are two styles of limited medical benefit plans: coinsurance (sometimes referred to as co-pay based or expense incurred) and indemnity-based (sometimes called fixed indemnity) insurance. Fixed indemnity style limited medical plans that do not issue creditable coverage letters or represent themselves as a “true group health insurance plan” are exempt from the new regulations because they are filed as supplemental and not subject to these new regulations, as opposed to the coinsurance-based limited medical plans, which are.

Employer groups renewing after September 23, 2010 that are currently on a limited medical plan subject to the health care reform rules regarding the removal of annual and lifetime limits have several options:

1) Their carrier will not renew the plan because it cannot meet the new rules;

2) They are renewed with significant rate increases; or

3) They move to a fixed indemnity style limited medical plan, such as Framework Health Plan.

“We’re moving forward with our fixed indemnity limited medical product and we will continue to invest in technology and customer service to assist our customers. We understand things are going to change in our industry, but we have a go-forward plan in place to help our current and prospective customers right now,” said Brian Robertson, executive vice president of Fringe Benefit Group. “We are only five months away from October renewals and most customers want and need to know about the future of their plans. We can provide them with answers – a solution – today.”

Framework Health Plans are specifically designed for employers looking for a health plan that is affordable, flexible, and easily administered. Some of the limited benefit health plan’s attractive features include: guaranteed issue (employees and their eligible dependents will not be denied coverage during open enrollment periods), customized enrollment forms, flexible billing technology that corresponds with an employer’s existing payroll cycle, and experienced "live" customer service representatives. Information about Framework Health Plan and the latest news on the health care reform and its impact on the limited medical plan industry is available on the company’s Web site

About Fringe Benefit Group

Austin, Texas-based Fringe Benefit Group and its affiliate companies have helped employers design and administer a wide variety of benefit programs since 1983. For more information, visit


PR for Fringe Benefit Group
Melinda Hart, 210-824-3433
[email protected]

KEYWORDS:   United States  North America  Texas

INDUSTRY KEYWORDS:   Health  Professional Services  Human Resources  Insurance  General Health