Health Care Reform

Changes effective January 1, 2011

The Lockheed Martin task force established to address the impacts of health care reform legislation has been working to identify all aspects of the new law that affect the Corporation’s health plans. Several new requirements are a few years off yet, but some are effective for the plan year that starts Jan. 1, 2011.

Among the changes effective in January are the following:

  • Extension of coverage for dependent children to age 26. Regulations will extend the dependent child medical coverage to age 26, with no student, financial support or marital status requirement. The definition of eligible dependent effective Jan. 1 will include your children up to age 26. A complete updated definition covering eligible dependents is available here.
  • Lifetime plan dollar limits on benefits no longer apply. Health plans with lifetime coverage limits will no longer be allowed to impose a lifetime limit on the dollar value of total health benefits. Effective Jan. 1, the LM HealthWorks Plan will not impose a lifetime limit on any of the Plan’s benefits for active employees, whether the covered individual is the employee or the employee’s eligible dependent. Note: lifetime limits may still apply to certain benefits or services which are not essential health benefits.
  • The option to choose a primary care physician. The new regulations require health plan providers to advise covered employees of their right to choose a primary care provider (PCP) or pediatrician when a plan requires or allows such designations. Also required is the opportunity to obtain obstetrical or gynecological care without a referral.  You and your covered dependents have the option to select an in-network PCP who can help you manage your care—the decision is yours. The LM HealthWorks Plan does not require you to select a PCP and referrals are not required for specialist visits, diagnostic tests or lab work, though certain health care services such as hospitalization, outpatient surgery and certain other outpatient services require precertification. Although PCP selection is not required, you are encouraged to consider selecting and building a relationship with a primary care provider to support stability and help centralize coordination of care for you and your family.
  • Limits to over-the-counter medication claims for Health Care Spending Accounts. Effective for all expenses incurred on and after Jan. 1, 2011, drugs available without a prescription (i.e., over-the-counter, or OTC) may be reimbursed under the Health Care Spending Account (HCSA) only if accompanied by a prescription from a physician. This change in OTC eligibility applies to medicines or drugs only. Eligible supplies, equipment and other items, such as bandages and contact lens solution will remain reimbursable without a prescription. Insulin retains its special status and does not require a prescription for HCSA reimbursement.

    Important note: This restriction is effective Jan. 1 regardless of which plan-year funds are being used, i.e., OTC drug claims cannot be incurred in the January-March grace period for 2010 funds, except for those submitted with a prescription. So, for non-prescribed OTC drugs, you will need to purchase items before Dec. 31, 2010.  And remember, all 2010 claims must be submitted for reimbursement by April 30, 2011.
  • Preventive services covered at 100%.  Also effective Jan. 1 is the requirement for employer plans to cover preventive services at 100 percent, i.e., without any deductibles or copayments. The LM HealthWorks Plan already provides identified preventive services at no cost to the employee; other plans will follow on Jan. 1.

Lockheed Martin’s plans already comply with other new requirements:

  • Children cannot be excluded from coverage based on pre-existing conditions
  • Lockheed Martin does not have annual dollar limits for essential benefits, which complies with new rules established under the legislation

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